Thomas Edison once said, “I have not failed 10,000 times…. I have succeeded in proving that those 10,000 ways will not work.” His light bulb moment would have flickered into obscurity, had it not been for Edison’s unceasing passion and persistence. Those same attributes helped entrepreneur Mitsuru Izumo survive tough times to build his ‘green’ startup company, euglena Co. Ltd., into a $1bn TSE listed firm.
Izumo’s journey began on a visit to Bangladesh in 1998, when he was a first year University of Tokyo student. The malnutrition he saw triggered a lifelong interest to end famine. “I was eager to become the person who solved the malnutrition problem in developing countries,” says Izumo.
About one billion children suffer from malnutrition worldwide.
Since 1980, many universities have researched ways to cultivate Euglena, a form of microalgae and food source with the potential to reduce famine. Euglena does not need arable land to grow because it is cultivated in fresh water. The algae convert CO2 to oxygen and carbohydrates, producing 59 different nutrients. It also holds the promise to cut harmful CO2 in the atmosphere.
At University of Tokyo, Izumo researched practical ways to grow Euglena. He continued his research after graduation in the evenings and on weekends, while working at a Japanese bank. A year later he quit his bank job to refocus on research. Three years later, aged 25 years, he launched euglena Co. Ltd (in August 2005). Technological breakthrough came shortly afterwards. “We changed the way Euglena is cultivated by using a sanitized special cultivation liquid which prevents biological contamination,” he explains.
Izumo felt he held a winning hand. His firm was the first to market a unique range of Euglena based health foods and drinks, against which no other company could compete. Customers, Izumo assured himself, would beat a path to his door. He did not concern himself any further. For example he thought, “We don’t need to market Euglena because it provides the perfect nutrition.” He even assumed his new venture was riskless, “because we had already succeeded to mass-cultivate Euglena,” he says.
If he believed Japanese people would quickly acquire a taste for microalgae based on their love of sea vegetables, he was wrong. It proved a struggle to persuade people to start drinking Euglena green juice. “At the time I couldn’t imagine the problems at all,” Izumo says. Without any track record, all 500 of the large Japanese companies he approached refused his advances. “I didn’t know how difficult it was to persuade people to drink a new innovative product,” he says.
In 2005, he thought the most important factor to becoming a great entrepreneur was to be ‘scientifically correct’. “I misled myself,” he admits, adding, “If we knew about the marketing issues back then, I honestly wouldn’t have started my own company.”
It took over two years to get his big break, when Itochu Corporation—one of Japan’s largest trading companies—invested in the firm. The backing by a big company changed everything. “After May 2008, all companies I met began to support and invest in our firm,” he reports.
Izumo has since built strategic alliances with other big Japanese corporations, to expand his firm into areas outside their core competency (that is outside the mass cultivation of Euglena). Advertising agency Dentsu, for example, helps with marketing a wide range of food and drink products based on Euglena microalgae. Other strategic partners include Hitachi, Isuzu, Shimizu, and ANA.
Euglena Co. Ltd. listed on the Tokyo Stock Exchange in 2012 and advanced to its First Section in 2014. The firm has annual sales of about $90 million, mostly health food and cosmetic products. By 2020, the firm plans to have in operation a $52 million Yokohama based bio-jet fuel pilot plant.
Not realizing how difficult his journey would be was a blessing in disguise. Instead of allowing inexperience, fear of failure, or embarrassment stop his pioneering efforts, Izumo remained focused on achieving his goals. He is an optimist with the ability to go from one failed attempt to another without loss of enthusiasm or self-esteem.
The personality trait is common among successful businesspeople. Cognitive psychologist Dr. Martin Seligman highlighted the importance of optimism in overcoming obstacles through his work with the Metropolitan Life Insurance Company. MetLife hired Seligman in the mid-1980s to improve the firm’s corporate performance. The firm was spending a fortune hiring and training salespeople who faced overwhelming rejection. Over half of all new hires quit the company within the first year. Four out of five were gone within four years.
Seligman’s earlier experiments into learned helplessness provided insights towards a solution. In the 1960s, he had subjected dogs to controversial electric shocks. Some were given opportunities to escape the shocks, while others were not. Dogs which controlled their ability to avoid them did so, while those with little control over outcomes resigned themselves to their fate—even when later given a way to escape the shocks. In short, the dogs gave up trying, as do pessimistic people facing difficult problems.
So he advised MetLife to only hire and train candidates scoring high in optimism on personality tests. Those candidates who ranked in the top 10% for optimism sold 88% more than those ranking in the bottom 10%.
The reason is not difficult to fathom. Optimists perceive each refusal as a challenge rather than a setback. They are resilient in the face of adversity. They have the capacity to learn from failure by trial and error, because they don’t see failed attempts as a reflection of inherent personal weakness.
“Don’t give up,” advises Izumo. “Entrepreneurship is not difficult. It is just a numbers game,” he assures.
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