Encouraging innovation among Japanese startups

Name: Tom Kelley
Title: Chairman, D4V (Design for Ventures); Partner, IDEO
URL: https://d4v.com/ and https://ideo.com
Hometown: Barberton, Ohio
Years in Japan: 5 (cumulative)

“How lucky I am to be here, right now,” is something Tom Kelley often tells himself. The D4V chairman (Design for Ventures) and IDEO partner could be sitting in any one of IDEO’s nine global offices, but the Tokyo studio is his favorite.

Since 2015, Kelley has visited Tokyo once a week each month, working to help unlock Japan’s creative potential through D4V, a Japan-focused venture capital firm with $50 million under management that works with internationally renowned design consultancy IDEO.

Beyond the office, Kelley welcomes the little waves of euphoria that can strike at any time, even in a space as mundane as a yakitori bar in Shibuya.

On his first trip to Japan in 1985, Tom stayed after finishing business to explore the country. While in Kyoto, he recalls having a magical encounter at a lovely little izakaya (Japanese pub) where he managed to connect with its owner, despite neither speaking the other’s language.

“It ended with me sitting at the bar talking with the owner and him singing, ‘I left my heart in San Francisco,'” he said. After, he thought, “I’ve got to come back.”

Two years later, he met the woman of his dreams — coincidentally from Sapporo — at a bus stop in Australia. She had been waiting a long time for a bus running on a holiday schedule, so he offered her a lift. They were married a year later.

Family is also a major part of Tom’s career. Around the same time, his brother David asked him to join IDEO. David sought in Tom a business-minded partner to complement his own creativity, while Tom was looking for adventure, having until then followed a traditional business school career path.

He joined IDEO in 1987 and discovered the design world to be much more rewarding. At the time, IDEO was still a small design studio with 15 staff. Thirty-two years later, the firm now employs some 750 individuals.

Both brothers are well known in creative circles. David was part of IDEO’s design behind Apple Inc.’s first desktop mouse. He also fleshed out and encourages an approach to innovation that begins with the question, “What’s the human need behind it?” Aptly named “design thinking,” this approach was developed with the intention of approaching things with a designer’s eye.

In this same spirit, Tom has released three best-selling books on the subject. The third book, “Creative Confidence: Unleashing the Creative Potential Within Us All,” was a collaboration between brothers that was born out of their desire to collaborate after David’s brush with cancer in 2007 and a trip to Japan.

The book introduces innovation as a skill to build upon rather than a natural talent, but it wasn’t the brothers’ intent to present themselves as the inventors of design thinking — the concept’s underlying ideas are as old as time.

However, they did reframe it with the hope of demystifying the creative process in order to help individuals from any and all industries. “Everybody has the potential for creative confidence,” said Tom.

Following their book tour, the two had a discussion about Tom’s next step and potentially increasing his personal commitment to Japan. David eventually said: “Look Tom, you love Japan so much. Why don’t you do something in Japan?”

After frequent visits and behind-the-scenes work as a partner, Tom has focused on dialing up entrepreneurship in Japan through IDEO’s work with D4V since 2015. D4V currently holds investments in 40 Japan-focused startups.

“My goal is to unlock the creative confidence of Japanese entrepreneurs so entrepreneurship can be a big part of the business story of Japan and the growth of the Japanese economy,” he said.

Tom sees Japan as more creative than many studies reveal or that even the Japanese themselves believe. The country may not rank highly in implementing new ideas, but by other parameters it may be the most creative nation on the planet. For instance, Japan is often touted as a leader in quality innovation. “Creativity is bubbling up in Japan,” said Tom. “It’s just a question of unlocking it.”

Besides his love for Japan’s culture and people, Tom sees opportunity. The nation’s entrepreneurial culture is comparatively undeveloped. In countries with more mature entrepreneurship cultures, making a big impact can prove challenging, the U.S. being one example. In this sense, there is an opportunity for Japan to play catch-up.

At a recent TEDx event, economist Jesper Koll — an expert Tom holds in high regard — presented data from the Organisation for Economic Co-operation and Development positing the oversized impact of entrepreneurship on the overall economy.

The data suggests that every one percent increase in entrepreneurial activity adds a half percent to a nation’s gross domestic product. If true, this means Japan benefits greatly from boosting its entrepreneurial endeavors and in doing so may lead to its GDP rising significantly.

If one were to envision Japan’s progress on a graph, Tom thinks Japan is at an inflection point, similar to those he has experienced countless times in Silicon Valley. After a long gestation period, promising technologies such as virtual reality may reach an inflection point followed by rapid growth.

The period following the inflection point “could not be more fun,” said Tom. “From a business viewpoint, there is (also) a big opportunity.”

Speaking on his legacy, Tom said: “I would like to look back and say we (IDEO Tokyo and the D4V part of it) moved the needle on entrepreneurship in Japan. That would be a sweet result to look back on at the end of my career.”

From Ohio to Silicon Valley and beyond

Tom Kelley hails from Barberton, Ohio, a small town by all definitions. Kelley never imagined living in Silicon Valley or traveling to Japan and elsewhere. “This wasn’t written in the book of life on the date of my birth,” he said. “No one else left town.”

However, Kelley resolved to make his own luck. After graduating from Oberlin College, he later earned an MBA from the University of California, Berkeley.

He joined IDEO in 1987 and has been with the design company for over 30 years, currently serving as a partner. Kelley has also released three books, the latest with his brother David, and is chairman of D4V (Design for Ventures) that is part of IDEO’s efforts to bolster Japan’s startup scene.

The Big Questions is a Monday interview series showcasing prominent figures who have a strong connection to Japan.