Takafumi Horie, 31, has been the man in the news since the end of June, when he announced that his Tokyo-based Internet service firm, Livedoor Co., was in the market for Osaka’s debt-ravaged Kintetsu Buffaloes baseball team.
In the present tumultuous state of the professional game in Japan — with merger talks ongoing between the Buffaloes and its Kobe rival, Orix BlueWave, and a plan by some of the owners of the country’s 12 pro teams to merge the Central and Pacific leagues prompting a players’ backlash that may yet lead to a strike — Horie’s buyout bid added considerable fuel to the yakyu flames.
However, it was precisely because he shares the view of many of the players and fans that merging the clubs and then the leagues is not the way to go, that Horie made his move. This was combined with his conviction that Livedoor can turn the troubled Buffaloes around and then turn a healthy profit. To do so, Horie envisions root-and-branch restructuring, involving issuing stocks to the fans, offering the players stock options and broadcasting games on the Internet. “Our plan will definitely change the current state of Japanese baseball,” he says with confidence.
Despite Horie’s enthusiasm and apparent Midas touch, Kintetsu (the Buffaloes’ railway-company owner) has repeatedly rejected his offers, while the old guard that controls the sport in Japan may be getting ready to announce even more team mergers at a watershed meeting scheduled for Sept. 8.
Though apparently stonewalled by the baseball establishment, Horie has far from given up. In fact, just an hour before this interview took place on Aug. 19, Livedoor announced that — if its Buffaloes bid founders — it will consider starting a new baseball team and apply for it to join the professional league.
At his relatively young age, this IT whiz kid from Fukuoka — whose habit of dressing casually also gets the old guard’s goat — has recently become something of an icon of change in a country whose “lost decade” (or more) is a source of wider disillusion to many, and not just the young.
Change, and innovation, appear to come naturally to Horie. Not content with cruising to high status with a degree from the University of Tokyo, where, as a 23-year-old student with just 6 million yen capital, he formed a Web site consulting and design firm he called Livin’ on the Edge Ltd.
The following year Horie dropped out of the prestigious school, and every single year since then the turnover of his IT business has doubled — both by providing new services and also through mergers and acquisitions. In 2000, he successfully listed his company on the Mothers market for emerging, high-growth stocks at the Tokyo Stock Exchange.
In 2002, Horie acquired the Internet service provider Livedoor, and the following year changed his firm’s name to Edge Co. Then, this February, he changed the name again, to Livedoor Co. — “simply because its name is better known than Edge,” he said.
At present, Livedoor’s Internet businesses encompass networking, consulting, e-commerce, e-finance and software development. Based in Tokyo’s super-swish Roppongi Hills, Livedoor’s sales to the year ending this month are expected to reach 25 billion yen — double the previous year’s, naturally, and certainly enough to make Horie one of the most successful young entrepreneurs in Japan. As befits that status, this single divorcee drives a lime-green Ferrari, and though he “lives over the shop” in a Roppongi Hills condominium, it’s a sprawling pad that sets him back 2.2 million yen in rent — per month.
Busy as he invariably is, and not one to let a waking second be wasted, Horie was good enough to talk to The Japan Times, and to give readers his views on management, the baseball business and what making profits is all about.
Baseball isn’t the first sport Livedoor has sponsored, is it? Previously, Livedoor has sponsored a motorcycle racer and an international soccer match, and you are also supporting the sumo grand champion Asashoryu. Now you are looking at baseball. Why is that?
Yeah. We’ve also sponsored American football, and other minor sports as well. To put it in a simple way, we think sport is “content” to attract customers on the Web. If we see cost-effectiveness in sponsorship, we will. If we don’t, we won’t.
As for Kintetsu, it’s highly effective.
Did you expect it would cause such a stir when you made your move to buy the Kintetsu Buffaloes?
From the beginning, we were aware that professional sport has a large influence in society, and that there’s more potential for it to expand. Out of all the sports in Japan, though, baseball stands out. So, we did expect this to a certain degree — but it was more than we had expected, which is a happy miscalculation. I’m glad that it became proof that we were right in assessing the impact of professional sports.
[In the press conference held an hour before this interview, Horie commented: "Even if TV audience ratings for professional baseball are decreasing, that doesn't mean to say that its popularity is declining. Baseball used to be the only sport that was aired almost every day during its season, so people watched it. But now, there are other things and other sports on TV that viewers choose to watch. The real fans watch on SkyperfecTV or go to matches at the stadiums. Its true popularity hasn't dropped at all."]
Do you play any sports?
Not really. I like to watch rather than play.
What is the problem with how Japanese pro baseball is managed? And what do you think lies behind all the difficulties surrounding your bid for the Buffaloes?
There is a complete lack of professional management. In addition, everything is run behind closed doors and information about business conditions has never been revealed in pro baseball.
The bottom line is that the system that creates “salaried-worker-turned-president” is the root cause of all the problems.
Most presidents of major Japanese firms are in their 60s. These people have won the in-house competition and finally reached the top and gained their status and honor. But their salaries are low.
In any case, although they may be talented in business, they don’t have management skills, because they’ve never done it before. So they learn how to run a company when they are already 60 years old.
Speaking from experience, within a company, there is a great deal of difference between the president and the rest. Really. So I can’t see how it can be possible for someone to become a president for the first time at that age.
These new 60-year-old presidents only have three to five years before retirement, and what’s in their heads is which company to parachute into after retirement. In such circumstances, they won’t try to do anything adventurous. They also don’t want to jeopardize all the perks of their position.
In addition to this, society doesn’t know how to reward successful people. Rich people are always targets of jealousy. No matter how successful you are, you are expected to spend your money secretly. There’s a weird sense of equality, which has it that all Japanese are middle class. But you know, Japan is said to be the world’s most successful socialist country.
Anyhow, in such an environment, I can understand why they are jealous of me. They’ve lived for 60 years in the system without questioning it, and when they finally reach the top of the pyramid, this weird kid appears. I can understand how they feel. I may have acted the same if I were in their shoes. Although of course, I would never walk in the same direction that they took.
Actually, this system is the biggest reason why the Japanese economy is very stagnant. So many major corporations are performing badly, but that’s natural, because inexperienced company presidents take turns running them every three to five years.
What a company really needs is a top management with sufficient experience running a business.
So is that why, in your recent book “Kasegu ga kachi (The One Who Makes Money Wins)” (Kobunsha, 2004), you are encouraging young people to become entrepreneurs?
Yes, exactly. I believe that the younger the president, the better. Regardless of size, when you launch a business at a young age and keep running it for five years, you are well qualified for top management. After that, I think you are capable of taking charge of a bigger business.
But not everyone can necessarily succeed like you. What would you say to them?
Try again. It’s not bad to fail. You just have to go back to zero. Restart from zero. That’s where you started anyway. Anyone can open their own business with capital of just 1 yen now. You can start tomorrow, or today if you want. So there’s really nothing to teach. You just have to learn it on the job. I always tell everyone who’s interested in starting up a business to start tomorrow.
You update your blog [personal, open-access Web site: blog.livedoor.jp/takapon_jp/ ] pretty regularly and write brief accounts of your schedule, including what you ate and where. It’s unusual for company presidents to openly write a diary. Why do you do it?
I’m simply making myself part of my IT business’ content by having my own media outlet. If the president himself becomes part of the content and can attract customers, there are a lot of advantages for us with just my own personnel cost like that.
While there are supportive comments, there are also lots of negative ones on that site. Some are very nasty, like those on 2 channel [an anonymous message board on the Web]. Aren’t you bothered by them?
No, because those people can’t actually say what they want to to me directly. They slander because they want to, so I don’t really care. The ones on 2 channel are a lot worse than those on my blog, but I check them as barometers of people’s interest. Basically, on 2 channel, everyone is bashed. No one is praised there. So the nature of the slanders isn’t important — it’s the number of comments that counts. If there are more comments on certain issues concerning us, I can judge how much influence a particular issue has.
In fact, I am interested in those people who actually take their time just to write and abuse me. I just don’t understand why they do it. Maybe it means that they envy me.
How popular do you think the Internet is in Japan?
As regards those who can use it efficiently, that’s about 10 percent. But because of its huge usefulness for many things, more people are always coming to it. If we include light users, I’d say that more than 15 percent are utilizing it, and from now on it’s going to really take off.
In Korea, the Internet is widespread. They are already discussing the problem of the “digital divide” — how to bridge the gap between those who can and cannot use computers, both financially and technically.
Do you have ideas on how to solve that problem?
Well, not really. I don’t think that’s our job. How to solve the problem of the digital divide is something that the government should take care of. Private corporations won’t profit from that.
Are you interested in becoming a politician yourself?
No. Japanese politics only influences Japan, which is such a small island country. I think business is a lot more interesting, because you get to do it globally.
As your company makes more profit, are you interested in philanthropy?
I believe that when a company is profitable, that already means that it is contributing to society. People buy because they need that product or service. And when we make profits, we pay tax. I think that it’s okay for a company to simply make profits and return part of them to society through tax.
The important thing is to think hard how your commodities will be received in society. You can’t force people to buy things. You have to provide products and services that people happily pay for. Companies who market things people don’t buy won’t make money, and will naturally founder.
Are you not interested in supporting NPOs either?
Unless the Japanese taxation system changes, the answer is no. If there is a tax-break or tax-reduction system, I’ll do it. But if we are made to pay more money in addition to taxes, then there is no way that we can make new capital investments. If a company can’t reinvest, it can’t make ends meet.
The important thing is to do business right, because that means that the company is already fulfilling its social responsibility. You are creating employment and paying tax. And when employment is created, that’s equivalent to creating consumers. That’s social contribution.
I think it’s important for the top management to run a company that can continue to do business right. And I think I’m doing a good job.
With Livedoor expanding so rapidly, how do you expect your staff to use their work time — and how do you use it yourself?
How they use their office hours is up to each individual. There is a certain time during the day when they have to come in to communicate with other colleagues, though. I just reward people according to their results. The better an employee’s results, the more salary I pay them.
As far as I’m concerned, except for when I’m sleeping (which he said is seven hours a night on average), I’m thinking about my business most of the time. In that sense, I guess I’m working all the time.
Over the years as Japanese society has become richer, there are those who have become more interested in values other than material ones — for example, living a slow life. How do you regard such values?
You can’t live without any money, but then it’s true that you don’t need much to live. It’s true that you have to use time and energy to make lots of money, so there are some sacrifices made. I think it all comes down to what you want in life.
I’m not trying to tell people how to live. If they choose to live a slow life, that’s fine. I’m just saying that no matter what you do, you do need money, and if you have more, it makes it easier to do whatever you want. Money isn’t something you can escape from.
I think money is nice and simple. It doesn’t discriminate among people, and I think all people are equal in the eyes of money. So making money is really about bringing a person’s ability into full play.
I believe people’s talents and charms can be converted to money. If they don’t have talent or charm, I don’t think they can make money. And actually, money naturally comes around to those people with talent or charm.
Livedoor has grown this big through mergers and acquisitions. From here on, what will be your investment criteria?
It all depends on whether we can get a return on our investment from a particular company, regardless of its business. For example, if we invest 100 million yen and get more than that in return in two to three years, we’ll invest. That’s a criterion. We can’t wait for five years, because you never know what might happen in five years’ time.
How far are you going to take Livedoor from here?
To be the world’s number 1. I’m going to make us the best in the world.
When will that be?
As soon as possible. I want to get it done with as fast as I can. Once I’ve taken this company to the top, that will be the end of my role in this firm.
Interview by SETSUKO KAMIYA, staff writer