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Letter from Japan: Hats Off
Here's to a little guy who made it big
By PETER McKILLOP
November 10, 1999
Web posted at 8:30 a.m. Hong Kong time, 7:30 p.m. EDT
To celebrate the landmark antimonopoly ruling against Microsoft, Asia Buzz officially declares today, Nov. 10, "Promote the Little Guy Day."
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The first recipient of this annual award is Tokyo-based Net entrepreneur, Terry Lloyd, a 42-year-old New Zealander who is actually making some headway as one of Japan's first Internet pioneers. For 16 years he has toiled on the fringes of Japan's computer industry overcoming barriers of language, technology and culture.
Now Lloyd's patient pursuit of wealth and glory is beginning to pay off. In September, the venture capital firm J.H. Whitney pumped $6 million in startup capital into Lloyd's company, LINC Media, to help fund four operating businesses. Next year, he plans to launch not one but four IPOs. One of them, Dai-job.com, a online job recruitment site, could muster a market cap of more than $200 million, if the company is judged by U.S. Internet valuations.
What kept Lloyd afloat all these years has been a fount of great ideas, an ability to forecast trends in Japan's developing technology marketplace, a lot of patience and a bit of luck.
Lloyd came to Japan for the same reason so many foreigners do--that is, to take advantage of the lucrative trade in developing interactive operating systems, which in pre-Microsoft days meant being an English translator. With the heart of an entrepreneur but the bank account of student, Lloyd went out on his own in 1983 by maxing out his Visa card. That was just enough money for a plane ride to Hong Kong, where he cut a deal with a local computer manufacturer to distribute foreign-language computers in Japan. Today, with Dell Direct, anyone can easily buy a computer in Japan with a foreign-language operating system. In the mid-1980s, it was virtually impossible.
Finding that niche allowed Lloyd to make a very modest fortune as foreign corporations snapped up the inexpensive desktops. By 1990, Lloyd spotted a new trend. His clients now needed someone to manage all those computers they had been buying from him. So he started what was probably Japan's first outsourced computer and network maintenance company. He kept costs down by recruiting 70 eager engineers from India. His client list was soon bulging and read like a "Who's Who" of foreign multinationals. In 1995, he sold this business to EDS, the computing consulting giant.
With the money he received from EDS, Lloyd founded Computing Japan, Japan's first English computer magazine. And, as anyone who has started a magazine knows, the burn rate for this small venture is deadly. It almost bankrupted Lloyd. Barely surviving that investment, he rode the Internet wave in Japan by building websites and managing computer systems. He also used his magazine to develop one of Japan's first Internet communities. It was not easy. Financing was almost impossible to acquire because he was a foreigner.
This year, Lloyd's world took a dramatic change for the better. "Suddenly, being a foreigner in Japan went from being a negative to a positive," he said recently over a lunch of Italian pasta. Foreigners looking to exploit the Internet in Japan started calling. China.com purchased his Web-design operation. Softbank's ZDNet made Dai-job.com a key content provider. And in May, Lloyd reached the agreement with Whitney. Lloyd's Tokyo offices are now bustling with new employees and fresh Dell servers to oversee his rapidly expanding multimedia company.
In Internet investor-speak, Lloyd's "angel" Whitney has provided capital that is being used to help him develop a series of "sticky" Internet portals that he thinks will position the company well for what bank analysts are predicting will be an Internet tsunami of new investment in 2000. Lloyd has used the network created by his magazine (now renamed J@pan.inc) to launch a business portal called J@paninc.net, an online stable of independent business consultants who will seek to facilitate the development of new Internet initiatives.
"We're building a community to affect change," said Lloyd. "Everyone says to me there are no entrepreneurs in Japan. That simply is not true. There are dozens of young Japanese men and women fresh out of American business schools who can't wait to start their own dot-com. And all you really need are 50 to 100 entrepreneurs to get the market going."
With more than 160 million people in Japan, it's a pretty good bet that Lloyd is onto something when he says there are at least 100 potential serious Net ventures in Japan. That's why every major global investment bank is scouring the country for new business opportunities. Having the "gaijin-friendly" resources of LINC Media is proving very useful. It's something Lloyd believes will also make him very rich.
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