Golden Rules of Success

Golden Rules of Success

Hiroshi Mikitani
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Preface
They say that to dream is the privilege of the young.
I think this is a beautiful saying, but it could not be more wrong.
It’s not that there is anything wrong with having dreams when you are young, but I have
always felt that within this expression lies the nuance that once you get out into the
“real” world you no longer have time to dream.
I’d like to suggest to you that a dream that is swept away and forgotten amidst the
challenges of adult life was never a true dream in the first place.
Just having dreams is meaningless. To actually achieve them, you must reshape your
dreams into well-defined goals, and then think about what to do to achieve those goals.
Based on what you come up with, take the steps to achieve each goal little by little. And
you must put your all into this – all of your abilities, your strength, your endurance –
you must be fully dedicated to achieving your goals.
Regardless of how long it takes, if you approach your dreams this way, there is nothing
you cannot achieve. And in this process, I believe you will discover the true meaning of
having dreams.
Do not be dissuaded by the cynics who say that dreams and reality are different. This is
nothing more than a bitter excuse made by those lacking the drive needed to transform
their dreams into reality. Dreams and reality are different, but it is for this reason
especially that following your dreams is worthwhile.
Until the Wright Brothers succeeded with their experiments, the idea that people could
fly was no more than a dream. The same was true for the steam locomotive and the
automobile as well. Each one of these was a dream made real, and one by one, they
transformed our reality. It is no exaggeration to say that contemporary society stands on
the shoulders of the dreamers who came before us. Dreams are the fuel that propels
society forward.
Why do I believe this? Because I have seen with my own eyes the extent to which a
person can grow when exerting every effort to achieve his/her dreams and goals.
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Continue to hold on to your dreams as long as you live. Continue to fight to make your
dreams come true until the day you draw your last breath.
I believe that this is what it truly means to be alive.
That said, fulfilling your dreams requires the use of certain techniques. Ten years ago, I
realized what my own dream was. Since then, I have continued to work in every area of
my life to make that dream a reality. Over the years, the number of people working
together with me has increased. My company, which I started with one other person, has
grown into a 5,000 employee-strong corporation.
From the start of this process until today, I have racked my brains over a certain
problem: How can I effectively communicate to everyone the way to achieve their
dreams and goals?
What must an individual do to achieve true success? And probably more important,
what must an individual not do? I have put my ideas about this into words and
repeatedly communicated them to my employees.
I believe that Rakuten is what it is today as a result of this communication. More than
anything, the fact that Rakuten has continued to grow despite the world economic crisis
is proof that this has been effective.
Our success is not a miracle, and it is not luck.
Whether one succeeds or fails has nothing to do with luck or fate. There are rules to
success. No matter your dream or goal, what must be done to achieve what you are after
is principally the same.
I organized my thoughts on this into five concepts and published those two years ago in
Five Principles for Success. That book was a general outline of my philosophy
regarding success.
What you hold in your hands now is a deeper dive into that philosophy. I believe that
anyone can succeed in business if he/she internalizes the information contained in this
book. The Golden Rules in this book provide details about how I would think or act
when faced with each kind of problem one faces in the course of business.
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It isn’t necessary to internalize every single rule. But if you consider at least the few that
catch your interest, the path to success will surely unfold before you.
Dreams have meaning only when they are realized. I hope that this book can help you, if
only a little, achieve your dreams. If even one more businessperson willing to make
his/her dreams a reality is created as a result of this book, our world will become that
much better.
For me, there could be no greater joy.
Hiroshi Mikitani
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Table of Contents
Preface
Chapter 1: 10 Precepts
01 Common sense is hogwash.
02 Dream Big.
03 Your role on the team has no limits.
04 Success requires “mind,” “skills,” and “knowledge.”
05 When to have humility, when to have confidence.
06 A brand is to a company what a flag is to a nation.
07 The future belongs to business.
08 Good technology is not enough.
09 Do not think and act; think to act.
10 Success is created out of the accumulation of many 0.01% improvements.
Chapter 2: Self Improvement
11 Be a pro.
12 Play catch between your left and right brains.
13 Think about life backwards.
14 The multiple personality solution.
15 Study your entire life. Study everything.
16 Build self-confidence with small successes.
17 Run as far as you like.
18 Find someone to play catch with.
19 Act with concreteness: half of half of half is one-eighth.
20 Every kind of information is valuable.
21 Humans are self-justifying creatures.
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22 Measure your intuition.
23 Seek out new frameworks, continue to learn.
24 The problems are endless. That’s what’s exciting.
25 Think about what you are missing.
26 Never lose your excitement.
Chapter 3: Know your rivals (A treatise on personal relations)
27 If it is not an added-value service, there is no point.
28 Think about things from someone else’s perspective.
29 Why do people buy things?
30 Turn your greatest risks into your greatest opportunities.
31 Anyone can imitate a best practice.
32 Listen closely to those with different opinions.
33 Strike a balance between cooperation and competition.
34 Improve your own abilities by guiding your subordinates.
35 Develop win-win relationships.
36 As a fundamental rule, move swiftly.
37 Report to, contact, and consult with others.
38 Analyze each situation from many different angles.
39 See the success in tough conditions.
40 The spirit of challenge.
Chapter 4: Motivate your organization
41 Use KPIs (Key Performance Indicators) to motivate your organization.
42 Be sensitive to resource allocation.
43 A leader is a general, a teacher, a strategist.
44 How to get things done ten times faster.
45 Utilize the principle of competition.
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46 The way to overcome the impossible..
47 Search out bottlenecks.
48 Sometimes it’s important to establish milestones.
49 Departments that consistently carry out morning meetings will succeed.
50 Every employee should think like a manager.
51 Create a framework to succeed, and develop horizontally.
52 Earn the trust of others.
53 Develop abstract customs.
54 A successful organization features a good mix of excitement and anxiety.
55 Speed is the combination of velocity and agility.
56 Smaller units provide transparency.
Chapter 5: 100 battles, 100 victories
57 Plan for alternate futures and you will be thoroughly prepared.
58 Come up with hypotheses and systemize them.
59 People who make progress in society all belong to one group.
60 Inspect things from many different angles.
61 See the trees, see the forest.
62 Factorize thoroughly.
63 Lean operations give birth to innovation and growth.
64 Think in terms of vertical and horizontal competition.
65 The Mikitani Curve: quality is fostered or destroyed by 0.5%

improvements.
66 Understand your core businesses and critical mission objectives.
67 Sometimes what you will not do is more important than what you will.
68 A company is a sumo ring. Employees are sumo wrestlers.
69 Develop a good sense of timing.
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70 The devil is in the details.
71 Failure is the foundation of success.
72 Read trends by the numbers.
73 Think about the value chain.
74 Differentiation + originality = victory.
75 There is no such thing as a special business.
76 Think up multiple uses for your resources to increase profits.
77 Strategy, execution, operation
78 There is no one method for achieving success.
79 The company that achieves the greatest cost reduction wins every time.
80 Build a framework for the continuous creation of new value.
Chapter 6: Developing a global mindset
81 Communication is the highest form of entertainment.
82 Get your information from the world
83 Understand long tails.
84 Information in newspaper articles is secondary information. Create your

own information network to help you understand the trends of the world.
85 The Internet will do away with national borders. Become a global thinker.
86 Study the best practices of the world.
87 The Internet will become the media, and media will increase its net presence.
The media will eventually become centered on the Internet.
88 Financial services as well will become entirely centralized on the Internet.
89 Strengthen your locality through globalization.
90 Fully analyze the successes of the past.
91 Japanese people are too humble when they are abroad. Have more
self-confidence.
92 It’s never too late.
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Chapter 1: 10 Precepts
The ten rules laid out in this chapter are the foundation of my business philosophy. I
thought long and hard about what is truly vital for succeeding in business, and
attempted to organize these rules by order of importance. At the end of the chapter are
two sections on the Internet that outline how I predict the Internet will change society in
the future. I believe that the 21st century will be remembered as the century during
which the Internet became a fundamental part of our society.
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01 Common sense is hogwash.
Ideas are relative. No idea is absolute.
In fact, there is no such thing as an “absolute.” For instance, because there is light, there
are shadows – the absence of shadows also means the absence of light. A naked light
bulb may seem incredibly bright when you turn it on in a dark room, but enter a room
with a single naked light bulb turned on in the middle of the day and it will seem dark.
Everything is relative.
It follows that there is nothing a human can think up that is absolutely correct in all
situations, and that furthermore, it would be a mistake to place our trust in anything as
uncertain as “common sense.”
This is my basic philosophy on life.
To put it bluntly, I think common sense is hogwash. There are countless business books
out there that repeat over and over and over again that “we must not fall into the trap of
common sense.” Why then, do so many people continue to fall into this trap?
This is something that deserves some serious thought.
Every manner of thinking has strong points and weak points. I do not know how many
thousands of years have passed since humans began living together, but I do know that
up until now no one has discovered a way to create an absolutely perfect society. I think
we may never create such a society.
All the world’s philosophies, ideas, and ideologies are continually evolving, being
adapted this way and that way. Nothing is ever set in stone. This is the nature of our
world.
Of course, I do not mean to suggest that just because nothing is certain, nothing has any
value either.
What’s important is to make forward progress while constantly adapting to new

situations. For instance, a child just learning to walk will often stumble. The act of
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walking requires that one lose balance. In order to walk – to put one foot in front of the
other – you must lose your balance. You lose your balance and then you regain it. And
by repeating this process, you move forward.
Progress in civilizations and society occurs in essentially the same way. Most likely, the
very essence of evolution is actually located somewhere within this process of
stumbling and getting back up.
This is not an abstract theory. Realizing this to be true will help you in every part of
your life. Needless to say, this includes business.
Do not be afraid of losing your balance and falling over. Children learn to walk while
stumbling, but half a year after they start, they rarely stumble.
When I started Rakuten, many people told me that the idea of an Internet shopping mall
was one that had been done to death, and that no one was interested in such a thing
anymore. Ten years later, I wonder what those people would say now.
This is why common sense is nonsense. There is no such thing as an absolutely right
opinion. Be suspicious of common sense, don’t fear going against it, and proceed along
the path that you know to be correct.
The best ideas evolve while being constantly adapted.
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02 Dream Big.
With people, and companies as well, immense growth is always the result of a
breakthrough. To make a breakthrough is to surpass old boundaries. It is to break down
a wall that no one thought could be toppled, to push past your own limits, and to see a
new frontier for the first time.
The problem is, these walls are often hard to see. Other than athletes, most people do
not regularly think about their own limits.
So what allows you to clearly see your limits? Goals.
John F. Kennedy first announced on May 25, 1961, that by the end of the 1960s the
United States would send a man to the moon. The background to this speech was what
was known as “Sputnik Shock.” The former Soviet Union had succeeded in sending into
space the first satellite, Sputnik. At that time, the United States had not yet been able to
launch a satellite. The thought that the Soviet Union had beaten the United States in
sending a satellite into space shattered the confidence of the American public. It didn’t
help that a month before Kennedy’s speech, the Soviet Union had succeeded in sending
up a manned satellite and making Yuri Gagarin the first man to ever look down upon the
earth with his own eyes.
Kennedy’s announcement to send a man to the moon was part of a plan to wipe away
the shock that had spread across the United States. There has not been a speech since
that so excited the American heart. Setting a timeframe of nine years, telling the public
that the plan was to be accomplished not “someday” but “before this decade is out,” was
absolutely brilliant. It was already very difficult to launch a satellite, and this plan meant
going even further; sending a man to a heavenly body 380,000 kilometers away.
If we think of this in terms of what the average person might deem common sense, it
must have seemed to be a nearly impossible goal. But precisely because it was
impossible, it was fantastically heroic.
Kennedy could not say with any reasonable certainty that it was a goal that could be
achieved, but he believed that the impossible was possible.
For those working in the space program, the setting of such a seemingly impossible goal
no doubt woke them up to the existence of an obstacle directly in their path. I don’t
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know if they faced ten obstacles or 100 obstacles, but I can say for certain that they
overcame every hardship. Achieving one breakthrough after another, at 4:17 PM on July
20, 1969 (US Eastern Daylight Time), Apollo 11 landed on the moon.
There is no such thing as “impossible.” The impossible will always become possible
eventually. If enough people who hold this belief emerge, the future of humanity will
change.
There is no doubt in my mind that the landing of Apollo 11 on the moon greatly
influenced me.
President Kennedy’s proposal of “achieving the goal [to put a man on the moon] before
this decade is out,” set a clear and concrete objective that enabled the United States to
achieve this. I do not buy the idea that improvements in spaceships over time would
have eventually led to someone landing on the moon.
Within this story is a truth that can be applied to any situation in business. Success is
never aimless. If you only carry out routine work aimlessly day after day, you will never
succeed. The setting of clear and concrete goals followed by movement to exert every
effort toward the achievement of those goals is indispensible.
Dream big. Believe that what you want is absolutely possible, decide on a date of
accomplishment, and set clear and concrete goals. Goals alone are what lead people and
companies to achieve amazing results.
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03 Your role on the team has no limits.
Every Monday at Rakuten, every single person cleans his/her workspace.
This has been the practice at the company since we had fewer than ten employees.
It doesn’t matter if you are fresh out of college or an executive; everyone cleans. We all
get on our knees and make sure that even the legs of our chairs are polished. We do this
so that everyone will recognize that there is no job in the company that is unrelated to
their own work, and I include myself in this.
Every job in your company is your job. It’s all about whether you fully realize this or
not. Those who do not realize this will absolutely never succeed in business.
As companies grow larger, practicality dictates that roles and responsibilities must be
divided up. However, as a result of this, employees begin to think that their job is just
fulfilling their own role, and some even go as far as believing that doing anything
outside of their role is wrong. Actually, nearly all large corporations have this problem.
It is at the root of all that is wrong with these companies.
A grouping of thousands of people each carrying out his/her own assigned role is
nothing more than a herd of sheep. It does not even deserve to be called an organization.
An organization must constantly strive to be more than this. An organization must aim
to become a single team in which each member acts beyond his/her own areas of
responsibility to cover for others.
Every job is a kind of war, in that every job is a competition. Unless you win, nothing
you do has any meaning. In order to achieve absolute victory, each member of your
organization must cultivate the mindset that he/she alone holds the fate of the
organization in their own hands.
I believe that only a group of people sharing such a mindset can truly be called a
“team.”
If you are a supervisor or manager, know that the team you foster will make the
difference between whether you are successful or not. If you are an employee, know
that whether you succeed or not is all about whether you can maintain continuous focus
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and engage in your work as a member of your team. Being able to do this well can
change the direction of your life. It is that important. Bear this in mind.
However, if your role is all that you concern yourself with, you are doing nothing more
than selling your time. And I would suggest to you that this approach is the equivalent
of throwing away your life.
Even those fresh out of college and those working in lower-level positions should
challenge their work with the mindset that they are the main actor in the company. A
team begins to realize its true potential when each member begins to share this mindset.
Moreover, when your team begins to work well, your own abilities begin to truly shine.
No matter how good the racer, no one can win driving a bad car. This is exactly the
relationship between a team member and a team. The key to realizing your full potential
is working in a superior organization.
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04 Success requires “mind,” “skills,” and “knowledge.”
No matter how long you live, you will never be successful if you only daydream about
success. Success is not fate. Success is something that you grab firmly with your own
two hands. Successful people will succeed. Unsuccessful people will not. Successful
people, and unsuccessful people – there are only these two types of people in this world,
and furthermore, successful people all happen to share three traits.
These three traits are what I call “mind,” “skills,” and “knowledge.”
“Mind” could also be thought of as your drive to do your job. It is the source of all
motivation in the workplace. The desire to succeed, to become rich, to delight your
customers – what motivates you might well be any of these. “Skills” refers to your
abilities. As examples, think of communication abilities and administrative abilities –
these are skills useful in business. Your ability to self manage is also a kind of skill.
Finally, “knowledge,” or the amount you know. It goes without saying that knowledge is
of vital importance in the business world.
Truly gifted people possess all three of these traits.
However, not many people possess all three traits in good balance from the get-go.
Those with a wealth of knowledge may not have sufficient drive, or those with drive
may not have the skills to make use of it. If you objectively analyze yourself, you can
figure out in which of the traits you are weakest, and if you know that, you can develop
a method to overcome your weaknesses. If you succeed in overcoming your weaknesses,
your potential to succeed in business will grow by leaps and bounds.
Beware the highly skilled. Some skills are basically congenital – for example, those
with excellent communication skills may have been born that way. When talented
people enter the business world, they tend to deliver unusually high results right from
the start and without much effort. Under most circumstances, I suppose that the business
they enter into first becomes their life’s work, but be warned that there is a major catch
here.
The catch is that it is difficult to truly succeed using only the talents you were born with.
Unless you continuously make an effort to improve yourself, you will never find real
success.
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There are many people in the world who were born blessed with talent and proceed
forward by dazzling others with the skills they naturally possess without ever learning
to struggle or study. In Japan in particular, for some reason or another people quit
studying sometime after they enter the workforce. But it is especially after you start to
work that studying has an important role to play in your life. As I have already stated,
knowledge is of vital importance in business. Even if you do not have many skills, you
can make up for what you lack by hitting the books. How many people are there in the
world who are excellent at sales but poor speakers? We have all heard time and time
again stories of lauded and gifted salespeople who formerly had a complex about their
own communication skills.
Business is the practice of overcoming the limits of our abilities through effort and
innovation. For this, if for no other reason, you must not rely solely on your skills, but
constantly work to acquire knowledge and improve yourself. New business ideas are the
result of good analysis and good judgment. Although these are both more or less talents,
through daily training you can improve your abilities in both of these areas. If you have
the mindset to improve yourself, you will realize that even the newspapers and
magazines you read daily are treasure-troves of ideas. With the right mindset, even
something as simple as sitting and watching the young people as they travel from your
town into the city can fill you with countless new ideas for business.
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05 When to have humility, when to have confidence.
Nothing in this world is absolute.
This is true about who you are as well.
Everything which exists is impermanent. It is unreasonable to think that you alone are
an exception to this.
In business, you must always keep this in mind. Especially when your work is going
well or when you are succeeding.
When things go well, people naturally begin to gain confidence. They start to think that
they are good at what they do, and that they have succeeded because their way of doing
things is the right way of doing things.
There is nothing wrong with having confidence in your work. But it is when your work
is going especially poorly that you should really have this confidence. More than any
other time, it is when everyone around you seems to be your enemy and you cannot see
a way out of the situation you are in that you should have confidence in yourself and
walk with your head held high.
And then, once you have achieved success, throw away your confidence. Once you are
successful, learn humility. Be humble to the point that you begin to believe that your
success is an accident. The truth is that in the grand scheme of things, sometimes the
methods we use just happen to produce good results, and as soon as the world again
shifts, these same methods may just as well bring about a sudden tragedy.
Now, I am not saying that success is 100% chance. I would say that 99% is probably
effort. However, I would also say that whether or not that remaining 1% goes your way
can be the difference between success and disaster.
Failure can happen at any time: It could happen tomorrow.
This may make you unbearably uncomfortable. I believe that this discomfort is a
catalyst for great work. Those who enjoy their success in complacency are the ones that
truly need to be worried.
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For example, no matter how solid the business plan, if you think in terms of 10 or 20
years into the future, there is not a plan in the world that is anything more than a castle
in the sky or a castle made of sand.
Everything in business will eventually crumble.
A company is like a river, it never stops for even a moment. In business, changes occur
moment-by-moment.
There is not a doubt in my mind that currently successful businesses will experience
failure in the future. It is important to always prepare for the worst with this in mind.
In order to prepare for the worst, you must have the courage to deny your own best
attributes.
The way you think, the way you work, the way you act – you must be ready to deny
everything that you have believed up until this point in your life. I understand that this is
hard, but unless you do so you will never create anything new. You will be trapped in
your past successes, unable to find the way to success in the future.
It is when you are successful that you should most doubt yourself. Know that the way
you do things is not the only way to do things, and foster in yourself the courage to start
over from square one at any time.
This is what I believe is really meant when people talk about never forgetting where you
came from. One must always seek out new methods and new directions with an open
mind.
This is the secret to continuous growth.
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06 A brand is to a company what a flag is to a nation.
Looking ahead, I think that companies will only become more and more like nations.
What is the essence of a nation? Surely, it is not its territory, nor its currency. I believe
that the essence of a nation is nothing less than its people. Up until the 20th century, it
may have been enough to call any grouping of a specific people in a specific place a
nation, but with the coming of the Internet, I believe that we must fundamentally change
the way we think about these things.
This is because the advent of the Internet means that information can now easily cross
national boundaries, moving freely from place to place. You might say here that it is
“just information,” but that would be underestimating the power of the Internet.
It is true - information has no substance. It is mental real estate, and thus a completely
virtual existence. But along these same lines, it must also be said that currency, national
borders, and national character all started as concepts in someone’s mind. Everything
that one might think of as making up the essence of a nation is a type of information.
Being information, all of these concepts are affected by the Internet. If we were to build
high walls around national borders, it might be possible to restrict the movement of
people or goods for a short time. But as long as the Internet exists, there is nothing that
will be able to stop the flow of information from place to place. Just as the Berlin Wall
which divided East and West Germany was torn down by the citizens of those countries,
national borders are and will continue to be made obsolete by the flow of information.
Currency will meet a similar fate. The Internet will continue to make the concept of a
nation and the meaning of currency into ever more ambiguous ideas. By contrast,
corporations will become increasingly more important.
As corporations become more important to society, the social responsibilities of those

corporations will become greater as well. International corporations in particular bear
enormous responsibilities to the world. Needless to say, these responsibilities cannot be
fulfilled simply by working to increase profits.
Moving forward, it will be essential for corporations to take a clear stance on their own
ideals and ideologies. “What kind of society are we hoping to create through our
business?” – The ability of a corporation to clearly explain its answer to this question
will determine whether that corporation will grow or not.
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In this sense, I believe that a brand is to a company what a flag is to a nation.
Rakuten exists under a “flag” that represents the belief that the Internet can empower
the individual, because we believe that the Internet holds power over the future only to
the extent that it is used to support the talents and efforts of its users. In this day and age
in which we are seeing the ever further decline of the concept of the individual, we are
confident that giving the individual a helping hand will be the key to creating a more
prosperous and happy society.
There is currently a trend among brands in that many of them are moving from being
mere indicators of their owner’s status into representations of their owner’s beliefs. This
trend will continue in the future. The individual’s consumer activities will begin to play
the role of a kind of vote. Those corporations that receive the support of a large number
of “voters” will grow, and their ideals will change society. This is why it is imperative
that every company watch carefully over its own brand.
Think about what kind of brand-flag your company is raising. If you believe in the
ideals of that flag, then you must give your all to your job. And if the ideals of that flag
are not clear, then you should raise a new flag yourself. You do not need to be an
executive to remold your company’s brand. If the executives of a company will not
make the ideals of their brand clear, then it is just as well that the brand be elucidated by
the shared beliefs of the employees working for that company.
I believe that we no longer live in an era in which people will simply offer their lives to
companies without giving any thought to ideals or beliefs.
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07 The future belongs to business.
When I established Rakuten Ichiba in 1997, I made four hypotheses about the Internet:
1. The Internet will become simpler and more convenient.

2. The Internet will spread like wildfire.
3. Japanese people will begin to buy things on the Internet.
4. The Internet will change distribution.
Not even ten years passed before every one of these hypotheses came true.
Those fond of providing explanations for everything would most likely say that each
one of these hypotheses was obvious to absolutely everyone at the time of the birth of
the Internet, and that for anyone with even a passing knowledge of the Web at that time,
calling these ideas “hypotheses” is ridiculous – these were bound to happen.
If all of this was really so obvious, then why didn’t everyone do the same thing I did ten
years ago? What I am trying to say is that most people do not think about the future very
much.
Although people can always come up with any number of explanations about things that
have already occurred, people rarely try to explain how the future will unfold. People
say so easily that “we don’t even know what will happen tomorrow” – this is not being
careful, this is being lazy.
It’s true that no one knows what will happen tomorrow. But those who do not face the
uncertainty before them and work to shape the future themselves will never be able to
forge a path toward success.
If you are to analyze the success of Rakuten over these past ten years, then you should
also use your powers of analysis to think about how Rakuten will develop over the next
ten. Thinking in this way, you will realize that there is one thing that we can say for
certain about the future. In the past ten years, although the Internet has greatly changed
society, that change is very small compared to the change we will see moving forward.
In the next ten or twenty years, the Internet will surely drastically change the world.
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There is no longer any social system or force that can put a stop to the inevitable spread
of the Internet across the globe. As a result of this spread, over half of the proprietary
information protected by vested IP rights is likely to disappear. The systems and means
by which such IP rights are protected will break down, and a new world will be created
with the Internet as its pillar.
This is what I mean when I say that the Internet will drastically change the world.
We are currently living in a revolutionary period unlike any other seen in the course of
human history. In business, this is something that you must constantly keep in mind.
What kind of society will people build as a result of this period of revolution? I believe
that business has the power to shape the answer to this question.
People once created new order through war and politics. That era is now long past.
From here on out, the creation of new order will be the result of efforts on the part of
every single person currently alive on this Earth. These efforts will be based on
economic activity. In other words, these efforts will be business.
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08 Good technology is not enough.
The principle function of the Internet is to consolidate the knowledge and information
of humanity.
People certainly had tools to do this before the invention of the Internet. These were
languages and writing. People have been sharing knowledge and information using the
tool of language for thousands of years.
It is precisely because of this ability that we have managed to overpower other animals
and reign over the earth despite being such relatively weak animals ourselves. Letters
and written materials, along with the “technology” of correspondence, have made it
possible to share knowledge and information with a wider range of people in a more
precise way.
It goes without saying that the development of the Internet encouraged the progression
of communication even further.
Moreover, the Internet is an entirely new dimension compared to the technologies that
came before it. In theory at least, it is not limited by ideals or concepts, but is a new
kind of tool that makes it possible to completely bring together all of the knowledge and
information of humanity.
This is awesome. Think about it. It sounds like something out of a sci-fi story – by
connecting to the Internet, a single human being can gain access to the knowledge of the
entirety of humanity.
Now, there is really no meaning in just bringing together a tremendous amount of

information. Unless information is placed into databases and indexed, it’s not even as
valuable as a mountain of trash. People often speak of trying to find a needle in a
haystack – without technology to instantaneously retrieve a single “needle” out of the
millions of pieces of data in the Internet, its value is severely lessened. In this sense, the
role played by Google is highly significant.
My apologies to the developers of competing search engines, but I would go as far to

say that if it were not for Google, the Internet would not have yet spread as far as it has.
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That said, when I consider the future, I think that search engines like Google will
become outdated. No matter how advanced a search engine is, as long as it is a machine
system, it will eventually become an everyday-use product just as telephones and
washing machines have. The kind of praise being lavished on Google is similar to the
way people talked about the first cars ever developed. It is only regarded so highly
because there are currently no “automobiles” with as many features as Google. It is
obvious that as soon as a “car” with the same number of features is developed, Google’s
relative position in the market place will drop. This is the limitation of all technology:
the more useful an instrument, the quicker it will be copied and the quicker there will be
movement to usurp its position in the market.
In terms of the extent to which a piece of technology develops, I believe that organic
services able to attract people on a human level will develop the fastest. These kinds of
services are critical for Internet businesses. People have a tendency to lose interest in
old technology as soon as new technology comes out. It is expressly because we live in
such an age that we must always keep in mind that good technology alone is not enough
to overcome the competition or differentiate ourselves from others.
Some things never change no matter what era we are in. This is the case for success as
well. If you cannot touch the hearts of others, you will never succeed.
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09 Do not think and act; think to act.
Nothing will happen if all you ever do is think about things.
In business, rather than thinking about this and that, it is better to first act.
Of course, there is nothing you can do about wanting to think before you act, and I
would never tell you not to think about anything at all. Actually, I believe that thinking
is incredibly important, perhaps the most important thing in the world. If you don’t
think, you will definitely never succeed in business, and it goes without saying that
those who are better thinkers will go farther in the world.
No, what I am trying to say is this: action is necessary in order to help you think.
“Before you act, you must first think about what you will do” – this way of thinking is
the beginning of all mistakes. The truth is that action is food for thought – this is how
people ought to think.
The reality in your head begins to have meaning when it receives feedback from the real
world. To put it another way, thoughts are born out of action.
For example, it doesn’t matter how much you try to use words to explain tennis
techniques if the person you are explaining them to has never held a racket. You should
first make them feel a racket and a ball. Have them watch others and then have them hit
the ball themselves. Teaching someone how to play tennis by having them try it first is
infinitely more effective.
In business as well, this couldn’t be truer.
Despite this, there are an incredible number of people in the world who spend their time
only thinking about this and that, talking about their ideals, and never acting. It’s
enough to make me wonder if they aren’t using thinking as an excuse for their own
indolence.
It is a matter of course that in the world of business, action carries with it a number of
risks. And it is natural for anyone to hesitate when faced with risk. But this is precisely
why we must act – so we can think.
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I am not talking about big actions here. You don’t need to do very much to fuel your
thought process. For example, say you have come up with a business model – you can
first test it on a very small scale, and then base your thinking going forward on the
results of this test. These kinds of small tests are of the utmost importance for success in
business. More than any amount of information you could struggle to possibly gather, a
single experiment is far greater food for thought.
It is okay if you start out slow, but first you must act. You can think afterwards. And you
can then begin your next action and then think again, and then act again. Businesses are
built on this repetition.
Suppose you are throwing a ball against a wall and you want to know how it will
bounce back. You can calculate this using a motion equation, but in reality many walls
are uneven, with bumps and pits here and there. In the real world, the ball won’t bounce
back exactly as you calculate it. Of course, you could also try your equation taking into
account those uneven areas, bumps and pits, but doing such complex work takes time –
isn’t it faster to actually throw the ball against the wall? You will learn much more this
way, and beyond how it will change the way you think, finding your answers in this
manner is much more enjoyable.
Allow me to add one last secret here. Do not be afraid that the ball may go in a different
direction than you expect when you face the wall of reality. More often than not,
opportunity hides in these unexpected directions.
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10 Success is created out of the accumulation of many 0.01% improvements.
Anytime anyone succeeds, someone, somewhere, will be jealous.
I can understand why one might feel this way, but let me assure you that someone who
can only understand the success of others as being the result of luck will never succeed
themselves. Because it doesn’t matter how big an opportunity you are presented, if you
are not ready for it, you will not be able to seize it. Most likely, you will not even be
able to see it in the first place.
Someone who has never learned how to surf will never be able to ride a wave, no matter
the size of the wave they find. Opportunity is the same. Although it may be true that
Rakuten was able to ride the IT bubble to greater success, for those unprepared for this
“wave,” it was a disaster. In order to ride opportunity’s wave, you must have completed
adequate preparation.
The problem then, is determining what kind of preparation you should do to prepare for
the next opportunity you might encounter. I believe that the best strategy is to spend
each day preparing through small improvements.
It is not enough to simply work diligently every day. Even if you make only the smallest
of improvements day-by-day; be just a little more efficient today than you were
yesterday, and just a little more efficient tomorrow than you were today. No matter how
high a mountain a climber aims to summit, he must start by putting one foot in front of
the other. In terms of business, even a 0.01% improvement is fine – start making
improvements to the way you work today. If you make a 0.01% improvement each day,
after a year you will be 44% better at what you do. This accumulation of improvement
will lead to success, and the people who make this kind of effort will be able to grasp
opportunities when they pass by.
For this purpose, develop a mindset of looking at your job objectively as if someone
else was doing it. It’s easy to see errors in the way that other people do things because
you are able to view the jobs done by other people objectively. Apply this view to your
own work. You should be able to see any number of points you might improve upon.
You will most likely discover that each individual error has its own reason, be it lack of
time, too much work, not enough assistance. If you saw other people facing these issues,
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you would realize that everything will work out some way or another, but when you
think about your own problems it does not seem so easy, does it? This is because of
your own attachment to the situation. It is sorry to say, but everyone feels like this about
their own problems.
Nevertheless, just a little effort on your problems can make a big difference. If you feel
you don’t have any time, wake up earlier. Get to your desk even ten minutes earlier and
do your best. This is a 0.01% improvement.
The vital thing is to continue these 0.01% improvements every day. Do not just do them
when you think of them; in order to build upon each day’s efforts, you must come up
with your own framework for this and stick to it.
To say it precisely, you need to create a record of what you do in order to view your
own job in an objective way, and this record should be outlined in terms of the shortest
units of time possible. I recommend creating a report of your activities on a day-to-day
basis. We are doing this at Rakuten. By doing these reports on a daily basis, the time
needed to create the reports is shortened as well. And they make it possible to see at a
glance if you are really continuing your 0.01% improvements every day.
This is simple, honest work, but it is the little things that one does every day that lead to
grand results. This is the secret to riding opportunity’s wave, and the way to become a
“lucky person.”
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Chapter 2: Self Improvement
Having a well-established self-identity is the first step on the path to success. Know
your own weak points, and think about methodologies for continuous growth.
30
11 Be a pro.
To put it simply, I believe that a professional is someone who loves their job. Someone
who just can’t help but love their job will think about it in the back of their mind 24
hours a day, 365 days a year, no matter what they are doing. There is no need to teach
such people the secrets of success. They are already successful.
There is no greater life than one spent pursuing a career that you also feel is your raison
d’être. I believe that people are born into this world in order to do this kind of work. The
problem is trying to figure out what to do when you are not actually particularly suited
to the job you are in.
I believe that many people are in such a situation, although I will leave to another time
the topic of the extent to which each person feels they are or are not suited to their job.
You might feel that you are not suited to your job because you do not have a passion for
your work, or because there are many other jobs that you might rather be doing, or
because of personal issues. I will not talk about these reasons here, because I think that
if you have such a problem it is something that you should think about yourself.
However, before you sit down to think about it, I think you should first try to really put
your all into the work you are involved in. After having truly made an effort at your job,
if you still think that it is not something you want to be doing, you should change
careers or start your own business. Without putting your all into your current job,
although you might say that what you are doing right now is not for you, the truth is that
it is likely that even if you try something else you will end up feeling the same way. In
Japan, we say that if you really understand one thing, you understand everything. The
fact of the matter is, those who can succeed at one job can make themselves successful
at any job, and those who cannot succeed at their current job can never make themselves
successful.
Therefore, before you do anything else, dive into the job before you.
Becoming enraptured in your work is not a hard thing to do.
If it helps, you can think of your job as a type of game.
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I may be inviting misunderstanding when I say this, but actually I think of my own job
as the greatest game ever invented. There is nothing more interesting. I often forget to
eat or sleep; I am that obsessed with it.
What is a game really, if not the accomplishment of set goals?
This is the secret to enjoying your job: first establish goals. In order to achieve your
goals, you will find that you need to concentrate and come up with innovative ways of
doing things. It seems to me to be human nature to want to test out whether your own
ideas and innovative methods can be used in the wider world. The more you concentrate
and the more you innovate, the more enjoyable your job will be.
People who are so passionate about their job as to be respected by those around them
for it are, whether they realize it or not, pursuing these kinds of set goals and
accumulating innovative methods in order to achieve them. Whether or not you can
enjoy your work is the difference between whether or not you can set these kinds of
goals.
Basically, a person who does not feel passion for their work is like an archer with a bow
and arrows but no target. No matter how many times such an archer draws his bow and
shoots his arrows, he will never feel archery is enjoyable as long as he does not have
anything to shoot at. This is true for anyone.
If you think your job is boring, set targets for yourself. Face those targets and fire off
arrows. If you hit your targets you will be happy, and if you do not you will be
disappointed. You will begin to want to hit the direct center of your targets, and to that
end you will begin to think up more and more innovative ways to do this and put in the
effort to make this happen. I believe that this is the natural way of responding to goals
and that anyone, no matter who they are, will begin to feel this way. This is the true
meaning of having a raison d’être, and it is the path to becoming a true professional.
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12 Play catch between your left and right brains.
They say that your right brain controls intuition, and your left brain controls words and
calculations.
If you think calmly about the process by which you become excited about an idea and
then work out the details of that idea and develop it into a business model, you will
realize that this must be true.
With ideas born out of your right brain, even if you understand the general framework,
the details will be ambiguous. They are extremely simple. Even if you know in your gut
that the idea is correct, it has not been turned into language and you cannot
communicate it properly to other people. Turning your vague idea into words and
placing it within a certain framework is the job of the left brain. Accordingly, ideas born
out of your right brain are inevitably always deflated by your left brain the more and
more you think about them. However, in exchange for this, once the idea enters your
left brain you become able to compare it to existing business frameworks. By turning
the abstract details into words, the once simple idea may become a very complex one.
The repeating exchange that goes on between your left and right brains is like a game of
catch. You turn ideas into words and fill out their details in the left brain, and then send
the ideas back to your right brain for an intuitive judgment. And you repeat this process
over and over again.
I will give you a detailed example – you are drinking wine, and it’s delicious, and so
you begin to wonder why it’s so delicious. And you think that perhaps it is because the
wine has been cultivated on the same land for many years, and the tannins in the wine
have been removed to the point that it is very mellow. Having thought this, when you
take your next drink of the wine, you will try to determine whether the deliciousness is
really due to the tannins in the wine being mellow. At this point, you may realize that it
is not just the tannins, but that also the bouquet is excellent and so forth – in other words,
you will realize that you had not yet put into language certain qualities of the wine. And
you will then begin to think about what the reason behind the good bouquet is…
This process of intentionally using the two corresponding actions of your brain,
intuition and analysis, to work a concept down to a single idea, is like a game of catch
between your left and right brains. Doing this process with multiple people is also a
good idea – in other words, brainstorming.
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Taking a simple idea and complicating it, then simplifying it again and complicating it
again – this process makes it possible to see the most important points of an idea. It
allows you to see not just the “why” of the main part of the idea, but the “what” of the
detailed parts of the idea.
It is a sensational way of putting it, but in my case, after playing this game of catch over
and over again, I reach a point where everything seems spectacularly clear. To put it in
terms of a jigsaw puzzle, it is like the moment when all of the pieces fall into place and
the puzzle is done. It is a moment when everything, including time, falls into place, as if
the answer to what I am thinking about has been unlocked and I can see it clearly now.
This was what it was like when I thought up the idea for Rakuten Ichiba. At that
moment I understood the “why” of the “roots” supporting the “trunk” of the business, as
well as how the “branches” and “leaves” – the details of the business – needed to be.
Furthermore, I understood how the business would change in the future and how far it
should change – in other words, what sort of “trimming” would be necessary. It was as
if I was standing on a tall mountain looking down on the whole of Rakuten. It was like I
could see it so clearly I could touch it. It has already been ten years since I had my
initial idea.
Anyone can take any idea they have thought up and turn it into a business model, but I
doubt there are many people who, after having created their model, reexamine their idea
once again based on their intuition to see if it will really work or not. Unless you do so,
the idea which you have worked so hard to come up with will come to naught.
Do not allow your ideas to only flow one-way from your right brain to your to your left
brain, but toss them back and forth between the two sides. This is the secret to
developing business ideas.
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13 Think about life backwards.
Right now, you are alive.
Someday, you will die.
Even though there is nothing more certain, human weakness causes us to too often
ignore this fact.
We do not know when we will die, and moreover, no matter how much we think about
death, we can’t change the fact that it will happen – I think that most people rationalize
not thinking about death in this way. Let me assure you that this is not a rationalization,
but is akin to running away.
This is the lesson I took from the 1995 Hanshin-Awaji Earthquake. My parent’s home in
Akashi City suffered huge damage, and I lost my beloved uncle and his wife.
It is extremely difficult to put into words how I felt as I wandered through the
mountains of rubble that my hometown had become, searching for the bodies of my
relatives. I remember that at some point I suddenly found myself standing in silence in
front of a school gymnasium.
In that gymnasium were not just the bodies of my uncle and his wife, but the bodies of
many, many victims of the earthquake. Such a great number of people, people who had
been healthy and happy until the day before, had all suddenly lost their lives in an
instant.
I will never be able to remove that image from my mind. People had told me that life
was fleeting, but I never really understood just what they meant. That day I experienced
a level of sadness that I thought would tear my heart apart, and I finally understood in
every part of my soul and body that someday I too would die. I woke up to the fleeting
nature of life, and why this makes life that much more precious.
We do not know when the end will come, but it will come. What do you want to spend
your time doing until that end? I think that people must think long and hard about this
before they make plans for their life. This is reality. A clear understanding that life will
end makes it so much easier to know what you should be doing today, right now.
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No matter what you are planning, if there is not a set time schedule for it, you cannot
really say that you have a plan. It is a lonely and terrifying thing to think about your
own death, but without time limits, you cannot really form a plan for your life. It is an
absolutely truth that those who do not form plans for their lives will never be able to do
anything great.
I suppose there are people in this world who do not really care to achieve anything.
There is of course nothing wrong with that. I really believe this from the bottom of my
heart. Happiness in life is not just about your own achievements, and it isn’t as if every
single person must achieve something great.
But for me, I want to leave evidence that I existed in this world, and I want to do this
through my achievements. My dream is to create a system by which every person in the
world can become happy. If I am going to achieve this goal, I must never forget that my
time is limited.
They say that Nobunaga Oda (initiator of the unification of Japan under the rule of the
Shogun in the late Sixteenth Century) was fond of the saying by Atsumori (a young
samurai who was killed in the Genpei War), “Life lasts 50 years.” I believe that he must
have been the kind of person to think about life backwards from death as well.
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14 The multiple personality solution.
“A third personality” is my own personal term. Put simply, I am talking about viewing
yourself freely as someone else, or rather, taking a third-person perspective on yourself.
This may be similar to avoidance, but I firmly believe in this. Making decisions
becomes extremely difficult in times of crisis, and a madness of judgment often actually
makes things worse. Some time ago in Japan there was a lot of commotion about food
products with intentionally mislabeled origins. Thinking back on it, I think that
throughout Japan many people must have watched their televisions in disbelief,
confused about why the people involved were saying and acting the way they were.
When you are on the viewer’s side of the television; in other words, when you are
thinking about a situation objectively, you sometimes find the “simple” things that the
people directly involved in the issue believe everyone understands are actually quite
difficult to comprehend. This is how it is when you are in a pinch. People in a pinch
tend to make their problems worse. It is no exaggeration to say that the damage caused
by poor judgment in the aftermath of a crisis is often much worse than the damage
caused by the actual crisis.
In order to stop yourself from causing such damage, you need to think about the issue
objectively from a perspective like that of a person watching the occurrence on
television. People tend to make a big deal out of even a small cut to their little finger
when it is their own finger. But when it’s someone else’s finger, they are more likely to
think it’s pathetic for someone of such an age to make such a big fuss over something so
small. Life is like that.
In times of crisis, in times when you are in a pinch, if you think about things as if they
were happening to someone else, you will realize that they are not such a big deal. With
worries as well, it does not matter what the problems you have in your life are, if you
think about them from the perspective of someone else, you will come to realize that
most of the things you get upset about do not amount to much.
Which of the two perspectives will result in a good solution to your problem should be
obvious.
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When you are troubled or upset, try completely removing yourself from the issues and
think about how to deal with the problem from someone else’s point of view. This is the
best method for dealing with a crisis.
This is not as easy as it sounds. Especially when you are in a pinch, it is difficult to
suddenly take on a new personality in order to solve your problems. Therefore, I
recommend that you practice viewing your own life from someone else’s perspective
even when you are not in trouble. Try to imagine how other people view you right now.
This practice is valuable not just for problem solving, but also for improving your
day-to-day manners and people skills.
Let me add one more important point about contrasting yourself with others. When
other people are in a pinch or in trouble, in the same way as when you yourself are in
trouble, try to step out of your own frame of reference and view the problem as if it
were actually happening to you. If you can imagine what it would be like if you yourself
had cut your little finger, you will be able to easily understand what you should do for
the other person. What is a minor scrape to someone else may be extremely painful to
the person with the cut. You must understand this, and lend a hand to those in trouble as
much as you can.
Whether it be within your team, within your family, or with your customers, this
empathetic way of thinking will help your relationships go much more smoothly. It goes
without saying that smooth relationships will help your business grow.
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15 Study your entire life. Study everything.
These are the words of my favorite professor in college.
More than anything else, they are stern words of warning to me.
I am impatient by nature; I don’t really like work that requires the amount of persistence
that you need to have for studying. There is nothing I enjoy about such tedious acts.
Since I was young I have always preferred to cram overnight rather than sit down to
study ahead of time.
However, even if it was cramming overnight, when I was a student I always studied
when I had to. When I entered the workforce, though, the need to study went away. Of
course, you actually do need to study even after you start working, and if anything,
there is an even greater need to do so. But because there is never an upcoming test, you
quit studying.
This is such a huge mistake.
There are no professional athletes who quit practicing because they have already gone
pro. When athletes stop training, they stop being professional athletes.
There are certainly people out there who really feel that what they learned in school
never made a bit of a difference in their lives. But I would argue that the reason why it
never made any difference is because when these people entered the workforce they no
longer wanted to study. I believe that what you actually learn in school is not knowledge
itself as much as how to study. If you do not continue to study after you leave, then you
will of course not be able to make use of what you learned in school. But it is such a
waste to simply let go of all you have learned after you went to the trouble of learning it
in the first place.
Although what you study will surely vary from what others study, you should study
your entire life. Without constantly taking in new things and improving yourself, your
development as a person will come to a halt. Those who put their all into studying as
students should have an understanding of the kind of power one can receive from
studying something systematically. In the space of four or six years, a senior in high
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school can become a lawyer or a doctor, albeit an assistant. If you really study seriously,
you can change who you are.
By changing yourself, your job will become more enjoyable. And when your work
becomes more enjoyable, you will want to study more. Those who have internalized this
loop within themselves are sure to grow tremendously even after entering the workforce.
No matter what field these people enter, they will be able to succeed at the biggest of
jobs. Even if only for one hour or thirty minutes a day, make time for study. The
accumulation of this time will determine who you are three to five years from now.
Let me stress that studying is not just something you do at a desk. It is important that
you understand that absolutely everything you do is a form of studying. Even in your
daily work there are opportunities to learn things. The accumulation of lessons learnt
through your job is as valuable a form of studying as anything else.
If you only ever pursue the kind of routine work in which getting the job done is your
only goal, it is likely that you will be bored your entire life. But if you take the attitude
that there is something to learn from everything, even routine work will become
fascinating and fuel personal growth. No matter the work, a job that provides the joy of
personal growth is one into which people will put their all.
Study your entire life, and continuously pursue personal growth. People are born into
this world in order to learn.
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16 Build self-confidence with small successes.
Even the best mountain climbers cannot summit the world’s highest peaks in the
beginning. Climbers start with smaller mountains and then work their way higher.
While it is important to set big goals, if the goals you first set are too large, the weight
of it may well break you. And so even if you choose to pursue only a small goal, begin
by accumulating small successes. Develop the “habit” of succeeding at the goals that
you set for yourself. This is the secret to not falling into the tragicomic lifestyle of never
succeeding at anything you set out to do. Do not just pursue a dream your whole life
that you will not be able to see through to the end; start by accumulating small
successes and work toward what you want.
The experience of success causes people to grow. The feeling of elation you have when
things go well, and the feeling of achievement you get when you succeed at something,
are joys that are not easily compared to anything else. The need for this joy will foster
within you a strong heart able to withstand the suffering and maintain the effort needed
to achieve more success. The joy of success is the source of the energy one needs in
order to keep going during even the difficult times.
When you grow tired of your job or become unable to exert your full effort for it, it is
because you have not yet experienced enough success. You do not fully realize that joy
awaits on the other side of all your hard work.
In the beginning, climbing even a one-thousand meter mountain is sure to be hard work.
And so when you reach the top the first time you are sure to be overjoyed. However, if
you climb the same mountain again, the next time you reach the top you will not be as
happy as you once were. You will likely only think that you would be happier if it had
been an even higher mountain. And you will begin to challenge two-thousand meter and
three-thousand meter peaks.
In this same way, as you accumulate successes, your goals should become bigger and
bigger.
Achieving a big success is enough to cement your own confidence in yourself. The
highest peaks in the world lie at the end of this road.
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They say that the best batters in baseball will watch videos of themselves making good
hits and hitting home runs over and over again. They do not watch themselves striking
out. Your brain, like a tape deck, has the ability to play the images stored in it over and
over again. Practice remembering over and over again in your head the way you felt
when you succeeded and the mental state you were in when you dealt with something
well, as if you had an emotional tape deck.
Build success on top of other successes. This accumulation will teach you the true
meaning of the phrase “nothing is impossible.” When you finally understand, not just in
your head but in every inch of your being, that there is nothing impossible in this world,
you will begin to see what you are really capable of. And then at some point in time,
you will awaken to what you are meant to do in this world.
Challenge small goals today, not just for the purpose of accumulating success, but in
order to find meaning in your life as well.
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17 Run as far as you like.
People sometimes use the phrase “burnout syndrome.” But really, no one ever “burns
out” do they? They merely lose their curiosity and drive to improve.
People work single-mindedly to enter university, pass difficult tests, and achieve goals.
These acts in themselves are not bad. The problem is that in exchange for all this effort,
people sometimes lose their ability to see the full breadth of the world and become
inflexible in their beliefs.
Just because you stand on top of a mountain does not mean you are in heaven.
The only things that wait for you at the top of a mountain are the view and the
satisfaction of having climbed the mountain. At the top of the world may be a view
more spectacular than you could ever imagine and the true essence of satisfaction, but at
the end of the day it is just a good view and satisfaction, nothing more. Even the
climbers who love their sport the most do not live at the top of mountains.
Normally, it would be suggested here that we think of the top of the mountain as the
goal and climbing the mountain as the way to get there.
But actually it is the opposite.
People do not climb mountains because there is a peak; rather, the peak is there for
people to climb.
Goals in life and business are not exactly the same as real mountains, but mountain
climbing does greatly resemble an individual’s experiences in life. In order to continue
to give your best to your job day in and day out, you need goals.
Participating in a marathon without a goal is excruciating. And so goals are always

established. The big difference I suppose is that in your job and in real life, you cannot
simply quit running because you have already reached your goal.
Curiosity and the drive to improve are the energy people use to continue running. It is
only when you lose sight of these two that it becomes difficult to go on.
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The reason why people need to study even after entering the workforce is so that their
curiosity does not wither away.
The world is full of surprises. As long as you never give up trying to experience these
surprises, your heart will continue to overflow with curiosity. It is because people are
curious that they can make the effort to move forward in life.
In order to foster within yourself a drive to improve, form rivalries. The world is large.
No matter where you go in it, you will always be able to find someone better than you.
When you become tired of putting so much effort into something, just remember that
somewhere there is someone putting in even more effort. And do not forget that greater
joy lies on the other side of greater effort.
No matter the task, there is never really a point where you are completely done with
anything. This applies to both your personal life and work. There may be points where
you can think to yourself that you have done enough and that you can stop what you are
doing, but you will never ever reach a point where what you are doing is absolutely
complete. Depending on whether you find this to be painful or wonderful can make a
180-degree difference in your life.
Will you choose to live in a hell where you are constantly forced to run somewhere, or
will you choose to live in a heaven where you are able to run as far as you like? Which
reality you experience depends on whether or not you possess curiosity and the drive to
improve yourself.
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18 Find someone to play catch with.
It is not always enough to have a game of catch between your left and right brains, it is
also important sometimes to play catch with other people.
In the same way that pro baseball players use a game of catch to warm up and check
their form, you can use conversation to verify whether or not your own way of thinking
and judgment are correct. When I am a bit troubled with something, when I cannot find
an answer to a problem I have run up against, or when I get a new idea, I use
conversation to put my thoughts in order. It is during conversation especially that I
usually realize I have fallen into a mental pitfall.
There are, of course, also times when these “games of catch” do not lead me to a
different decision than the one I had already made. But even if this is the case, I always
feel somehow different after having “played catch” compared to the time before I did
so.
First of all, there is some significance in putting your thoughts into words and sharing
them with others. Even if the person you are talking to disagrees with your opinions and
you are equally unswayed by theirs, it is immensely valuable to just know that there are
different opinions in the world.
There are also times when I realize my own mistakes in the process of explaining my
ideas. And then there are the times when, although I was previously unable to come up
with any ideas, during the conversation I am able to think of a number of good ones.
The vague recognition of the problem that I hold in the back of my mind, along with the
fuzzy parts of my ideas, always begin to form into clear issues and ideas once I turn
them into words and talk about them.
A true partner who you can talk to about your ideas or problems at any time – the kind
of person with whom you could actually play a game of catch– is a treasure of
unmatched value.
I think that the best way to find a partner for catch is through playing catch.
First, try raising an issue – “throwing a ball around” – with those nearest to you. People
are strange creatures. In most instances, if you throw a ball to someone, they will throw
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it back. And from there you can start playing catch. This is much more constructive than
just approaching other people to complain about your boss or coworkers, or to gossip.
And more than just helping you to find a good conversation partner, it is fun.
The best part about being an up-and-coming company was always having someone to
play catch with. Starting a company is an experiment of trial and error, and when
something happens you always end up discussing it with those around you. When
Rakuten was in its early stages, there was no reason to even go to the trouble of calling
conversations “catch.” There were not many employees, and the office was small. It was
as if we were playing catch 24 hours a day, all year long. It is no exaggeration to say
that Rakuten today was born out of the conversations of that period.
We have continued to this day the practice of catch that we developed at that time. As
the number of employees has grown along with the size of the company, it is no longer
as easy to talk to employees whenever I would like, but when I get a chance I still enjoy
a “game of catch.” For example, the best way to know what is popular today is to play
catch with the younger employees. They have an understanding of the time they live in
that is much clearer than any understanding one might gain just by looking at statistics.
Natural communication, which does not rely on the Internet, is likely to become ever
more important for corporations in the future. In this sense, catch is an important tool
for communication.
Playing catch is not something you need only do at work. For me, my wife and my
father are both important partners. They both have a deep understanding of my good
and bad sides, and so they sometimes throw balls at me that sting in such a way as to
take my breath away. There is no catch partner as wonderful as the one who can tell you
things you do not realize while at work and plainly say the things you do not want to
hear. Find someone to play catch with. It will help you to objectively understand your
own way of thinking and the way you do your job.
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19 Act with concreteness: half of half of half is one-eighth.
Accumulate improvements and succeed. This is the way we do business at Rakuten.
That said, words like “improvement” and “success” are abstract. It’s meaningless to just
talk about them. Unless these concepts are turned into concrete goals and actions,
they’re meaningless.
Allow me to illustrate this point. At Rakuten we have something called the “1/8
Project.” This is an initiative to concretely improve the way we do business by
shortening the amount of time spent in meetings. In order to make this happen, first, we
halved the frequency at which meetings occur. Then, we halved the number of
participants taking part in meetings. From there, we halved the length of meetings. Half
of half of half is one-eighth. I came up with this project because I believed that, through
this process, the amount of time members of the company spent in meetings could be
effectively reduced to one-eighth of what it once was.
If we just talked about reducing meetings times, nothing would change. But because the
1/8 Project calls for concrete action, the overall time spent in meetings has actually been
reduced to one-eighth. This is what I mean by acting with consistent concreteness.
“Reduce waste”; “save electricity”; “be kind to the elderly”; “save the earth”… There
are many slogans in the world. Most of these slogans have a wonderful message, but if
there are no concrete actions and goals backing them up, they’re nothing more than
appeals for your attention.
Think about training regimes for top athletes for a moment. They are always detailed
and clear. No matter the exercise, its purpose is always made absolutely lucid. I have
heard that even when comparing the results of the exact same exercise over multiple
training sessions, whether or not the athlete knows the exact effect of the exercise
changes the outcome remarkably.
This is the true for exercising, and it is true in business. Just saying that you will give
something your all or that you will try your best is worthless. You must pursue concrete
actions, and you must do so while always considering “Why am I doing this job?” and
“What will result from this job?” Abstract action will only lead to abstract results.
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You can’t get anywhere by only walking through the darkness.
Are you just going through the motions at work, unable to save yourself from doing the
same things day in and day out? It’s not uncommon for people to lose their sense of
certainty about the exact nature of their work after carrying out the same tasks day after
day after day. If you have been doing the same job for a year and don’t feel like you’ve
gotten anywhere, this is most likely your problem.
They say that a journey of a thousand miles begins with a single step. Be it a step or a
half step, the important thing is that you are stepping toward a goal. If you want to
succeed, do your job while constantly making sure that you understand what concrete
actions need to be done.
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20 Every kind of information is valuable.
I might put this in another way: “everything and anything can be valuable information.”
In the Book of Five Rings by Musashi Miyamoto, the famous swordsman compares the
jobs of a carpenter and a samurai, and comes to the conclusion that they resemble each
other very much. Watching carpenters, he must have surely discovered principles that
could be applied to his own work. This is exactly what I want to talk about here.
I have heard that the story that Sir Isaac Newton discovered his laws of gravity after
watching an apple fall from a tree was made up some time after he came out with his
findings, but whether it’s true or not, people love this story. Why? I think it’s because it
holds within it a mysterious truth about the creative process.
Answers and ideas are often hidden within completely unrelated things.
Or, if you will allow me to put it another way: there is nothing in the world unrelated to
your life. Everything is valuable information.
Answers and ideas may not always be apparent, but it is not like anyone is hiding them
from you. It is just that you do not see them. If you look for them, you will find them.
So what must you do to become the kind of person who is able to see this hidden
information? Approach the world with curiosity. Take an interest in everything. I am
repeating myself, but I just cannot stress enough how important it is to understand that
there is nothing in the world that doesn’t affect you. Look for the information hidden
within the true nature of things.
Actually, it may not be enough just to look for this information. No matter how
passionately you look at the things around you and the situation you are in, if you do not
feel you are facing any problems, you will not be able to find any solutions.
Musashi Miyamoto came to the conclusion he did because he was obsessed with his
trade. He thought about the work of a samurai day and night, and it was this that
enabled him to see answers in the work done by carpenters. If he had not been obsessed
with physics, Isaac Newton would not have thought much about it when he saw that
apple fall.
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When you have a problem before you that you just cannot solve no matter how hard you
try, everything suddenly becomes a hint. When you are really immersed in something,
you will think about it no matter what you are doing, and everything you see and hear
will teach you something about it. It is like when you are in love – you think about the
person you are in love with no matter where you are or what you are doing. It is a
similar mental state. Being sensitive to every kind of information means that you have
fallen in love with your job.
Have you ever been so caught up in your job that you cannot eat or sleep and all you do
is think about how to try to solve the problems you are facing? Once you experience
this for yourself, you will understand how true it is that everything can be valuable
information.
There are definite differences between work and love. This goes without saying. For
instance, with love, there are times when you might be extremely passionate, but you
still never see your relationship develop. This is not the case with work. If you really
care about something related to your job, you will find an answer.
Answers are hidden in absolutely everything. Do not let information pass you by.
Develop sensitivity for every kind of information.
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21 Humans are self-justifying creatures.
This is an admonishment to me as much as anything.
Self-justification hinders rational thought. It does so more than anything else. I have
even sometimes thought that the reasons for most of the mistakes made in the world
might simply boil down to the person making the mistake believing that they are
absolutely right.
No matter how amazing or respected a person is, be they an author, politician,

economist, or anyone else highly praised by the general public for their talent and
insight, everyone at some point in their life has made a decision that to everyone else
seemed obviously wrong.
These decisions always have one thing fundamentally in common: after making the bad
decision, the person responsible justifies their own actions. They attempt to shift the
blame for their mistake onto other people.
In Japan we say, “Every thief has his reasons.” This is truest when you are talking about
your own actions. It is normal to believe tentatively that there is a rational reason behind
what to other people may appear to be an obvious failure.
“I’m not wrong, I’m right. I haven’t made any mistake” – this is how people always feel
after they mess something up. It is this attitude that causes people to make excuses and
justify their own actions.
But what are other people supposed to think when they hear these excuses? Think about
how you feel when you hear other people make such excuses, and you will quickly
understand what I want to say here. Excuses only make matters worse.
Everyone knows this to be true. But it’s human nature to make excuses. People do not
just make excuses to others either, they also make excuses to themselves. And there is
nothing that anyone can do to stop this: It is not just pointless, it is extremely dangerous.
The best response to failure is to think about the reason you failed and develop a
method to make sure that you don’t fail the same way twice.
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When you justify your own actions, you lose sight of the reasons behind your failure.
When the reasons for your failure become obscure, you become unable to develop
correct countermeasures.
In other words, self-justification is the reason why some people seem to make the same
mistakes over and over again.
Actually, this is particularly true for me. I cannot keep talking as if this were about other
people. When I slip up even a little, I immediately try to justify what I have done. I
always do this. I cannot stop myself.
But I also think that even if I cannot stop myself, if I do not do something about this I
am placing myself in danger. This is why I always make an effort to find someone to
play catch with, and why I go out of my way to hear the information I don’t want to hear.
Choosing to live in an environment in which everything you do is right is equivalent to
limiting yourself. This is why I say so often that everything starts from self-denial.
Humans are creatures that always want to justify their own actions. I am this way as
well. I cannot deny this.
I may not be able to deny it, but I can work to make sure that I never forget that I have
this tendency.
I believe that the only way to deal with the disastrous want to justify one’s own actions
is to constantly remind yourself that self-justification is in your nature.
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22 Measure your intuition.
Let’s say that you have the sudden feeling that if you open a book store in front of your
bus stop it would be extremely popular.
This is your intuition at work. There are many people who have succeeded in business
just by their intuition. But there are many, many more who have failed in business due
to an overreliance on it. Never forget this. After all, if this was not the case, the people
who succeeded in business only by their intuition wouldn’t be able to act so proud of
themselves.
I am not suggesting that some people have good intuition and others poor intuition.
What I am saying is that intuition is like a rough draft or a sketch. There are no details.
In business, details matter. The details can sometimes present you with tremendous
obstacles, and hidden within these obstacles and the opinions of those who disagree
with you are sometimes truly excellent ideas. In any case, if you try to draw up a
business model without filling in all of the details, you will fail.
This is why you need to develop metrics to measure your intuition.
Take the intuition you have that something might become popular, and investigate it in
terms of actual numbers. How many people pass by your stop? What are the sales of
nearby stores? How many people visit bookstores near the next stop? What are their
profits? What are the rents in your neighborhood? What are bookstore personnel costs
like? Gather data on all of this and a whole range of other figures and calculate what
your profits might be supposing you opened your store.
Having filled in the details of your plan, take a long and hard look at it. Do not just
focus on the nitty-gritty either; look at it in terms of the big picture as well, re-exposing
the data to your intuition.
If you do this, you should begin to develop a different intuition than the one you
initially had when you first stood in front of your stop. The profits you can expect based
on the data you gather will likely be lower than your first vague expectations. Most
people tend to take an overly hopeful view of the world, and frankly, there is most
certainly a reason why there is not already a bookstore in front of your bus stop. If you
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can think of an idea, there is no reason to believe that somebody else cannot think of the
same idea as well and hasn’t already.
Now, this does not mean that you should give up. Take your detailed plan, look at it
from afar, and think about ways to bring the low numbers in line with your initial
expectations. Maybe you miscalculated something. Maybe there is a way to bring the
numbers up. If you think about this you will begin to form new ideas. This is the second
wave of your intuition.
This second wave should be much more concrete than the first wave, because you will
now understand the ins and outs of a bookstore. Your business model will be that much
clearer.
Take your new model and try to measure it once again. The numbers you need will be
entirely different this time. As you repeat this process over and over, your model will
become more and more detailed.
This is the best and only way to make good use of your intuition.
Value intuition. But know that you will never continuously succeed in business relying
on intuition alone. You must measure your intuition in order to make full use of it.
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23 Seek out new frameworks, continue to learn.
Frameworks and frames of mind: these are the windows through which we view the
world.
Japanese people like to divide the world into amateurs and professionals. There are
professionals in every field, and you often hear these people look down on their
contemporaries as amateurs. There is a clear line that divides the amateurs from the
professionals.
I do not think this line is just the difference between the amounts of specialized
knowledge two people have. What really divides amateurs and professionals is whether
or not the frameworks of a person’s profession have truly been imprinted on the mind of
that person.
In marketing, we have marketing frameworks. You might also call them thought
patterns. If it we were talking about chess, we would call them strategies.
Strategies are not common sense. They might seem like it, but they are not. Even the
professional chess players who play in ways that seem to go completely against
common sense must constantly study strategy. Strategy is the framework through which
people think in a more chess-like way.
You sometimes meet people who have accumulated immense specialized knowledge but
have not yet become professionals in their field. The reason for this is that these people
have yet to internalize their field’s frameworks. They are like a pro chess player who
does not know any strategies (although frankly I doubt such a player exists).
The other side of this is, if you understand the framework of what you are doing, even if
you do not have a lot of specialized knowledge about it, you can understand the gist of
it. And in business, understanding the gist of things is immensely beneficial.
Before you begin to study the more specialized aspects of what you do, first learn about
their framework.
You might understand marketing but not human resources. You might understand
computer operations, but not technology. You might be able to read a blueprint, but be
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unable to make heads or tails out of a ledger. I think this is common in the business
world. Because a company’s areas of specialization expand as it grows, especially those
working in large corporations may find themselves unable to do every kind of work
their company does. This is why so often people admit that they do not even know what
goes on in other sections, and why large corporations sometimes have problems with
territorialism.
The division of work is something that companies do to make themselves more

effective. It is not done to make everyone in the company territorial – companies divide
up work to they can utilize the power gained when separate specialized sections are
organically linked together as one.
Realistically, there is no specialized job that can be completed using only specialized
knowledge. Whether you are drawing up project plans or trying to come up with new
ideas, an understanding of another field is always helpful, even if it serves only as a
reference. Furthermore, knowledge of the frameworks of other fields will help you to
correctly understand the reasons behind successes whenever significant results are
reported in those fields. And this understanding, in turn, should be useful to you in your
own field.
Do not pursue just the frameworks of your own field, but take an interest in other fields
as well. Study them. This will expand your horizons and the larger your horizons, the
better. The larger your horizons are, the more flexible your ideas. In the end, knowledge
of other fields will help you to come up with ideas for your own.
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24 The problems are endless. That’s what’s exciting.
There are very few problems in business that cannot be solved. I wouldn’t go as far as to
say there are no unsolvable problems, but I think that for most issues there is always a
way out.
On the other hand, whenever you are up against Mother Nature, some things are just
impossible. For example, it is absolutely impossible to prevent earthquakes before they
happen with the science and technology we have today.
We can, however, follow earthquake preparedness plans and thereby lessen the damage
they inflict. This is because earthquake preparedness plans affect change on society.
Society is an artificial construction created by people. Because it was created by people,
it can be changed by people.
Business is also a product of society. Except that, unlike earthquake preparedness plans,
which deal with nature, business deals with creativity. And when it comes to creativity,
nothing is impossible.
The thing is, when you use your creativity to solve a problem, you inevitably become
able to see a new problem on the horizon. In fact, you never actually solve problems.
Rather, you solve a problem, and then come to see a new, different problem. This
fascinates me.
An argument against what I’m saying here might be that if this is the case, why bother
solving the initial problem in the first place? Why try to solve any problems? If this is
how you feel, I’m sorry, but I fear that you might not be cut out for business. Because in
the end, this is what business is about: the endless application of the creative process.
In Greek mythology, there is the story of Sisyphus. Sisyphus is forced to endlessly try to
push a rock up a hill in Tartarus in order to cleanse himself of his worldly sins. The
cruelest part of the story is that although Sisyphus works so hard to push the boulder up
the hill, every time the boulder falls back down just as he is nearly to the top. And so he
must push the boulder up the hill for all eternity.
Although there are essential differences, business shares some similarities with this
story. You are never able to see your next problem before you solve the one at hand, but
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there is always a next problem. And it is always much more difficult than the one that
you faced before. Unlike Sisyphus, you are not constantly going up and down a hill, but
you are constantly climbing one, never reaching the top.
The harder the problem that you face, the greater you grow as a result of trying to solve
it. You scale a high peak, only to realize that there is a yet higher peak to scale. In other
words, creativity and the problem solving process exist to help you to find new
problems. You solve the problems before you, and aim for higher peaks. This is what
business is all about.
I’m sure that some people might question whether this is really all that fun. I believe it
is. Of course it is. Using your creativity to solve problems, and then finding new
problems waiting for you when you are done – what could be more exciting than that?
Whenever I run up against a particularly tough problem, I always feel intensely excited.
I do not think of having to solve more problems as punishment – being able to solve
new problems is a reward.
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25 Think about what you are missing.
Unlike sports, there are no time limits in business. Likewise, business is not something
that you must face alone.
When athletes are hurt they usually try to hide their injuries to the extent they can – they
don’t want their competitors to know where their weak spots are or when there are
problems with their performance.
But there is absolutely no need to act like this in business.
In business, you can have as many weak points or deficiencies as you like, because
these points can be supplemented. The only truly fatal thing is to not realize this.
This is one explanation for why we so often do not listen to the things we do not want to
hear. If we really were all participating in one-on-one competitions, we really would be
able to see each other’s faults and weaknesses. They would be horribly apparent.
However, in business, weaknesses are not so visible. There are many factors behind who
wins and who loses. Differences in capital mean differences in employee numbers and
quality. Unlike sports, in business not everyone is competing on a level playing field. It
is for this reason that when you encounter difficulty it can be very hard to understand
exactly the causes behind the issues you are facing.
There is one thing you can always be sure of. Nobody is perfect.
Everyone has weak points. Everyone has flaws.
If you can make up for your flaws, your job will go even better than it ever has before.
This is why it is so important that you understand accurately what you lack. You must
not let your own delusions of grandeur get in the way. Think humbly. Think about what
you are missing.
Once you understand this, think about whether you can make up for your weaknesses by
studying, or if this can be done by having someone else cover for you. Make your brain
into a new one that possesses what your current one lacks, or invite others to work
together with you. There are many ways to go about it.
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Basically, the first thing you should do is to think about studying. For example, if you
feel that English is imperative to your work, then you should start by studying English
yourself.
There is no need to be overly stubborn about this. Ultimately, you should just do
whatever you need to do to achieve the results you want. Rather than spend hours and
hours studying English, there are times when it just makes more sense to hire an
interpreter who has already perfected their skills. When deciding whether to study or to
ask others to help you, you should weigh carefully the amount of time it takes to study
versus how effective studying will be.
Judging this can be more difficult than you might think. There are times when you may
find yourself unable to even make a judgment, and your problem will continue to go
without a solution as you put off both studying and asking for help.
If you understand your own deficiencies, you can choose to either study or use some
other method to make up for them. Really think about this at least once. And when you
come to a conclusion, act as soon as possible.
In business, you can supplement your own weak points and deficiencies. Not doing so
will only allow your rivals to pull farther and farther ahead of you.
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26 Never lose your excitement.
As long as you work, it is important that you maintain a high level of excitement. This
is an absolute must.
I believe that charging up one’s motivation and maintaining a high level of excitement is
also a vital part of everyone’s job.
It is unfortunate, but we are all human, and as such, we sometimes lose our excitement
for things.
The problem is, more often than not, when a person loses their motivation they do not
necessarily realize it. For this reason, you must keep yourself constantly conscious of
your own excitement level, working to raise it when it begins to get low.
Everyone is motivated by different things. This is the natural way of the world. For
instance, I have heard that before Steven Spielberg begins filming, he always watches
Akira Kurosawa’s Seven Samurai. This is his way of getting motivated. They say that
the first time Spielberg saw Seven Samurai, he felt that it was the definitive example of
the way a film ought to be, and that he was deeply moved by it. Being deeply moved is
always an inspiring experience. At these times your thoughts are crystal clear, and you
have no trouble generating enough excitement.
In my case, I like exercise, and so I often go to the gym. I work up a sweat two to three
times a week for an hour and a half each time. First I enter the sauna to get my heart rate
up, and then I do half-an-hour of aerobics, followed by various muscle exercises. This
alone always manages to make me feel very excited by the time I hit the showers.
Exercise in itself is a good motivator, but even more than that, the reason I think this is
so effective is because it reminds me of my dreams of becoming a professional athlete.
When I exercise, I am able to clearly remember how it felt to be young and so into
tennis that I just did not want to do anything else.
When you are a child, you get excited about even the smallest things, whether you mean
to or not. But, somehow, when you become an adult, you lose this ability. You are
moved less and less, and it takes more and more to get you excited.
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When you feel mentally drained, it is better that you do not try to throw yourself into
your work. Actually, I even think that it is far better to take the day off when you feel
this way.
When one person is unexcited about what they are doing, that attitude will spread to
everyone they work with. It will affect the energy of the whole group, and can even lead
to failures and mistakes. More than anything, when this happens, work stops being fun.
When you stop enjoying your work, you begin to approach your job as something you
do simply because it needs to be done. It becomes impossible to do creative work, and
as a result, you become unable to make important judgments.
Keep your energy up, and maintain a positive attitude at work. Continuing to work
when you feel mentally drained will only lead you to failure.
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Chapter 3: Know your rivals (A treatise on personal relations)
When I say “rivals” here, I don’t mean just your literal rivals; I am talking about all
interactions within your company, and the best way to form good relationships. In other
words, think of these chapters as a treatise on personal relations.
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27 If it is not an added-value service, there is no point.
What is the difference between a five thousand yen watch and a million yen watch?
Think about it. Ever since the discovery of quartz, the price and performance of a watch
have become unrelated to each other. A five thousand yen watch and a million yen
watch both tell the same time.
So why do people pay a million yen for a watch?
For these people the watch has some attached added value: this value is equivalent to a
million yen.
This applies not just to watches; in the modern world, this applies to everything.
Those involved in business must constantly think about whether the things they offer to
customers (be they products or services) actually have added value or not. We no longer
live in an age where it is acceptable to sell something worth a dollar for a dollar.
This also means thinking about what the real source of your profits is. Why do
customers purchase what you sell? Do your products and services carry with them
added value? Does that added value give your customers a feeling of satisfaction above
the actual value of the product? And more than anything else, can you further improve
that added value?
Thinking about this continuously is the best way to further the development of your
business, and is a basic principle of business that you absolutely must never forget.
If you are an employee at a company, this way of thinking can also be applied to your
relationship with your company. All employees are in some way selling a certain kind of
service to their company. And that service as well needs to carry with it some added
value. Why does your company pay you? You will never get anywhere in life if you
think so simply as to believe it is just because you have signed a contract.
What added value are you providing to your company? Think about whether you can
increase that added value, if even only a little.
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It is important you understand that increasing added value is perhaps the hardest work
that you can do. Doing it and thinking about doing it are entirely different.
I am sure that anyone with subordinates already knows this, but if you carefully analyze
the people around you, you will realize that there is really not much difference between
a superior employee and a not-so-superior employee. However, under the right
circumstances, that small difference can become as great as the difference between
heaven and earth.
I think that the vast majority of the people in the world do not make the effort to
facilitate this small difference in their own work. Is this because they think, ‘If other
people aren’t making the effort, why should I?’ Or is it because they think that since
everyone is getting the same paycheck, if they made a little more effort it would cause
them to incur a loss in comparison?
It goes without saying that this will not result in a loss, but an enormous opportunity.
What is your added value? Think about it. It is fine if you start small but make an effort
to improve it. This small effort may be the difference between success and failure.
Always remember that for the people willing to give you their money, if there is no
added value in it for them, there is no point.
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28 Think about things from someone else’s perspective.
This was first said to me by my grandmother when I was in my fourth year of

elementary school, and it has stuck with me ever since.
I do not think that this sentence needs any explanation. It is a fundamental principle of
many religions and belief systems across the world. You might even say that the entirety
of what the human race has written on morals is just this idea over and over again using
different words and phrases.
Think about things from someone else’s perspective. There is no doubt in my mind that
if the people of the world were actually able to do this, nearly all of the world’s
problems could be solved. Wars, famine, North-South disparities, ethnic conflicts, even
environmental problems could be entirely done away with.
Conversely, one might also say that the inability of anyone to really do this is the reason
for most of the world’s difficult problems.
The ability to think from someone else’s perspective is unique to humankind. I believe
that this is a far greater testament to a person’s humanity that the ability to use tools or
build a fire. Infants cannot do this. Children of a young age do not yet possess the
ability to absorb ideas from their culture, and this is not something that is encoded in
our DNA. I believe that this is most likely an ability that we picked up after we began to
form societies. I also believe that before I encountered my grandmother’s words, I may
not have been conscious of the idea of thinking about things from another person’s
perspective.
The same thing or action can look entirely different depending on what angle you view
it from. This might seem obvious, but if you were not already conscious of the idea of
different perspectives, you would never realize this. And although people say “try
thinking from someone else’s perspective,” no one really tries to do this very much. It
seems like most people think that doing so will weaken their own position.
This is a big mistake. Think of it this way: if you cannot understand the point of view of
the person you are talking to, there is no way that you will ever be able to convince
them to accept your own view. Of course, if you are in an oppressively higher social
position than the person you are talking to you can force your opinion on them, but that
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is something entirely different from gaining their understanding. And if you take a
long-term perspective on this, you will realize that these kinds of actions will ultimately
only hurt you.
In business especially it is important that you think long and hard about this. To put it in
the simplest terms, business is all about you earning profits for yourself while pushing
loss onto others. Success is all about keeping this up for a long time, consistently. But
the real world doesn’t make this easy. So, one strategy is to concentrate on building
relationships through which both you and the people you are working with can benefit.
Such relationships will last. In order to create these relationships, it is vital that you
think about things from other people’s perspective.
I am not saying that you should proceed by only thinking about profit for the person you
are dealing with either. Seriously thinking from someone else’s perspective is all about
thinking about how to trade off as much as possible between what you want and what
the other person wants. It is all about finding a point of compromise where both you and
the other person gain something. Whether you are selling something, offering a service,
or making a deal with one of your trading partners, this way of thinking should be
fundamental – it will never fail you.
Being able to think from the perspective of someone else is one of the basic
requirements for succeeding in business.
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29 Why do people buy things?
When I first started Rakuten Ichiba, it was at a time when other Internet shopping malls
had failed one after another. Most people saw this as a sign that Internet shopping malls
would never be successful. I thought otherwise.
I thought about what functions Internet shopping malls provide, what their merits were,
what their demerits were – in other words, I thought about the alpha and omega of
Internet shopping malls, and then I came to a single conclusion.
If the power of the Internet could be sufficiently utilized, from the perspective of
product variety and price, it was far easier to start an Internet shopping mall than to
open a store offline. I came to believe at that time that if I could create a system that
provided customers real-time information on product specifications and price, my
shopping mall would absolutely succeed. This conclusion paved the way for Rakuten
Ichiba.
If I had given up at that time because other people said that it was not possible, Rakuten
would not exist today. It is extremely important to always look for the simple reasons
behind things and to repeatedly ask the kinds of questions that help you to see things as
they really are. Even after Rakuten Ichiba got off the ground and began to succeed
month after month, I have never forgotten the importance of asking these questions.
Why do people buy things in the first place? If you think about shopping, you will
realize that there are many different facets to it. Some people will say that they purchase
only the things they need, but is that really true? Is that all there is to it? Do people
really only buy things to satisfy their needs?
When I was working to start up Rakuten I thought about this a lot. I thought about it
when I was sleeping and throughout each day, I thought about it when I watched
television, I thought about it when I walked around town, I thought about it at work, I
thought about it everywhere.
People buy things for a variety of reasons. And those reasons all have their own reasons,
and those reasons themselves all share one thing in common. In the end, the reason
people buy things is, it is fun.
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Shopping is entertainment.
When I figured this out I was able to come up with a lot of new ideas for Rakuten
Ichiba.
I believe that it is expressly because buying things on Rakuten Ichiba is fun that so
many thousands of customers visit the site each day.
Seeing things for what they really are is not just the job of philosophers. Businesspeople
especially must always look for the true nature of things. If you just follow the current
trends you will never really come up with a good idea. Epoch-making business ideas
and plans are born from an understanding of the true ways of the world.
When you run up against a problem, rethink your views. See things the way they really
are. Why are they like that in the first place? Ask “why” over and over again. Turn
conventional thinking on its head. And from there, search for the solutions to your
problems. If you cannot clearly understand a problem, you cannot solve it.
I know that it might seem like a waste of time initially, but in the end, thinking over and
over again about the truth of a situation will lead you to a solution to your problems.
This is the best and only way to solve really difficult issues.
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30 Turn your greatest risks into your greatest opportunities.
“Risk” is a word that is almost always partnered with “avoidance,” to the extent that it
often seems that the entire world is obsessed with avoiding risk. The thing is, and you
can say this about anything really, behind the things that the entire world avoids there is
usually a business opportunity.
Risk is especially this way. Those who dare to face risk head on will be successful in
business. If you look at the history of any company that has achieved huge success you
will find countless examples of great risk-takers.
Those involved in Rakuten Ichiba at the beginning were also risk-takers of sorts. The
idea of an Internet shopping mall was already one with a recognized history of failure in
Japan. Common sense told us that there was a high chance we would not succeed. But
that was a risk we were willing to take.
Some people would probably call taking a risk in this way, or rather, betting against
such risk, a kind of gamble. I cannot deny that business contains within it certain
elements of gambling, but I believe firmly that gambling and business are basically
different.
It is true that I bet against a risk, but I did so only after completely understanding the
magnitude and type of the risk that I faced, reducing it as much as I could and then
preparing a plan to deal with the worst-case scenario. We were not talking about
one-in-eight odds or anything like that, and it was not the kind of gamble in which
winning is absolute success and loss is absolute failure.
The biggest risk that I faced at that time was the possibility that the Internet would not
spread as fast as I had predicted. The speed of proliferation that we saw in 1997 was not
sufficient to attract enough customers to Rakuten Ichiba, no matter how appealing we
made our site. The initial business model depended on the Internet spreading throughout
the world at a rapid pace. There was always the possibility of going bankrupt if the
Internet did not spread as fast as I had predicted.
As has been written in many other places before, in order to deal with this risk, we set
the fee for opening up a shop on Rakuten Ichiba at 50,000 yen, a price unheard of at the
time, and we asked that store owners pay for half-a-year’s service up-front. This meant
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that even if the Internet did not spread as fast as expected, we would still be able to
maintain a minimum cash flow. This is also the reason why we initially accepted little
capital and kept employee numbers low. We believed that keeping our scale small
would better enable us to wait until the Internet spread. We did not just take a risk, we
worked to fully understand the magnitude and type of the risk we faced, and then
developed a plan to deal with it even if the worst-case scenario occurred.
The reason why risk taking so often leads to opportunity is because areas of risk often
also have the huge merit of being nearly devoid of competition. In the case of Rakuten
Ichiba, we faced no competitors. I do not think I need to explain how much this helped
us to succeed.
Understand precisely the type and magnitude of the risk you face and come up with
concrete plans to deal with it. If you can accomplish this, your greatest risks will
become your greatest opportunities.
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31 Anyone can imitate a best practice.
The trick to doing your job well is to always search for the obvious solutions close at
hand. This is always the case when you run up against a wall. The person in the next
seat over surely knows the answer, or can at least tell you something.
People often do not look for solutions in their surroundings. Like the characters in the
play The Blue Bird, people tend to look for answers far away, believing that the
hardest-to-find solutions are the ones with the most value. This is nothing more than an
illusion. People have engrained into them the idea that the harder something is to obtain,
the more valuable it is. This may be the case with precious metals and minerals, but it is
absolutely not true when we are talking about the best way to get a job done.
I would not suggest that workplaces in Germany and Japan, for instance, are exactly the
same, but the fundamentals of work are principally the same the world over. The
problems that people face in any location are never that different. That being the case,
we can infer that there are a limited number of good solutions to each problem as well.
The point of this is that in the same workgroup there are likely to be those who can deal
with a certain problem well and those who cannot.
Therefore, the solutions that you find by searching far and wide are likely to also be
easy to find close at hand. If you look around nearby, you are likely to see a solution. If
you cannot see a solution, you aren’t looking hard enough. That is the only reason. Ask
yourself, how well do you actually understand the approach that your coworkers take
toward their own jobs?
Let me illustrate what I mean by explaining something that once happened to me.
At Rakuten Ichiba, we have a system which I came up with known as “Two minute
calls.” The premise of the system is that whenever we receive a request for information
or materials, the person in charge of the account of the customer making the request
must call them within two minutes.
From the customer’s perspective, this means that they receive a phone call not long after
closing the web page on which they requested the material. They are likely to be a bit
surprised, but I believe that this system helps us to further gain the customer’s trust.
Furthermore, the speed of this system is not just facilitated by a computer, but is fully
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supported by a human being on our side, and this is important because one of our
intentions with this system is to help our customers understand that there are actual
people at Rakuten Ichiba interested in working for them.
Just by receiving a request for information or materials, the chance of forming a new
contract increases. When this system was actually introduced at Rakuten Ichiba, our
sales increased significantly.
I call it a “system,” but actually it is not such a complicated process. All we did was
create a position with the sole responsibility of calling customers to ask for information
within two minutes of receiving a request.
I think that this is a system that could be effectively used in any number of businesses,
but it actually did not spread very far throughout the Rakuten Group. Although this is an
easily accomplished method of increasing results, thus far no one has really paid much
mind to it. Interestingly enough, the system is spreading quite rapidly through our US
subsidiary, LinkShare. I do not mean to suggest that American workers are somehow
better, but for some reason, even though all our employees belong to the same company,
our staff on the other side of the Pacific can easily understand the merits of this system
that our Japanese staff seems to be completely in the dark about.
Examples of success are always close at hand. The greater part of every job lies in the
way it is executed and the operations followed. The thing that really makes a superior
worker superior is the way that they execute their work and follow operations. You can
not fake talent, but anyone can imitate a best practice.
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32 Listen closely to those with different opinions.
Anyone will gladly lend their ears to opinions that make them feel good. I am not going
to talk about these kinds of opinions here. What I would like to talk about are the
opinions that make you feel bad; opinions that cause you to shake with rage from head
to toe. I am talking about opinions that are difficult to hear.
What about these opinions makes them difficult to hear? For one thing, there is the
matter of whether you are prepared to hear such opinions or not. Another issue is that as
you gain seniority it gets harder and harder to find people who will say such things to
you.
Think back to when you first entered the workforce. What a great time – when a person
first enters the workforce, they are often pelted with continuous negative opinions from
every angle. And all you can do is clench your teeth and hear them out. Sometimes you
may have been blamed for something you did not do. There may have been times when
you were the target of a misunderstanding or malice. But even malicious criticism you
receive is never groundless, and so it is better to think of such opinions as training to
help you keep your composure, and to listen from a removed point of view. It may
sound harsh, but as they say in Japan, “every thief has his reasons.” Within any opinion,
there is at least one nugget of truth likely to be useful to you. Once you are alone, try
writing this in a notebook and using it to better yourself. With particularly malicious
opinions, this is the best way of getting back at the person criticizing you. You will not
gain a thing by getting angry or seeking vengeance.
When you stop being around people who will give you this kind of opinion, you have a
problem. When this occurs, it is important that you make clear, through your attitude
and words, that you are open to receiving negative feedback. It is for this reason that the
door to my office is always open, except when I am meeting with a customer or taking a
ten-minute nap. I want the people I work with to come to me with their opinions
whenever they like. I also tell everyone that works with me the following: “Please tell
me anytime you have an opinion. There may be times when I react with anger, I am
sorry, I am only human. But no matter how angry I get, no matter how dull I think your
opinion is, I will not toss it aside without considering it. I promise you this. Tell me all
of your opinions.”
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This is not something I really want to write here, but to be honest, not every opinion I
hear is useful. It is not that such opinions are necessarily wrong, but often the opinions
are too narrow-minded or do not take a long enough view on the situation. It is not
about the opinions being deep or shallow – it is a matter of perspective I think.
Management sees things from a different perspective than employees do. If you cannot
see the entirety of a situation, you cannot possibly choose the best way forward. When
you look at a situation from such a perspective, you do end up feeling that many of the
opinions you hear are not very useful, but if you say this openly to the person giving
you their opinion, you may end up like the emperor in The Emperor’s New Clothes. And
while this in itself is terrifying, the even scarier reality is that reacting negatively to
opinions may cause those around you to stop coming up with ideas. An environment in
which there can be no debate is lethal to a person’s spirit and powers of judgment. In
order to avoid such a situation, you must always consciously approach people with an
open mind.
There may only be one worthwhile opinion among every 100 heard, but even if that is
the case, that one opinion may expose you to a lethal mistake. A single opinion can save
a company.
Beyond everything said up until now, the attitude of a leader willing to hear any opinion
can bring a breath of fresh air to your corporate culture and create an environment
where every member of your organization thinks carefully about the things going on
around them. An environment of free debate is an important tool for any organization
from this perspective as well.
Respect especially the opinions of those with different values from your own, and make
sure that others understand that you respect such opinions.
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33 Strike a balance between cooperation and competition.
It is often written that Rakuten is a very competitive company. But it is also a place
where people can share a sense of accomplishment over their work.
Each employee is the rival of every other employee, but is also an invaluable teammate
with every other employee. This might seem like a paradox, but the two frameworks
really do exist, side-by-side, at Rakuten.
It’s not just that they exist side-by-side – just as in the natural world, in any organization
it is important that there be both competition and cooperation. If there is only
cooperation, you lose your sense of urgency. If there is only competition, teamwork
becomes a mess. This is not just about any single company; this is a problem throughout
society.
The business world is a complicated place, and because of this, there are numerous
instances in which you are forced to cooperate with those you are competing with. I
have even heard that in English there is a word to explain this, “frenemy” – a mix of
“friend” and “enemy.”
It is important that cooperation and competition exist side-by-side, and that a balance be
struck between the two. In order to strike this balance, you must do away with any
law-of-the-jungle ideas you may have and look at your business from a wider
perspective. You must realize that social development and industrial development are
only possible if individuals and businesses develop first.
Competition is important, but you must think about whether that competition
contributes to development or hinders it. On occasion, pause for a second and really
give this some thought: right now, is it better for you to be competing or cooperating?
Throw away your preconceptions and give this some thought from a third-person
perspective.
If you realize that it is better to cooperate, put your heart into it. When it is time to
compete, exert every effort and fight until the end. For both individuals and companies,
this is the best approach to take.
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34 Improve your own abilities by guiding your subordinates.
In a separate section I write that a leader must be a teacher. No matter the subject, to
teach others means that you must first learn yourself.
I imagine that there are not a few people in the world who feel that giving guidance to
their subordinates is a pain. This is because they have not achieved a subjective
understanding of their own job.
In order to teach someone something, you must think about and analyze the things that
you do subconsciously on a daily basis and be able to put them into language in such a
way as to be completely understood by others. If the processes and methods by which
you do your job were always the same, there would be nothing challenging about
teaching others. However, in the real world, there are always special circumstances, and
you often run into situations that cannot be predicted. Processes and methods must
therefore be flexible. If you really think about how you judge situations and how you
deal with issues on a day-to-day basis, you will realize that this kind of flexibility is
both incredibly important and incredibly difficult to teach. In fact, the reason why
guiding others is such a pain is that this kind of flexibility is not always teachable.
Of course, this is perfectly natural. There are not many people who even think that
much about their own jobs. For this reason, guiding your subordinates is actually a
chance to improve your own abilities.
Every now and then, I meet someone who is surprisingly good at teaching. You do not
often see these people in the business world, but if you think about sports, for example,
I am sure that you can easily recall a number of people like this. This type of person has
almost always experienced tremendous hardship early on in life. Their thoughts on their
sport have been developed through repeated trial and error, and that’s why they are so
good at teaching others. I believe that this benefit is why we have the expression in
Japanese, “work hard, even if you must pay to do so.”
On occasion, giving guidance to your subordinates can actually help you to “buy” a
chance to do hard work. By having your subordinates attempt things that you have not
tried, you can learn vicariously through their trial and error.
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With all subordinates, the quality of their work and their personalities are of course
going to be different. There are those who you can foster into good workers just by
encouraging them, and those who need to be yelled at. For this reason, guiding your
subordinates can also help you to develop an eye for judging people.
There is one more thing I would like to say on this subject, something that must not be
left out. Because you are guiding someone else, you must take your own job that much
more seriously. It is not uncommon to hear of people who entered a company with poor
manners and developed better manners after gaining a subordinate. We sometimes say
that it is the child that raises the parent, and I think this phenomenon is similar.
Work to become better at guiding your subordinates. This will improve your own
abilities as well.
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35 Develop win-win relationships.
Bringing together conflicting interests is a fundamental principle of business.
They say that in the past, pirates were also merchants. Depending on the person they
faced, they would plunder or bargain. In other words, if it was more profitable to
plunder they would, and if it was more profitable to enter into a deal with the other party,
they would enter into a deal. Even plundering has its costs.
This is a bit of an extreme example, but this kind of behavior mirrors that of modern
companies. Logic dictates that you and your trading partners will have conflicting
interests. A one-yen profit for one side is a one-yen loss for the other. Like a pirate, in
business, if there is an opportunity to make a profit, someone will try to grab that
opportunity.
However, it is very difficult to achieve huge success in business this way.
The reason why piracy became prevalent (and in some places, still is) was because the
world was large. When the world narrowed, pirates lost their space to roam. I suspect
that the growth of the importance of trust in business contributed more to the decline of
piracy than any increase in the severities of punishments. Trading became more
profitable than plundering.
The rise of the Internet has served to further shrink the size of the world. And it has
made the importance of trust in business even greater than before.
Earning the trust of your clients and trading partners has now become an absolute
condition for success in business. In order to develop relationships of trust you must
consolidate conflicting interests, something that goes against all logic. In other words,
you must foster win-win relationships. This means making sure that your trading
partners also profit from your transactions.
Added value is what makes it possible to defy logic and create these kinds of
relationships. If a transaction has added value, you can carry it out and help your partner
to be profitable while also maintaining your own profit at the same time.
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The difficult thing about this is that it means that you must constantly create added
value yourself. As soon as a company loses its ability to create added value, that
company stops having a place in society. And an existence that only plunders from
society without giving anything back is destined to go the way of the pirates.
This is true for Rakuten as well. This is why we are always continuously and frantically
trying to give birth to added value. What must we do in order to help our customers to
lead richer lives and make a contribution to society? We give this serious thought and
constantly try to make this goal a reality. Creating added value is the reason
businesspeople exist, and the best way to overcome competition.
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36 As a fundamental rule, move swiftly.
An important quality for a businessperson is the ability to move swiftly.
In my experience, all of the really excellent businesspeople I have met in my life have
shared the ability to act quickly. I cannot think of a single exception. The speed at which
they made decisions was quick. The speed at which they implemented decisions was
quick, even their actual walking speed was quick.
Even if it is something small, apply this idea to what you are doing right now.
Especially if it something you do not really want to do – the longer you wait, the less
and less you will want to do it. Above all else, you must never postpone the kinds of
things that other people might normally postpone.
Most people in the world are impatient, but I wonder if this is because they know on a
gut level that it’s the most efficient way to be. If you think about this from another angle,
a person without a sense of urgency will never be a success in business.
Most people in the world believe that success or failure in business is determined by
differences in ability. While it is true that each person possesses different skill levels, it
is not necessarily the case that those with superior skills will succeed in business. This is
something that everyone ought to understand through experience.
However, there is no exemption to the statement that moving swiftly will help you
succeed. If you compare those that do today what they could do tomorrow with those
who do not, you will find that the former group comes out ahead every time. In other
words, speed is more important than skill.
We can also surmise from this that in business, time is more important than skill. A day
is always 24 hours. A year is always 365 days. These are conditions that no one can
change. What differentiates one person from another is how efficiently that person uses
the equal amount of time that they have been given. Someone who moves swiftly is
exponentially more efficient with their time than someone who does not. It is as if they
had been given exponentially more time. No matter how skilled you are, you will never
beat someone who fits 30 or 40 hours of work into a day by only putting 24 hours of
work into a day yourself.
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If you are quick enough, you can catch up and surpass those who are more skilled.
Being quick on your feet is thus an important skill in business.
It’s also something that you can get better at just by willing yourself to do so. If you
decide to do something, do it quickly. Do not put it off. Think of procrastinating as
being the same as not acting at all. Decide what you will and won’t do and stick with it.
If you can do this, you will never run up against a wall at work. You will be able to
constantly, consistently put your full effort into the issues before you.
I am not saying that you must immediately decide what you will do about every issue
facing you right now. But move swiftly as a basic principle. There may be times when
you stray from this principle, times in which rather than making a decision in the heat of
the moment it is better to make a decision with a cool head. Judging things correctly is
important. As a principle, you should never procrastinate, but there may come a time
when putting something off is the better idea.
It might seem here that I am contradicting myself. Nevertheless, whatever you do,
understand the importance of being quick to act. Never forget this; inscribe it in your
heart.
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37 Report to, contact, and consult with others.
Reporting: The act of telling others, “I did this.”

Contacting: The act of telling others, “I will do this.”
Consulting: The act of asking others, “Is it okay to do this?” before you do it.
This is something so basic it is written in every business book aimed at beginners.

Although everyone knows how important these principles are, I don’t believe that
everyone is acting on them. A high percentage of business failures could be avoided by
upholding these principles of communication. It does not matter if you are an
inexperienced employee or if you have worked many years, it does not matter your
position – these principles are important for every job and worker no matter where you
look in any company.
I am not saying that you must always report, contact, and consult about every single
thing you do. Doing this will make you a robot. What every company actually needs are
employees who can act based on their own judgment. However, overdo it and you will
no doubt be yelled at by your superiors.
The important thing is to make a judgment after deciding whom to consult, whom to
contact, and what to report to others. In principle, how much you do each of these
actions is determined by how important the job is, but aside from that, your decision
about this should differ depending on your superiors, the parties involved, and your own
abilities. This is why you must think for yourself. You must think from the perspective
of your superiors about how much you should consult, contact, and report on each
individual job. If you do not make the right decision, your consultations,
communications, and reports will become garbled, and working will become difficult.
After you complete a job, you will be screamed at for not consulting about it beforehand.
The next time you do consult about something, you will be screamed at for asking for
advice about petty matters.
What I want you to take the most from this is the knowledge that if you make sure not
to slack on your reports, things will pretty much go smoothly all the time. This becomes
truer and truer as you move up the career ladder, and is vital when you enter into middle
management and begin to ask your subordinates to handle jobs. Perhaps it is a matter of
pride, but as people gain more experience it seems like reports often become shorter and
shorter. Perhaps the person doing the reporting thinks that because they are not talking
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to a new employee there is no need to explain every little detail, but this lack of
explanation is a great source of anxiety.
In the modern world we fortunately have a tool that can easily dispel anxiety. With one
e-mail, you can report everything you have done. Using mere e-mail, you can develop a
relationship of trust with your superiors, and this is something that you absolutely must
concern yourself with. Perhaps this is putting it too simply, but I often think that e-mail
reporting is the most important tool for improving communication among
businesspeople.
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38 Analyze each situation from many different angles.
For instance, try thinking about Rakuten Ichiba from a myriad of different angles.
It is a network for selling and buying.
It is a place for communication.
It is a form of entertainment.
And it can also be understood as a business tailored to its members.
You can think of it as an evolved form of distribution, and you can view it as one use for
the Internet. Thinking of it in terms of sales and purchases immediately begs the
question of “what is consumption?” What does it mean to sell things?
By changing slightly the angle from which you view things, what you are viewing will
appear entirely different. Depending on the perspective, you will be able to see
problems or ideas in everything you look at. When you add one more angle to the way
you look at the world, you suddenly become able to see new problems and new ideas.
Analyzing things from many different angles will allow you to search out new problems
and develop new ideas.
Such analysis is an important step that bridges the gap between the work you have been
given and new work for you to do. Employees who cannot view the world from
different perspectives will inevitably be weeded out of any company experiencing rapid
growth. You become recognized as an important member of your team only when you
reach the stage where you begin to find work for yourself.
There is a world out there in which this way of thinking is not valued. This is the world
of the “salaryman,” the worker who is just another cog in the corporate machine. The
“salaryman” believes that his job is to sell the company his time. The “salaryman” does
not have the consciousness of being responsible for and concerned with his job. In this
sense, there are many executives and bureaucrats who are also “salarymen” of sorts.
Such people only view their own jobs from perspectives that suit them.
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And they are all aware of this.
Although they could at any time view something from a different perspective, these
people do not. They most likely believe that if they tried out something new, their
workloads would increase. They do not feel responsible for the results of their work. It
is an awful thing to say, but I think these people must live incredibly boring lives. If
they just changed their perspective, they would discover countless things that they
should be doing with themselves, but they do not.
Without doing so, they will never experience the joy of having accomplished something
that they were meant to do. They will greet the end of their lives having only spent their
time doing day-to-day work.
If you do not want to be like this, you must develop the habit of viewing things from
multiple perspectives. Don’t view your job from just one perspective, but from many
different angles – doing so will allow you to see previously unrealized points for
improvement and new ideas. If you only take a short-term mindset about this, then yes,
it may mean that your workload will increase. However, in the long term, this process is
an indispensible practice that will help you shift from only repeating routine work
day-after-day to pursuing a job that you can truly think of as your calling.
Work is not about solving problems given to you by others like a school exam. Work is
about discovering problems for oneself.
Look at things from multiple perspectives and discover new problems. Solve those
problems. Repeat. This repetition is what working is really all about. It is the source of
all joy in the workplace.
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39 See the success in tough conditions.
When company sales are getting worse, it can begin to seem like no matter what you do,
or what any department does, nothing works out. You may begin to think that the
company itself is a lost cause.
I believe that this way of thinking is tantamount to throwing in the towel too early. No
matter how bad things get, you can find signs of things turning around if you look for
them. At such times especially, you should seek out these signs and work to magnify
their effects.
Depending on how you look at a situation, the way it appears may seem completely
different. This has already been printed in many, many places in the past, but when
Rakuten Ichiba was founded, our total revenues in our first month amounted to 320,000
yen. Of that amount, 180,000 yen was what I had put into the company, meaning that
our thirteen-store shopping mall had actually only sold 140,000 yen worth of goods.
This was not a “tough situation.” This was what some would call “the end.”
But that is not how I thought of it.
I did not take the view that we had only sold 140,000 yen of goods, but that we had sold
as much as 140,000 yen of goods. Despite the fact that we had just opened, despite the
fact that we had no physical stores and that everyone around us said that Japanese
people would never shop on the Internet, we had sold 140,000 yen of goods. To put it
another way, there were people out there who had bought 140,000 yen of goods from us.
Had fourteen 10,000 yen items been sold, or had it been fourteen-hundred 100 yen
items? What kind of customers bought from us, what did they buy, and why? This was
not something that could be understood simply by looking at the figures telling me that
our total sales had been 140,000 yen. If I had not analyzed this information, I would
only have been able to look at the results and shrug with disappointment. But I knew
that the fact that we had sold 140,000 yen worth of goods meant that there was a reason
we had done so.
No matter how many times you multiply zero, you still get zero. But our results were
not zero. Our results were 140,000 yen. I thought to myself that if we could just find out
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why we had sold that amount, we could exert effort on that point and multiply that
figure by ten or one hundred times.
This method of thinking and everyone’s hard work is what led Rakuten to what it is
today.
We did not stop at one hundred times more profit. Ten years since that first month, our
yearly gross merchandise sales are more than 1 trillion yen.
No matter how bad off the world may seem, you can find examples of companies that
are succeeding. No matter how bad off a company may seem, you can find examples of
people and departments that are succeeding. At the bottom of Pandora’s Box was the
spirit of hope. Hope exists in any situation.
Seek out hope. Although everything may seem bad, the fact that some people and
departments are succeeding means that there is hope. These people and departments
hold the key to making that hope a reality.
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40 The spirit of challenge.
Once you lose your will to challenge new things, your job will more or less stop making
you happy. And furthermore, no matter how much you continue to succeed, everything
will turn against you eventually.
This has been proven throughout history.
If start-up companies ever forget this, their place in society will be completely lost.
Being a start-up company is an adventure. It is a challenge against the unknown.
It is about forging a new path through the wilderness. It is about aiming for a peak not
yet scaled.
Challenge the unknown and bring new value into the world. That new value will make
the world happier.
This philosophy is at the core of our work.
Creating new value is not easy. No one ever said that it was. Trying to do so will always
mean running up against huge difficulties.
But it is these difficulties that fuel growth.
For a start-up company, success means overcoming difficulties. In a world without

difficulties, success is meaningless.
There is never any proof that you will succeed.
What start-up companies are after are answers to problems not yet solved.
Leave the problems that already have answers to other people. The work of a start-up
company is to attempt to do the things that we or others seemingly cannot do.
In our world, nothing is impossible.
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Believe in yourself, believe in those around you, and make the impossible possible.
Think with all of your ability, and work with all of your might.
Think while you move forward. Move forward in order to think.
Succeed at that which others have been unable to succeed at.
This is the spirit of a start-up business. It is the spirit of challenge.
No matter how big a company becomes, no matter how much success it accumulates,
this alone must never be forgotten.
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Chapter 4: Motivate your organization
If you cannot motivate your organization, you will never achieve truly great success. It
is vital you study how to foster and motivate a good organization.
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41 Use KPIs (Key Performance Indicators) to motivate your organization.
I recommend the use of KPIs.
KPI stands for “Key Performance Indicator.” In order to achieve large goals, you need
to set measurable mid-term goals. Think of KPIs as the concrete values you attach to
these goals.
In order to motivate your organization, you need big goals. But in order to accomplish
those goals, the concrete steps toward their achievement must be illustrated in an
easy-to-understand way. If the people in your organization cannot accurately see any
markers of where they are going or how far they have come, the result will only be
confusion. Think of KPIs as the markers you need to make your work go smoothly.
For example, through the use of KPIs, you can quickly understand the fine details of the
key figures for achieving you goals. In the case of sales, these are factors such as how
many deals a salesperson has made or how many new clients that person has pulled in.
For employees, as organizations become bigger and as goals become bigger, smaller
jobs can begin to feel correspondingly less important. When this happens, it’s only
natural that you should feel that slacking off for the day will not make a big difference
to your organization as a whole. This kind of feeling among your employees, if left
unchecked, can bring your entire organization to a halt.
KPIs can serve as a bridge between the greater work of your whole organization, and
the individual jobs done by each employee. They are the path between the big goals of
the next few years, and the small goals of today.
Do not, therefore, be content with vague language-based goals – establish concrete

number-based goals whose level of accomplishment each person can easily check.
Working toward these kinds of goals is simple, honest work. But it is precisely this kind
of work that is the source of dynamism in the workplace.
In the end, no matter how big your organization, each company is really only the
accumulated result of the work of each employee. Each person in your organization
taking one step forward today is the same as taking five-thousand steps forward if you
work in a five-thousand-person strong organization. In one year, this will be more than
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1.5 million steps. The only problem is that in order to actually accomplish 1.5 million
steps forward per year, every single person in the company, without fail, must take one
step forward each day.
It’s often said that start-up companies compete with ideas. People believe that if their
idea is good enough, it does not matter how well managed their organization is, the
company will succeed. I dislike this way of thinking – I feel that it is the same as saying
that although start-up companies have ideas, it is at the expense of having quality
employees.
This was not what I had in mind when I set out to establish a start-up company.
My goal was never to compete on only ideas, but to create an organization that helped
to foster the skills of each individual employee, an organization that could compete with
any well-established company it came up against. I believe that having objective,
number-based goals is extremely important for this reason as well. The future of
Internet businesses will depend on how well each business improves the quality of their
products and creates new services.
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42 Be sensitive to resource allocation.
Resource allocation is all about figuring out where to best put resources. Developing
sensitivity for this is something vital for every company, no matter how big or small.
Each company possesses different types of resources depending on the industry it is in,
but no matter the industry, the most important resources for any company are its human
resources and its capital. It all boils down to what you do with people and money.
Everyone understands this well and knows that it is a question of the utmost importance,
yet it is a topic that for some reason seems to always get sidelined. Rather than make
decisions in terms of people and money, it seems more common to make decisions
based on vague concepts such as “business sense” and plain old intuition.
This is not just an important topic for businesspeople. Resource allocation is an

important issue for everyone. It is the issue of how to best use the limited resources we
have.
On an individual basis, I think that everyone has at some point sat down and thought
about the best way to spend their own money and time. If you are to think logically
about dividing up resources, you need to first consider what you want to accomplish
overall and the individual tasks that will make this possible. You must consider how
necessary each task is before you start working on it. Although this is the most logical
way to go about resource allocation, in reality it’s far more common to think only about
the tasks you have before you as you are doing them.
There was a time in my life when I used to wake up one hour earlier each morning in
order to study English before work. If I had decided to do this in the one hour before
bed, I do not think I would have been able to keep up a consistent study schedule.
Sometimes you work late, or you are invited out for drinks – things happen. But because
I set aside time in the morning, and because, as a member of the workforce, I was forced
to wake up at a certain time every day anyways, it was fine. If you actually tried this, I
think you would find that it is not as difficult as you imagine. It’s actually quite easy to
wake up even two or three hours earlier. Among the elite in Europe and the United
States, it’s not uncommon for people to show up for work at four or five in the morning.
At such an early hour, no one calls, there are no meetings, and there is no one asking
you to listen to requests or for advice. You get far more work done than normal. In
Japan, this also means that you can completely avoid the morning rush hour commute.
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It is such a small thing but this small innovation can change your life. It can also open
up new possibilities.
The same thing can be said for organizations about resource allocation. The important
thing is to always question common sense and think logically. For example, just because
you are approaching an important part of your project, that does not mean you should
assign most of your best people to the job. There are times when you can see amazing
results by assigning a few inexperienced but enthusiastic young people to a task. The
fact is that no matter how skilled or unskilled a person is, their abilities fluctuate.
Depending on the environment and conditions, those seemingly without skills may
prove to be very good at what they are assigned to. When people come together, they
can foster tremendous change in each other. I believe that personnel organization is
about facilitating such change. You must consider this kind of thing. Just organizing
personnel based on data is something that even a computer could do.
I understand well how difficult it can be to efficiently divide up resources when your
company grows in scale, but especially in large organizations, the ability of
management to utilize resource allocation to overcome problems and innovate is the key
to future success.
Whenever I hear someone say that their corporate culture has begun to feel stale, I
cannot help thinking that it is because poor resource allocation has made work feel
routine.
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43 A leader is a general, a teacher, a strategist.
This is true for every leader, no matter how small their group.
Young people especially tend to think of leaders as only being general-types, but a true
leader does much more than just instruct his/her group.
Generals are strategists, and therefore they must be aware of the big picture. Strategists
do not just work out plans for the problems near at hand, but think about the
overarching strategy for their whole group. To compare it to skiing, when you ski, you
should not just look at what’s right in front of you, but far into the distance as well.
When you lose sight of where you are going and why you are going there, you lose your
ability to lead your subordinates.
Furthermore, if you cannot think strategically, during times of particular uncertainty,

times of trouble, or times of failure, you won’t be able to formulate an appropriate
response.
Everyone understands that minimizing loss to the greatest extent possible is the best
strategy for dealing with failure. If you only ever run into one type of failure, thinking
of ways to deal with it is not so difficult. The problem is that failure comes in many
shapes and forms. Profit, customer trust, team spirit – when you fail at all of these
factors at once, how do you decide which to prioritize?
Strategic thought is indispensable for judging this appropriately. This is why we say that
the best generals are those who are good at fighting a losing war.
Another quality of a leader that we must never forget is that leaders are also teachers. I
want to stress this point strongly.
Those that become leaders have confidence in their own actions and judgment as a
matter of course. But whether they can teach their ways to others is an entirely different
issue.
Being an excellent athlete does not always mean that you will be an excellent coach. It
is hard to teach others the things that you do as second nature. And if there is a
difference in skill between you and the person you’re teaching, it is even harder. If you
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ask enough people about what they think the secret to being a good batter in baseball is,
some will look at you and say, “When the ball comes toward you, swat it.” This is
genius. It is possible these eight words contain the entire knowledge of the world of
batting. However, I doubt that these words are immediately understandable by the
average person. In order to really teach someone something, you must transform the
knowledge of a genius into something that the average person can understand. You must
put your intuition into words and put them to others in ways they can relate to. What I
am about to say might sound a little pretentious, but this is one of the biggest reasons
for my wanting to write this book.
You cannot create a good company just by gathering together many talented people.
Because when one person leaves, your company will lose that person’s talents. You
need to construct a framework to transfer abilities from person to person. This is not just
about fostering knowledge; I believe that worker education becomes worthwhile when
you start to raise the actual skills of your employees. Without a system to do so, no
company can last over the long term. For a true leader, this kind of work is an absolute
must.
Why do you succeed? Why do the things you do go well? Analyze the answers to these
questions, and once you understand them completely, it is your duty to become a teacher
and communicate your ideas to your subordinates. Help your team to grow, utilize that
growth, and achieve your goals. And then aim higher. The ability to set such a
wonderful cycle in motion is the mark of a true leader.
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44 How to get things done ten times faster.
People always have a complaint about their organization. Either it is rusting and
ineffective, or it is not getting anything done, or any number of other issues. Criticism
of bureaucracy is similar. The fact that even people within these organizations say such
things is pathetic. It’s enough to make me want to scream at these people.
Making your organization effective is your job!
Organizations exist to allow people to achieve things that they could not accomplish on
their own. Members of organizations should think of their organizations as their tools.
And a tool is only as good as the person holding it.
Chefs sharpen their knives daily to make sure they do not become dull. Taxi drivers
never fail to fill their cars with gasoline, lest they stop running. You would never hear a
chef moan that he cannot cook because his knives are dull or a driver complain that he
cannot drive because his car has run out of gas. When you work with tools, maintaining
those tools is part of your job. Compared to a knife or a car, an organization is a million
times more complicated. And much like the issues of sharpening a knife or filling a car
with gas, when people stop innovating and making efforts to improve, their organization
breaks down. This is why it’s so important to keep up with efforts for improvement and
innovation.
If your organization is broken, then I would suggest that you take drastic measures to fix
it.
The most common reason why an organization breaks down is long idling times. In
other words, it is when there are long periods of time when not much is happening. You
must completely do away with such occurrences.
I believe that no matter the organization, as a general rule it is always possible to get
people to work ten times faster. You need to aim for this speed on a normal basis. No
matter what you are doing, in meetings – any time at all – reduce the time things take to
one-tenth. Carry out two-hour meetings in twelve minutes. You might say that this
seems impossible, but if you really make the effort you can get it done somehow.
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Once people realize that their organization is working ten times faster, they will change
their attitudes. And as they do so, they will begin to feel excited about work again.
Working faster is always more exciting; this is human nature. It’s when you go at a slow
pace that your job seems dull. Once people realize the pace at which they are working,
they will want to work even faster.
Making people realize that they want to work is the way to make your organization
move.
I am sure that some of you reading this book think that carrying out a two-hour meeting
in twelve minutes is absolutely impossible. But I did it at Rakuten. I took what used to
be one-hour meetings, and conducted them in less than five minutes. Fifty-five minutes
of these meetings were being taken up by explanation. You might as well write out the
explanations for others. I made those who wished to speak at meetings submit what they
wanted to say a day before the meeting. People were already writing out what they were
going to say in preparation for the one-hour meetings; I just pushed up the process.
Those attending meetings are now required to read all the materials before the meeting
starts. This is something that can be done whenever people have a spare moment. This
means that when the meeting time actually rolls around, we have five minutes to clear
up any fuzzy points, five minutes to have a decision, and two minutes to spare.
In the beginning there were some people who did not adjust to this very quickly, but
actually this system has been implemented very smoothly. There is something about
putting your ideas into written words that makes any points that, if spoken, would be
ambiguous or unclear, suddenly easier to understand. Thus, by continuing this system,
we have seen the added benefit that workers are getting better at expressing themselves.
This system has resulted in a significant benefit from the way things were before.
If people want to, they will work ten times faster. And the faster your organization can
work, the more effective it will be.
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45 Utilize the principle of competition.
In Darwin’s theory of evolution, he stated that natural selection is a law of the natural
world. Introduce this law into your enterprise to make it evolve.
In other words, utilize the principle of competition within your organization. Many
companies already are, although whether they are utilizing it correctly or not is another
matter. Two people trying to pull each other down are, after all, also one type of
competition. This is not what I am talking about. I believe that it is important not just to
create an environment for competition itself, but to create an environment which can use
competition in a positive way for the good of the company.
It goes without saying that your company’s growth is linked directly to the abilities of
your workers and their motivation. Therefore, the kind of environment you need to
create is the kind which can serve to raise each employee’s level of motivation and
desire to improve their own abilities.
Within the main building of Rakuten I have created a library intended to be used as a
learning space for individual employees, as well as classrooms for lessons. I have also
built a fitness gym. The gym in particular was constructed to act as a means of stress
release, but beyond that, I also believe that improving your body can lead to growth.
Success is not built on the workings of your mind alone.
How an employee uses (or does not use) each facility is entirely up to the employee.
Unfortunately, there are many employees who are simply too busy to use these facilities,
but I also think that this shows that the principle of competition is alive and well at
Rakuten. And in any case, no matter how busy things get, you can always find someone
lifting weights in the gym or reading something technical in the library. No one is forced
to do these things. What is important for us as a company is that each employee shows
that they have the desire to improve themselves. This is the real reason why we have
created these facilities.
There is a terrifying difference between someone who always continues to improve

themselves and someone who does not. If the right environment is in place, employees
should realize naturally that improving themselves is a good way to raise their own
results. Those who don’t will fall victim to natural selection. In order to create the right
kind of environment, it is important to build a framework for competition.
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I think that Rakuten is a harsh and competitive environment to work in. We evaluate
people accurately. We give rewards to those who succeed, and conversely, we punish
those who do not. This is not to say that we penalize people more than necessary. We do
not think of it as a negative to take on the challenge of something new and fail. We
don’t make people take more blame for their mistakes than necessary.
On the other hand, we monitor carefully those who do not seem to be doing anything. It
is not enough just to do the job you are given. In order to produce big results in any
position, you need to establish hypotheses and investigate them. Not doing this will
result in you being poorly evaluated at Rakuten.
Being evaluated negatively does not just mean a reduction in pay. There have also been
times when, for example, executives have been demoted to the level of regular
employees. However, it’s possible to make a comeback at any time. If you are demoted
due to a negative evaluation, your negative history disappears with your punishment and
you start your new position with a clean slate. Rack up enough positive evaluations in
your new position, and you could well be promoted higher than you were before. For
young people who only understand how to solve the problems they have been given, I
am sure that this is a very difficult environment to work in. Every employee is always
being expected to seek out and solve his/her own problems. However, those that adapt
to this kind of environment and realize the importance of bettering themselves will be
promoted rapidly.
Great growth equals great motivation. In the end, there is no greater joy to be had than
the joy of self-improvement.
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46 The way to overcome the impossible..
The joy you feel when you accomplish something is not just nice, it is something
capable of motivating people far more than any cash incentive. This is all the more the
case when people accomplish something together with their team.
I do not mean to under-evaluate money here; it is a source of energy, the thing that
makes companies run. A company that cannot raise its profits has nowhere to go but
down. I started Rakuten because I wanted to accomplish something big, and I would not
have been able to do so without money. No matter the company, the pursuit of greater
profit is a constant goal. This should be apparent to anyone.
This is the same for employees as it is for companies. People work to increase their
incomes.
All that said, no one will exert their utmost effort for profit alone. This may just be my
ideals talking, but I believe that it is human nature to be motivated by the want to
accomplish something with those you count among your team. I do not know how many
millions of years it has been since we came out of the jungles and began to hunt
together with our tribes, but regardless, it was this process that allowed us to come as
far as we have. We have succeeded to this point by living together with others. This is
without a doubt because of the joy of accomplishing goals with other people. Compared
to the mind-boggling length of time this has been important in human history, money
has not been around for long at all. This indicates to me that it is not in our nature to be
truly enthralled by monetary gain.
The sharing of a sense of accomplishment is the base upon which the concept of a
“company” was built. The joy of accomplishing something with others fosters growth
and improves companies. You must never allow this joy to disappear from your
workplace. The greater the challenge before you, the greater the joy when you
accomplish it.
Last year, I hired 170 people fresh out of college. As part of their training, they were
asked to get people to sign up for Rakuten Credit Cards. We asked that each new
employee come back in a month with ten contracts. For people who had been students
only a few months before, many of them must have felt that this was an impossible task.
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They did not succeed. My guess was that since the task did not seem to require much
effort, they didn’t take it seriously enough. So I presented the group with a new
challenge.
“I’ll give you one more week. Come back with thirty contracts each.”
My guess was that having been hired so recently, most of the group would react strongly
to being threatened by their CEO.
Since the group could not get ten contracts per person in the first month, the logical
conclusion is that getting three times as many contracts in a week would be impossible.
But I believed that if the group awoke to the fact that they had to overcome this task
somehow and took it seriously, they could do it. People truly shine when they are
running frantically toward a seemingly impossible goal. At the end of the week, the 170
new employees returned with 10,000 contracts. This works out to 58.8 contracts per
person. In other words, the young employees had shown me what’s what.
I enjoy imagining what the looks on their faces must have been when they heard the
news. Do young people today hug and heartily pat each other on the back the way my
own generation does? Even if their way of expressing it was different, I am sure that
they must have felt the same joy that anyone in my age group would have felt under the
circumstances. When they succeeded, they tasted the joy that people have been feeling
for thousands of years – the joy of succeeding with your group. They also learned that
no matter how big the goal, if they come together with their team members, they can
achieve it. This knowledge is a treasure that I hope they never forget. They now know
the way to overcome the impossible.
Human beings have succeeded on this planet because of our ability to crawl toward
large goals, encouraging those we work with and being encouraged ourselves in the
process. Over our history, we have through this process made the impossible possible
and broken down all barriers. In the workplace, there is no greater joy than this kind of
success.
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47 Search out bottlenecks.
No matter how long you search, you will never find a company where every department
is working at 100% efficiency. There are always setbacks and deficiencies. It is
important to focus on the problems you have in front of you and solve them, but
sometimes before you can do that you must find out what is really causing the problem.
You must seek out the areas that are lowering the efficiency of your company as a whole.
What I am talking about here is bottlenecks. It is vital that you seek out bottlenecks and
solve the problems. Without doing so, it almost does not matter how much effort you
make toward improvement in other areas.
To put it another way, you can possibly raise the efficiency of your entire company by
fixing bottlenecks. I am talking about a relatively small effort which has a great effect.
This is something you cannot afford not to do.
Look over your company constantly and develop an eye for bottlenecks. This of course
should not just apply to companies, this is important for people as well. You can achieve
tremendous personal improvement just by alleviating your own bottlenecks.
Let me give an example of what I am talking about. In 2007, Rakuten moved to a new
building in Shinagawa City, Tokyo, known as Rakuten Tower. Most of our headquarters
functions were contained in the building’s twenty-three floors. That means that
five-thousand people work on twenty-three floors. The building has ten elevators in
operation around the clock, but in the beginning, at the start of each business day or on
Mondays just before the morning all-company meeting, the elevator hall was always
crowded. It used to take up to thirty minutes to get all five-thousand people to their seats.
With the elevator hall always crowded, people were spending the start of each day
stressed out, with no choice but to wait in line for their turn to ride the elevator. I am
always going on and on about raising productivity, so I am sure that on an individual
level everyone is making an effort. Although I appreciated that each person was making
an effort in some way, I was tired of letting this problem go. I remember seeing
everyone lined up in front of the elevator hall one day, and becoming furious.
Something had to be done.
There are no problems in this world without a solution, and I refused to believe that in
my own company, something as small as elevator congestion could not be solved. After
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all, if we couldn’t solve such a simple problem, it would be ridiculous to think that we
could spread our company across the globe.
The elevator problem was a bottleneck for Rakuten. The thirty minutes it took to get
people through the elevators was completely lost time. Thirty minutes for each person
meant that the whole company was losing 2,500 work hours per day.
Each elevator stopped on each floor, and when we worked it out, we found that it took
twenty seconds to let off passengers. This meant that it took as much as 440 seconds to
go to the top floor and back. When this was revealed, I made the decision that the
elevator would stop on floors one, two, three, five, seven, ten, thirteen, fourteen,
seventeen, and twenty-one. We installed new panels in each elevator with buttons for
only these floors. People who work on a floor where the elevator does not stop get off at
a nearby floor and use the stairs. Of course, we left the stop button open to
accommodate the disabled.
Ever since implementing this system the average amount of time people spend waiting
for an elevator has dropped to five minutes. This means that just by implementing this
system, we raised the productivity of every single worker by 5%. Furthermore, we
didn’t just reduce the amount of time lost; we reduced the amount of stress people felt
about their morning routine.
The moral of the story is that even if they are small, you must never overlook
bottlenecks. Solving them can lead to tremendous improvements.
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48 Sometimes it’s important to establish milestones.
The knots in bamboo, the places where the plant changes direction, are what make
bamboo so strong. Strong companies as well require such knots.
There are certain times when although you are continuing to work just as hard as you
always have, your speed of growth slows and you stop seeing very many new
developments. This is the natural way of growth. The truth is that if you were to graph
the concept of growth, you would not see a steadily rising line, but a step graph.
And since there are steps before you, you should make good use of them during these
periods of stagnation and climb out of the lull that you are in to greater heights. When
your growth slows, it only means that you are approaching the next step.
Say you teach a child how to add and subtract, and then you have her practice what she
has learned. For a certain amount of time, she will grow at a rapid pace, but then
suddenly she will reach a point where she no longer becomes any better no matter how
much she practices. It is then time to teach her how to multiply and divide.
With children, you can always tell when the right time to teach the next step is. But with
companies, this is much more difficult. The situation in every company is entirely
different. There is no easy route of progress such as that from addition to multiplication
and so forth. I think that the general way of pulling a company out of a rut is to stumble
forward during lull times while groping around for a breakthrough. There are not a few
cases where no breakthrough can be found and people just give up.
Because your rate of growth dulls at these times, even if you try something new, you
have little access to capital and human resources and few options. When I say establish
milestones, what I am saying is that you should not wait to fall into a period of
slowdown to try something new but actually consciously move yourself into such a
period in order to force yourself to approach the next stage of growth. In other words, I
believe that at certain times it is important to stop for a second, rethink the direction and
condition of your company, and prepare for the next stage.
For example, if you think that you are going to have to cut costs or personnel, do it
before it becomes necessary. Seek out new ways of doing things even when things are
going fine.
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Innovation is something that is normally done only during times of falling profits. What
I am saying is that you should innovate during times of growth as well.
When things are going well, you are likely to have the courage to create change in the
face of opinions contrary to your own. Let me tell you, creating change during the times
when you have capital and human resources to spare is infinitely more effective than
during the hard times. As you grow, initiate further internal change, and lay the path to
smoothly shift into the next stage of growth. Create milestones for yourself and aim for
even greater success.
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49 Departments that consistently carry out morning meetings will succeed.
Every department at Rakuten carries out a meeting in the morning every day.
At the meetings, department members share information and the current status of the
department is explained. The reason we do this is so that people will clearly understand
the theme for each day from the beginning.
Departments that carry this practice out faithfully have consistent success, without
exception.
Why? More often than not, failures at work occur when employees have little specific
idea of what they should do. What should I do today and what should I do tomorrow? If
you still fail after having absolutely decided these things, you can surmise that it was
because your initial hypothesis about what you should be doing was wrong. If that’s the
case, fixing the problem you are in is a simple matter of searching out why your
hypothesis was wrong, revising it, and thinking about what you should be doing once
again. Do this consistently, and you will eventually succeed.
Conversely, if you do not follow through with every step of this process, or if you are
unsure of what exactly you should be doing today, you will definitely fail.
You must not engage in vague work. The workday lasts in most cases from nine am to
five pm, eight hours. If the work you are doing is vague, that time loses its value and
will pass by in an instant. Continue to carry out vague work every day and you may go
one or two years without accomplishing anything.
Making sure to have a meeting every morning creates an opportunity to introduce

concreteness into every single day. We are basically lazy creatures. Given the
opportunity, people will goof off. This is just as true for me as it is for anyone. In order
to keep focused on your job, you must instill in yourself at the beginning of each day a
firm desire to complete the day’s work.
Once clear goals and actions have been established, do not just let yourself be inspired,
dedicate yourself to the goals in front of you without straying from the path. If you can
focus solely on your job, you will find that you are able to accomplish a lot more than
you initially thought possible. And furthermore, you will have more fun doing it.
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It might seem troublesome at first to establish concrete goals at the start of each day, but
if you continue to do so over a long span of time I think you will begin to feel how
significant this is. And you will find that it is an excellent way to find meaning in your
work.
I recommend it to anyone and everyone.
Even if you are not in a position to be able to call morning meetings, you can decide
what you will do each day on your own. At the start of the day, organize your goals and
actions, and make sure that as the day progresses you take steps to achieve your goals.
If you follow this procedure at work, you will never fail to meet your goals. Do this day
after day, and you will achieve great success.
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50 Every employee should think like a manager.
In Japan we have the expression, “Salaryman perseverance.”
The expression is used to describe people who only think of themselves as employees of
a company, who only work to the extent that they receive a salary. I do not think that
you will ever enjoy your job if you have this attitude.
You must throw away “Salaryman perseverance” and take on the mindset of a manager.
To put it a different way: it is important that you really have the consciousness that the
company where you work is your own company.
When you take part in business with the mindset of a manager, the entire world
suddenly appears different. Your perspective on business improves. When your
perspective improves, you become able to see further. You become able to take a
big-picture view of your work. Being able to do this is not a simple matter of ability, it
is a matter of perspective. It is the same as someone who stands on the roof of a
building – just by standing there; they are able to see far into the distance. They can see
far because they are up high, not because they have superior vision.
Why do those with a manager mindset have improved perspectives? To put it simply, it
is because when you take a big-picture view of your job, you are able to see the balance
of profits versus expenditures. As a result, you become able to understand how each
individual job connects to profits and sales.
This is management. This is something that every manager must, and does, think about.
In other words, when you take a manager mindset, you are managing yourself.
A manager mindset will give you an improved perspective. It will allow you to take a
big-picture view on your work, identify problems, and come up with hypotheses. This is
incredibly useful.
Japanese people have a tendency to deal with money in a very vague manner. It is
possible that for too long we had the custom of believing it to be the highest virtue to
treat money as sacred, and that as a result, those who now focus on money are easily
hated. However, you must throw away your aversion to this while you are in your
company, because unfortunately, to manage is basically to focus on money.
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In the war of business, money is weapons and bombs. Trying to think about the big
picture without thinking about money is not possible.
Managers think of this first. Most employees never think of it at all.
And without thinking about money, your perspective falters. When this happens, you
stop being able to see in front of you. In order to always see the big picture, you must
take a higher perspective on things. In order to do this, you must always have the
mindset of a manager.
All managers see things from such a perspective. Taking a higher perspective will give
your daily work concreteness and make it that much more interesting. It will help you to
find meaning in your work. It is when all employees have this mindset that a company
is able to exercise its abilities to the fullest extent.
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51 Create a framework to succeed, and develop horizontally.
Successful people tend to follow certain “winning patterns.”
If you succeed in one field, you can think about what made you succeed, and then use
that same strategy in other fields.
In Rakuten’s case, we first found success with Rakuten Ichiba, and then moved into
other areas.
The fact is that in order to succeed you must try many different things. Through trial and
error, you eventually end up with a collection of effective actions.
For example, over the course of Rakuten’s history, we introduced special offers for
those looking to open up shops, we introduced a points program, we realized
cost-cutting measures, we used different kinds of marketing strategies, etc. Many
different things helped us to succeed, and these points taken as a whole can be thought
of as the framework of our success.
Once you understand this framework for yourself, you should apply it to other projects
you work on.
It takes blood, sweat, and tears to make a business succeed. If you succeed, you will be
rewarded handsomely, but this alone is not why you should make an effort to succeed.
In the process of moving toward success, you can discover what’s effective and what is
not, allowing you to establish a framework for success. You can apply this framework to
other projects.
Most well-established companies have been successful at doing this, but it is something
that start-up companies do not seem to do very well for some reason. Even if you come
to the conclusion that you owe your success solely to originality, you always have the
option of using a different kind of originality when you expand your business.
Regardless of whether it is a single hit or a popularity boom, there is a reason why

success comes to some people again and again.
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If you can organize your own pattern of success into a framework, that framework will
become an important resource for your company. This will require a lot of deep thinking.
Just looking at the apparent factors behind a success will not help you to see a pattern.
You must think deeper about the true reasons behind your success and find that pattern.
Among the reasons for your success, what are unique factors, and what are universals?
Work out the differences between the two and build on the factors that can be applied to
other fields.
This is something that can be applied at an individual level as well. Whenever

something goes your way, figure out why it went well and utilize this pattern at other
times. Those who are good at studying do this on a subconscious level. The way you
study English can also help your golf game.
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52 Earn the trust of others.
Soccer players must have good relations with their teammates in order to play well
themselves. Players not trusted by their teammates will never have the ball passed to
them. Hence, they will never have the chance to kick the ball and will not be able to
show off their talents, no matter how skilled they are.
This is true in business as well.
In every office, there is always someone who will complain, “No matter what I say no
one listens, so why bother?” No one listens to what you have to say and you can never
catch a break at work. It is never your fault when something goes wrong; it is everyone
else’s fault for not listening.
Thinking in this way is an obvious mistake. The problem here lies not with your
coworkers and subordinates who do not listen, but in the fact that you cannot get anyone
to listen to you. If you are looking for someone to blame for this you need to look in a
mirror.
If you think about this issue from the perspective of the people you are talking to, you
should be able to understand immediately. What kind of person never has their voice
heard? Think about this. There is a reason why those around you do not listen to what
you have to say.
Conversely, think about what kind of person always has his/her voice heard. Working in
a company is a team effort. Just like in soccer, if you are not trusted by your team
members, you will not be able to do a good job. Think of being trusted by your team as
one part of your job. If you are an employee, you should aim to be the kind of person of
whom it is said, “We should leave it up to him/her. If he/she cannot do it, it cannot be
done.” There are many different kinds of useful skills in business. The ability to earn the
trust of others is one of them.
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53 Develop abstract customs.
If you’re setting out to achieve something, it’s important that you have the courage of
your convictions.
I believe this to be true, but at the same time I don’t trust convictions.
Humans are weak. They forget easily.
If you treat people with kid gloves, they will only become more and more childish.
The person who cried yesterday will be over it today. Talk about ideals today, forget
them tomorrow.
We are such creatures.
This is why it is so important to make promises and set goals. The passion that you have
now exists so that you don’t forget the lofty beliefs you hold so dear. But no matter how
passionate you are, you will calm down eventually.
At Rakuten, we have many abstract customs. Every Monday we have a company-wide

morning meeting, and everyone cleans their desks. This is something we have been
doing since the early days of Rakuten Ichiba, when we had few employees. These
customs are meant to remind everyone that we are a team working to realize common
dreams. Our first six people have grown to five-thousand, but I am always thinking to
myself how, if possible, I would like to have our morning meetings in the same place.
Even if we are in the beginning of the Internet age, there are times when you need to
have face-to-face interactions and feel the presence of the people you are working with.
This isn’t just about how we must not forget our ideals. By having everyone do the same
work, having everyone clean and having everyone meet for periodic morning meetings
– in other words, by establishing turning points which delineate separate periods of time
through abstract ceremonies – we are able to foster a sense of oneness among all
employees. Furthermore, by giving people an opportunity to reconfirm the rules of
conduct, we are able to establish a music-like rhythm and pace in the company.
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I realize that phrases like “turning point” and “rules of conduct” have fallen out of
fashion, but I believe that humans are not strong enough creatures to ever do away with
these concepts entirely.
No matter how high your ideals, no matter how tight you clutch to them, if you do not
make the effort to continuously renew your beliefs, you will forget them.
We carry out Monday cleaning and morning meetings to prevent the loss of ideals and
to bring together everyone’s hearts and minds.
I would wager that no one is born without high ideals. People use their ideals to
encourage their weak selves and build self-respect on their achievements.
I think organizations are the same.
No matter how lofty a person’s ideals, if they lose their dedication to their company,
those ideals become meaningless. This is why it is so important to utilize set ceremonies
that can unite everyone’s minds and establish a heartbeat-like rhythm in your company’s
work.
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54 A successful organization features a good mix of excitement and anxiety.
A workplace without excitement is like food without spices. Excitement is what causes
people to become fascinated by their work. When you are fascinated by what you are
doing, your job is fun. Workplaces must never lose the spirit of excitement.
So how do you maintain excitement in the workplace? I believe that the answer to this
question is a goal-oriented mindset.
The joy of work is the joy of accomplishment. Before you can accomplish something,
you must first establish the goal to accomplish it.
Without goals, an organization is nothing. Its members have no hope of experiencing

the joy of accomplishment. It is when a group of people sharing a goal-oriented mindset
come together that they cease to be a mere group and become an organic organization.
The feeling that people get when they are working together toward a big goal is one that
connects people and sets their hearts and minds as one.
It would be nice if it were possible to simply set a goal that no one else has been able to
achieve and have people rush toward it together with all of their combined might.
Ideally, the pursuit itself would fill people with excitement. Unfortunately, it seems that
excitement alone is not enough. A truly successful and motivated organization has not
just excitement, but an equal amount of anxiety as well.
Anxiety sharpens the mind. It makes you conscious of even the smallest things. And the
small things are always important when you work.
No matter how small they are, if you do not feel any worries about your job at all, you
cannot really do good work. Every member of an organization must continually work to
sharpen their senses. To that end, an organization must be put under an appropriate level
of pressure. For an individual member of the organization this may be stressful, but
there are times when stress can cause you to push just a little bit harder.
It is therefore the responsibility of a leader to place stress on his/her subordinates. I

sometimes say things in a harsh way, and have been known to scream on occasion.
Frankly, I cannot stand seeing someone with a low sense of danger.
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If you do not do your job well, your company will go bankrupt. People should approach
their work with this kind of attitude. This sense of danger is what is needed to produce
the required amount of anxiety.
Excitement and anxiety.
They are the two sides of wheels on a car. If you do not have both, you are not going
anywhere.
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55 Speed is the combination of velocity and agility.
When you say something is fast, what are you really saying? In actuality, there are two
kinds of speed: velocity and agility.
In terms of working, velocity is expressed through efficiency improvements. Shortening

meetings, decreasing the number of copies made, reducing the number of people
working on a project – these are all examples of increased velocity. Generally, people
waste so much time that I almost wonder if it wouldn’t be safe to say that people are
wasting 70% of each day.
You must eliminate waste.
I don’t just mean once. Like trash, waste is something that must be thrown out over and
over again. Throw it out in the morning, and you will come home to new waste at night.
Waste is a monster that lowers the efficiency of the workplace. Waste slows your
judgment. Do away with waste, and your ability to make firm decisions will speed up.
This alone is enough to speed up everything you do in your job.
Agility, the other type of speed, might just as well be called “instantaneous force” when
we are talking about work. It is the speed at which you act after you have decided
something.
Once you have decided to do something, do it quickly. This is the same as when I talk
about the importance of being quick on your feet.
Agility is particularly useful when you are changing the direction of your work. Since
you are going in a different direction from the one in which you have been going until
now, naturally, you lose a lot of steam. And the anxiety and fear of changing direction
only serves to worsen the matter. You must remember during these times that anxiety
and fear only exist in your mind. As long as you put off facing reality, you will never
feel at ease. Therefore, it is important that you do as quickly as possible whatever you
set out to do.
Anxiety and fear only cloud your mind. The best thing to do is to act. To act is to think.
In order to think, I act.
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That is why whenever I start something new - I dive straight into it. There is nothing
you can do about worrying. Or rather, all you can do is act. Before anything else, begin
to run toward your goals. Other people will run with all their might to catch up.
I believe that my team works at its fastest when everyone is trying to catch up with me.
In an incredibly short time I can bring people up to top speed. That kind of agility – or
rather, acceleration – is a vital skill for an organization.
I believe that one reason why attempts to change direction often end in failure is
because of the drop in speed they cause. A drop in speed can be lethal to your company.
You might even say that the cause of most failures and disasters is a drop in speed.
When you change directions, you slow down. Your main challenge at such times is how
quickly you can bring your organization back to full speed. Even when we are talking
about times of failure, an organization that moves fast can quickly correct any mistake.
Velocity and agility: the two kinds of speed. Any truly excellent company encourages
both.
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56 Smaller units provide transparency.
Make shelves larger, and it becomes harder to see what they contain.
Companies are the same. Whenever any one group gets too large, it becomes difficult to
understand the activities within it. Furthermore, as departments get bigger, individuals
lose sight of their group’s contribution to the whole and begin to feel less responsibility
for their own work.
In nature, it is usually the hunted that form large groups. The larger your group is, the
less likely you are to be the one hunted down. This is the common knowledge of all life.
With humans as well, the formation of groups often causes each individual to lose
his/her sense of danger.
Even if predators form groups, they are usually not very big ones. Each animal has its
own responsibilities and there is no waste. Those who aren’t useful to the hunt only get
in the way.
When you are forming units in a business, it is obvious which is better. Work units
should be made as small as possible.
Since Rakuten was founded ten years ago, our employee figures have increased by more
than eight-hundred times, but as we have grown larger we have only further divided up
group duties.
In Rakuten Ichiba, we have a front office, a middle office, and a back office.
Furthermore, each section contains different groups organized by genre. Specifically, we
have fashion groups, food groups, and sports groups. Within sports, we have different
sections for golf, tennis, and skiing. In terms of regions as well, as we have grown, we
have subdivided the Kansai region into groups for Osaka, Kobe, and Kyoto.
This concrete organizational scheme ensures that within the company, individuals are
placed into the smallest groups possible. This means that when a problem arises, you
can see specifically and easily where it has occurred. Since the location of the problem
is clear, you can quickly take action to fix it.
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The reverse is also true. This organization scheme means that when success is achieved
the feeling of accomplishment is that much bigger for those involved, and this in turn
helps to develop a competitive mindset among employees. It is also useful in that it
makes it easy for people to learn from the examples of success set by their peers.
By decreasing the size of units in an organization, organizational transparency increases.

Suddenly, things unseen are made visible, to the extent that even those on the outside
can see them.
Segment units to the greatest extent possible and make areas of responsibility clear.
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Chapter 5: 100 battles, 100 victories
Businesspeople must produce results. In order to do so, you must fully understand the
ins and outs of your job. This chapter is a treatise on how to fight 100 battles and win
every time.
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57 Plan for alternate futures and you will be thoroughly prepared.
In the thicket of the future always resides the snake of uncertainty. There are very few
things that ever go exactly as planned. This is the way of the world.
What kind of snakes hide, or do not hide, in your path? You won’t know until you
actually step into the thicket. Although you don’t know whether you are up against a
snake or not, if you do not adequately prepare, you are likely to be bitten. What should
you do when you meet a snake? It’s important that you make preparations for when
things do not go as planned. Formulate many different hypotheses, and then when the
plan you choose goes awry, implement ways to deal with the new situation you find
yourself in.
In the case of Rakuten Ichiba, when we first started out, we set the price of opening up a
store on the site as half a year’s payment up front at 50,000 yen per month. At the time,
the price to open a store in other Internet shopping malls was hundreds of thousands of
yen per month. I predicted that setting the price at such an unheard-of level would allow
us to reap profits once the spread of the Internet really took off. Just having ten or
twenty stores would not allow us to be profitable at such a price, but if we had
two-hundred or three-hundred stores it would not be a problem, and I predicted that we
would reach such a level in two to three years.
For Rakuten Ichiba, this was scenario one – success in three years. If the future had
turned out according to scenario one, Rakuten Ichiba, whose fate depended on this
strategy of the low 50,000 yen fee, would have definitely become the go-to place for
those wanting to own stores.
However, there was never any guarantee that reality would go exactly as planned.
Although I knew the Internet would spread, I also knew that it wasn’t entirely
impossible that it would take ten years to attract the amount of stores I wanted.
In other words, there was another scenario that required consideration – scenario two. In
this scenario, the spread of the Internet did not occur as fast as I predicted. However,
even if scenario two came to pass, the system I had developed required those wishing to
open stores to pay their monthly fees six months in advance, and this meant that even if
we attracted only one store, we would at least earn 300,000 yen. For small companies in
particular, this kind of cash flow is of the utmost importance. Even if the Internet did
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not spread as fast as I had hoped, even if we only attracted store-owners at a modest
pace, with this system in place, I believed that we would still be able to stay afloat.
To some extent, business resembles gambling. To compare what I did to roulette, it was
similar to the practice of placing bets on multiple locations. However, business and
gambling differ. With gambling, even if you hedge your bets, such actions will not
necessarily mean you will win. On the other hand, in business, if you have enough
backup plans, you can raise your chance of success to nearly 100 percent. In roulette,
once the ball is rolling, you can no longer place bets, but in business, even when you are
near the end and the ball has stopped rolling, you can still place a bet. Even if you
haven’t placed any chips on number one, once you realize that one is going to win, you
can immediately place 100 chips on it – as long as you have the chips prepared. If not,
there is nothing you can do.
This is why it is so important to make predictions for the future, come up with multiple
scenarios, and then make the necessary preparations to ensure that you can benefit from
any opportunities that arise.
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58 Come up with hypotheses and systemize them.
This is something that I have already said, in one way or another, a number of times in
this book. Come up with hypotheses and systemize them.
This might seem like a generalization, but I believe that you can view every success in
business as being the result of this process. Actually this doesn’t apply just to business.
With anything in life, if you approach it while maintaining a relentless focus on these
two actions – coming up with hypotheses and systemizing them – and you will never
fail.
I don’t think that anyone ever has any trouble or confusion coming up with hypotheses.
For instance, when it’s your own life, you know well how to promote self-growth. If,
say, you want to master Chinese, your hypothesis would be that you should study it. The
difficult part is keeping at it.
This is why I say you need to systemize your hypotheses.
When I say system, I am talking about developing habits that will enable you to
actualize your hypotheses within yourself.
For example, if you want to master Chinese, wake up ten minutes earlier every day and
study. This is a system. This kind of process is necessary in order to make yourself
study for ten minutes each day. If you continue on this way without giving up, you will
find that after a year you have improved considerably.
Recently, in order to train my legs, I have regularly been walking up the ten flights of
stairs from the company meeting room to my office. The ten floors are separated by 220
stairs. Since there are meetings in the meeting room twice a week, each week I climb
440 stairs. With fifty work weeks in a year, this means that each year I climb 22,000
stairs.
In order to ensure that I carry out this practice regularly, I bought a pedometer. Well, to
be honest, I actually use a mobile phone with a pedometer function, but the point is that
this allows me to check exactly how many steps I have walked on any given day.
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You might think of a pedometer as a simple thing, but through this system I have seen
remarkable effects. Already, even though only a few months have passed, I have
developed a good amount of muscle in my legs. Even if it is something small, if you
develop a system to make it a part of your life, you will see results from your efforts.
The important thing is making sure that you really have a system. If I had just said that I
would try as much as possible to use the stairs after each meeting, I don’t really think
that I would have followed through with it. After a meeting, I use the stairs. Not as
much as possible, I do it. I have resolutely decided this.
I began to use a pedometer in order to ensure that I actually followed through with what
I had decided. When you want to measure your results, it is important to have
something to help you. Measurement introduces a level of consciousness to the process.
Incidentally, on this point, I receive a mail on my mobile phone on the hour, twenty-four
hours a day, telling me the sales figures for Rakuten. This system has allowed me to
really test and prove how effective time-based management can be. To what extent do
you work to make your own hypotheses a reality? Establishing systems to make things
happen is a necessary factor for success.
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59 People who make progress in society all belong to one group.
There are only two types of people in the world: Those that seek out how to achieve
things, and those who make excuses for what they cannot do.
How many people belong to the second group? It goes without saying that the people
who make progress in society all belong to the first.
In order to achieve great things, you must work hard. One percent of the world will
always take up hard work and try to accomplish things, while the other 99% will always
ride on the first group’s coattails and live peacefully. This is how things are. Anytime
anyone anywhere tries to do something new, someone will always come around and try
to get in their way.
People who always make excuses are masters at looking for reasons why something
won’t work out. No matter what it is, these types of people can immediately come up
with ten or twenty reasons why something cannot be done. There is no good reason to
involve oneself with such people. I think it is utterly stupid to spend your whole life
talking about what you cannot do.
Instead, search out the reasons why you failed at something, and work to make sure you
succeed next time. The difference in attitudes between people who do this and those
who do not do this is the difference between heaven and earth.
A goal that can be achieved now is not a real goal at all. Your goals should be those
things that you currently cannot make happen, because these goals will lead to personal
growth. It is a matter of course that you should not know before you begin whether or
not you can achieve the goal you are setting out toward. That’s the point.
Even if you don’t know if you can do something, believe absolutely that you can, and
while doing so, think up every possible method for how you can achieve your goal.
Keep trying until you achieve what you are after. This is the only path to success in life,
and it is the only path to success in business.
I am not about to sell you the fairy tale that you can achieve anything if you just believe
in yourself. This is not what I mean. What I am saying is that, within reason, there is no
problem that cannot be solved with enough effort. I am saying this from experience.
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I have heard that there is an expression in some parts of the world that “God doesn’t
burden you with more than you can handle.” No matter what you come up against, the
fact that you can see a problem means that you can overcome it. The important thing is,
no matter what your problem is, you must believe that you can overcome it. And you
must exert the necessary effort to do so.
Anything that seems impossible can be made possible through wisdom and innovation. I
believe that there is nothing more interesting than this process, and it is why I am
fascinated with business. Maybe I’m just a business nerd, but I truly believe that the
harder the problem is the more enjoyable it is to solve. I can’t help it. For me, the bigger
the goal, the more inspired I become.
Not a day goes by where I don’t think to myself how fun it is to lead the Rakuten Group
and climb the tall mountains I face. I am constantly thinking about how good it feels to
stand on such tall peaks.
Everything is a matter of perspective. Do you see difficult situations as something to be

avoided, or something to embrace? There really are only two attitudes in life.
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60 Inspect things from many different angles.
No matter what, always make an effort to see things from a different angle.
This is something that everyone supposedly understands, but that hardly anyone does.
There is no fundamentally more useful approach to solving problems. I would even go
as far as saying that most of the world’s problems can be solved just by taking a
different perspective on them.
For example, think a bit about this book you are now reading. How was this book
created? Between when I wrote it and your reading it, many different people were
involved and many different things took place. Everything that took place was backed
up by people, be they at the bookstore or library where you got this book, the shipping
company, the distributor, the printing company, the publishing company, or anywhere
else. The bonds that tied all of these people together made this book possible. The
creation of this book was really made possible by the collaboration of everyone
involved.
What is important about this book differs for everyone. For some, it differs only
slightly; for others, entirely. For readers, the most important thing is the content. What’s
important is what is written in the book – depending on how interested someone is in
the content, they will borrow or buy this book. On the other hand, for the shipping
company, this book is nothing more than an object of a certain shape and weight. Even
when we are talking about the same object, depending on the perspective, its
significance is entirely different.
To view something from a different angle you must think about it from the perspectives
of many different people. When you think about something from someone else’s
perspective, you become able to see a new side to the object in question. This may help
you to discover a new sort of idea or find a shortcut previously unknown.
From my perspective, as the writer, I have the tendency to think that if the content is
good enough, people will buy the book. But for the designer, they might reason that
when someone takes the book in their hand in the bookstore, no matter how good the
content is, if the cover design is ugly no one will buy it. For the people working at the
bookstore, while they prize the content and the design, I’m sure they also think about
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how the price of the book affects sales. Finally, from the reader’s perspective, it’s
possible that some view this book differently depending on how others think of it.
Depending on whether you are selling, buying, working in a market, or managing or

developing something, any single product might appear entirely different to you. You
must always remember that there is no one right way of looking at the world.
The world is built on subjectivity, and each subjective view can be justified.
Even if you are looking at the same thing, the way you and the person next to you see it
may be entirely different. Don’t just view the world from your own perspective, but
make a habit of always thinking about how someone else might view what you are
looking at and imagining how they might feel about it. An eye that can see things from
many different perspectives is a tool of immense value in business.
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61 See the trees, see the forest.
Everyone has things they are good at and things they are bad at.
In the context of skiing, there are those who always look directly in front of themselves,
and those who always look far into the distance. There are few people who can do both
and really observe the full environment they are in.
If you only ever look directly in front of yourself, you lose sight of where you should go.
If you only look far ahead, you will soon lose your balance and crash into something. In
business as well, a balance between looking far ahead and directly in front of you is
important.
In order to foster this sort of balance, you need to first figure out whether you are the
type of person who always looks directly in front of yourself or who always looks far
ahead.
If you have big dreams but always seem to run into problems or make mistakes at work,
then you are the kind of person to look far ahead but not right in front of you. If you
give your all to your work day after day but only ever take on jobs that are given to you,
then you are looking too much at your feet and forgetting to look into the distance.
Once you know what type of person you are, you must work to make up for what you
lack.
If you are the type to only look at your feet, than you should give some thought to
identifying the greater meaning of the job that you are doing right now. If you don’t
know, ask someone, and listen to what they have to say.
If you are the type to only look far ahead, then you should focus on the job you are
doing right now and concentrate on making it a success. You need to realize that
perfectly completing the job before you is a step toward making your dreams come true.
The reason that the expression “can’t see the forest for the trees” exists is no doubt
because most people only see what is directly in front of them and forget to look at the
big picture. Although this is the general trend, if you take a look at the recent business
world you can also see many cases where the opposite is true.
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Especially in Internet businesses, there are an unusually high number of people who
only see the forest and cannot see the trees. I think it is a bit much to call these people
dreamers. Although the world is changing minute-by-minute all around them, their
heads are so high up in the clouds that they cannot adapt at all. It should come as no
surprise when these people fail.
It is extremely important that you come up with business plans that focus on the future,
but if this is all you do your business will lose its concreteness. No matter how correct
your vision of the future is, if you cannot succeed at your day-to-day work your dreams
will remain just that. In the end, working is really about whether or not you can
continue to accomplish job after job.
To put it another way, your predictions about the future only become meaningful when
you are able to do a portion of your daily work without any mistakes. Only those who
exert continuous effort are granted the right to shape the future.
See the trees, see the forest.
Develop your own ability to do both.
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62 Factorize thoroughly.
No matter what your goal, there is essentially nothing that cannot be achieved. I have
written this in many places throughout this book.
The reason I can make this assertion is because no matter what the objective, it can be
factorized. Everything in the world is really composed of many compound elements.
In the past, this has been said in a different way: “A journey of 1,000 miles begins with
a single step.” There is not a person alive who wouldn’t be taken aback by being told to
walk 1,000 miles, no matter how confident they are. But if it’s a single step, anyone can
do it. Accumulate steps, and 1,000 miles will be over before you know it.
Set goals, and then analyze the path to those goals down to each single step. This is the
only way to assuredly achieve what you want.
It is important that when you think about anything in business you do not just analyze it
but break it down into its components. The reason I use the term “factorization” is
because in business there are many things that can be factored into different groups. I
talk about the importance of this factorization in another section.
For the time being, think about your goals that you think are impossible, analyze them
thoroughly, and then also analyze what you think is the biggest goal you can achieve.
Remember that realistically anything is possible.
No matter how complex the figure, if you factorize it, it can be rewritten in an
easy-to-understand way. Goals are similar. At first glance, it may seem that before a
goal is completed a number of different things will have to be done, but if you think
about it calmly, and if you factorize everything that needs to be done, you will come to
understand what is and is not actually necessary.
It is important that you thoroughly analyze what needs to be done. You cannot cut any
corners here. Without data on how you will achieve your goals, you will not be able to
draw up a route to get to where you want to go.
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I believe that the reverse engineering talked about so much by both automotive and
electronics companies is a form of factorization. Companies take the new products of
their competitors and analyze them piece by piece, researching their structures.
No matter how revolutionary the product, if you analyze it, mass-producing it becomes
easy. No matter how complex the machine, it is just the sum of its parts.
Of course, reverse engineering is not done for the purpose of recreating existing
products, but for the purpose of developing superior products. It is a concept that is
equally valuable when thinking about what needs to be done to achieve goals. In order
to achieve goals, you must break them down first.
Thoroughly analyze your goals, and you will realize what they are really composed of.
If you want to achieve your goals, you should focus on what you can do about their
components, today, right now.
What should you do today, specifically? Realize what it is clearly, and then throw
yourself into your work. Factorize thoroughly.
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63 Lean operations give birth to innovation and growth.
Although we think of ants as hard workers, I have heard that if you take a good look at
an anthill you will find that only a minority of the ants are working, while the others are
mostly wandering about doing nothing in particular.
If you take a good look at the business world you are likely to see the same thing.
This isn’t to say that people are mostly goofing off. If you actually look at a company,
most people will probably seem busy. Unfortunately, this kind of busyness is actually
wasteful. Think about your own job. Most of the things you do at work are probably a
waste.
How much of what you do is a waste depends on you and your company. One thing I
can say for sure is that there is waste. In business, eliminating waste leads directly to
growth. Eliminating waste is the key to making your business fly.
However, do not think that you will automatically increase your profits if you just cut
costs. In most cases, people think that cutting costs means sacrificing growth. They will
ask, “Do you stop growth?” or “do you stop investing?”
This way of thinking is completely wrong.
Cost reduction is to a company what a diet or strength training is to an athlete. It is

meant to trim fat and build muscle. Wasteful costs in business are like fat. If you trim it
away and build muscle, moving will become so much easier. In business, when you cut
costs, coming up with new ideas becomes easier. New products become easier to
develop and new services easier to create. Cost cutting need not be something scary – it
is in fact an entirely positive thing.
For instance, say you have a job that is being done by ten people, and you tell one
person to do it alone. Under normal circumstances, they might respond that this is
impossible. But in my experience, if someone takes it upon themselves to do something,
ten times out of ten they are able to do it.
To give another example, say you are in a meeting, and it is proposed that a certain goal
will take three months to accomplish. In such instances I tell people to do it in ten days.
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In the past, people used to become very annoyed with me when I said things like this.
They would tell me that even if I am the boss, some things cannot be done. However,
recently people have stopped saying such things.
This is because up until now, there have been almost no instances where people have
been unable to achieve their goals in less time.
Doing things like this is difficult if you go about it with common sense and normal
methods. You need to utilize your intelligence and innovate. This is when things begin
to be possible. Innovation leads to organizational growth.
Rakuten has a ten-year history of innovation. Although people often tell me that they
cannot just make things more efficient, somehow, there is always something that can be
done. It seems to be the fate of organizations to give birth to waste.
Lean operations completely do away with waste and implement only the operations
needed to get things done. Do not just get rid of a little waste, completely purge it from
operations. At the same time, implement new, parallel operations. Each operation has
multiple meanings. Geographically, 1,000 miles is always 1,000 miles. But in business,
innovation can make 1,000 miles into 100 miles, or even 10 miles. For this reason,
shorten the time it takes you to achieve goals to the shortest time possible and see what
happens. That, or decrease the amount of people assigned to a project. In order to
achieve goals in the least amount of time using the least amount of people, your
company will have to completely do away with waste. This way of doing business can
lead to breakthroughs, and can be a driving force behind personal and organizational
growth.
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64 Think in terms of vertical and horizontal competition.
Vertical competition may well be an entirely modern phenomenon. There was a time
when competition nearly always meant horizontal competition. Ramen shop A would
open next to ramen shop B. This is a textbook example of horizontal competition.
But then, suddenly the noodle maker who was supplying noodles to ramen shop A
started to package their noodles and sell them to the general public. Now, it is possible
for everyone to enjoy delicious ramen at home. In other words, two companies that at
one time were not in competition are now competing with each other. This is a textbook
example of vertical competition.
Industries that at one time were thought to be hardly competitive at all have now
become very competitive.
I have heard that comic books stopped selling when video games became popular. In
other words, comic books and video games competed for the free time of children, and
video games won. The Internet and mobile phones are now competing in a similar way.
Who is and is not in a competition can change rapidly at any given time.
Right now television studios talk about the Internet as a competitor, but the situation
could change at any time. It may even happen that electronics makers become
competitors of television stations.
Those of us in Internet businesses hold the possibility of competing with every industry
in some way. Every now and then there is an Internet company that is particularly fast at
technological innovation. With these companies, even if they know nothing about a
certain industry, you may find them to be strong competitors in that industry tomorrow.
How to defend against these kinds of companies is something that I have been thinking
about since I started Rakuten. Thinking about how to avoid competition seems to be the
destiny of all who work in Internet businesses.
This is something that can be said about those working in other businesses as well. In
the modern business world, every business must constantly think about the possibility of
having to replace their core business with something else. Businesses must also
constantly think about what fields they should enter.
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We no longer live in an era of set and unchanging business sectors. In the new world,
where any company might enter into any industry, the only way to win is to be better
than all potential competition.
Incidentally, allying yourself with other businesses can also be an effective way of
improving your position in the market. I am not talking about alliances on the level of
Japan’s Warring States Period here (a time of social upheaval, political intrigue, and
nearly constant military conflict that lasted roughly from the middle of the 15th century
to the beginning of the 17th century), but it is true that in business, yesterday’s enemy
may be today’s biggest ally.
The merits of moving from a purely competitive relationship to one in which both sides
benefit are obvious. To this end, you must always think about vertical and horizontal
competition. The keys to surviving the modern “Warring States Period” are a flexible
mind, free ideas, and a grand vision. This is what I think makes it so interesting to work
in the modern business world.
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65 The Mikitani Curve: quality is fostered or destroyed by 0.5% improvements.
The fact that anyone endeavors at anything means that we live in a competitive society.
Whether it is televisions, cars, or rice cookers, manufacturers exert great effort to make
sure their products are the best. The same is true for sales, for your local café, for
restaurants, and for each store on Rakuten Ichiba. Everyone is working their hardest to
sharpen their skills and provide the best service possible.
Regardless, there are always obvious differences between different products and
services. Why is this? Where do these differences come from? I think it is all about the
last 0.5% of effort put into a job.
Anyone can endeavor to their limits. The difference is made when someone does their
best, and then does 0.5% more.
Once you are done with a job, even if you think you have completed it, you must not
stop there. Take just a bit more time on it. You probably will not be able to add very
much, but as long as you are already doing something, you might as well do everything
that needs to be done. Do not ever be content with knowing that you have finished
something; add another 0.5%. Even if it is only something little, many small 0.5%
improvements will make a big difference in the long run, and furthermore, people can
feel these small differences. It is in our nature to do so.
Say you have a piece of cotton fabric and a piece of silk. Which is softer? You can tell
just by feeling them. However, if you examine the surface threads, the difference
between the size of each thread may be less than 0.1 mm. Between pieces of silk and
cotton, or even between pieces of cotton, if you compare many samples, you will find
obvious differences in quality. When you put these differences into numbers, they may
seem close to zero, but when you touch each piece of fabric, or when you see the way
they look in light, you will feel that there is a tremendous difference between these two
things that machines are barely able to measure as distinct. This nearly insignificant
difference can mean a huge difference in price.
Regardless, there are very few people who think about this when they do their job, and
so the differences created by those who put in the extra 0.5% effort seem especially
large.
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This especially is why a difference of 0.5% can seem so much larger.
The last step is always the most important. It is the last 0.5% of effort that you put into a
job that improves everything. Be conscious of this difference, and create a system to
make sure that you always make this final effort. The very last bits of effort can improve
the subjective quality of a product rapidly along a pattern not unlike a parabola, or a
quadratic curve (I call this curve “The Mikitani Curve”). Not only products and services
fit this curve; added value does as well.
When you really get down to it, the difference between an amateur and an experienced
professional is a mere 0.5 percent.
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66 Understand your core businesses and critical mission objectives.
When a company’s scale grows, at some point, the number of different jobs that a
company does grows as well. Naturally, this raises resource allocation issues. No matter
how big a company is, resources are limited. This never changes. It is thus obviously
important to be able to judge and throw away what isn’t necessary in order to promote
the effective distribution of resources.
Making this kind of judgment is surprisingly difficult. There are not a few companies in
the world seeing falling profits because of how hard this kind of decision is to make.
Even those who run businesses may be swayed by feelings and desires. In order to not
let my judgment be clouded by these things, I have established three rules of
continuation. If I come across a process that does not fit with any of these three points, I
throw the process out without a second thought.
The first point is high profitably.
I am sure that this needs no explanation. If something’s profitable, do it; if it is not, quit.
This is common business sense.
However, it is not always so simple to make decisions based on this one point alone. A
company will never survive over the long term thinking about profitability alone.
Companies are living things. Suppose you decided that the cost of calories was too high
and started only eating carbohydrates. Your health would fail sooner or later. Likewise,
in order to create muscle and bone you need protein and calcium. This leads me to my
second point, which is whether the process is part of your core businesses or not.
Your core businesses are the framework of your company, your identity. Many creative
processes may be part of your core business, but that does not mean that you core
businesses are made up of only creative processes. Core businesses are those that
support your company over the long term.
The third point has to do with critical mission objectives.
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In the same way that vitamins and minerals alone are no substitute for calories but are
nonetheless necessary, your critical mission objectives are those processes that are
necessary for your company. In the case of Rakuten, these are things like member
services. Member services don’t give birth to any profit, but they are very important for
Rakuten as a whole. I believe that we can say the same of our baseball team. It is an
irreplaceable part of our marketing strategy.
I make decisions on whether or not to continue with projects based on these three
principles. If a project does not fit with any of them and does not seem to be going well
now but may fit with one of the principles if it is continued on a bit longer or if the
proper methods are found, I will probably take the gamble. The important thing is not
just to try, but that continuing on holds value in terms of these basic principles and
concepts.
Putting a stop to anything is always painful, but I think of it as similar to trimming back
a tree you have raised. Any unplanned branch can easily become a blockade to another,
more important branch. I’ve heard that when this happens, trees are more likely to fall
victim to pests and disease. As living things, companies are the same way.
Making decisions based on these principles is not just useful for work-related issues, but
in your personal life as well. What are your own core businesses and critical mission
objectives? How can you raise your own profits? It’s worth your time to stop and think
about this sometimes. You must think about whether or not you are spending your time
on any wasteful “projects” that do not fit any of these principles at the expense of
something truly important.
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67 Sometimes what you will not do is more important than what you will.
When people plan things, they always think about what they will do. They do not
usually think about what they will not.
It’s easy to decide what you will do, but difficult to decide what you will not. This is
because deciding not to do something is the same as throwing away a possibility. Even
if you do not actually do something, as long as you do not decide not to do it, there is
always the possibility that you might. People want to have these possibilities available.
And so they withhold on decisions until the very last moments.
There are certain times and situations when deciding not to do something will present
you with much better results than planning only what you will do ever would.
An easy to understand example of this is when you are deciding to give up at something.
Deciding to give up means you no longer will do the action in question. It also means
you are throwing away a potential to win at something as well. No one wants to throw
away a chance to win. So they put off quitting things. And so, your continual loss in
whatever area you put off quitting only grows bigger and bigger.
If you are going to give up on something, it is better that you do so quickly. This will
minimize the damage incurred by failures.
Making win-lose decisions is difficult on the battlefield, and even harder in business.
Even so, putting off a decision will only maximize the damage of any loss.
If you think that you aren’t good at making win-lose decisions, then it’s time to rethink
the standards by which you make decisions. Depending on the topic, your standards
ought to be different – for some decisions they should be market share, for others
profitability, the type of business, the competition, etc. No matter what kind of standards
you use, it is better that they be objective and clearly expressible in numbers. People
always become emotional when they lose. Emotion clouds judgment. If you have
objective numbers to look at, you can avoid falling into this trap. Sometimes there is
more value in giving up and preparing to fight another day.
This way of thinking is not just useful during times of struggle. Deciding not to do
something can prevent loss and waste.
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When I started Rakuten, I made decisions about which fields I would not enter into. I
will not of course say which fields these were, just that I won’t ever make this kind of
decision again. Once your company starts to grow, you begin to receive invitations from
many different areas. And once you have established a safe level of capital, you may
want to enter into any new profitable field open to you. Even if I myself do not think
this, someone at the company is bound to notice an opportunity and bring it up.
Once you have decided not to do something, there is nothing wrong with reconsidering
it from time to time. That said, understand there are also times when doing this can
interfere with the core businesses of your company. While it is important to preserve the
core businesses that are the identity of your company, reconsidering whether to pursue
something or not can in certain instances prevent your company from falling off track,
and is therefore also an extremely important process.
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68 A company is a sumo ring. Employees are sumo wrestlers.
“I will work myself to death for your company.”
There aren’t many young people who would write this on a job application anymore.
With the decline of lifetime employment practices in Japan, it’s no longer uncommon
for someone to change jobs in order to get ahead in the world. Gone are the days of the
employee who believed in putting the company first, ahead of everything else, including
his/herself. The funny thing is that although the way we think about employment has
changed, the way we think about companies is still basically the same.
What is a company? Some people believe that it is the property of its shareholders. This
is one way of looking at things.
But for employees, this way of thinking is meaningless. It is true that management holds
a responsibility to the shareholders, but this does not mean that the average employee is
working to appease them as well.
I think it is essentially nonsense to argue about who a company really belongs to.
Thinking of a company as a physical thing is likewise meaningless. When investors give
money, they are not investing in things you can touch like the buildings and facilities of
the company.
I believe that a company is a collection of people with a shared vision and shared
desires. It is a place where people come together having decided that they will advance
toward a single goal in order to accomplish these desires. This is my ideal form for a
company. This kind of company is only meaningful if the people working in it become
happy by doing so. And furthermore, it must be mentioned that we must never forget
that companies exist to pursue profit.
A company is just a place. To put it simply, it is like a sumo ring. The real meaning of a
company is found in the people that work there, the sumo wrestlers, not in the company
itself. Never forget who really owns the sumo ring; who the star of the show really is.
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69 Develop a good sense of timing.
In business, it is vital that you look at the big picture. That big picture must include time.
To put it in terms of “seeing the forest through the trees” – not only must you see the
forest and the trees, but you must understand how the forest will change in the future
and make preparations for this.
It is not enough to only analyze the present; you must at the same time make predictions
about future changes.
People are usually too late in realizing this. This is why it is so common to hear
someone wonder why something has turned out the way it has. It is because of a lack of
preparation for a problem they could have easily predicted.
In business, there is infinitely more benefit in doing things in advance than doing things
after some time has passed. Because, unlike games such as Go or Chess, you are not
taking turns with the people you are playing against. You always have multiple moves
you can play, and there are times when it is possible that the person you are playing may
not make a move at all.
On the other hand, it is not always the case that you must do everything quickly. There
are times when it is better to be prepared and wait for the situation to change rather than
act immediately. No matter how often it may be better to act in advance, like fruit, there
are some things you cannot really enjoy until the time is right.
This is why you should develop a good sense of timing. To put it simply, you should
watch the events of a situation, and act appropriately by doing what is necessary when
the time is right.
Rakuten Ichiba is now attempting to expand out of Japan into the world at large. As the
first step in this process, we have already opened Rakuten Ichiba Taiwan. Compared to
Rakuten Ichiba in Japan, the scale of this company is still very small, but the speed at
which the company is growing is far greater than the speed at which Rakuten Ichiba
grew in Japan. We have already taken a number of steps to prepare for the future in
consideration of that speed. These steps were made possible because we took a close
look at the timeline of our growth from our experience in Japan.
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I think that “stage management” is a great term. Whether we are talking about people or
companies, understanding objectively what stage you are currently in and implementing
plans in accordance with that stage is vital. Depending on the stage, there are times
when one must charge ahead and focus only on profits. There are also times when it is
important to sacrifice profits in order to promote expansion.
Depending on the stage you are in, what you should do will change.
What stage are you currently in? What should you do right now? Just like when you are
looking at a map, you must consider all the axes, including time, and make your
decision based on a comprehensive view of the situation. Developing a good sense of
timing is therefore extremely important in business.
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70 The devil is in the details.
In Japan, it’s more common to believe that gods exist in small things.
What are really in the details? Gods or devils?
I think it’s very interesting that English and Japanese are so perfectly opposite on this.
Thinking gods reside in small things suits Japanese people who feel great joy in seeing
small things done well.
I believe that the reason that Japanese automakers took the world by storm is because of
the great care taken to making sure that the smallest parts of each car were done
perfectly.
For example, I believe that the thorough dedication to quality control on the part of
Japanese automakers helped to reduce the amount of poor quality products made to the
lowest possible level, and that this in turn allowed Japanese automakers to overcome
other automakers in the United States.
From the Japanese perspective, gods are in the details. From the US perspective, the
devil is in the details. Being careful about details can lead to opportunities, while
ignoring them can cause you to plunge into a pitfall.
Essentially, the two phrases are saying the same thing.
No matter how correct a business plan is on the big points, if the details aren’t right, the
plan will fail. This is something I personally see a lot.
I think this is a total waste. Whenever people start a new business, if it does not go well
in the beginning they usually give up. They should instead think about whether the
overall concepts of the business plan were incorrect or whether they had not thought
about the details enough.
If the problem is the details, fixing the plan is not difficult. Giving everything up just
because it does not go well at first is rash. The reason why businesses that have done
well up until now and then cease to do so is often for this reason – they are not failing
on big concepts, but on details.
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If you have problems with details you basically have problems with the way things are
executed and operated. You can call this a problem of laziness. No matter how superior
a business model is, if there are problems with the way processes are concretely carried
out, the model will not succeed. Put simply, no matter how good your product is, if your
sales force does not want to sell it, it will not sell. There are unfortunately many
businesses in the world where this is the case.
I suppose that if you approach the issue from this angle, you may also come to believe
that it really is ‘the devil in the details.’
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71 Failure is the foundation of success.
After a failure, you often do not feel like getting back to work again.
However, failure will show you the reasons for your problems. Once you understand
these reasons, all you have to do is fix them.
In the process of failing, you no doubt discovered many points that need to be improved.
If you can actually implement these improvements, you will take a real step forward.
So when you fail, do not get yourself down. Pat yourself on the back, you have learned
something. And implement changes quickly.
In Japan there is an old proverb saying that failure is the foundation of success. When
you take the attitude of implementing improvements soon after a failure, you are
actualizing this proverb.
Discover problems, and fix them quickly. Doing this repeatedly is the key to creating
improvements in yourself and your company. Failure is only truly failure when it does
not lead to improvement. And the only reason for this to happen is a slothful response
by the people involved in the failure.
If you do not make improvements quickly, you will make the same mistakes over and
over again. And only a worthless person makes the same mistakes over his/her entire
life. They trip up over the same point each time no matter how many times they run into
it, and at some point, they find their life has come to its end and that they have not made
any progress on these issues.
There are many ways to think about failure.
You can for example, decide to view the things that you fail at as things that other
people would fail at as well. Accordingly, in these issues lay opportunities. If everyone
trips at the same spot, you can pull far ahead by not tripping at that spot yourself. Thus,
within failure lies the key to fantastic progress.
When you trip over a stone, take a good look at that stone. It may well turn out to be a
diamond.
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72 Read trends by the numbers.
Sales, profitability, break-even points, organizational profits, shares, prices, customer

figures – you encounter many different numbers in business.
Being good at such numbers is an absolute prerequisite for becoming a manager of a

company.
Numbers are facts. They do not lie to you. There are no more reliable tools to help you
understand objectively the details of your business.
Reading this, some may argue that numbers do in fact sometimes lie. For example,
suspicious investment businesses will often create seemingly trustworthy graphs and
calculations, which, although they seem real, are actually composed of numbers entirely
based on lies.
It’s true that this kind of thing happens, but I believe that it is especially for this reason
that people must become good at understanding numbers.
The reason numbers seem to tell lies is because you misunderstand what they are
actually telling you. I am not talking here about cooked ledgers or times when people
are intentionally provided with botched figures. In most cases, the reason people are
misled by numbers is due to a problem in their own comprehension.
In order to read numbers correctly, you need to develop your ability to connect numbers
to reality. You could also call this the ability to imagine bigger and better things after
looking at numbers.
If you do not have this skill, it does not matter how fast you are at calculations or how
good you are at remembering numbers. These are not useful business abilities. On the
other hand, if you can do this, reading figures will suddenly become fun.
There are those out there who are incredibly knowledgeable about the stats of baseball
players. I think that this must be a similar phenomenon to what I am talking about. By
looking at the numbers, you can imagine the player actually playing baseball. This is
why these figures are incredibly interesting for some and incredibly dry for others.
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If you want to improve your ability to read numbers, you should start by chasing after
changing statistics.
At Rakuten, all employees send daily reports to their managers. We have made it so that
the many figures received in each section are organized and sent to me. In one day,
these figures usually amount to a stack of paper 5 cm (2 inches) thick.
This is a fairly large amount. However, after closely reading these figures each day, I
began to realize some things. I became able to tell if a change in the numbers was
something I needed to pay attention to, or an innocent shift. And I became able to
develop a feeling for the trends that underline each section’s profits.
Just by looking at numbers, you can see not only what is happening in your office, but
to some extent as well the direction the world is moving in. The number of business
ideas and points for improvement I have uncovered because of the practice of reading
the reports every day are more than I can possibly write about.
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73 Think about the value chain.
I first thought of creating Rakuten Ichiba when I realized that the Internet was going to
spread like wildfire. Actually, at that time I thought up a number of models for Internet
businesses, but Rakuten Ichiba was the one I settled on.
The reason for this was, I also clearly realized that the Rakuten Ichiba model, more than
any other model, would give birth to a value chain.
Rakuten Ichiba is just a place. As a space, it is nothing special. As a space alone, it has
no real value. What gives it value are the stores that occupy it. That value itself is made
up of two types of value. One type is the value for the sellers. By creating a store on
Rakuten Ichiba, your product will sell. There is thus value in creating a store. The other
type of value is the value created for the end user, the people who shop. By using
Rakuten Ichiba, they are able to purchase many different things. Shopping thus has
value for them as well. These two values are chained to each other.
Rakuten Ichiba was opened in 1997, and as I have written before, we opened with 13
stores. To be honest, at the beginning, neither value was very high. From the end user’s
perspective, there weren’t many products available. From the seller’s perspective, things
didn’t sell very well.
As I have explained before, I made the price to open a store so low as to even put
Rakuten Ichiba into the red, in order to take the burden of low sales off of the sellers.
That way, even if the sellers did not sell very much, there was still some value in having
a store on the site. And on top of that, my six employees and I frantically scoured Japan
drumming up business.
As a result of our efforts in that first year, we managed to sign 100 contracts. In the
second year we signed a multiple of that. By the third year we were signing 100
contracts per month and the number of stores on the site had finally shown a real
increase. The number of people shopping on the site also increased with the increase in
the number of stores. With the number of shoppers on the site increasing, the number of
stores on the site increased further, and so on. The two values had become chained up to
each other. Unlike a normal business, as we sold more and more, our value and appeal
increased exponentially.
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Currently there are 33,000 sellers on Rakuten Ichiba. While we haven’t reached our
limit yet, this may be the most we will ever see, given the population of Japan. The rate
at which we are signing contracts with new store owners as well can no longer be
expressed by an exponential equation. For those opening up stores on the site, the
increase in the number of sellers means that their competition has increased. But for us,
this competition is another source of added-value and appeal. Direct price competition
quickly becomes competition over product quality. Therefore, we have developed
strategies to obtain high-quality products for the site that are not offered anywhere else,
to come up with service innovations, and to help sellers create relationships of trust with
their customers. When sellers work hard to improve themselves, the diversity of
Rakuten Ichiba as a whole increases, raising the quality of the site.
In May 2008, we opened Rakuten Ichiba Taiwan. Currently it is not directly connected
to Rakuten Ichiba in Japan, but we plan to make this happen in the future. And we of
course don’t plan to expand only into Taiwan. The diversity of Rakuten Ichiba will
increase by leaps and bounds moving forward.
A good value chain can be a strong asset for your company. You should think about
what values you can link up within your own business and how to make these linkages
effective. I think this is possible in any business.
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74 Differentiation + originality = victory.
Remember this when you are trying to fight a losing battle against one of your rivals.
Through differentiation, you set yourself apart.
For example, if you are a restaurant, this could be the spices you use, the quality of
service you provide, your cost performance, your atmosphere, anything. First find out
what factors you are losing on, and then work to catch up.
Once you figure out what these factors are, imitate your competition on these points.
This will shrink the distance between you and those ahead of you.
Once you have done that, add your own originality.
Follow this method, and you will always pull ahead of your rivals.
This is the kind of arithmetic that even an elementary school student can understand.
And yet it is something that hardly anyone actually does.
Instead, people believe that they cannot beat their rivals by doing the same things, and
try to further put their own touch on their products and services, obsessing over their
own originality.
This is why they cannot pull ahead. The reason that your rivals win is that they have a
kind of originality that cannot be copied. When you work to catch up with your rivals
by copying what they do, you erase that originality.
At this point in our example, both restaurants will appear exactly the same from the
window of a passing car. If you then add your own originality, it is obvious who will
win: You will.
In the manufacturing world, this is called “reverse engineering.”
It is when companies analyze the products that their competitors have completed and
figure out everything about how they work. In other words, they reverse the engineering
process.
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Through analysis and a focus on new elements, you can clearly differentiate yourself
from your competitors. If you add originality onto that, you can pull ahead. The process
of developing your own originality starts when you close the distance between you and
your competitors.
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75 There is no such thing as a special business.
Each business has its own kind of special information.
The manufacturing world has manufacturing information, and the services world has
services-related information. Even in the food world, the problems of a soba restaurant
and those of a ramen shop are definitely completely different.
This way of thinking is why businesses fail.
Of course there are different aspects to every business, but these are surface issues. The
fundamental logic of business never changes, no matter the industry. Regardless,
businesspeople always think that their business is different from others. Thinking in this
way is proof of someone who only sees the surface of things and does not understand
the underlying logic. This is why such people think that business is so difficult, and why
they almost always fail.
Think about a ramen shop and a fancy French restaurant. You might think they are
completely different. But actually any restaurant that succeeds shares fundamental
commonalities with other successful restaurants. This may be the attitude of the
employees toward their jobs, the amount of effort put into each dish, the effectiveness of
the kitchen, the expression of content on the diner’s faces as they leave the restaurant –
the importance of these things is constant.
No matter the business, the principle that “profit = income – expenditures” never
changes. There is a fundamentally inverse relationship between increasing income and
decreasing expenditures. This is what is difficult about basically all businesses, and it is
why what must basically be done in every business is the same. If you want to raise
profits, first increase customer satisfaction. Profits not based on customer satisfaction
are like the morning dew – they will evaporate as the days goes by.
Customer satisfaction is what is left over after the customer has used their money to
purchase from you. If it is a negative value, they will most likely never purchase from
you again. You must be at least at zero or in the positive range. Successful stores are
further into the positive range than others. What makes a customer satisfied depends on
what they entered the store seeking out. How much you think about this and how much
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effort you make on this point will determine how satisfied your customers are. In other
words, your service level can raise the added value of your products.
This sort of fundamental logic never changes.
It is a matter of course that you can raise profit by lowering expenditures, but if you do
this alone your customer satisfaction levels will only fall. Managers that understand this
rid themselves of waste and make the most of what they spend.
The reason that a popular ramen shop and a fancy French restaurant really do not differ
from each other so much is because there just are not that many methods for becoming
successful. Basically, it is a problem of the quality of your employees. This is the same
for any business.
No matter if you are in the restaurant business, finance, the sustainability business, or
the biomedical field, this never changes. Nor do the fundamental principles of
marketing or sales.
Rakuten has been successful because of our belief that Internet businesses are just like
any other business. I believe that even pro baseball is just another business. This is why
we are also succeeding at managing our baseball team.
There is no such thing as a special business.
Keep this in mind for when you run up against trouble.
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76 Think up multiple uses for your resources to increase profits.
A simple example of using resources in multiple ways would be a café that turns into a
bar at night.
Every company has a number of different kinds and types of resources. When I say that
you should use resources in multiple ways, I am talking about the practice of not just
using each resource for its original intended purpose, but devising multiple uses for
everything you possess.
For the Rakuten Group, our servers are a resource, the programs used by Rakuten Ichiba
and Rakuten Travel are a resource, and last but not least, our customers are a great
resource for us.
Under normal circumstances, each of these resources may only be employed for one
purpose, but if you view the resources you possess horizontally, vertically, diagonally,
or upside-down you will find that there are multiple ways to use things.
It is like in agriculture – depending on the season, the same field may be used for rice or
wheat. This concept is also applicable to business.
The café-bar model is one example of the how resources are used in multiple ways. You
might also consider how production companies will create a film, run it in theaters,
show it on television, and then release DVDs. Recently, many businesses are thinking
up new ways to use their computers. In most businesses, employees turn off their
computers when they are done working for the day, but in some companies, after night
falls the computers are hooked up to each other, creating a supercomputer-like network
on which these companies run any advanced calculations that need to be completed.
This allows the companies to avoid purchasing an actual supercomputer, and is just one
example of the many different ways computers can be utilized.
Developing multiple uses for your existing resources can help you to save a lot of cash.
In principle, using resources in multiple ways doesn’t cost anything, and so any extra
uses you come up with are immediately very profitable. If you can pass these savings
onto the customer, their satisfaction with your work will increase, leading to further
increased profits.
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At Rakuten, we are currently putting a lot of effort into utilizing our customer base in
many different ways. The skilled utilization of so-called “intangible resources” in
particular can lead to unparalleled increases in profitability. We have seen this
concretely in the Rakuten Eco-system. When customers of Rakuten Ichiba also use
Rakuten Travel or Rakuten Securities, we benefit considerably. This allows us to save
resources we would have otherwise used to attract new customers, which sort of work is
usually very costly. Furthermore, when we pass our savings from this onto our
customers, we find that we attract even more customers. Within the Rakuten Group,
almost any kind of economic activity is possible. The ideal economic environment to
operate in is one in which our activities also result in benefits for the customer.
This is just one example of how it is possible to use the resources that we have in our
customers in multiple ways.
Use resources in many different ways in order to lower costs and raise customer
satisfaction.
I predict that in the future, resources that cannot be used in multiple ways; in other
words, resources with poor utilization rates, will disappear off the face of the earth.
When a business is not making money, it is usually because of poor resource utilization.
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77 Strategy, execution, operation
Strategy, execution, operation.
Every business in the world operates within the cycle of these three concepts. First you
come up with a strategy, then you work out the details of how to pursue it, and finally
you actually implement it. Businesses grow through the repetition of this process.
The problem here, as I see it, is that all too often the strategy aspect of this process is
over-emphasized.
Some seem to have the illusion that success is all about strategy. Whether we are talking
about people or success, all you ever hear about is strategy, strategy, strategy. I think
that this must be because compared to the other two concepts; strategy is much easier to
explain. If we look to any of the classic Japanese war stories, we can see countless
examples of what I am talking about. For instance, reading these stories you can learn
about how Minamoto no Yoshitsune split his forces in the Battle of Ichi-no-Tani or how
Toyotomi Hideyoshi constructed Sunomata Castle in a single night. I believe these
stories are entirely fictitious, but even if they are true, I must say that I am far more
interested in how these things happened than just knowing that these events took place.
How did Yoshitsune train the horses that carried him and his soldiers down the
mountain and to the shore that day? How many people did it take to build Sunomata
Castle in one night, and how were these people organized?
We never learn these things reading the old war stories. If these kinds of things were
written in these stories, I’m sure that the resulting dreariness of the tales would
discourage anyone from picking up any of these books. But the fact is, if you really
want to achieve something, these small details matter.
Just like with the old war stories, in business people tend to gloss over the details. When
someone fails, it is assumed that the problem was strategy; that the fault lied with the
business model. There are a surprising number of instances where people rush into this
assumption and don’t actually examine where the problem truly resided within the cycle
of the three concepts.
Failure = a flawed business model.
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When written out as an equation, it almost seems plausible, but I do not believe this one
bit. Strategies are rarely ever wrong. It is more often the case that the way the strategy
was executed or the resulting operations were problematic.
When I first formulated the idea of an Internet shopping mall, there were many people
who told me that this business model had already been proven to be flawed. At that time,
many large companies had already tried to make an Internet shopping mall profitable,
and each one of them had failed.
However, I believed that the business model was not the problem, but that it was
something else entirely. When I looked into it, when I actually visited the other sites, I
found them unattractive. They were slow to update, and much of the information they
contained was old. There were even cases where, for instance, although it was the day
before Valentine’s Day, the site was advertising Christmas goods. The companies
running Internet shopping mall sites were creating homepages themselves for each store
selling goods on their site, because at that time it was believed that only a specialist
could create a website. Thus, it took a lot of time and effort to swap out any of the
pictures of the products being sold. The strength of the Internet, the speed at which it
can deliver information, was not being utilized well.
The problem has nothing to do with the business model of an Internet shopping mall
being flawed. The problem was the way the model was being executed. At Rakuten, we
solved this problem by developing a system to let store owners create their own simple
web pages. We were not professional coders, but we attempted to create a system that
did not yet exist in the world. That this was “impossible” couldn’t be helped – if we had
not succeeded, Rakuten would not exist today.
While it is important to think about strategy, you must never forget to consider
execution or operations. Within these two concepts there is often an immense amount of
room for innovation.
To what extent can you think up methods and exert effort to improve your work in
regard to execution and operations? Whether or not you can make the impossible
possible or achieve a miracle has to do with how much thought and effort you put into
what you are doing.
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78 There is no one method for achieving success.
There are as many paths to success as people trying to achieve it.
When you are aiming for success, there is no need to follow in the footsteps of those
who came before you.
It is human nature to want to walk up the first path you find when you are climbing a
mountain. You naturally think that it is the quickest way to the top.
In business, this is a bad idea. The reason being, no matter how quickly you rush up that
path, someone has already used it to reach the top. The path to success is fraught with
peril, and incredibly thin. You should think of it as only having enough room for one
person.
I will not say that it is impossible to overtake other people using the same route, but it is
incredibly difficult. Rather than trying to catch up, its far better to chose a different path.
In business, you should forge your own way. There is not just one route to the top. There
is always an approach that no one else has tried.
For example, consider Google. Right now, it seems that most people have given up on
beating Google. It seems impossible to do so. But I believe that it only seems so and in
fact there is no real reason why someone could not construct a system that could blow
Google out of the water. There is nothing impossible about it. Even so, there are very
few people attempting this. I think it’s because somewhere in the back of everyone’s
mind exists the belief that there is only one path to success.
There is one more lesson to be drawn from all of this. When someone succeeds at
something, they inevitably try to repeat their success. In other words, they use the same
winning pattern.
A pattern is a type of framework, and it is certainly true that frameworks can be applied
to many kinds of circumstances. There is nothing wrong with having a winning pattern.
As I have written in another section, there is merit to systemizing your success and
applying this system to other fields.
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However, it is extremely dangerous if you only ever rely on your winning pattern. Do
not think of your own pattern as the only pattern. There are multiple winning patterns in
the world. Never forget this: There is no one way to achieve success.
If you are not constantly aware of this, if you lose your ability to think flexibly, you will
only end up falling into the same patterns over and over again.
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79 The company that achieves the greatest cost reduction wins every time.
When we talk of cutting costs, people inevitably speak of reducing operations or

throwing away business plans. It is wrong to think in such simple terms. First, really
implementing effective cost reductions requires a kind of creativity akin to what is
needed to come up with new business models. Second, cost reductions must not stymie
growth. Pursue instead only those cost reductions that accelerate growth.
At Rakuten, we have been successful at greatly cutting costs. This year we expect to see
reduced costs of 1.5 billion yen a month, a total of 18 billion yen for the year.
We have achieved this through a constructive reorganization of our R&D department

along with a large reduction in corporate expenditures. It is an abstract example, but for
instance, we reduced the number of meetings by half, reduced the number of people
participating in meetings by half, and reduced the time taken up by each meeting by half.
This being one-half to the third, we managed to reduce the cost of meetings to an eighth
of what it once was. This reduction method is not just applicable to meetings either. We
also reduced the amount of waste by half. We reduced the amount of people assigned to
work on each job by half. And we reduced the amount of time worked by half. I realize
that the phrase ‘time is money’ is too often repeated, but in business, time and money
really are of equivalent value.
Of course the above two examples are not all we have done. For instance, we have not
just started printing on both sides of copy paper, but have begun to require that people
first make their writing more concise and then furthermore put eight A4 pages onto one
A3 page when making copies. We have implemented measures to make elevators more
efficient. Our large cost reduction of 18 billion yen this year has been achieved by
focusing on the small stuff.
We would not have been able to achieve what we have if we had exerted any less effort
than we did. If we had just aimed for a 5% or 10% cost reduction, there would have
been no point. It is expressly because we aimed for reductions to one-half to one-third
that our efforts were so effective. When you aim to reduce costs to such a level, you are
suddenly forced to dramatically change the way you do business.
Let me illustrate my point a bit more. Say you are a company and you are about to enter
a new field. At these times, companies commonly invest as much as possible into the
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new field. However, when you invest so much, the stakes are a lot higher. With failure
no longer be an option, businesses usually respond by thinking up absolute and rigid
business plans that they are sure will succeed. Companies pursuing this strategy usually
fail. I would say their success rate is around fifty percent. Overly positive projections
will stab you in the back; they will lead you places you do not want to go.
Investing is like gaining weight, in that when you invest, it becomes hard to move. You
become less sensitive to changes in your environment and unable to adapt. When
entering a new field, which by definition contains many elements you will not be used
to, it is best to tread lightly. Remember that the dinosaurs went extinct due to the rapid
environmental change that occurred at the end of the Jurassic period. Our ancestors,
who survived this same period, were able to do so because as mammals, they were
small and lightweight.
Do not think of new business ventures as such important things. Rather, your business
should try many different ideas, over and over again. I call this the experimental phase.
During this phase, it is imperative that you expend as little money as possible. I believe
that this is one of the conditions of success. The reason for this is as I have already
stated. It is better to tread lightly. Cost reductions are also valuable from this perspective.
When you reduce the cost of each experiment, you increase the number of chances you
get to try different things. Reducing the amount of resources you have to work with
increases the amount of opportunities you have.
Once you have found success during the experimental phase, you should increase your
speed as soon as you can. How fast you can increase the speed of your organization
relates to how competitive your organization is. In order to succeed here you should
slim down your organization. When the units of your organization become lighter, the
flexibility of your organization increases. In this process, you need to consider human
resources as well. You should construct an organization that can quickly grow your
successful experiments into large businesses.
For businesses, cost reductions are like shedding skin. Just as a caterpillar comes out of
its cocoon as a butterfly, cost reductions can push a company into an entirely new phase.
The company that achieves the greatest cost reduction wins every time.
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80 Build a framework for the continuous creation of new value.
Companies live much longer lives than people do.
Rakuten will continue to exist after I am gone. It is my wish that it does. For me, this is
the ideal way for a company to be.
People say that tigers leave behind their fur and people leave behind their names, but I
have no interest in such things.
I want to leave behind a framework – one that continuously creates new value.
The essence of Rakuten is its frameworks.
They say that the cells that make up our bodies are replenished and replaced
moment-by-moment. This being the case - how are we, as humans, able to maintain a
consistency throughout our lives in the way we do? This is a topic of great interest for
modern science.
Companies are similar entities. Although the people that make up a company may leave
and be replaced, the company itself maintains a consistent shape. With companies
however, the mechanism by which they do this is obvious. They use frameworks.
Within Rakuten, there exist many frameworks. There are frameworks to raise profits,
frameworks to turn failures into successes, team-building frameworks, frameworks to
learn from other people, frameworks to foster employees, etc. I believe that more
important than any of these are the frameworks by which we continue to create value. It
may even be better to say that all of the other frameworks exist for the purpose of
helping us to continue to create value.
Once a company stops creating things of value, its days are numbered.
The reason people often praise start-ups so much is because they create the kind of
value that no one has ever seen before. And the reason why that praise does not last long
is because that kind of value gets old quick.
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I think that if you want to create sustainable value, you should do so by accumulating
continuous efforts to improve everything you come in contact with. There is never any
end to improvements.
It is my belief that the biggest job I face is the construction of a framework that can
encourage the continuous creation of new value after I am gone. Even my goal of
creating the best company in the world is nothing more than a step by which to achieve
the construction of this framework.
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Chapter 6: Developing a global mindset
The type of business ideas you are able to come up with will differ depending on how
you view the world. The ability to view the world correctly from a wide perspective is a
requirement for creating new business models.
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81 Communication is the highest form of entertainment.
The Internet is a tool to connect people. No matter how advanced technology becomes,
people themselves stay the same. Humans will always want to connect with other
humans. While there are countless things that the Internet has made possible, the
fundamental truth that the Internet is primarily a tool to connect people will absolutely
never change.
The Internet shopping mall Rakuten Ichiba was born out of a focus on this function, on
communication. People often talk about the convenience and ease of purchasing things
on the Internet, but just being a convenient and easy place to shop does not mean you
will make sales. The greatest feature of Rakuten Ichiba is how it uses the tool of the
Internet to connect shoppers with merchants. Our greatest strength is that we allow you
to connect with the people of Japan on a person-to-person basis no matter where your
shop is.
When I opened Rakuten Ichiba, there were many other Internet shopping malls in
existence, but basically all of them employed a consignment sales system. The shopping
mall itself took care of everything from creating product catalogs and shipping products
to dealing with customers.
I, on the other hand, believed that there was no way to succeed using this kind of system.
The person who knows the most about their products, the person who wants to sell
those products the most, is the person who owns the store selling those products.
Supposedly, sellers ought to be infinitely more passionate about creating catalogs and
dealing with customers than any mall. For the customers as well, dealing with the
person directly in charge of the product is much more convenient. More than anything,
this kind of relationship helps to foster communication between sellers and buyers. It is
not just that shopping on the Internet is convenient. It is also kind of fun. I would even
say it is far more enjoyable than it is convenient. Internet shopping is itself a form of
entertainment.
All of this is why at Rakuten Ichiba we have the sellers make their own websites, ship
their own products, and deal with customers themselves. It is true that in the beginning,
when many people didn’t know a thing about the Internet and in some cases had never
even touched a computer, we heard from many people saying that this was an
impossible plan. The average person believed that creating your own site and e-mailing
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customers yourself would be too difficult for anyone who wasn’t a specialist in these
kinds of things.
However, if we had done these things for the sellers, we would not have been able to
make full use of the special characteristics of the Internet. That is why we instead
developed a system to allow even those who had never touched a computer to create a
simple homepage for themselves. There were definitely people in the beginning who
had a hard time using the Internet to interact with customers. But I firmly believed that
if sellers could do this well, their communication with their customers would proceed
smoothly, and people would see their businesses grow.
As a result of this strategy, there are currently 33,000 sellers on Rakuten Ichiba. The
secret to Rakuten’s success is that each one of these sellers is dealing with customers on
every level. Thinking about the entirety of the site, I would estimate that there are
currently 40,000-50,000 customer service specialists on the site. These specialists are
communicating with tens of thousands to hundreds of thousands of customers every day.
From this perspective, there is no shopping mall like us anywhere else in the world.
Internet shopping malls are not vending machines. They are tools for communication.
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82 Get your information from the world
I do not mean to put down the Japanese press, but if you compare Japanese newspapers
and magazines with media in other countries one cannot help but notice fundamental
differences.
For example, Japanese newspapers seem to place a heavy emphasis on scoops. Each
company aims to publish stories faster than all the other companies. Of course, what I
am about to say depends on the content of the article, but I have almost never felt any of
these scoops to be of any real value. My apologies to the reporters who spend their days
working so hard to report on the news before anyone else does, but I have to question
what is so great about reporting something first. Doing things in this manner only leads
to results where Japanese newspapers become a string of facts with little room for any
editorial content.
On the other hand, in Europe and the United States, the editorial is king. Basically all
articles feature the opinion of the reporter and carry the reporter’s name. The market
position of a media outlet is determined by how well-thought out these opinions are and
the number of skilled editorialists at each company. Personally, I consistently read the
Financial Times. The opinions in its pages never fail to have their own sense of
direction and this direction is always very helpful to me in both shaping my thoughts
and in business. Of course, I read the Nihon Keizai Shimbun as well. In fact, I don’t feel
quite right if I don’t read it every morning. But I have come to believe that the way you
gain information from Japanese newspapers and from editorials is entirely different.
Pay attention to foreign media. Of course, as a prerequisite to doing this you should
always glance at Japanese newspapers, but I believe that everyone should set time aside
to look at foreign media, especially the high-quality newspapers and magazines of
Europe and the United States. I want to recommend this to everyone reading this book.
Even if you aren’t very skilled at the language the paper or magazine is written in,
plowing through it anyways, with a dictionary at hand, is likely to still have its own
worth.
There is one more reason to know the news of the world, and that is to fuel your thought
experiments. The things that are happening in the world are not necessarily going to
happen in Japan, but I think it helps to think about what I would do if they did. This
allows me to hone my skills at predicting the future. Although we all live in the same
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world, there is definitely a time lag between when things happen elsewhere in the world
and in Japan, and this will certainly continue on in the future. Although the airplane
broke down the barrier that was the Pacific Ocean, the barrier that is the Japanese
language is still with us. Even the Internet has not yet completely broken down this
barrier. There are fifty times more people living in the world as a whole than just in
Japan. Simple calculations will lead you to believe that there are fifty times more things
happening outside of Japan than in it. Japan of course is part of world news, but just one
part.
What you realize soon after picking up newspapers and magazines from Europe and the
United States is that just relying on Japanese media you cannot know what is going on
in the world in real time. When you open your eyes to the rest of the world, you realize
finally that they have been covered up all along.
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83 Understand long tails.
I want you to imagine a dinosaur with an endlessly long tail. This dinosaur represents a
graph of the interests and preferences of all the people in a mature society. At the
highest point of the graph – the dinosaur’s head – are those things that are the most
popular among the highest number of people. From the dinosaur’s head, to his neck,
torso and tail, the number of people steadily decreases. At the tail you enter into the
world of minor hobbies.
In terms of Japan, for instance, when our society was fresh in the period of high-speed
economic growth, the tail of the dinosaur was not very long. The head of the dinosaur
was very high, and the tail was short and stubby. There were only a few really popular
things in society. In terms of types of dinosaurs, it was a Tyrannosaurus Rex or any
other dinosaur that walks on two legs. It was tall along the Y-axis and short on the
X-axis.
However, as a society matures, the head of the dinosaur becomes lower and lower, and
the tail longer and longer. In other words, the amount of things that people are interested
in, increases. The Y-axis shrinks, while the dinosaur begins to form a long neck along
the X-axis.
As societies age, the amount of choices available to the public increases. At the same
time, the interests of individuals diversify. This concept can perhaps be applied to all
societies. A little while ago, a popular phrase in Japan was “my boom.” I think that this
expression illustrates that we are living within a fully matured society, as it shows that
the number of groups responsible for initiating popularity booms has become smaller
and more diverse.
Many of the well-known businesses in Japan that have succeeded up until now were
fostered when we were a short-tail society, but they are now being forced to adapt to a
long-tail society. One reason for the economic slowdown in recent years has been the
inability of some of these companies to fully adapt. This shift is the reason why cars,
books, CDs, and brand goods do not sell as well as they used to. As the tail of the
dinosaur grows longer, its head droops. Companies are trying to cope with losses by
diversifying their lineups, but since this is in part a problem of market saturation there is
just nowhere to go. The physical world has its limits.
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With adaption methods and limits being different in each industry, it is currently of the
utmost importance that companies learn to flexibly adapt to the tail of society as it
grows longer and longer.
Rakuten Ichiba’s growth over the last ten years is not unrelated to what I am talking
about here. One reason why we set it up so that individuals could open shops was so we
could flexibly adapt to the diversification of interests. With one store, no matter how
large it is, there is a limit to the amount of goods it can carry. Rakuten Ichiba’s current
form as a collection of 33,000 retail spaces is partly in response to this issue. Since the
products dealt with by each seller are physical objects, we are not completely free from
the limits of the physical world. Even with 33,000 stores, those 33,000 stores have their
own limits, but the point of our system and its strongest merit is that we can
theoretically increase the number of stores on the site to any number.
This, of course, is strongly correlated to our ability to increase the number of customers
using our site. It is an issue of the extent to which we can cover all of the interests of a
diversified society, and depends on how long we can grow our own tail.
Whether we increase the number of stores on the site or the number of customers using
the site first is a chicken vs. egg issue. Regardless of what comes first, once the cycle
starts to pick up speed there is no choice but to work to accelerate it to the greatest
extent possible. In Rakuten, our belief is that having a long tail is everything.
A world with everything in it is no less than a small universe.
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84 Information in newspaper articles is secondary information. Create your own
information network to help you understand the trends of the world.
In the section on getting information from abroad, I recommended reading newspapers

from Europe and the United States. However, you must always remember in the back of
your mind that the information you get from a newspaper is secondary information. The
same goes for information on the Internet. It goes without saying that this information
can be accessed by other people, and furthermore, there is a time lag between the actual
happenings and when you see the news of these happenings.
Make an effort to increase the amount of primary information that reaches your ears. If
you are in the food business, those in the farming and livestock businesses and those in
the fishing industry can be a good source of primary information. For Internet
businesses, customers and end users are of course a good resource, and university
researchers and regular retail business owners are another.
I don’t mean to say that you should only collect information about your own business. If
all you do is worry about your own work, the size of your world will grow smaller and
smaller. While it is true that you can supplement the small size of the world you live in
through information gleaned from newspapers, magazines, the Internet, and other
secondary sources, this alone is not enough to really expand your own outlook on the
world. In order to do so, you must come in contact with new information, and in order
to do that, I recommend that you finish your work in good time each day and get out
into the world. You can always talk to your coworkers about work at work. Make an
effort to talk to those in other industries outside of work.
The great intellectuals of the Meiji Restoration lived in an era when the only available
method of international travel was to undertake a long and dangerous journey by sea,
and yet these people travelled to the United States and the countries of Europe to see
with their own eyes and hear with their own ears about the modern civilizations there.
The experiences and inspirations gained through these journeys became the driving
force for Japan’s progress during that period.
There were many books from Europe and the United States in Japan at that time, and
many people who had come from abroad to Japan as well. The intellectuals of the era
could have simply read these books and listened to the stories of the foreign nationals
they met in Japan, but they knew that this alone was not enough.
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There are many topics where you can develop knowledge of the issue by learning about
it, but never really understand it until you experience it. Furthermore, secondary
information is that which has by definition already been through someone else’s head.
In that process, the other person naturally adds his/her own subjective views and
decides what is and is not important. You cannot truly understand the trends of the times
through secondary information.
You cannot, of course, directly confirm with your own eyes and ears the entirety of
information on everything that occurs in the world. No matter how often you get out
into the world, you will still be forced to rely mostly on secondary sources for your
information. However, depending on how you use or do not use the primary information
you struggle to acquire, there will be a big difference in your ability to utilize the
secondary information that comes to you.
The quickest way to explain this is to compare actually going to New York, breathing its
air, and then hearing news about it, to just hearing news about it without ever having
gone there. The amount of the news you are really able to understand will be entirely
different. Furthermore, if you can make friends with someone you can trust about New
York, you will be able to see the same news from an even wider angle.
The further into the Internet age we get, the more valuable personally experienced
information will likely become. In order to understand trends before anyone else, you
should make an effort to increase the amount of primary information that comes in
direct contact with your eyes and ears.
Create your own independent information network to understand the trends of our age.
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85 The Internet will do away with national borders. Become a global thinker.
I have already written about my belief that the Internet will cause a type of great
revolution in the world, changing the way we think about nations and national
boundaries. In order to prepare for this era, you must first do away with national borders
in your own mind.
For a long time, Japan has used the barriers of language and the ocean to close itself off
from the world. You might say that we have been protected from the rough waves of the
world’s sea. That we have developed our own unique culture and civilization in the
midst of our ever changing world is, I think, something to be proud of.
However, in exchange, we have been unable to really perfect technology to connect us

with the rest of the world. We have not yet escaped the aftershock of our history of
isolationism, even after entering into the 21st century.
For most Japanese people, “the world” is someplace that you venture out into for a time
and then return. It is as if Japan is different, not really part of the world. For most people,
no matter where they go, they always feel like “guests.”
Japanese people do not have the recognition that Japan is part of the world and that the
world is a single connected place. Of course people understand this as a concept but
they do not really feel this way themselves. This is why so much news from abroad
seems so uninteresting to so many Japanese people. For instance, although what goes on
in the Middle East directly affects Japan, most people do not think of the region as if
they can change what goes on there.
This is just my impression, but I feel that, conversely, Americans and Europeans seem
to treat the news of the greater world in the same way that Japanese people treat news
from the countryside of Japan. When it comes to business, Europeans and Americans
target foreign markets as a matter of course, while Japanese businesspeople, despite the
degree to which the Japanese economy is connected to the world, still use phrases like
“advancing into the world.”
We must actively change this sentiment. Saying that the world is one is simple, but for
most average Japanese people, feeling that this is true in their hearts is another thing.
Unless we do away with this sentiment, we will not be able to adapt when the Internet
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finally does erase national boundaries. We will be manipulated by the people, capital,
and information coming like a giant wave into Japan, and we will lose sight of the path
that our nation must follow.
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86 Study the best practices of the world.
Just as when I noted that people do not pay attention to the examples of success around
them, there is one more thing that no one seems to pay enough attention to. It is
something that everyone in the world thinks they know – why are the world’s best
companies, in any field, the best?
Can you clearly explain this? It seems so obvious, but most people never think about it.
Einstein reportedly once said, “Why do the clouds float in the sky? Strangely, most
adults never think about this. Because I was a late bloomer and then developed rapidly I
think I find this strange. It’s why I became a scientist.”
Similar things can be said about business.
Just as there is a reason why clouds float in the sky, there is a reason why the world’s
best companies are the best. You should make the effort to understand this and apply
what you learn to your own business.
This is something that you will understand quickly if you look into it, but each company
that we think of as being the best in its field is actually highly unique. The companies
that stand on the top of their respective industries do not very well fit the forms of
classic or traditional companies. They are not classic examples of success.
You might think that this is unusual at first, but give it some thought and you will
realize that this is the natural way of things. There is no reason to believe that someone
ought to be able to stand on top of the world using only common sense. It is when you
succeed at the kind of thing that no one has ever thought of before that you rise from the
ranks of the average.
The world’s best companies are all unique. In each case, there is no other company like
the top company. Why is it that although these companies are known the world over, no
one really understands how unique they are? Is it that people are dazzled by their profits
and end up thinking of that uniqueness as a kind of technical information?
Within such technical information is the key to success.
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It is natural that it should be difficult to apply this concept to your own business. If it
were easy, everyone would do it, and the world’s best would not be unique. However,
when you fundamentally understand the lessons contained in the aforementioned
“technical information” you become able to apply these lessons to your own business.
Seek out the uniqueness and kernels of the world’s best companies and look for the
universal concepts within them that can be applied to other fields. Like Einstein, study
the world’s best practices and train yourself well in the principles of success.
Why do clouds float in the sky? Never forget how strange this is.
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87 The Internet will become the media, and media will increase its net presence.
The media will eventually become centered on the Internet.
Ever since the industrial revolution, businesses have moved toward mass production,
and along with mass production and mass sales, we have also seen the rise of
advertising.
An important point of mass-production methods is that they are supported through the
process of delivering products to the most consumers possible. Before the age of mass
production, the trend in most industries was custom-made products for the individual.
Mass-produced goods are, on the other hand, ready-made products for the masses.
There are many reasons why ready-made products pushed custom-made products out of
the market. One is that mass production allowed for an extreme reduction in costs.
Another reason that must not be overlooked is the role played by advertising.
Advertising is a process through which information is spread throughout the general
public. Its purpose is to talk up the merits of a product and pique the interests of
consumers. From time to time, advertising is able to link together the wants of
consumers, and fads are born.
What is interesting about fads is that they show a certain amount of individuality
themselves while at the same time robbing the people following them of their
individuality. People wear the latest fashion to show their individuality. However, by
wearing such fashion, their individuality becomes lost in the mass of other people
wearing the same thing. Fads come and go quickly. The miraculous cycle of fads shares
an affinity with mass production, because fad cycles lead to the maximization of
consumption. Because of this, as long as there is mass production there will always be
advertising.
As modern civilization has matured, we have seen the diversification of the products we
buy and sell. Product diversification is the fate of the free market. Once people start to
analyze the preferences and interests of consumers and begin to create products based
on such data, the medium of advertising has no choice but to become more finely
individualized as well. This is essentially the real reason why we have seen an explosion
in the number of magazines on the market since the 1980s. Just as the market can
become saturated, there is a limit to how tailored to the individual something can
become. There are limits to advertising and to mass communication. However, even if
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there are limits, the need for advertising never changes. Business has thus come to have
a vested interest in the media.
The relationship between business and the media has been upset by the Internet. This
has occurred because the Internet has accelerated the trend toward the diversification of
interests, which has been occurring for some time. At the same time, it has facilitated
the transmission of a high volume of information. Countless small communities have
been born on the Internet and connected together through a variety of means in a
net-like way. The flow of information from one community to the next has itself led to
the creation of numerous small fads that come and go with such quick succession as to
hardly be “fads” in the traditional sense. The role of spreading information was
previously the responsibility of the media, but with the Internet taking on this function
more and more, the diversification of interests has accelerated and the definition of what
constitutes a fad has narrowed. This trend is definitely accelerating.
It has not been easy for existing forms of mass media to adapt to the new worldviews
that have been fostered as the public becomes more individualized. This is because most
media outlets came to maturity in an era when information sharing relied heavily on an
advertising-supported one-source-to-the-masses model. Older media outlets are trained
to target large sections of the public, and this has resulted in traditional media becoming
not unlike a whaleboat which is now attempting to catch tiny tetra fish.
The number of newspapers printed each day and the amount of advertising revenue
earned by television stations are both falling. Television programs are becoming less
and less interesting and already children are starting to turn away from television.
Television will never survive if it loses its proficiency at creating content. With
newspapers as well, if they keep publishing in the same style they have until now, they
have no future.
This trend is proceeding far faster than I ever imagined it would. To be honest, I
predicted that this sort of thing would happen ten years ago, but I never imagined that
by today the trend would have progressed as far as it has.
In the not-so-distant future, or even in the near future, media will become centralized on
the Internet. This is a fate that can now no longer be avoided.
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88 Financial services as well will become entirely centralized on the Internet.
Money is essentially digital information. It is something thought up by humanity;

nothing more than a promise. And because it is mere information, it can be hosted on
the Internet.
If you think about it, you will realize that this is a far more convenient way of doing
things. In the not-so-distant future money will be entirely hosted on the Internet. It will
perhaps be a long time until we no longer have any currency or paper money at all, but I
believe that this is essentially only a matter of time.
I understand that some people are not comfortable with this idea. A 10,000 yen bill feels
like 10,000 yen. I understand this. I understand the feeling, but I have to say that I think
it is overly sentimental.
When we first started putting money into banks, I am sure that there were many who
were opposed to this process and many who expressed sentimental opinions about it.
However, these days, hardly anyone thinks twice about using a bank. Someday hosting
money on the Internet will be thought of in the same way.
Net banks, net securities, net insurance – already almost all financial services can be
accessed through the Internet. Since the fees for these services are reduced when a
customer uses the Internet, I believe that in the not-so-distant future all services will be
available on the net.
This is something that no one can stop. All financial services will be put onto the
Internet. Banks and security firms will close down their branch offices. Business models
from now on will be based on such a future.
If you do not think ahead about what will happen when this future comes to pass, you
will be left behind by history.
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89 Strengthen your locality through globalization.
If you only ever experience Japan, it becomes hard to understand it very well. It is only
when you go overseas that you begin to gain a true understanding of this country. When
you go abroad, you begin to understand the special characteristics and unique points of
Japan, as you become able to compare them with those of other countries. You begin to
see Japan clearly.
Globalization is to some extent all about looking at your own country from the outside.
In other words, globalization is all about improving your locality.
I really felt this strongly when the economic bubble burst at the end of the 1980s. I
realized at that time exactly why Japan’s financial systems were so weak.
When the price of land suddenly plummeted, Japanese financial institutions began to
frantically sell their assets. Overseas financial institutions realized what a huge
opportunity this was and bought all of this property up. Japan sold for a low price, and
foreign countries bought for a low price. World financial institutions are good at buying
things cheap.
This is something I understood by looking at the wider world. The bursting of the
economic bubble was the kind of event unheard of in Japan. Land prices and share
prices plummeted, and people faced the prospects of the economy hitting rock bottom.
This fear resulted in the selling of assets at low prices.
However, if you understand the ways of the world, you realize that the burst of the
bubble was nothing more than a phase. Land prices move in cycles. Sometimes prices
are low, and if you buy at these times you will see an increase in your own profits.
Investors in the world as a whole judged the situation by these economic principles and
managed to grow their own profit margins. Because of globalization, the burst of the
bubble in Japan became a tremendous business opportunity for the world.
The strength of global companies is their ability to pick out examples of success in one
market and utilize the same methods for other markets. Japan is currently struggling
with a number of domestic issues. If we stopped looking at these issues from just an
internal perspective but took a global view on them, I am sure that we could find
solutions.
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I am not talking here about slicing out examples from abroad and making conjectures.
This is not about glancing at the next house over and seeing that they do something one
way and thinking that you might try it yourself. What I am talking about is fully
engaging with the world and firmly dedicating oneself to this engagement. Do not think
about the outside world as something that does not concern you. As a member of the
same world, make it your business to know the substance of other countries. And then
take your knowledge of those countries and look once more at your own country.
I believe that within this process lies the true meaning of globalization.
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90 Fully analyze the successes of the past.
This can make you humble.
People enjoy talking themselves up. Although there are many reasons why someone
might want to succeed, one must not overlook the fact that people want to show how
wonderful they are. You want to show what you are good at to others. People are not so
different from the cat who has caught a sparrow and runs to show the bird to its owner.
This same instinct is shared by humans as well. It is an instinct firmly rooted in our
nature.
Because you want to show how great you are, you do things using your own methods.
You want to prove to others that your methods are the right methods. When people do
this, they usually fail.
Modern people always carry with them a certain prejudice – the prejudice that they are
living in the most advanced civilization of all time. People want to plunge forward into
the future on their own, and refuse to listen to any “outdated” lessons from history.
This is truly unfortunate. The lessons of history deserve to be considered.
It’s true that 100 years ago there were no computers. But does that make those of us
who use computers now so special? How many people even understand what goes on
inside a computer? This isn’t just the case for computers either – if you ask someone to
build a mobile phone, a television, even a match – how many people could actually do
it?
The civilization that we enjoy and are working to advance is, at the end of the day,
something built by someone else. We were born into this civilization. We are only using
the frameworks and tools we use now because someone in the past provided them to us.
If you really think about it, you realize that those in the past have most likely already
tried to achieve the same things you struggle to accomplish.
For example, Edo (the name of Tokyo during the Edo Period) used to be called a town
of a million people. What has the current multimillion-person town of Tokyo inherited
from Edo? Surprisingly, it was quite a bit. Edo had an information industry, a recycling
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industry, food and service industries, and even temp agencies. No matter the era,
organizations have developed through the same processes. There are not even large
differences between the reasons that organizations succeed and fail now and the reasons
organizations succeeded and failed in the past. There are many instances where the
issues that companies run into as they work, traps they fall into, and disasters they come
across are exactly the same.
Even if civilizations change, humans are always the same on the inside. You do not even
have to look as far back as the Edo Period to understand this. Think about the last
problem you had and how you overcame it. In that process were surely many hints to
help you in the future. If you think in this way, you realize that history is really a
collection of the results of the many trial and error experiments carried out by humanity.
You must absolutely make use of this resource.
Throw away your need to prove yourself and all of your conceits. In the end, those who
succeed are those who study humbly. This is what history has taught me.
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91 Japanese people are too humble when they are abroad. Have more
self-confidence.
I really feel this way.
If you look at the current state of the world, Internet companies everywhere are
advancing into other markets. Be they from China or South Korea, there are examples
of companies looking abroad everywhere. However, after I stated that Rakuten would
be expanding overseas, a journalist asked me, “Why do you want to expand overseas?”
This is such a Japanese way of thinking. Actually, perhaps this is the kind of thing that a
Japanese reporter has to ask. I do not want to put too much blame on the reporter.
It’s just that, had the interview taken place in the United States, no American reporter
would ever have asked me such a thing. I told the reporter this. I also explained that an
American journalist would rather ask, “Why haven’t you expanded overseas until
now?”
This is the global way of thinking.
Japanese people have for all too long thought of overseas as being a separate space that
exists in a world different from our own. National boundaries all exist far over the sea.
Because we are surrounded by the sea, we have become an extremely precious people
unable to think of foreigners as actual existences.
Our natural cradle has allowed us to create our own unique culture. But at the same time,
the filter of the sea has meant that we are exposed only to the good points of other
cultures, and we have thus come to idolize other countries.
At one time Japanese people were such as to be compared to lone wolves, but these
days there are no foreigners who would describe us this way. We no longer prize our
uniqueness, but instead have developed the ability to absorb foreign cultures to a high
level.
I believe that we should take pride in the unique nature we have developed within the
boundaries of our natural environment. However, there are points for improvement
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within this nature as well. The other side of our reverence for other cultures is a
hesitation about our own. This is why Japanese people are so modest abroad.
Landscapes are best when seen from afar. Viewed from afar, mountains are nothing less
than breathtaking. But when you actually climb them, it becomes much more difficult to
call them beautiful. They are steep, and they contain snakes and bears. Other countries
are the same. It is true that they contain types of beauty unknown in our own. But they
also contain other things. They contain both beautiful things and ugly things. There are
good points and bad points everywhere. This is the reality of the world.
Now that overseas holidays have become so common, this sort of thing is something
that everyone should be able to understand, but perhaps the length of time that we have
held our traditional beliefs has made it hard to change this natural tendency. This is why
so many people currently feel somewhere in their hearts the hesitation they feel about
Japan. If that was not the case, there is no way that we would still be so peacefully
closed off to the world at this time.
Japan and other countries are certainly different. But in the end, the same human beings
inhabit every country. Even if cultures are different, joy is joy and suffering is suffering.
If you understand this, there is nothing to be afraid of. It is not like going abroad is the
same as going to another planet.
Have more confidence in yourself and “expand” overseas.
191
92 It’s never too late.
I have heard of the term, “first mover advantage.”
The first person to act has the advantage.
This is certainly true. Especially on the frontier of the Internet, being the first to act is a
great advantage. When you go into uncharted territory, you face no competition. You are
free to take up as much space as you like.
Those who come later are robbed of this advantage. Because competition is fierce, they
are forced to strain themselves and work hard. They are not able to capture as much of
the market as the people who came before.
This is why when you are approaching a frontier, you should be the first person there.
This is the meaning of first mover advantage.
However, don’t think that there is really such a thing as being too late.
If you start now, you can do anything. I truly believe this.
Coming late to the game is difficult. It is not easy to win. Everyone says this. But if you
are trying to win at something without exerting any effort, I suggest you rethink your
views on the world.
If you draw up a grand scheme and take your time, you can be the catalyst for
revolutions.
This is where sports differ from business. In soccer, you must win within ninety minutes.
In business, you decide your own time limits. If ninety minutes is impossible, take ten
years.
Rakuten Ichiba was not the first mover. We came into the market at a time when
everyone believed that the Internet shopping mall model was a thing of the past. Even
now, as we try to expand abroad, we face a situation in which in many countries there
are already services similar to our own. There are not a few people who have told me
that they do not feel we will succeed.
192
But I believe otherwise.
Just as there is the phrase “first mover advantage,” there is also the phrase “best mover
advantage.” Those that act in the best ways have an advantage. Just because someone
acted first, that does not mean that their ways were the best ways.
Even if their ways were best in the beginning that does not mean that there are not better
ways now.
If you are not the first mover, be the best mover.
In life, there is no such thing as “too late.”
If you start right now, right this instant, nothing in the world is impossible.
I truly believe this from the bottom of my heart.
193
About the Author
Hiroshi Mikitani was born in Hyogo Prefecture, Japan, in 1965. After graduating from
Hitotsubashi University in 1988, he joined the Industrial Bank of Japan. In 1993 he
received his MBA from Harvard Business School. After leaving IBJ, he established the
Crimson Group. In February 1997 he founded MDM, Inc. (currently known as Rakuten)
and became CEO. In May of the same year he opened the Internet shopping mall
Rakuten Ichiba. In 2000, Rakuten completed its initial public offering on JASDAQ.
Since then, the company has expanded its operations with the addition of Infoseek,
Rakuten Travel, Rakuten Securities, Rakuten Credit, Fusion Communications, Rakuten
Bank, and other businesses. Mr. Mikitani became the owner of the J-League soccer team
Vissel Kobe in 2004, and in the same year formed Japan’s first new professional
baseball team in 50 years with the creation of the Tohoku Rakuten Golden Eagles. He is
currently the Chairman and CEO of Rakuten, Inc.
This book is a composed of completely original material.
Golden Rules of Success.

First printing (Japanese version): June 25, 2009.
Author: Hiroshi Mikitani
194

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Golden Rules of Success

Golden Rules of Success

They say that to dream is the privilege of the young.

I think this is a beautiful saying, but it could not be more wrong.

I believe that this is what it truly means to be alive.

Our success is not a miracle, and it is not luck.

For me, there could be no greater joy.

01 Common sense is hogwash.

03 Your role on the team has no limits.

04 Success requires “mind,” “skills,” and “knowledge.”

05 When to have humility, when to have confidence.

06 A brand is to a company what a flag is to a nation.

07 The future belongs to business.

08 Good technology is not enough.

09 Do not think and act; think to act.

10 Success is created out of the accumulation of many 0.01% improvements.

Chapter 2: Self Improvement

12 Play catch between your left and right brains.

13 Think about life backwards.

14 The multiple personality solution.

15 Study your entire life. Study everything.

16 Build self-confidence with small successes.

17 Run as far as you like.

18 Find someone to play catch with.

19 Act with concreteness: half of half of half is one-eighth.

20 Every kind of information is valuable.

21 Humans are self-justifying creatures.

23 Seek out new frameworks, continue to learn.

24 The problems are endless. That’s what’s exciting.

25 Think about what you are missing.

26 Never lose your excitement.

Chapter 3: Know your rivals (A treatise on personal relations)

27 If it is not an added-value service, there is no point.

28 Think about things from someone else’s perspective.

29 Why do people buy things?

30 Turn your greatest risks into your greatest opportunities.

31 Anyone can imitate a best practice.

32 Listen closely to those with different opinions.

33 Strike a balance between cooperation and competition.

34 Improve your own abilities by guiding your subordinates.

35 Develop win-win relationships.

36 As a fundamental rule, move swiftly.

37 Report to, contact, and consult with others.

38 Analyze each situation from many different angles.

39 See the success in tough conditions.

40 The spirit of challenge.

Chapter 4: Motivate your organization

41 Use KPIs (Key Performance Indicators) to motivate your organization.

42 Be sensitive to resource allocation.

43 A leader is a general, a teacher, a strategist.

44 How to get things done ten times faster.

45 Utilize the principle of competition.

47 Search out bottlenecks.

48 Sometimes it’s important to establish milestones.

49 Departments that consistently carry out morning meetings will succeed.

50 Every employee should think like a manager.

51 Create a framework to succeed, and develop horizontally.

52 Earn the trust of others.

53 Develop abstract customs.