Venture business in USA

JECK Member Isao Ishiguro

1.Histrical background
I had been engaged in US IT business from December 1994 to April 2010. During the 15 years, I had been working at NEC's US subsidiary company for the first 5 years, and then at my own company (K&I International Inc.) for the next 10 years. In those days, main frame for which IBM had been dominating was declining and open system like Server and PC has emerged in order to build system. As the result, 1'st generation of ventures such as Microsoft, HP, Sun, Apple, CISCO, Oracle established their firm positions.
Subsequently, Internet technology has been developed in 1990s, and influenced significantly to Culture and Business after mid of 1990s. Many new ventures were born in the field. I am writing in this paper "the venture business in USA" based on my experiencs of joint-working with some US ventures of those days.

2. Joint working with US ventures
Our company was set up in January 2000 and worked at New York office (and Tokyo office in last 4 years). Our business was focused on business development of US ventures in Japan, entrusted software development and engineer dispathing for both of US and Japan companies, and publishing US IT report.
As for business development, we had worked together with the follwoing companies. I describes the works of those days and their current status. Most of ventures utilize VC (venture capital) funds. VC investments are clasified in early stage (called agenles), mid-stage and late-stage, and there are specific VCs in each stage. Ventures' final goals (exit program) have been listed or purchased by large company. Most of our parners were introduced from VCs and ventures network.

(1) Nexidia Inc. (Atlanta) It is voice recognition company. Since USA Patriot Act was enforced in 2001 (partially prolonged in 2011, expired in 2015) and government's related budgets largely increased in security field after 9.11 tero attack, it was rapidly expanding due to the money. It provides voice recognitions of 10 and more countries, which are applyed to wire tapping in telephone network. At that time, they were developing private sector business (contact cener) and received 2'nd phased VC fund. It was the first partner for us and fortuantely NEC's telephone switching system group was in charge of distributor. Our company worked for developments of related application and Japanese version voice dictionary. It was acquired by NICE, a large company related to contact center.

(2) iWay Software Inc. (New York)
It is owner company, and provides adapters to connect different sytems like IBM and SAP and integration solution to administrate the adapters. It was already mid-size company with office in the center of Manhattan and 700 employees. K.K.Ashisuto was a sole agent and our company was a sales agent in Japan. And, Hitachi and NEC were customers. It is still doing steady business at the present time.

(3) CAMINUS Corporation (New York)
It is a total solution vender related to energy. As electricity has been deregulated in US and UK, power generation, transmission and sales are managed separately. And, power is dealt in the market between power generations and sales or sold directly to big customers, then transmitted through power cable to sales companies or customers in such a manner as destination control by minutes (pipeline). CAMINUS developed the design of UK market system and provides total solution. We had been working for the business development in Japan by utilizing connection to the president who had been EVP of the counter partner company when NEC set up Joint ventures. At that time, the expectation for power deregulation was rising in Japan. Mitsubishi trading company which had subsidiary power generation company was interested in the company and joint working with us. However, since full deregulation was not achieved at that time, we failed in introduciton of the solutions to Japan. It is listed in NASDAQ.

(4) Media Publisher Inc. (California Berkley)
Video publishing vender by using multi-streaming technology. Enterprise information managemnet system which is constructed based on video began to grow in USA. We made Japanesization and aproached to NEC, Sony and CTC. But, the system (video information transfer and education from exectives and staffs to employees and outside persons) was too early for Japan at that time. We cannot find the name at the present, but it might have been acquired by some big firm because there were a rumor then that it might be.

(5) Time Cruiser Computing Corporation (New Jersey)
It is eCampus solution vender which supports school administrations such as notifying course & time schedule of class, executing home study and tuition payment, and began to be popular in USA. We introduced it to NEC, Benesse but it was too early in Japanese market. We can find the name of Campus Crusing in the same New Jersey town, then it might be a successer.

(6) Yellow Dragon Software Inc. (Canada Vancouver)
In those days, there was big boom related to eBusiness (B to B EC (electronic commerce)) solutions. United nations (UN/CEFACT) had been developing the standard spec named ebXML. The team spined out and developed XML based eBusiness platform. iWay Software had been marketing on OEM base. We introduced it to NEC, NTT Data and Mitsubishi electronic. But not sucessful. It was acquired by Adobe Systems in 2003.

(7) eQuanxi Inc. (California Palo Alto)
It was early staged eBusiness platform vender whose development center was placed in HongKong. Itochu trading company was intersted in it in either way of deistribution and VC investment. But, it was not achieved. The name cannot be found at the present.

(8) Group Intelligence Inc. (New York)
I was asked to support the person for start-up of B to B information exchange site business, who had succeeded in middleware software business in the past and had a contact with me in the time of NEC. I introduced a few Japanese VCs, but not successful to find any VC who was interested in start up company. It had been developing by their self fund. The name cannot be found at this moment.

As described above, we had worked for a variety of ventures covering from start up to fully completed one. Most of them have gained success in USA, but almost nothing in Japan. The reasons are analysed as follows.
(1) As for some business, they were too early for Japanese market.
(2) Japanese big companies tend to be prudent for ventures and avoid the risks. But. on the contrary, this means that tackles for new technologies and business models were delayed. And, it seems to be the reason that Japanese IT industry has been loosing competitiveness in the world.
(3) Japanese big companies tend to prefer self-development to finsihed package products. I had deep impression in my experience of Sumitomo Bank's New York development, which was full banking sytem by connecting some different venders' packages (deposit/money transfer, loan and accounting) by middleware. In Japan, full banking system is self-developed by hudreds human power. (although scale like customer numbers and transaction volume is much different).

3. California vs New York
I had stayed in California for the first 4 years and then in New York for the next 10 years. Therefore, I would like to explain lives apart from works. In California, office was located in San Jose (center of silicon valley) and home is Cupertino (the town of Apple head office). Office was adjacent to Cisco head office, and suprising because their buildings (2 story) had been constructured newly by 2 ~ 3 every year. House was built alongside the rotary where 10 or more houses were standing. These houses formed one community (address is assigned along the road (avenue, street)) and some races were mixed there. And, English education was very poplar because of a lot of immigrants. There are Public college (community college) in each city and everybody can enter if they graduate senior high school in not only US but also abroad, and choose any subjects. College has ESL (English Secondary Language, English secondary persons) course and general course, and easy to transfer from ESL to general when graduate ESL. This is wondeful culture of California, free and open mind.
After that, we moved to New York. Office was located in World Trading Center, used to be, for the 1'st year (time of NEC) and nearby Empire Estate Buiding for the next 9 years. I rememberd that it was hard to smoke due to high story building. House was apartmnet located in Manhattan for 1 year and then in New Jersey. So that, we had not so much time to share with neighbors in apartment, but with Japanese group. Associations with American were mainly at works. However, they were busy in business and not so much relaxed. It might have been goodness of New York.
It is said in USA that No.1 graduate of University sets up venture and N0.2,3 work in venture management. It was quite honored for me to have worked with such excellent persons and shared exciting time.