Entrepreneurship in the samurai tradition

Samurai SwordKentaro Sakakibara knows something about tradition. His family are koto and shamisen makers whose musical instrument business goes back 120 years. One might have assumed then, that Sakakibara would take over the family business on reaching adulthood. But with fewer people playing traditional Japanese instruments nowadays Sakakibara’s parents told him to, “Do as you please.”

What pleases Sakakibara is helping Japanese to entrepreneur in the samurai tradition. He’s built an army of samurai gundan − young entrepreneurs following the samurai spirit and traditions, to launch start-up companies on shoestring budgets. His company, Samurai Incubate Inc., was among the first incubation / accelerators to establish itself in Japan. Incubator / accelerators provide mentoring, workspace, camaraderie and financing to budding young Internet entrepreneurs.

Sakakibara got the start-up bug in 2000, just as the Internet started to boom. He was 25 years old when he joined his four friends in Axiv.com, the e-commerce Internet start-up they founded.

Unfortunately, Sakakibara was the last among them to join, so he received the least attractive buy-in terms. When the firm was flipped to CyberAgent a year and a half later, his friends walked away with millions. Sakakibara was left holding worthless share options.

Without regrets, the budding samurai leader marched on….

Sakakibara worked in advertising for a time after the sale and then returned to Axiv.com where he earned good money. By 2008, he had saved enough to strike out on his own.

Original Residents of Samurai House

Original Residents of Samurai House

The company he then founded, Samurai Incubate, supported entrepreneurs. At first Sakakibara helped his samurai clients with their online sales and marketing. But they kept asking for more services. They needed office space and a home to live too. To better address their needs, Sakakibara rented a small house in East Tokyo where twenty entrepreneurs could work and live. It became known as “Samurai House.”

Young samurai also need seed capital. So in the summer of 2009, with ¥51.5 million in capital (about half $1 million) raised from Axiv.com, Sakakibara formed Samurai Incubate’s first investment fund. That fund has already returned ten times invested amounts.

Today Samurai Incubate manages ¥543 million (about $5.7 million) of investment capital spread across four funds. Sixty start-ups have received funding to date, each typically in the range of ¥4 million – ¥5 million (roughly $40k – $50k).

Samurai Incubate may not be the largest incubator in Japan nor offer the most financing, but they are hugely popular among entrepreneurs. One reason for the appeal is the 200 events held at Samurai Startup Island each year, the Shinagawa workspace Sakakibara set up in late 2011. Event topics include, “How to collaborate with big companies”, “How to raise investment capital” and so forth. As soon as Sakakibara identifies a new issue facing the start-up community, he organizes a new event around the topic.

Entrepreneurs who receive funding are not just investees, they join the ranks of gundan − a regiment of samurai fighters. There are currently four gundans, one for each fund. Each gundan is a self-contained community. Samurai entrepreneurs within each gundan share ideas, helping one another to pivot out of harm’s way on the new venture battlefield.

An entrepreneur need not be selected to the ranks of gundan to join Samurai Startup Island’s community. “All samurai are welcome to Samurai Startup Island,” says Sakakibara. “I think all start-up entrepreneurs in Japan are samurai.”

Besides the charismatic personality of its founder, perhaps the single biggest reason for Sakakibara’s popularity is his philosophy on entrepreneurship. Following an ancestral tradition to preserve Japanese culture, Sakakibara aims to pass samurai values onto future generations. Those values include gi (honor), rei (etiquette), yu (courage), yo (praise), jin (considerateness), sei (integrity), chu (loyalty) and cho (challenge). The most important samurai value, according to Sakakibara, is sei − meaning integrity or to keep one’s word.

Sakakibara’s samurai spirit is contagious. Not only is he popular among entrepreneurs, but corporate investors are also jumping on the bandwagon. Samurai Incubate’s fourth and most recent fund includes a number of large, well known entities seeking not just a return on investment, but a return to cherished values.

Kentar0 Sakakibara

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