Innovator-mentor

Innovator-mentor

Serial entrepreneur Taizo Son talks about funding startups, inspiring others to act on their good ideas and transforming education. By Vikram Khanna in Singapore

Taizo Son vividly remembers one of his earliest introductions to the wonders of the internet. As a college student in the early 1990s, he met Jerry Yang, one of the founders of Yahoo.

He recalls: "At the time, even in Silicon Valley, the search engine was very new. It was difficult to explain what a search engine is. Jerry explained it with a beautiful metaphor: 'Yahoo is something that will make the apple fall down in front of the future Newton.'

"He predicted that every kind of human knowledge, wisdom and intelligence will be uploaded to the internet. But without a search engine, we can't get the correct information.

"I was 22. I was so inspired. I thought, 'Wow this is exciting! I should definitely contribute to this project.' So I said to him, 'I would like to create a Japanese version of Yahoo'."

He did just that, within three months, and Yahoo Japan -- a separate company from the US business -- went on to become Japan's top search engine, ahead of even Google. Ever since, Mr Son has been scouring the world for future Newtons, Einsteins and Edisons, and funding their dreams.

One of the sources of his fortune was the online gaming company GungHo Online Entertainment, which he founded in 2002. Its main product, Puzzles and Dragons, became the world's top-grossing application on both iOS and Android and made him a billionaire.

Mr Son is the youngest brother of Masayoshi Son, the founder of the Japanese internet giant SoftBank.

Like his brother, Taizo is a serial entrepreneur who has founded, seeded or mentored hundreds of startups, and has a fascination for technology.

"Technology is the source of innovation," he says. "If we could solve problems by logical thinking, there are so many smart, logical people in the world, so they will solve those problems -- or have already solved them. The remaining problems will not be solved by logical thinking. We need out-of-the-box solutions. In most cases, those solutions will come from new technologies."

In April 2017, Mr Son decided to move to Singapore. There's a story behind why he did so. He explains: "For the last 20 years, as a serial entrepreneur I have been engaged in the IT industry and I have witnessed a lot of innovation. But I dare to say that the next five years will be the most exciting that we will experience.

"There will be very drastic changes in everything. Because artificial intelligence technology is coming, robotics is coming, biotechnology. ... All kinds of technologies are making great innovations, disrupting each other and accelerating the development of each other.

"For the last two decades the internet was for the PC and the smartphone. But now, IoT (the Internet of Things) is coming and everything will be connected to the internet. So the innovations will go out from the screen and everything will be affected -- the way of working, education, healthcare, farming -- everything will be changed.

"I was born in Japan and I spent most of my time in Japan. And Japan is a good country, it has a good culture and technology and sophisticated people. But the country is ageing, the population is decreasing and there are many stakeholders and legacies. That's why Japan cannot change regulations, rules and laws in such a short period of time.

"But today's new technologies are very disruptive, and some of the technologies are facing the obstacles of today's regulations.

"When I came to Singapore, I shared some of these ideas at a keynote speech. Some Singapore government people came to me after that and told me, 'Taizo-san this is a very exciting idea -- we are also thinking of similar ideas. So why don't we get together and make it happen?'

"I said, 'Are you sure? I think it's very difficult to change laws and regulations in a short period of time.' 'We will do it,' they said. 'We are heading for a smart nation. We have to innovate, we have to take the lead.'

"So I felt that they have an entrepreneurial mindset. So I shared that if they could have regulatory sandboxes, we can do everything. Then we can make a showcase -- this is the future of the city, this is the future of healthcare, education, farming, manufacturing. They said, 'Let's do it.' That's why I came to Singapore."

HUMANIST VISION

Mr Son is especially attracted to companies that have a social and humanitarian mission. For example, he has provided seed funding for a company called Astroscale, whose business is to remove space debris surrounding the earth. Earlier this year, he invested in an incubator for startups to upgrade farming and reduce food waste in India.

In choosing which startups to support, Mr Son can afford to be both more daring and patient than most.

"We are not venture capitalists," he explains. "We don't have partners. All the capital is my individual money from capital gains made over the last 20 years as an entrepreneur.

"So we don't have to pay back investors. That's why I have a completely free hand to choose what companies to invest in. I am not focusing on market trends or technology trends. I am focusing on the impact of the investment.

"Healthcare is very important to everybody. Updating the food supply chain, especially for developing countries like India, Africa and so on. Also education, new city design, new energy ... those kinds of things are our focus."

One of the ventures he is most proud of is Zipline, an ambulance service that uses drones to carry blood and vaccines to remote areas. It's been deployed in Rwanda, where conflict has destroyed many roads and railways. "Carrying blood and vaccines via a regular ambulance would take four hours. But with this drone it takes just 15 minutes. The cost of delivery is less than US$4 for five kilogrammes and it can fly for 100 kilometres. ... They are saving lives every day in Rwanda."

He sees a future for Zipline in many places, including Southeast Asia, where a vast archipelago such as Indonesia could benefit from a low-cost logistics solution.

BUSINESS PLANS 'OBSOLETE'

Mr Son takes a radically different approach to assessing companies compared with conventional investors.

"I strongly feel as an investor and an entrepreneur that we don't need a business plan at all," he says. "In the 20th century we needed a business plan. We needed a schedule, milestones and so on. But in the 21st century we don't need it any more. It hurts us."

Business plans are obsolete, he says, because the environment has changed. "Thanks to the internet, thanks to the social media, all information, good and bad, will be transmitted to the world very quickly, almost in real time. We can't predict the side effects or the butterfly effects. For example, these days, crowdfunding is popular. If someone has a good project, many people will support it. Within a day or two they can raise money from all over the world.

"There are also so many non-profit activities in the world. And especially the millennial generation is very keen on those kinds of things. Kickstarter from America, or Slush, which is a startup movement from Helsinki -- those kinds of movements are growing very quickly.

We can't predict those kinds of phenomena.

"When those information platforms did not exist, we had to pay to get the resources we needed. That's why we needed a business plan. But these days, if we want to get resources, we can approach crowdfunding platforms if it is about money, or we can approach social media if it is voluntary power. Or we can write a blog, which is transmitted through social media.

"So the way to collect resources has totally changed. That's why now, the business plan is nothing."

So if Mr Son does not look at business plans, what does he look for when evaluating a potential investment?

"We are looking for the passion of the founders and whether they have a good team. We look only at the people. Because most startups, most entrepreneurs will fail -- maybe 99 percent.

"But if the founders have great passion -- for example, if they say, 'I am okay if I spend the whole of my life pursuing this mission, I am happy' -- those kinds of guys will never give up."

And how does he gauge someone's passion? "I always ask questions," says Mr Son. "Why are you doing this, and how? But 'why' is the most important.

"If entrepreneurs have a strong motivation, especially a personal reason -- for example, if they say something like 'I loved my grandmother, but she died because of this disease, but if we could have this medical technology she would still be alive, that's why I pursue this mission', then his motivation is very strong, he will never give up. But if the motivation is 'I'd like to be rich, or I'd like to be famous' -- eventually they will give up."

Mr Son has learned a lot from spending time with young entrepreneurs.

"In the beginning, I was teaching them. I would say, 'Hey, why don't you make a business plan like this? Why don't you talk with potential investors, Why don't you hire a good team, and so on.' I also invited senior entrepreneurs to teach them.

"To some extent, it was effective. But what we found very interesting was that after the lecture, almost every week, we had a pizza party. And in the pizza party, the young entrepreneurs would exchange ideas and information with each other.

"After one year, I asked them what part of the programme was best for them. And all of them said, 'The pizza party'."

For Mr Son, the takeaway from that experience was that lessons from seniors are of limited validity for young entrepreneurs. "We are too far from them, so they can't really learn from us. Also, the lessons we learned are a bit older ... the situation is always changing. So letting young entrepreneurs stimulate each other and be role models for each other -- that is helpful, that is what fosters an ecosystem for innovation.

"So building a community is important, and the community members should be diverse. Not only entrepreneurs but all kinds of people -- investors, researchers, media guys, some big company guys, governors, artists. And then, if someone shares an interesting idea, diverse people will give diverse opinions, which stimulates innovators."

Singapore already has a good ecosystem for innovation, he says. "But I want to enrich it more. That is why I will bring some very interesting guys from around the world to come here."

TRANSFORMING EDUCATION

As a teacher and mentor, Mr Son believes that education must change, starting from the primary level. He relates his personal experience: "I have a boy, and my wife is always wondering which school we should send him to. We visited a lot of schools -- in Japan, in the US and in Singapore. Of course, there are many good schools." But still, he found that something wasn't quite right.

"The teachers are giving lectures and students are, in a way, passive. When we look at today's education system and when I look back to when I was young, 30-40 years ago, it's almost the same. Some of the curriculum is very interesting, but some is very boring. The education system has not been updated."

Dramatic developments in technology call for a different approach to education, he suggests.

"AI and robotics are coming and they will replace our jobs. I am very worried that the speed at which AI and robotics are developing is much faster than expected. We, as a society, cannot shift to the new paradigm quickly. We will struggle. Eventually people will shift to the new paradigm. But robots are very productive. They don't go on strike, they don't get tired, they don't sleep, they cost less. So people will struggle to get new jobs; we need to retrain.

"The existing, traditional education system is based on memorising knowledge. But AI and robots are much better at memorising. So I strongly feel we must update the education system as quickly as possible."

Educators have pointed out that the 21st century needs four key skills -- the "four Cs": creativity, critical thinking, communication skills and cooperation skills.

"But today's school system, classroom system, lecture system, are not designed to foster those skills, because teachers teach and students are passive. It's the total opposite of creativity.

"Teachers should shift to becoming mentors or facilitators. We should provide a self-directed learning environment. If we do that, the students will talk to each other, support each other, learn from each other -- like in the pizza party."

Mr Son has put some of his ideas into practice. In early 2017, he started a trial in Tokyo. He set up a room equipped with all kinds of creative tools such as 3D printers, laser cutters, 3D scanners, powerful computers and mechanical tools. Youngsters can come in after school for free.

They pitch ideas such as "I'd like to invent a new car", or "I'd like to make a robot". There are supervisors to help them, including experts in hardware engineering, software and design.

"Just six months have passed since we started and we have seen some amazing results," says Mr Son. "A nine-year-old boy developed a very intelligent smart robot by himself. We didn't teach anything. He just started to Google and watched many YouTube videos on how to build robots. And his idea was original, so we supported it and brushed it up. Finally he made it, and it was amazing.

"Another case was a young girl, 10 years old. She pitched to us that she would like to do animation and she sketched the characters. We scanned and printed them using 3D printers. Then she created plastic models and embedded bones into them, using pieces of metal. So she made it possible for her creations to move their hands, legs and necks. Then she designed a user interface. It was original, high-quality animation.

"Now, the boy who developed the robot has started learning AI by himself, because he wants to put AI into his robot. And the girl has started learning how to make animation like Pixar and Disney and is planning to develop a storyboard application.

"On the first day, we had zero members. Within six months we had 220 -- kids mostly 9 to 12 years old. We didn't teach them. We call it self-directed learning." And it works, he says.

"If we ignite kids' curiosity and motivation, they will never stop."

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