From the Editor

Why Bit Valley Makes Sense

First came the doubt. In our May issue, the writer asked people on the street -- in Bit Valley -- if they knew what Bit Valley was. Most had no idea. We defined it as the four central wards of Tokyo (Shibuya, Shinjuku, Minato, and Chiyoda), with the center being the area around Shibuya station, most notably the crossing next to Hachiko the Dog and under the Q-Front Building and its towering video screens. Just as I used to commute down Highway 101 in Silicon Valley, I now commute through this area in Bit Valley. On Highway 101 are billboards so tech-oriented they might as well be written in another language; around Shibuya station are girls wearing platform shoes so high they must be mounted, not put on. How could this be the Silicon Valley of Japan, I kept wondering.

More doubt was to follow. A reader complained about our Bit Valley directory, saying it was artificial to include only the companies within the limited area we had defined. Wouldn't it make more sense to use other criteria? he asked. When we profiled the founder of BizSeek in our June issue, he said that while he was moving his offices to Bit Valley, he didn't feel he belonged in "a hip place like Shibuya." Months later I interviewed the CEO of DealTime.com K.K. and asked him why he located around Yoga station, not in Bit Valley. He said he didn't want to be associated with Bit Valley -- that his company was meant to last. By that time, the "Bit Valley bubble" had popped. This supposed bubble was characterized by undeniably silly, overcrowded Bit Style parties put on at discos by the Bit Valley Association (BVA), and the pop itself coincided with the global dot-com downturn. (Though importantly, it wasn't yen so much as excitement that was lost.)

Doubt gnawed at me. For our September issue, I assigned a writer to cover the other tech-oriented areas in Japan. In the introduction, we included this quote: "Shibuya is mainly just a train station. It's not enough to coin a word and make a lot of fuss over."

Ugh. Was J@pan Inc nothing more than a purveyor of hype? I felt shabby.

Almost. But something else was happening: Bit Valley was growing. In September, we published in our Statistics section strong evidence of this: the National Land Agency of Japan reported in its "White Paper on Land" that most of Japan's Net companies -- including ones that had gone public -- were in Bit Valley. It devoted an entire section to the concentration of new businesses in the area. Indeed, it was notable that "Bit Valley" was even mentioned in a government white paper. In a real estate article, we showed the rising prices of setting up shop in Bit Valley, especially in modern buildings best suited for tech companies. Prominent incubator SunBridge opened its offices in Shibuya Mark City, exactly where we pinpointed the heart of Bit Valley. Our own BV Directory, where we track online the area's tech-related companies, grew rapidly, and easily became our site's top destination.

So it wasn't hype.

But something still bothered me. I had problems with the teen scene in Shibuya. It was like a stone in my shoe whenever I passed through the area, which was almost every day. To make matters worse, Bay Area magazines and Web sites I used to work at or freelance for kept showing Shibuya ganguro playing with their cellphones, seemingly no matter what the subject of the article. (Particularly annoying since they rarely covered Japan at all.) Somebody remove these girls and replace them with geeks, I demanded of no one in particular, internally.

Geek, Meet Girl
I'm pleased to report that I've since managed to resolve the whole issue and am now enjoying a state of logical consistency. The transformation occurred slowly. (No sudden epiphanies for this dim bulb.) It started with the great customer service I encountered everywhere I went in Japan.

OK, I know that some of you reading this now are old Japan hands, but for me, even though I had read about it, this was a big deal. It wasn't just the clerks -- I'm still astounded by smiling, friendly clerks who greet you, much less do anything beyond grunt and snarl -- but everything. The product designs. The building layouts. The way the construction workers bow and motion you away from that dangerous pot-hole they're filling. These are a people who really think about people, I realized. It isn't just training -- they're genuinely concerned about your satisfaction. This is the most valuable lesson that Japan has to teach the world, and it applies in a huge way to the New Economy.

Elsewhere in this issue (page 56) I introduce what I call the "can -- won't do" phenomenon. It's when the geek mentality seizes otherwise normal brains and makes them forget that just because customers can do something, it doesn't mean they will, or want to. Silicon Valley -- a flat, ugly, boring place full of geeks and geek wannabes -- either forgot or never thought about the real customers. Yes, you can offer allergy medicine or dog food through a Web site and bypass the evil middlemen, but what customer actually wants to go to a Web site just to buy these things? Japan may have been too late to the dot-com party, but it wouldn't have such sites to begin with. It's too customer savvy for that.

Enter the Net cellphone, where Japan is the undisputed world leader. Consider its advantages. A very personal device, it's easy to carry around, a converged appliance, affordable, and chic. Japan was late, but fashionably late.

Europe basically got the Net cellphone right, but for some reason felt it needed to be "serious" and go after the "serious" business user with "serious" business apps. (See page 34 for a great piece on the tech-oriented business activity between Europe and Japan, especially with regards to wireless.) Japan, whose view that technology exists to make life better can be seen in Astro Boy comics from a half century ago, saw the Net cellphone first and foremost as a means of entertainment and communication, a way to make life better and customers happy. It's an outlook that has served Japan well, and it's why I believe Bit Valley will become the next hotspot in the world's digital economy. As the notion of actually pleasing customers (instead of shattering middlemen and creating new paradigms) slowly reemerges, Japan will naturally take a leadership role in everything from the wireless Web to online gaming to consumer robots (see page 10). And as the world's top engineers and developers descend on Bit Valley to figure out the wireless Web scene, the presence of Shibuya's teenage goofballs will serve as a constant reminder of the "can -- won't do" phenomenon.

Geek, meet girl. This is your customer. She finds you boring. She finds your Web sites and business models and gadgets boring. She may look ridiculous to you, but, believe it or not, you look even more ridiculous to her. Make her happy, treat her well. If you can win her over, you can win over anyone. But first you have to give people what they actually want and enjoy. Remember that rule -- it's the lesson of Japan.

So now Bit Valley finally makes sense to me. There's no more disjoint between what's going on in these pages and what I see as I travel home at night, and I've assigned a follow-up story on Bit Valley for our May 2001 issue.

This area is going to be one hell of a fun place to live over the next few years. Sit back and enjoy the show. I'll give away the best part now -- the geek "gets" the girl.