Joi Ito's Web

Joi Ito's conversation with the living web.

Dagny And Joi Ito Get Jiggy Wid It
Yesterday Larry asked me if I could go to a Creative Commons party with him. "Sure!" I said. "Hamlet Linden has the details. It's at 1PM in Second Life." I showed up in Second Life around 1:30PM and messaged Hamlet who teleported me to a beautiful tree house. Everyone was in kilts dancing. I clicked the play button on the music and my room was filled with the music they were dancing to. I was looking kind of drab in my semi-default gear, so I was quickly handed a kilt. Then I clicked the dance ball and I was dancing around with the rest of them. Soon Larry arrived and talked to everyone about Creative Commons. It was great meeting all of our new friends in such a beautiful place.

See Hamlet Linden's blog for a better post about this party.

Also:

Thanks to all who helped contribute a total of L$37,178 to the Creative Commons donation box provided by Pathfinder Linden. All funds are transferred to Lawrence Lessig's Second Life account, and from there sold and converted into US$ that are deposited directly to Creative Commons' official PayPal account. More events to benefit CC will be planned this Wednesday and Saturday; join the Free Culture group to get involved!
Yay! Thanks!

The Live Door thing is dragging the whole Tokyo Stock Exchange down, but there is particularly high impact on IT companies. I'm sitting in a cab right now talking to the cab driver and he's now convinced that all Internet and IT companies are run by scoundrels. "I knew all of this new economy stuff was bullshit," he says. It will be interesting to see what the long term repercussions will be on our industry. On the other hand, we recovered from the Hikari Tsushin collapse so I'm sure we'll recover from this.

Last night all TV channels were running "specials" of Horie and his rise to fame and his recent troubles. The newspapers and TV reports were so amazingly detailed you might think they had been preparing these shows for months. The shows remind me of the scenes in movies where the mob throws vegetables and jeer at the accused during public hangings. This swing from hero to villain is a common thing in Japan. However, I think Horie pissed off more than the usual share of big-shots so he's got a number of powerful constituents fueling the flames. Regardless of his guilt or innocence, I find this public flogging and mob jeering rather disgusting.

My wise attorney in Japan always tells me to try to stay out of the press. There is an old saying in Japan that the press always get to use you twice. They write about you to push you up and they write about you to tear you down. This is clearly the case with Horie.

Things Horie has said in his book and on his blog are being featured prominently in the media. In his book, Horie makes some strong statements. He says that money can buy anything and also talks about cutting chonmage (the samurai hair knots). Both of these statements are stupid and provocative statements in my personal opinion. Note to self: be careful about what you write and say.

This also reminds me of various other public figures that I've known in Japan. I used to work closely with chairman Shima of NHK (the national broadcasting company) and watched as he rose to fame and gained a sense that he was running Japan. I remember being in his office watching a Diet meeting. He grabbed the phone and called someone and told him, "I TOLD so-and-so not to say it that way!" and slammed the phone down. He also regularly told foreign heads of state that he ran Japan. However, when he decided to take on the ruling party and try to make the public broadcasting independent of government control, he was smacked down hard and fast by the LDP. (NHK's budget requires approval by the Diet which is controlled by the LDP.) Ousted with a minor scandal, I remember going to the funeral of his son shortly after his ejection from NHK. The company had ordered former co-workers at NHK not to attended his funeral. Mr. Shima passed away several years later lonely and completely powerless.

There is a long list of people who have been hyped and then smacked down by the media. I would say that those who piss off the media and the ruling party seem to get smacked down the hardest. I know a number of people who have fallen with various scandals, but have rebounded several years later. Many people who were smeared with the Recruit scandal years ago are now back in play.

My advice to people who are thinking of becoming public figures in Japan:

1) Manage media exposure - Take breaks from media appearances and be wary of articles that want to make you look better than you really are. Try to get out from under labels that at first glance may appear flattering but could piss people off or make you look stupid.

2) Don't believe the hype - Obvious point, but EVERYONE seems to get a dose of invincibility madness when the get glowing press and get shuttled around in motorcades. This madness is the weakness that will be exploited.

3) Don't say or do ANYTHING that might be used to tear you down - Japan (not only Japan) is full of situations where people break the law because everyone else does it. Sometimes it feels like securities and corporate statute are at the level of traffic laws - things that can be ignored as long as you don't get caught. The problem is, just because everyone else is doing it, it doesn't mean it won't be used against you. Especially if you are going to take on the establishment, you have to keep yourself squeaky clean.

4) Don't piss people off for fun - There are plenty of situations where people will get pissed off with what you do. There is no point in pissing people off on purpose. Resist the urge.

Just watching the news. The CEO of Life Live Door and 3 others have been arrested. The TV is flooded with this news.

I spent part of the day today in court. I was defending myself against the landlord of a friend of mine who has been unable to pay rent. I am the guarantor on the lease and the landlord has decided to come after me for the money. This is probably the fifth time that I've had debt collectors of various sorts come after me because of guarantees that I've made. I'm sure people wonder why the hell I keep guaranteeing things. The odd thing is that it is so common in Japan. It is as good as required for any significant transaction such as renting an apartment or borrowing money from a bank. Even government affiliated loans require personal guarantees by people other than the principles.

My first experience with these guarantees was back when I was just starting to work in Japan over 15 years ago. I signed a document that listed a transaction breakdown between two affiliated companies. I thought I was a witness. Later, when one of the companies closed down, the other company (owned by the same parent company) came after me as the guarantor of the transaction. I quickly learned what "to guarantee" means and ended up having to pay.

Since then, briefly as the headmaster of a small school, as the CEO of various companies and the friend of people starting companies, I've been asked to and have signed as guarantors for various contracts. The really horrible thing about this Meiji era practice is that it is so common. People seem to think nothing of asking for it and without it it is almost impossible to function. I've spoken with various people in government and business about the damage that this system causes and most people agree. However, I don't see any changes.

When Digital Garage was still not public, the bank required the two founders including myself to guarantee all loans. At one point I had millions of dollars of guarantees outstanding. The crazy thing was that the bank made me sign a "and all lines of credit in the future" form. Even after I left Digital Garage to be chairman of Infoseek Japan, I was still a guarantor for Digital Garage and was only released at the IPO.

One of my portfolio companies failed several years ago. As the lead investor, I went around to the other investors and explained the situation. Two of the other investors asked me to PERSONALLY cover their loss. Both of these companies were public Japanese companies. I didn't pay of course, but they seemed to think that it would have been nifty if I had. I've never heard of such a thing happening in the US.

As I blogged before, this is a major source of suicides since bankruptcies cause a cascading serious of bankruptcies to friends and family. The shame often drives entrepreneurs to suicide. It is no wonder that entrepreneurship isn't very popular in Japan.

Anyway, I was reflecting on this and remembered that this was on my list of "one of the things we need to change here" as I sat before the judge trying to defend a case that I know I have no chance of winning.