International -- The Stars of Asia -- Entrepreneurs and Dealmakers
Hiroshi Mikitani (int'l edition)
CEO -- Rakuten Inc. -- Japan
Hiroshi Mikitani, 35, was an early convert to the Web. Five years ago, he left a promising career as an investment banker to set up his own Internet consulting firm, serving clients such as Softbank Corp. Then, in 1997, he launched Rakuten, the first cybermall in Japan to offer retailers a low-cost way to reach consumers on the Internet. With the Japanese economy in decline, it looked like the worst possible time to launch an online retail venture. But Mikitani saw only opportunity: "I knew that the Internet would eventually take off in Japan, and I wanted to be a part of it."
Turns out he was right. Rakuten ranks as the largest and most popular shopping destination on the Japanese-language Web. And Mikitani is one of the brightest stars to emerge on Japan's fledgling Internet stage. Millions of consumers log on daily to the electronic marketplace to buy everything from fresh fish to insurance to toys from stores that don't have the money or inclination to set up their own network and operate a Web site. In April, when Mikitani took Rakuten public on Jasdaq, Tokyo's over-the-counter market, it was the most successful debut by a Net company in Japan this year. Rakuten, which is 50%-owned by Mikitani and his family, raised $430 million in the offering. The company's market cap has since soared to $6 billion. Many of Japan's other newly listed e-ventures, by contrast, have seen their share prices plummet during the recent sell-off in technology stocks.
Mikitani, who dresses casually in polo shirts and khaki pants, has an easygoing manner. But don't be fooled: He's a workaholic driven by ambition. With his wife at his side, he works 15 hour days, often six days a week. And apart from the occasional round of golf, he has no hobbies. His aim is to create Asia's biggest consumer shopping and trading destination. He's managed to build up Rakuten from 13 vendors to more than 3,100, who all pay him a monthly fee. The site attracts some 70 million page views a month, second only to Softbank's portal, Yahoo! Japan. Operating profit in the first three months of this year reached $1.9 million on sales of $4 million, nearly reaching the total of Rakuten's profits and sales in the whole year of 1999.
If not for a stint at Harvard Business School, where he earned an MBA in 1993, Mikitani might still be an investment banker at the staid Industrial Bank of Japan. During his bank-sponsored years at Harvard, he learned about the challenges of running a business and took note of the rise of Net startups in Silicon Valley. Mikitani was shaped by U.S. culture well before his Harvard days. As a child, he lived for two years in New Haven, Conn., where his economist father taught at Yale University.
Upon graduation from Harvard, Mikitani returned to the IBJ where he worked for two years and saved enough to launch Crimson Group, a merger-and-acquisition consulting company he still operates today. In 1997, he plowed his savings into Rakuten, which so far has remained debt-free. "I wanted to set up a real Internet business, a model for other startups in Japan to follow," says Mikitani. He's on his way.