OFFICE SPACE CONCEPT A HIT

Silk Center turns entrepreneurs’ enclave

by

YOKOHAMA — What was once a modern and grandiose hotel had become obsolete.

Fifteen years after it was forced to close down, however, the Silk Hotel has been reborn as a nest for ambitious entrepreneurs, once again becoming the vanguard of the era.

Soho Yokohama Incubation Center, run by Hiromi Saito, a 42-year-old entrepreneur, has breathed new life into the structure, turning its 75 cozy rooms into “electronic cottages” housing others like her.

With the economy in recession, the time was not necessarily right for launching a rental office business. Still, over 150 applicants gathered for its first offering of 25 rooms in February 1998. Today, all 75 rooms are occupied, and many applicants are on a waiting list.

The five-story structure, which occupies the upper half of the 41-year-old Silk Center building, can no longer be called modern.

Despite its outward appearance, however, it boasts cutting-edge telecommunications infrastructure — probably the single most important feature in this cyber age — including a nonstop server with a capacity of 1.5 megabits per second.

Technically, this is nothing new. But Soho Yokohama has made it affordable — a monthly fee of 100,000 yen or so covers rent, round-the-clock access to a high-speed telecommunications network, use of facilities such as computers and public space for meetings.

“We wanted to create the kind of space that we ourselves want to use, and make it available at an affordable price,” said Saito, president of Soho Inc., which operates the center.

Saito, an award-winning architect and head of the architectural firm Space Creation Inc., said the history and location of the building — constructed in 1959 as a centenary project for the opening of Yokohama port — meant a lot to her.

When she was asked to do something with the long-discarded hotel, it did not take her much time to come up with an idea.

“Silk used to be Japan’s major export product, and it is from here that silk was shipped, bringing in huge amounts of foreign currency,” she said. “And with that foreign money, a number of entrepreneurs started businesses here, playing a leading role in modernizing Japan.

“I thought this birthplace for Japan’s modernization would make an ideal cradle for today’s entrepreneurs.”

For Saito, who entered the business world as a teenager, Soho Yokohama is the realization of her long-held dream to nurture venture businesses. At the same time, it is the antithesis of the government’s approach to public works projects — namely, constructing numerous expensive facilities that often turn out to be good for nothing.

“Instead of thinking what hardware to build, we must first have a clear concept about the kind of software we need. Hardware should be the means to realize that concept,” she said.

Thus, in transforming hotel rooms into rental offices, Soho Inc. concentrated its limited resources on installing an up-to-date telecommunications infrastructure.

“We did it all by ourselves when we could, bringing in our own computers and other belongings,” she said.

In the process, major firms sympathetic with her ambitions offered help, for instance, by leasing personal computers and offering office furniture at low cost.

And much to her surprise, the Ministry of International Trade and Industry granted 170 million yen in subsidies to Soho Inc., at the time still a startup firm capitalized at only 10 million yen, to help it develop a room-to-room security device to ensure network fire walls among its tenants.

All that support came, in a sense, through a human network — including ministry officials who encouraged her to apply for the subsidy — that she has built throughout her career as an entrepreneur.

And that is probably why Saito placed so much emphasis on another feature of Soho Yokohama: being a center for human networking providing both physical space and opportunities for entrepreneurs, venture capitalists and other supporters to get together.

Reflecting that desire to make it something special, Saito defines Soho as “super office, human office” instead of the “small office, home office” the acronym normally stands for.

Indeed, many tenants of Soho Yokohama appreciate the center’s function of helping them broaden their human networks just as much as they do its sophisticated telecom infrastructure.

Hirofumi Miyamoto, a 32-year-old system engineer and president of I.T. Brain, said the presence of a high-speed server and inexpensive rent was a major reason for his decision to become a tenant.

But, he added, another merit of being here is that he can meet with other entrepreneurs with different backgrounds.

“Horizontal networks are valuable,” he said. “There is much to learn from those from different backgrounds. And there is much we can mutually understand as we’re all, to some extent, feeling lonely.”

For Isao Shimozaki, president of Blast Inc., a firm that promotes technology development, an encounter with other people led to a new business. He became the coordinator for technology-oriented new businesses at a third-sector incubation center in Sagamihara, Kanagawa Prefecture.

Through his experience as a coordinator, he said, he has built confidence in Blast Inc. and now plans to establish yet another firm, specializing in the development of medical equipment, in Tokyo.

“The more the virtual world evolves and enters our lives, the more importance we must place on face-to-face communication,” Saito said. “It is through those whom we’ve come to know and established mutual trust with that we can find new business partners and customers.”