The conventional wisdom is that traditional Japanese companies can’t innovate.

And traditionally, that’s been true.  Hosoo, however, might be carrying on a 1200-year-old tradition, but they are hardly a conventional company.

Today we talk with Masataka Hosoo, who is the 12th-generation leader of Hosoo, one of Japan’s most famous kimono silk makers. And while the company used to provide kimono fabrics to emperors and shogun, times have changed.

Masataka explains how he is changing with the times and working with not only fashion brands like Dior and Chanel, but companies like Panasonic to develop user interfaces that involve textiles rather than simple lights and buttons.

We also talk about a possible innovation blueprint that Japan’s other small businesses can follow.

It’s a great conversation, and I think you’ll enjoy it.

Show Notes

  • How ancient weaving techniques are used in modern fashion
  • When Japan hit peak-Kimono (it’s not when you think)
  • Bringing kimono fashion to Paris
  • How to retrain a 300-year old company to be innovative
  • Why textiles should be seen as jewelry
  • How traditional Japanese crafts can go global
  • How other 300-year-old companies are reinventing themselves
  • Why Kyoto might be Japan’s next startup hub
  • The 80/20 Rule for innovation in Japan

Links from the Founder

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Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for joining me.

Who says traditional Japanese companies can’t innovate? Well, okay, actually, a lot of people say that. I mean, yeah, to be honest, almost everyone says that, but the point is, those people are wrong.

Now, I have talked before about my work at Tepco and other large companies and the progress of they’re making their innovation programs, but today, we are going old school and I mean really old-school.

Masataka Hosoo is a 12th generation leader of Hosoo, the company that bears his family name. Now, Hosoo is one of Japan’s most famous kimono makers. They used to provide fabrics to emperors and Shogun, but times have changed, and today, Masataka explains how he is innovating and changing with the times.

Hosoo still makes kimono fabrics, of course, but they are also working with companies like Dior and Chanel to create new design ideas, and also with companies like Panasonic to change the way people interact with electronics.

It is a great conversation, not only about fabrics and fashion, and the unexpected way that they affect our lives, but one of a unique approach to innovation and of punk rock, but you know, Masataka tells that story much better than I can, so let’s get right to the interview.

Tim: Cheers!

Masataka: Cheers.

Tim: So, I’m sitting here with Masataka Hosoo of Hosoo, one of the most innovative textile manufacturers in Japan. So, thanks for sitting down with me.

Masataka: Thank you.

Tim: Hosoo is a very different kind of company than the startups that usually come on the show. I mean, you were founded 330 years ago, but you are doing really new things. So, why don’t you tell us a little bit about who Hosoo is and what you are doing today?

Masataka: Okay, now, Hosoo is a family business and we had been making kimono more than 300 years in Kyoto. Of course, Kyoto is a 1000-year-old chapter and our textile called Nishijin textiles. Nishijin is a district’s old name in the center of Kyoto about 3 km², and this area had been making textile more than 1200 years, and before, our client is Imperial Kyoto, Shogun at the top of a samurai.

Tim: So, Nishijin-ori, I mean, you mentioned its 1200 years old. Is it the same technique today as it was 1200 years ago, or has it been improved along the way?

Masataka: I think so, yes. The textile improves so every year, every year, so sometimes, our special material 400 years ago, developed, we called Haku, it’s a Japanese paper put on the cold leaf, after that, cut. The material is developed 400 years ago. Now, still, we use it.

Tim: We will put up some links on the site to the videos you have on your site because it is really an amazing process to watch, but these days, you are also working with a Dior and Chanel, and a lot of modern designers.

Masataka: Our company, we still make kimono, and as a side, we make textile and we provide to robust luxury market such as Christian Dior, Chanel, Louis Vuitton. We provide textile, something for clothing. Sometimes, for upholstery.

Tim: Okay, so material you are using this for their interior design and fabrics, not the fabrics of the clothing.

Masataka: Yes, sometimes, we have a project with the fashion house. They would forge clothes for the Paris Collections. Now, we worked with three categories. One is for interior project, one is fashion project, and one is contemporary art project now.

Tim: All right. Well, listen, I want to dive into each of those a little bit later, but before we do that, let us back up a bit and talk about you.

Masataka: About me? Okay.

Tim: So, Hosoo has been a family business for 330 years. You are the 12th generation?

Masataka: Yes, I’m 12th, yes.

Them: That’s amazing? And, you took over the company about 10 years ago.

Masataka: Yes, 10 years ago.

Tim: All right, so let us step back to that time. So, you were saying at that time, Hosoo had been continuing its tradition of making kimonos, kimono fabrics, right?

Masataka: Yes.

Tim: That is definitely a shrinking market, so actually, in Japan, when did the kimono market peak?

Masataka: Actual peak is 70s or 80s.

Tim: 70s and 80s? Oh, I’m surprised it’s that late.

Masataka: Yeah. Of course, the kimono market, before, 100 or 200 years ago, there were people – everyone –

Tim: Had to have a kimono.

Masataka: The kimono, yes, and 150 years ago, Western countries came to Japan, but our textile, Nishijin, is very high-end, so before, general people never own Nishijin because that is only high-end.

Tim: But, the bubble era. So, during the bubble era, everyone could afford really high-end kimono.

Masataka: Yeah, turning point, I think, 150 years ago in Meiji Period, everything that changed.

Tim: Sure, sure, and the men changed very quickly, the women took a few more decades. It makes sense. So, yeah, the increasing wealth is what allowed so many people to buy it. After that, was it simply fashion changed?

Masataka: Yes. So, these 30 years, the kimono market is shrinking – we have 19% loss, become a 10%.

Tim: Wow.

Masataka: And, the Nishijin textile, same as well.

Tim: okay, so when you were growing up in this family as the 12th generation, that is a lot of expectations, and I’m sure a lot of pressure. Was this something you always wanted to do?

Masataka: When I was a child, I don’t like my family business because I feel very conservative. I want to do the more creative things, and after graduating university, I started my own company.

Tim: Ah, really? What did  that company do?

Masataka: Before, I do the musicians.

Tim: Really?

Masataka: Yeah, really change my background.

Tim: I was a professional musician too.

Masataka: Oh, really?

Tim: First time I came to Japan, Japanese record company brought me to Japan.

Masataka: Oh, really?

Tim: Yeah. So, you did that for a couple of years?

Masataka: I make using, sometimes, I work with commercial things, but the strangers are not so good because sometimes, I get project, but sometimes the industry is a very – most of the big market, they have to – and

Tim: It’s hard to make money as a musician.

Masataka: Yeah, I think so. Yeah, I tried to do the best job, but the business is very hard, and I started a fashion house, and it’s a concept with fashion, music, design.

Tim: So, when you were moving away from the pure music and expanding it to kind of music and fashion house, was that on your own or was that as part of Hosoo?

Masataka: This is independent.

Tim: Completely independent?

Masataka: Yeah, I never think about joining my family business.

Tim: So, what changed your mind?

Masataka: 12 years ago. My father is CEO of my company and he participated in the exhibition in France, like a cusion.

Tim: Right, right. It was on like a chair.

Masataka: They fasten the chairs and a visit 2006.

Tim: Okay, so your father was the one that kind of took that first step?

Masataka: Yeah, and this is kind of like digital marketing. I think my family business is more conservative kimono, but I feel kimono expanded over the market.

Tim: So, it kind of changed your impression of your dad?

Masataka: Yeah, but I don’t know, because that is 2006. That is the marketing, never built a business model, just for testing.

Tim: But, still, for a 300 – well, then, it was a 320-year-old company, especially something as traditional – I mean, textiles are traditional and kimono textiles must be the most traditional market imaginable. So, this seems like a pretty big step.

Masataka: Yeah, I think so. Yeah, I decided back in my family business because I found a family business, it is very creative.

Tim: So, after that first test marketing in 2006 in Paris, what was the next step?

Masataka: I went back to my family business and I started challenge to get the new market for overseas, but before, people never do that. Yeah, the first steps, I participated in many kinds of exhibitions Milano Salons and participated in exhibitions in Frankfurt, and sometimes, in Paris, and I bring to the cushion with our textile. That’s all very difficult to build the business model.

Tim: What was the breakthrough? Because you mentioned it now, one of your main lines of business is providing fabrics for interior design and for art installations.

Masataka: Yeah, the first, I think, just focus for products, so no materials. I focused more Japanese, Japan’s patterns. So, the turning point is 2008, so during the exhibition in Paris in Louvre Museum, and the title is kind of Japan’s Senses, and the exhibition moved to the next year, moved to New York, and after the exhibition in New York, I got one email. I get offer from this architect, if you want to develop textile, I got the image from him. The pattern was a very abstract pattern, not Japanese patterns.

Tim: So, it was a blending of more modern Western design with traditional Japanese techniques and textiles?

Masataka: Yes, that’s it used for the traditional technique and the material, but the pattern is very contemporary way, so this is a turning point for me. Before, I think, I focused more on Japanese patterns.

Tim: Okay, what you had this insight and you said, okay, there is a demand, I found my new market. Were there changes you had to make inside the company? Did you have to retrain people that require new equipment?

Masataka: Of course, yeah, first time, so the craft man, so worry about everything, but because everything is like, we never do that, already, they have skills. With one or two months, we start to develop.

Tim: What was their attitude? Did they see this change as a new and exciting opportunity, or did they view it as a nontraditional and why are we making this strange Western stuff?

Masataka: Yeah, they have both.

Tim: Both?

Masataka: Yeah, they have some afraid for the new things, but sometimes, they hop to the new market.

Tim: And, today, what percentage of your business is still traditional kimono fabrics?

Masataka: 80% kimono and the 20%, our new business.

Tim: Okay, and I’m curious, because there’s some businesses in Japan that are just so traditional, they exist in their own silo. Does your traditional business, the kimono markets, are they aware of the thing you’re doing with the art installations and with Dior, or are they like two separate worlds?

Masataka: Yeah, before, I think so, separate. I have to build a new market, new business, but now, I think not separate. Everything is the same, connected, because our mission is how to maintain our kimono content to the future.

Tim: When I think about, the women who own your kimonos probably also own Chanel and Dior goods as well. Let’s talk about textiles in general because every day, we’re surrounded by fabrics and textiles from the clothes we were to the furniture, to the carpeting but we don’t really think about them. So, I’m curious, when you see fabric, or you see textiles, what do you notice about it first? What’s important about it?

Masataka: For our textiles, Nishijin textiles, the important thing is very similar to the jewelry in the Western country because before, 200 or 300 years ago in Japan, they never put on the jewelry, so for them, it’s the textile equal jewelry. So, our textile is very similar to jewelry because sometimes, put on the Japanese washi paper, put on the gold leaf.

Tim: Right, I was watching the videos. It’s amazing. Some of these are 10 or 15 layers of silk in different thicknesses. It’s astounding.

Masataka: Yeah, and sometimes, the shell is a slice of shells worked into the silk – very complicated, but why complicate just for the beauty? For them, it’s the textile called jewelry.

Tim: So, when you’re making something new, something genuinely new, it’s obviously more than material and pattern. What is the difference between a work of art, something that’s done right, and something that’s just pretty?

Masataka: Yeah, that’s very difficult question. Yeah, I feel beauty, or I don’t feel beauty. Yeah, the beauty is very difficult to explain. Our textile is a very three-dimensional textile because the structure is very complicated. We have 20 layers, and everything is three-dimensional. If change the angle, everything is changed; it changes the color, it’s very complicated – the coloring, everything.

Tim: But also, you can’t really control, like jewelry is static; once a jeweler makes something, it’s done, and different women may wear it, but it doesn’t change, but fabric, even kimono, women wear it differently, and -obi is there’s a hundred different ways they get tied, so the fabric will be used differently by different people.

Masataka: I think with the clothes, cut the textile, put on the body, yeah, this is fast body, and for kimono, the tailoring is very flat. For example, the kimono is one flat textile and cut to eight parts, they become a kimono. That’s not so three-dimensional – that’s one textile. It’s very difficult to Western clothes. Western clothes is cut.

Tim: Yeah, Western clothes have their own shape.

Masataka: Yes, own.

Tim: If I take this shirt and I put it on a hanger or I put it on my shoulders, it kind of looks the same.

Masataka: Yeah, the textile follows the body.

Tim: Yeah.

Masataka: Japanese kimono is opposite.

Tim: Actually, so far, we have been talking about textiles in terms of fashion and interior which is how almost everyone thinks of them today, but you have also been working with textiles and other applications like electronics. You have been working with the MIT media Lab, you did a really interesting project with Panasonic using textiles as a speaker.

Masataka: So, three years ago, we collaborated with Panasonic, and this time, it is how to mix traditional beauty with technology. Many electric makers just push only technology and very futuristic.

Tim: Sure, sure, the UI human flesh is lots of lights and buttons.

Masataka: Yes, yes, so this collaboration, the concept is hidden technology, so we make speakers. The surface is our textile, and, on the textile, the sound is started. Then, take off speaker, the sound is stopped.

Tim: So, the sound will respond to how you are touching the textile, touching the fabric?

Masataka: Yes.

Tim: How did people react to it?

Masataka: People were surprised, kind of, I’d say, like Harry Potter.

Tim: It’s sort of magical.

Masataka: Yeah, magical, because you will never find the technology.

Tim: But, that is interesting because I think the most important technology in our life is always invisible. If the things we don’t think about. It has just become natural to us, like electricity. We don’t think about electricity anymore. It is just there.

Masataka: Yeah, electricity is of course, AI is coming so the people, maybe people will go to Mars, so this is a very, I’d say important pillar for the humankind, but textile, there’s more than 2,000 or 3,000 years.

Tim: That’s right. One of the first human products was –

Masataka: I think so. So, I’m very interested is what is a textile and what is beauty. I think textile are very primitive thanks. Of course, the technology is important, we improve. And, the next phase is craft with technology.

Tim: Now, this is a really interesting aspect of innovation in Japan. So, Japan is world-famous for craft, for Monozukuri, the dedication to getting things just perfect, and then improving a little bit more, but that sometimes is in conflict with innovation and trying new things, so how did you balance that with in your own company, this pull between let’s be innovative, let us try new things, and the dedication you have to tradition?

Masataka: When I was a junior high school student, I started the guitars, and I started in an original band. We do a punk band.

Tim: Excellent.

Masataka: I like the Sex Pistols.

Tim: Oh, yeah, me too!

Masataka: And, when I was in junior high school, I listened to Anarchy in the UK, shocking, and I started music. Yeah, of course, I love pop music – The Clash, Ramones – that is very cool. The craft company, for example, this is in textile, there’s many history, yeah, they sometimes do the broken and clash, and then rebuild. So, we need more destroy and rebuild. For example, so 150 years ago, more than 1000 years, so this is in textile, that’s all handmade, and well, 150 years ago, our client, Imperial, moved to Tokyo, and Nishijin textiles have gone down. This time, the three craft men went to Lyon in France, and their technology, high tech, there is a Jacquard system. Jacquard system is automatic.

Tim: So, mechanical loom?

Masataka: Yeah, this is loom, and this way, the Nishijin textile, before control of the humans…

Tim: The group that went to France saw the automation and brought it back?

Masataka: Yes, and the innovation.

Tim: So, what is next for Hosoo? Where are you going to be in 10 years, or maybe you are thinking of where you are going to be in 100 years, but what is next?

Masataka: What is next? Just our textile business is just beginning, and now, our craft men is just 10 craft men. Before, there were three craft men, and the important is the more younger generations want to join our traditional business. This is the most important thing because our mission is how to continue it for the future, and now, we try to collaborate with technology. Sometimes, buy technology.

Tim: So, before, you mentioned that the traditional kimono fabrics is about 80% of your business and everything else is 20%, so in the future, do you see that staying the same, do you see the new business be 80% and the kimono business being 20%?

Masataka: Yeah, I hope 50-50 these years. Of course, I have to maintain personally, kimono. This is our core business, our origin, but our textile business will have many possibilities because our Nishijin textile, that is 1200 years ago, just focus on just the domestic market. The overseas people never know the technique. Just beginning 10 years ago, so we have many possibilities.

Tim: I have noticed so far, Hosoo does not use distributors. You are interacting directly with every client. So, most of the startups and most of the founders that come on this show have global dreams. They want to IPO a $5 billion company and they want to have offices around the world. So, it doesn’t sound like that is your dream. It sounds like you want to remain like a craftsman or a family of craftsmen.

Masataka: Yeah, family business, so our company scale is very small, but it’s okay. We want to continue it after 100, 200, 300, that is the most important thing.

Tim: So, to kind of continue that tradition that you have had for the last 300 years, but expand it enough to survive in the modern world?

Masataka: Of course, so we need to innovate more.

Tim: So, right now, most of the world’s 100-year-old plus companies are in Japan, but I think today, a lot of those old companies are feeling a lot of pressure. Do you think a lot of them are going to be going away or are most of them reinventing themselves like Hosoo is?

Masataka: I think keep maintaining innovations, challenging, changing, creation. Now, that’s why we collaborated with Panasonic and collaborate with Nissan. Of course, Panasonic and Sony is a big company, but they want to find like a DNA of innovation.

Tim: So, it would be a good idea for these small companies to try to work with big firms that are in completely different industries?

Masataka: Yes. I think so, the technology company, Kyoto, there’s many technological companies – Kyocera, Omron, Nintendo. Another thing is there are many craft companies, traditional companies more than 100 years companies, but they never connect, and Kyoto, there’s many university, Kyoto University, but they never connect.

Tim: But, that’s changing now.

Masataka: Yes, I think so.

Tim: And, I think this is why for years, I’ve said Fukuoka has the best startup ecosystem in Japan. I mean, it is small but it’s really healthy and creative, and I see a lot of really interesting things happening in Kyoto as well.

Masataka: I think so. There’s IPS Lab. Sometime, Nishijin textile lab. I think now, it’s very interesting. The Panasonic design headquarters moved to Kyoto this year.

Tim: Did they?

Masataka: Yeah.

Tim: Wow.

Masataka: So, design headquarters, 150 designers moved to Kyoto. Yeah, I’m very excited.

Tim: Yeah, I think Kyoto, it’s worth watching. I think it’s going to be a unique startup ecosystem because the ingredients are so different there.

Masataka: Yeah, I think so.

Tim: Excellent. Well, listen, before we wrap up, I want to ask you what I call my “Magic Wand” question and that is, if I gave you a magic wand and I told you that you could change one thing about Japan, anything at all – the education system, the legal system, the way people think about taking risks – anything at all to make it better for innovation in Japan…

Masataka: Better for innovation.

Tim: What would you change?

Masataka: Most people says it is concepts, so not so flexible. For example, production makers like a startup, okay, good quality. I think that Sony and Panasonic and Matsushita. Hundred years ago, they don’t have the way and they don’t have a concept. Of course, they don’t have fixed concept, but now, Japan is success. Many people, it’s fixed the concept, 20, 30 years ago. Concept, I think so.

Tim: In a sense that so many parts of Japanese industry became so successful, they just wanted to focus, like okay, we have the formula, let’s do it better. Well, I guess Hosoo is the same way. You had the formula, it was high-quality, and it was focusing on doing it better, and only recently, you have decided to change and innovate.

Masataka: Yes, we make kimono long time, and this is our success model, success concept, but 10 years ago, if we just focus on kimono, of course, the textile business is never gone. We focus for not kimono, just textile.

Tim: But actually, I think that’s actually a really good model for all Japanese companies. If you can take 80% of your resources and focus of those on this is what we do well, this is what we do better than anyone else, and then take 20% and say, okay, let us try something crazy and new, and see if we can build something.

Masataka: Yeah, I think I like this concept. I believe they are the new generations, younger people, they are very unique.

Tim: So, using the current generation is more willing to try new things and to experiment?

Masataka: And, recently, we do the recruiting for the craft men. Sometimes, recruiting for our marketing teams. Before, we do the recruit for craft men, people never come in, but now, it is 10 or 20 times, just one fourth.

Tim: So, for every opening, you will have 10 or 20 applicants?

Masataka: Yes, so the situation has really changed.

Tim: That’s interesting because it’s not that Japan isn’t full of laymen; it’s hard to find people for anything. So, why is there so much interest, do you think?

Masataka: I think two reasons. One, they think it’s not a traditional industry. They think for creative industry for our Nishijin textile. This is one reason. Another reason is, they want to find the Japanese DNA and they think about concept ventures.

Tim: Interesting.

Masataka: Our marketing team came from global big companies. We are a small family business, but many unique people are coming now.

Tim: So, is there like a new interest in traditional Japanese crafts or is it a new interest is sort of fusion of tradition and modern crafts?

Masataka: Yeah, I think so, and don’t feel conservative.

Tim: That’s great to hear. I mean, that’s an optimistic outlook on the future of innovation and of traditional craft. Are there other traditional companies in Kyoto that are following similar paths?

Masataka: Six years ago, I started a new craft project called Go On Project. This is a six craft company that joint collaboration. The concept is how to expand the craft, the overseas market, how to continue to the future, and the members, we are a textile company. Sometimes, craft company, ceramic company, bamboo craft, and wire knitting.

Tim: And, it is all that same philosophy of traditional craftsmanship with modern applications?

Masataka: Yes, and the Go On, the meaning, so to meaning is. One is of course, English, go on, going on for the future, and another meaning is the Japanese meaning, go on is for respect for the ancestors, go on, yes. There’s two meanings, so we fuse the go on, the respect for the ancestors, and we receive the baton from the ancestors technique, material, stories, and we go on.

Tim: Moving forward.

Masataka: Yes, that’s right.

Tim: That’s fantastic. Well, I’m looking forward to seeing more from Hosoo and the rest of the Go On community, but thanks for sitting down with me. I really appreciate it.

Masataka: Yes, thank you, thank you.

And, we’re back.

You know, you really owe it to yourself to check out Hosoo’s videos, and there are links to those at the site. Podcasting is a wonderful medium but sometimes, the spoken word just isn’t enough, and you have to see something to really appreciate it.

Anyway, one of the things I found most encouraging about Masataka’s story is how many young people are now interested in joining them and learning these traditional crafts, that they don’t view as a 1200-year-old craft being practiced by a 330-year-old company. They don’t view that as traditional, but rather as something that is fundamentally creative, and they are right, of course. Hosoo is creative and what they are doing provides a simple, easy to follow blueprint for other small Japanese firms that are trying to survive and grow in these changing times, and there are a lot of old Japanese companies in a similar situation.

It sounds simple. I mean, it is simple.

What Hosoo is doing is taking Japanese craftsmanship and attention to detail and applying that to the needs of a global market. They understand quality, they understand how to make high-quality goods, but that they are actively listening to their global customers before deciding what it is they actually should be making?

The reason so many small and actually even large Japanese firms are struggling is not because of the lack of ability or quality, but an unwillingness to listen to the demands of the global market, and if you have any doubt as to the power of the combination of Japanese craftsmanship directed by global demand, well, take a look back at Japan’s postwar expansion.

It was Japanese craftsmanship applied to global demands that led to the greatest economic expansion the world has ever seen, and you know, it could happen again.

If you want to talk some more about kimonos or fabric, or punk rock, for that matter, Masataka and I would love to talk with you, so come by and let us know what you think, and also, please feel free to follow Disrupting Japan on Twitter, Facebook, or even join our LinkedIn group. If you want to ask a question there, I guarantee you, I will respond.

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.