Hiroshi Mikitani, the charismatic founder and CEO of Rakuten, has etched his name into the fabric of Japan’s business landscape and beyond. His journey to entrepreneurial success is a story of resilience, vision, and a relentless pursuit of innovation. His path wasn’t easy, but his story is an inspiring one, offering a model for aspiring entrepreneurs to follow.
Early Life and Influences
Born in Kobe, Japan, in 1965, Hiroshi Mikitani was raised in a household that valued education and international perspective. His father was an economist and professor, which gave Mikitani early exposure to global economic ideas and the power of international business. This exposure was amplified when Mikitani spent a year studying in the United States during high school, where he first encountered the dynamism of American entrepreneurship and innovative business practices.
However, Mikitani’s journey wasn’t without adversity. In 1995, the Great Hanshin earthquake devastated Kobe, displacing thousands of families and causing catastrophic damage. Mikitani, who was working at the Industrial Bank of Japan at the time, saw the impact firsthand. This tragedy prompted a moment of reflection for him; he realized he wanted to contribute more directly to society and help rebuild communities. This pivotal moment influenced his decision to pivot from banking to entrepreneurship, setting the stage for the next chapter of his life.
The Birth of Rakuten
In 1997, armed with an MBA from Harvard Business School and a determination to create something transformative, Mikitani founded Rakuten, initially as an online marketplace called MDM, Inc. With just six employees, he worked tirelessly to establish a new kind of e-commerce platform. At the time, online shopping was still in its infancy, and trust in digital marketplaces was low, particularly in Japan. But Mikitani’s vision was bold: he wanted to create a digital ecosystem that empowered small businesses, enabling them to compete against larger corporations by giving them access to a nationwide customer base.
Mikitani rebranded MDM as Rakuten, a name that means “optimism” in Japanese. His strategy was to cultivate a community-like marketplace that offered customers a wide variety of options while giving sellers control over their virtual storefronts. He also introduced a loyalty program—Rakuten Super Points—which rewarded customers with points for every purchase, enhancing engagement and fostering a culture of loyalty. This program became one of the defining features of Rakuten, differentiating it from competitors and building a fiercely loyal customer base.
Expansion and Diversification
As Rakuten’s popularity surged, Mikitani pursued aggressive expansion strategies. Rather than sticking to e-commerce, he sought to create a holistic ecosystem of services, encompassing finance, travel, and telecommunications. Rakuten’s first major diversification came in 2003 when Mikitani entered the financial services industry by acquiring the struggling Aozora Bank. This acquisition was followed by ventures into insurance, credit cards, and even professional sports, with the purchase of the Tohoku Rakuten Golden Eagles baseball team.
A significant turning point came in 2010 when Mikitani decided to globalize Rakuten. He embarked on a series of international acquisitions, including the French e-commerce site PriceMinister and the American e-book reader Kobo. These moves were instrumental in extending Rakuten’s brand beyond Japan, transforming it into a recognizable global entity. Mikitani also introduced an “Englishnization” policy, mandating that all Rakuten employees conduct business in English to ensure better communication and integration with global subsidiaries. While controversial, this decision was pioneering in Japan and underscored his commitment to building a truly international company.
Key Strategies and Success Factors
Several key factors underpinned Mikitani’s success:
- Empowerment and Loyalty: Mikitani’s vision for Rakuten as an ecosystem that supports small and medium-sized businesses became the company’s competitive advantage. By allowing merchants to customize their storefronts and by fostering a loyalty program, he created a unique shopping experience that instilled a sense of community.
- Continuous Reinvention: Rakuten’s trajectory highlights Mikitani’s willingness to adapt and innovate continuously. From e-commerce to financial services and even telecommunications, he consistently sought out new areas of growth.
- Global Vision with a Local Touch: Mikitani’s decision to expand Rakuten internationally while adapting to local markets demonstrated his nuanced approach to globalization. Rather than imposing a one-size-fits-all model, he respected the uniqueness of each market.
- Boldness in the Face of Change: The “Englishnization” policy exemplifies Mikitani’s willingness to break norms and challenge traditional practices. His courage to make unconventional decisions became a hallmark of Rakuten’s culture and success.
Challenges and Setbacks
Mikitani’s journey was not devoid of challenges. The global expansion strategy, while ambitious, stretched Rakuten’s resources and led to financial losses in several markets. The competitive nature of international e-commerce also posed difficulties, as Rakuten faced stiff competition from Amazon, Alibaba, and other giants. Despite these setbacks, Mikitani remained resilient, viewing each challenge as a learning opportunity that fueled his vision of a diversified, globally integrated Rakuten.
Another notable setback occurred in 2017 when Rakuten’s core e-commerce business faced mounting competition domestically, causing a decline in market share. However, rather than retreat, Mikitani doubled down on innovation. He entered the telecommunications industry by launching Rakuten Mobile in Japan, positioning it as an affordable alternative to existing mobile providers and further expanding Rakuten’s ecosystem.
Legacy and Impact
Today, Rakuten is one of Japan’s largest internet companies and a global force in e-commerce and fintech, with operations across Asia, Europe, and the Americas. Mikitani’s journey from a young banker to the leader of a multi-billion-dollar enterprise is a testament to his visionary leadership and resilience.
One of Mikitani’s lasting legacies is his commitment to empowering small businesses in a world increasingly dominated by conglomerates. By providing small merchants with tools to compete on a larger scale, he has democratized access to online commerce. His emphasis on customer loyalty and user engagement has influenced business practices worldwide, as companies continue to draw inspiration from Rakuten’s model.
Lessons for Aspiring Entrepreneurs
Hiroshi Mikitani’s journey offers several lessons for new entrepreneurs:
- Identify Gaps and Think Big: Mikitani’s success stemmed from his ability to see opportunities where others saw limitations. His approach to creating an ecosystem rather than a single product laid the groundwork for Rakuten’s diverse offerings.
- Stay Resilient in the Face of Challenges: Mikitani’s career shows the importance of resilience. Whether facing natural disasters or business setbacks, he turned adversity into opportunity, continuously pushing Rakuten to adapt and evolve.
- Embrace Change: Mikitani’s decision to introduce English as Rakuten’s official language was a risk that paid off. His willingness to challenge conventions became Rakuten’s strength, proving that sometimes bold decisions are necessary for growth.
- Focus on Loyalty: Building lasting relationships with customers and stakeholders was central to Rakuten’s success. Mikitani’s focus on loyalty and community set Rakuten apart and created a loyal customer base that fueled its growth.
Conclusion
Hiroshi Mikitani’s journey exemplifies the power of vision, resilience, and strategic adaptability. From a single marketplace to a global powerhouse, Rakuten’s rise mirrors Mikitani’s relentless drive to innovate and push boundaries. His story reminds us that true entrepreneurial success often requires boldness, adaptability, and a willingness to embrace change—even when the path forward is uncertain. Aspiring entrepreneurs can draw inspiration from his journey, understanding that with the right mindset, vision, and perseverance, it’s possible to turn even the most ambitious dreams into reality.
22/12/2022