From Livin’ On the Edge to Livedoor

Takafumi Horie, CEO

TJ Exclusive Interview by Anthony Al-Jamie

As I sat across from a man younger than I, I thought to myself what makes Takafumi Horie special? Out of the millions of IT venture companies and young entrepreneurs driving these companies, why is it that Livedoor and Horie made it to the top and avoided all of the pitfalls that destroyed the thousands of dot coms? Is it confidence? Arrogance? Sheer luck? I just couldn't put my finger on it. What is it that makes Horie successful and at such a young age how did he become one of the most controversial and leading-edge figures in Japan's competitive business arena? After several minutes of speaking with him, and he revealing very little information, I realized just what it was that makes Takafumi Horie special: Strategy. He always has a strategy and he always keeps that strategy a secret until he is ready to unveil it in front of the entire country. I realized that like Mikitani from Rakuten and Son from Softbank, Takafumi Horie has a secret strategy behind everything he does.

One would naturally assume that Horie was defeated when Livedoor lost the bid for a baseball team while two bigger Net companies, Rakuten Inc. and Softbank Corp., succeeded. When Livedoor first entered their bid, many from the traditional side of Japanese business were wondering who this unknown was that refused to don the corporate uniform and attended meetings casually clad in a t-shirt and jeans as opposed to the customary suit and tie. Although Horie did not win the bid for a baseball team, he wound up with something much more valuable: free PR through a nation-wide media blitz that helped put Livedoor on the map. Most any marketing strategist will agree that free media coverage is an excellent marketing maneuver if you can do it. Japanese consumers loved Horie’s courage and determination when he took on the Old Boy’s Club of baseball, and then were sympathetic when he lost out. Now, “Horiemon” has become a celebrity with regular appearances on TV game shows, a model for a girlfriend, a chic office on the top floor of Roppongi Hills, and five best-selling books with such ambitious Trump-esque titles as “How to Make 10 Billion Yen” and “The One Who Makes Money Wins”.

How effective was the baseball team bid strategy? Hiroshi Kamide, an analyst at KBS Securities in Tokyo stated, "Livedoor never really had a chance of winning the baseball franchise, but from a publicity standpoint they were 100% right to do it." Livedoor’s profits at the year ended Sept. 30th, 2004 quadrupled to $54 million, sales increased by 185% to $294 million and according to Net Ratings Japan, livedoor.com was the second-fastest growing website in Japan in 2004.

Then in February 2005, Horie made top story news again when he bought many of his Nippon Broadcasting System (NBS) shares in after-hours deals. Livedoor bought 40% of NBS for $500 million, - a highly aggressive strategy which could have allowed Horie to build a stronghold in radio, television and newspapers via NBS’s holdings in other companies. This time it ended with Livedoor getting paid and many would say that once again his strategy was successful. In this case the strategy resulted in raising more than a few eyebrows mostly from those who agreed with him from a legal standpoint but ethically may have found his strategy to be too aggressive.  Nonetheless, he remained in the public eye with television appearances and front page newspaper coverage. 

The bottomline is, Livedoor is booming. Livedoor offers web hosting, an Internet auction site, DVD rentals, and online securities trading, as well as a venture-capital investment arm, an IT consulting business, and a mobile-phone-software developer. All of this from a 32-year old entrepreneur born in Fukuoka who dropped out from the prestigious University of Tokyo to start his first company originally called“Livin’ on the Edge” in 1996. Even in this early part of his career, you could see Horie’s cutting-edge strategy by using an out of the ordinary name. Less than four years later Horie took his company public on the Tokyo Stock Exchange Mothers Board and in February 2004, through an acquisition he changed the company name to Livedoor. The company now has one of the fastest growing internet portals in Japan.

Horie’s advice for being a successful entrepreneur is in line with how he started in business.

TJ: What is your advice for those wishing to begin their career as an entrepreneur?
Horie:  Get going soon. Start as fast as you possibly can.

TJ: You’re still quite young.  Do you think you will you continue to improve in business over the years?
Horie: No. I’m past my prime. I was in my prime when I was 20

TJ: Did you say you were in your prime when you were 20?  I always thought that men were in the prime of their business career when they are in their 40s.
Horie: No.  Men are in their prime when they are 18, 19, or 20.  That’s the best time to get started.  The younger, the better.

TJ: That’s surprising.  Do you feel this is unique to you or do you believe that this applies to people in general?
Horie:  All business people hit their peak when they are 20 or even 19.

It’s hard to believe Horie could be past his prime. Livedoor made 20 acquisitions in 2004, including an online travel agent, an accounting-software company, and a Shanghai-based Internet portal. A horse racetrack may be on the horizon as well. Although criticized by some for having a scattered strategy which can be seen by Livedoor’s diverse portfolio, Horie insists there is good reasoning behind all of his acquisitions. In January 2005, Livedoor announced plans to launch an online bank with Saikyo Bank Ltd., which will help Livedoor establish an online settlement system for its auction and shopping services. The strategy behind November 2004’s $22 million acquisition of accounting software house Yayoi Co., can be largely attributed to the ability to acquire Yayoi's 400,000 small and midsize business customers.  The bank will be able to make loans to businesses and offer an easy online credit check for companies, who will be able to upload their financials to the bank over the Internet.

Part of Livedoor’s success may be attributed to its diversification and Horie’s desire to stay on top of things.

TJ: What kind of manager are you?
Horie:  I guess you could say I micromanage.

TJ: Livedoor is very diverse in its activities.  How would you describe its corporate culture?
Horie: “There is no corporate culture at Livedoor. We are like the United States, or many countries grouped together - we have many cultures together under one roof” 

TJ: Do you believe it is important for young employees to learn to communicate in English?
Horie:  Yes, of course.

TJ: You speak English very well. How did you learn English?
Horie:  By studying words - thousands of words, and sentences are just a combination of words, so if you know a lot of words you can understand the meaning.  Although I can’t speak well, I can understand what people are saying.

TJ: What is your hobby?
Horie:  Everything.  I’m always thinking.  I never stop thinking wherever I go. I’m always coming up with new ideas, so I am too busy for just one hobby.

TJ: Do you have a lifetime goal?
Horie:  Yes, I want to travel outside our solar system. 

TJ: Are you serious?
Horie: Yes, absolutely. 

What is in store for Livedoor? Horie hopes to increase Livedoor’s portal revenue by developing its content and adding new services such as online dating, expanded shopping and an enhanced blogging area. Let’s not forget Horie’s personal goal to travel outside the solar system. Livedoor is continuing to grow by leaps and bounds, and Takafumi Horie is behind the wheel of the ship on a strategic mission to go beyond the Milky Way. As I learned during my interview, the secret to their success is not sheer luck or a hotshot’s confidence or arrogance. It’s strategy. And Horie’s strategic plans do not include small steps. He takes huge strides towards the goal with confidence. As fellow multimillionaire and entrepreneurial strategist Donald Trump has said, “As long as you are going to think, think BIG”.  No one can be sure of what Takafumi Horie’s next strategy will be, but we can be sure of one thing, it will be big.