More than ten years before Quora and ZenDesk became famous, there was OKWave. Kaneto Kanemoto founded OKWave to address a massive problem that was unique to the Japanese internet in the mid-1990’s. Most of the country felt the situation was inevitable, even natural, but Kaneto knew it had to change.
You see, a strict code of conduct governs almost all aspects of business and social behavior in Japan, and as a result, most Japanese are exceptionally polite in day-to-day interactions. However, when the anonymity of the Internet was introduced into the mix, a very different aspect of Japanese society came to the forefront. One that involved bullying, hostility and exclusion.
Kaneto founded OKWave to address these problems on the Internet in particular and in society in general, and has succeeded remarkably at both. The Internet is a far more helpful and much more welcoming place thanks to Kaneto and OKWave.
It’s a great interview and I think you’ll enjoy it.
Show Notes for Startups
- What people ask when no one is watching
- How to get Japan’s biggest companies to work together
- Growing up Korean in Japan
- Homelessness and waking up to what is possible
- The most dangerous funding you can ever receive
- What is the most important difference among the current generation of startup founders
Links from the Founder
The full transcript follows, but you can read a short summary of the interview here.
Transcript from Japan
Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for joining me.
Almost a decade before Quora or Zendesk, there was OKWave. Kaneto Kanemoto founded the company to address what was then a very hostile and cold Japanese Internet. And along the way to his IPO, he managed to both create a safe place for Japanese to ask and answer even the most personal and private of questions and also somehow managed to get some of Japan’s largest multinationals to work together to solve each other’s customer’s problems. As the interview unfolds, I think you’ll begin to understand that Kaneto’s motivation and skill in getting people to work together comes from his being an outsider in Japan. He’s startup journey was hard and I mean really hard. I don’t mean working long weekends hard. I mean being homeless and living on the streets hard. I think by the end of the interview you’ll agree that no one deserves their success more than Kaneto does. But I’m getting ahead of our story, so let’s get right to the interview.
Tim: I’m sitting here with Kaneto Kanemoto of OKWave, which is Japan’s largest Q&A community platform with both open public forum and offerings for companies and NPOs. But, Kaneto I think you can explain it much better than I can. So, why don’t you tell us a little about OKWave?
Kaneto: Yeah, OKWave as Tim introduced, Japan’s largest Q&A site.
Tim: So you now have over 40 million active users monthly.
Tim: So what kind of things are people asking about?
Kaneto: Most of around life, especially love.
Tim: So people ask about love life?
Kaneto: Yeah. “I love my boss, what can I do? I could feel that I never stopped my feeling to my boss, so…”
Tim: “So what should I do?”
Kaneto: Yeah, yeah, yeah. Many about pregnant, how to get pregnant. Many Japanese women marry but don’t have a baby.
Tim: Okay. Now that’s really interesting because I always thought that OKWave was asking a lot of like IT or technical questions.
Kaneto: Ah, yes, yes. First time, we have a lot of IT questions like Windows but gradually people start asking about life, pregnant, love, having affairs.
Tim: Are your users mostly women? Mostly men?
Kaneto: Half and a half.
Kaneto: Yeah 50-50.
Tim: So that’s really a good balance. Now, you also offer a Q&A platform for business.
Tim: I think that our listeners outside Japan will all know Quora as a general Q&A site or Zendesk as a corporate Q&A platform. How was OKWave different from those two?
Kaneto: OKWave take contents on AI technology. We syndicate Q&As with Japan’s biggest company like NEC, Rakuten, Canon company.
Tim: So how does that work? A customer has a question, and then what happens?
Kaneto: Oh, for example, Canon user watch Canon site. He or she has a problem on Canon’s products so they ask Canon site. So Canon introduced our Q&A site but designed as Canon.
Tim: So Canon would have a community of their own users answering questions from other users. And it’s just powered by OKWave.
Kaneto: Yeah. Canon’s Q&A database connect our OKWave database so other site express questions like NEC users watch Canon’s users questions.
Tim: So all of the different customers can see all of the questions and answers from everybody.
Tim: Aha. Okay.
Kaneto: So, if you clicked Canon’s printer and NEC PC and Buffalo’s connector…
Kaneto: If you cannot print what kind of problem about PC or a printer or a Buffalo…
Tim: Right you don’t know whose problem it really is.
Kaneto: Yes. People have a problem ask PC maker, connector maker, printer maker. I don’t know they…
Tim: Well this is interesting because I think that companies tend to view support as a cost center. And they don’t try as hard as they should.
Tim: Have your customers been very welcoming to the idea of working with these others and collaborating to find solutions?
Kaneto: Yeah. In the situation, very important knowledge is the experience.
Tim: The answers are not crowd sourced only from the users. They’re also crowd sourced from the companies who are part of this.
Kaneto: Yeah, that’s right.
Tim: I see it.
Kaneto: Canon, Epson, NEC pay OKWave because they cannot answer their question.
Tim: One of the biggest challenges with any Q&A service is maintaining the quality of the answers.
Kaneto: This is our AI technology. Lot of the question and answer, we check and [inaudible 00:06:22]
Tim: I could understand how AI technology can judge maybe the quality of the writing input. But how can AI judge whether it’s a good answer?
Kaneto: Canon, NEC and Epson’s expert collaborate.
Tim: So it’s a two-step process. The AI provides a basic filter and then you have experts to verify it. Earlier this year, OKWave ran a joint project, a joint promotion, with KonMari…
Kaneto: Oh, yes, yes.
Tim: … which is very famous in Japan and getting famous overseas about the Japanese way of organizing and tidying things up.
Kaneto: KonMari-san joined four years ago. KonMari-san have a strong image of cleaning.
Tim: Did she get her start on OKWave?
Tim: Really? I didn’t know that.
Kaneto: So, now, she is very famous. KonMari-san was listed one of the most influential Top 100 people in Time Magazine.
Tim: One of the Top 100 most influential people in the world and it all started on OKWave four years ago.
Tim: Do you think that the Q&A format is easier to learn things than, say, reading a book.
Kaneto: Q&A format is very easy to learn and a very good way to knowledge-share.
Tim: Q&A has a very long history. It’s basically…
Tim: Well yeah, or the Socratic Method.
Kaneto: Ah, yeah.
Tim: Really, that was before books, it was Q&A. Let’s talk a bit about you. So you went from founding OKWave to IPO in six years pretty fast. You’ve published several books that were very successful. Looking at just that part, it looks like success was really easy for you. But, you had a pretty hard time starting this company and what led up to this company.
Kaneto: I was Korean. I changed nationality in Japan but when I was a child few Japanese people dragged me.
Tim: You were telling me before you were bullied in school because you were born in Japan but Korean nationality.
Kaneto: So, I didn’t have a good future in childhood. I had a very harder time. I imagined that nobody have prejudice.
Tim: Have what?
Tim: Oh, prejudice.
Tim: As a child you didn’t think that other people had prejudice until you experienced it?
Tim: As an entrepreneur, people always say it’s always good to think differently, to be a bit of an outsider. But being an outsider in Japan especially as a child, especially when you’re growing up, is extremely difficult. When you were in elementary school and high school and very much an outsider, what did you think you would be doing with your life?
Kaneto: My parents could not enter university or a good company because of their nationality.
Kaneto: So my parents want to change me.
Tim: So they changed your nationality from Korean to Japanese.
Kaneto: Yeah, so when my friend knew that part, one of the friends dragged me against because I am Korean. I was very shocked.
Tim: They didn’t know you’re a Korean before?
Tim: You changed nationality and then these people that you thought were…
Kaneto: very few people maybe.
Tim: And how old were you then?
Kaneto: Ten years old.
Tim: Ten years old? So suddenly you went from being a normal kid with friends to being an outsider.
Tim: How did being an outsider change the way you thought about your future and how you interacted with your friends?
Kaneto: Until 25 years old, I could not read anybody even my wife. My wife is Japanese but when we fight, I thought she fights me because I am a Korean. I thought.
Tim: You just couldn’t…
Kaneto: Yeah. So I entered the Art University…
Tim: An Art University?
Kaneto: Yeah, university, and after I graduated, I entered the biggest Japanese design company GK.
Tim: GK. Yeah.
Kaneto: You know GK Yamaha bike, the products that we designed.
Tim: So being an outsider in Japan, in elementary school and high school, must have just been incredibly difficult. Things obviously got better in college and once you entered GK which is a great company to work for. What made you want to leave GK and start your own company?
Kaneto: Okay. One of the construction companies invited me to make design a design team. You are chief.
Tim: You’ll be in charge of a small team instead of being a small player in a big company. Well that’s attractive.
Kaneto: So I changed my job.
Tim: So what happened then?
Kaneto: A lot of products I designed. I received many prize but that company didn’t appreciate about the designs. I watched in a magazine Softmap, Yyou know? The president, Suzuki-san said SofMap think design is very important, he said. So I wanted this company. So I made a call to Suzuki-san. I want to partner with you. He invited me and we met. We hold a project.
Tim: SofMap is headquartered in Tokyo and at this time you were living in Nagoya?
Kaneto: Nagoya, yeah.
Tim: So you had to move to Tokyo?
Tim: It didn’t go as planned.
Kaneto: It didn’t go as planned. My wife is very tired of moving, changing, working, so, “I want a divorce” to me. And my design friend, “Don’t trust Suzuki-san”, my friend said. But my friend has stolen my capital and my wife wants to divorce and I am struggled.
Tim: So you came to Tokyo to look for work anyway.
Kaneto: Yeah, so I don’t have a mind to continue so I lived in park.
Tim: Yeah, you were living in the park. You were basically homeless.
Tim: Homeless in Tokyo. But you were working at that time, right?
Kaneto: After six months I don’t have a work.
Tim: So you were just looking for work?
Kaneto: Yeah, I met a Chinese woman. She comes to Japan. She read the book Japanese history. She wanted to learn Japan but Japanese people know there is great opportunity.
Tim: So she thought the Japanese people didn’t realize how good things are in Japan. Now I think she probably had a point.
Kaneto: Japanese are in a very good environment but they didn’t want to study, they didn’t want to walk.
Tim: So did talking to her change your opinion?
Kaneto: Yeah. So she claimed me, “Why you live in park? Because you are a little [against to be more tough.”
Tim: So she told you you’re tough enough.
Kaneto: Yeah, yeah. Tough, tough, tough. So I wake up. I want to do something so I met the internet.
Kaneto: I made a website.
Tim: So I would say at this point, you don’t have a job and you’re still living in a park. So when you decided now I’m going to make a website, what did you do?
Kaneto: I make a call…
Tim: You called Suzuki back again?
Kaneto: Yes, Suzuki-san. I want to meet again. “Ha? Ha? Ha?” But finally he would meet. So okay, now, I will give you your chance, design for business cards, 1000 yen.
Tim: That’s pretty cheap. That’s not much of a job.
Kaneto: So my first business in Tokyo.
Tim: So were you working as an employee or just outsourcing?
Kaneto: Yeah outsourcing.
Tim: So you were outsourcing design projects and getting back on your feet.
Tim: When did the idea for OKWave come to mind? When did you decide to make websites?
Kaneto: Suzuki-san gave me website designs work. I had no choice. So I searched to make website.
Tim: So you’d never make before you study.
Kaneto: Yeah. So I take website searching html or website…
Tim: So you were just searching for the basics of how to do websites.
Kaneto: Yeah. So I asked what can I do to make html site?
Tim: You were just asking simple questions online.
Kaneto: Yeah, but many people you cannot ask that question on this site.
Tim: People were not being helpful.
Tim: Actually that is one thing I’ve always been amazed at. Japanese are very, very polite, except when they’re online.
Kaneto: Yeah, I agree with you.
Tim: I think if our overseas listeners could ever read like Ni-channel which is one of the big online communities in Japan and it’s just horribly nasty stuff.
So you were trying to learn HTML amid this nastiness and naughtiness online in Japan.
Kaneto: So I want to make a craze. Anybody ask questions safely.
Tim: So what was the next step? I mean this was the mid-90s and it was really hard to start a company back then. I mean we both started our first companies in the 90s and it was really difficult to raise money. So what did you do?
Kaneto: Many venture capitalists I met could not give me capital. I have met many owners, internet company.
Tim: So you tried to get investment from the presidents of internet companies. That’s a good strategy.
Kaneto: But, many people advised this is not [inaudible 00:18:20].
Tim: Back at that time in the late 90s, the internet was not really… I mean it was open but it was more like lots of little communities.
Kaneto: Somebody gives anybody right answer and they say it. One president advised me, “If you want to make this site, you would use your created card.”
Tim: Well, bootstrapping, is that what you did?
Kaneto: Yeah. But at that time I leave my wife in Aichi Prefecture.
Tim: So you’ve been living in Tokyo and your wife stayed back in Nagoya for how many years?
Kaneto: Two years.
Tim: Two years.
Kaneto: Two and so I made a call. I want to say I’m sorry. I met my wife, I told her my plan. So she decided. My wife has savings.
Tim: She agreed to use her savings for capital?
Tim: Well that’s “better not screw yourself”. It’s one thing to lose investor’s money but…
Kaneto: I get a capital.
Tim: Oh man!
Kaneto: So, I opened OKWave Q&A site in 2000.
Tim: It was popular very quickly. So I think that you really did see something that other people didn’t. In Japan, you saw the internet as this place that could be very open, friendly, and welcoming where that’s not what the internet was like back in the late-90s.
Kaneto: Yeah. I didn’t have programming skill so I seek out a programmer.
Tim: As OKWave became more popular and grew larger, you did really some financing before your IPO right?
Tim: And was that easier?
Kaneto: Fortunately, Rakuten, the biggest EC Company in Japan IPO. Rakuten wanted to invest. Rakuten’s president Mikitani-san found our site. “Oh this is…”
Tim: That’s worth investing.
Kaneto: Oh yeah, investing. We got a ichi-oku-en…
Tim: …about a million dollars.
Kaneto: About a millions dollars.
Tim: That seems like so little money today but back then that was a really big round for a small company. Actually, it is amazing now when you think of how things have changed for startups. It’s undoubtedly better now, than it was before. But I’m curious what do you think about when you were young? Because of your Korean heritage, you were very much an outsider and it was very difficult. Do you think that situation’s getting better in Japan now?
Kaneto: Fortunately, many Japanese people love Korean culture.
Tim: So you think the discrimination is much less now than before?
Tim: That’s good. It’s nice when things move in the right direction.
Tim: Now, in Silicon Valley for example, a lot of the most successful startups have immigrants as members of the founding team. Do you think that being Korean National, being an outsider helped you to look at things differently or gave you a different perspective on what was possible?
Kaneto: Yeah, successful entrepreneurs have experienced outsider. Many of my Korean friends, they want to make a new something, a new company. They don’t want to work other…
Tim: other person’s company.
Kaneto: Yeah, other person’s company.
Tim: I think it makes sense as being an outsider means you’re more willing to change things.
Kaneto: Yeah, Japanese educational program should be same.
Tim: Yeah. The educational system really does try to make everyone exactly the same.
Kaneto: Yeah. Exactly.
Tim: Over the last 15, well, almost the last 20 years since you first started OKWave, what’s the biggest and most important change you’ve seen about how Japan looks at startups and startup founders.
Kaneto: Traditionally, Japanese company wanted to continue 100 years old, so many startup companies recently want to sell their company.
Tim: That is new, isn’t it?
Tim: So traditionally, if you started a company, your goal is to be president for life and hand it over to your children and grandchildren. I think that there’s a wonderful dynamic that the people who do want to sell their company usually want to go and start another one afterwards. And that is a very new dynamic in Japan. Before we wrap up, I want to ask you my magic wand question. So if I gave you a magic wand, and I said you could change anything about Japan, anything at all to make it better for startups in Japan, what would you change?
Kaneto: Anybody have something experienced. I want to change more about it on the make-a-money.
Tim: So what do you mean? I don’t understand.
Kaneto: If you have experience, for example, you know origami. If you teach origami…
Tim: You would want people to start thinking about how they can use their experience to make money and start businesses.
Kaneto: Yeah, I would change all over the world, make money about experience.
Tim: Well, I guess, that really is what most successful startups are about right? Taking experiences and turning it into a business.
Tim: With OKWave, that sounds like exactly what you did from the difficulty of being an outsider growing up to the difficulty of finding a place on the internet to have friendly Q&A is what led you to start the company.
Kaneto: Yeah. Thank you.
Tim: Well, listen, thanks so much for sitting down. It was really good.
Kaneto: Thanks so much. I’m glad to meet you again.
Tim: Alright. Me too.
Kaneto: Thank you.
And we’re back.
It’s amazing to think that back in 1997, Japanese VCs could not even conceive of the internet becoming an open and friendly place where people are willing to take the time to answer questions simply because they’ve been asked. Most assumed that it would evolve to mere Japanese business culture at that time, a collection of tightknit clicks and close communities. The open internet is obvious now, but Kaneto deserves credit for not only seeing it before anyone else did, but committing his life to making it happen. I was also impressed that many, well at least some, Japanese companies are willing to work together on complex customer support issues. Hopefully that idea will catch on in the West as well.
If you’ve got a story about trying to explain your vision to people who simply wouldn’t listen, we’d love to hear about it. So come by disruptingjapan.com/show037 and let us know what you think. And when you drop by, you’ll find all the links and sites that Kaneto and I talked about and much, much more in the resources section of the post. But most of all, thanks for listening and thank you for letting people interested in Japanese startups know about the show. I’m Tim Romero and thanks for listening to Disrupting Japan.