So I’m back in 2004, just starting to work on the PikiFriends idea.
I had no programming skills (I still don’t), and no startup cash. I wrote everything on scrap paper which eventually turned into sketchbooks full of brainstorms and ‘webpages.’ I took ideas from the internet and customized everything to fit my concepts. I sought the help of friends and family to bounce ideas around.
Making an SNS that’s uber-safe, all in English, and easy to use for non-English speakers
I loved an SNS called “Virb” at that time, I thought as far as design and feel, they really nailed it. But Virb and others weren’t made for ESL programs in jr/sr high schools. They didn’t have iron-clad safety features to protect minors (and schools), would not be easy to use for non-English speakers, and didn’t have ways for teachers to manage and assess students. I did my research and found nothing suitable. This really spurned me on; I believed I was on to something that could make a worthwhile impact on education.
No programmer, no program
The major problem which continues to this day: I don’t know how to program, and good programmers charge a small fortune to build what I was (and am still) dreaming of. I wasn’t about to get a business loan or max out my credit cards to hire a pro; my wife would hang me by my eyelids, and besides, I wasn’t prepared at all for that kind of investment. So I turned to friends.
The Starting 5
It was me, Naoko, Takeshi, Makoto and Satoshi, and we had a plan, sort of. Between us we had an educator, a creative director, a financial director, a programmer and a web designer. Everyone loved the idea of this project and spent a lot of time optimistically thinking things through. Besides me the American, everyone was Japanese, so that’s the language we used.
Money? It’ll come :)
Our naive yet eager team had a plan. Simply put, we’d build it and charge subscription fees to participating schools. Our spreadsheets were looking good. Our programmer was the “yeah I can make that” guy and was unperturbed by any programming challenge I threw at him. “Can you make it do this?” “Yeah, I can make that.” “How long will that take?” “Oh, it’s easy, so I could finish it soon.” And so it went for a while. And we didn’t need money to get started – our idea was so good, we could bootstrap this thing to a profitable future.
So many people, especially students, ask me to this day, “What does PikiFriends mean?” I have never revealed the true meaning (it has nothing to do with the word ‘picky’ btw), but it was born from our starting 5 team in my living room. It went through many edits before becoming PikiFriends, but the ‘piki’ part was there early on. The Japanese crowd thinks it’s a cute name.
Our team plan didn’t work at all. Who were we kidding, we needed money! There was no way we were going to build such a complex platform on the side given our limited talents. People had families and full time obligations, and there were too many unknowns. It was a big idea, and needed more business acumen than we had in our young, exuberant group. But the time we spent working on the idea was very valuable in many ways.
Our team splintered off amicably, but I still felt sure that this idea needed to keep moving forward. So with Napoleon Hill books and coffee in hand, I just kept developing ideas and networking like crazy. I met with lawyers, business consultants, entrepreneurs, professors and anyone else I could find that might help.
Like father, like son?
My dad was a banker, a successful businessman, and I can tell you that none of that rubbed off on me. I think I’m pretty smart and have a good sense of what works in the world (unless you ask my wife), but I can barely balance my own finances.
I admit I have some insecurities when it comes to managing a business (I’m the CEO of PikiPeople, Inc., which is no big deal whatsoever at this stage, but that title gives me the willies sometimes). But like it or not, I was diving into entrepreneurship and I had to get over it.
One of the causes of my insecurities was the fact that I had to do everything in Japan. I had to learn a lot about how things work here, and it’s quite different than the States, that’s for sure. The language, taxes, red tape, support systems, customs and ways of thinking are all very, very different.
Non-profit or for-profit?
My gut feeling was I should create an NPO around this idea. I know a few people in the States who successfully ran education-related NPOs, and I’ve always felt that a non-profit organization is, at least psychologically speaking, easier for teachers to accept and adopt.
But the more I looked into NPOs in Japan, the less I wanted to do it. The NPO system in Japan is a more recent phenomenon compared to other countries. Japan’s culture, as wonderful as it is, is not as much as a ‘volunteer’ and ‘give to charity’ kind of place as some other areas of the world, and there are few tax incentives for donating to NPOs than in, say, America. It seemed to me that it could prove very difficult to find funding. So I planned on creating a good ‘ol for-profit corporation. (I have not ruled out the possibility of converting to an NPO; my current partner and I discuss this often.)
The big question always is, how can this idea make money and stay afloat? Visions of hundreds of thousands of members brought dreams of advertisement revenue streams, sponsorships, splitting off into different age groups & languages, and managing it all wirelessly on my private beach in southern Italy, my 4-hour work week plan. This plan lasted about a day before I woke up.
Back to the fundamental question. Should I charge subscription fees, or go the ‘free’ route and find other ways to make money? After a lunch in Nishi Azabu (a beautiful part of Tokyo) with a very kind lawyer (yes they exist) whom I met via networking, I was convinced that charging subscriptions would place a very high barrier of entry. People need free stuff, at least initially.
So the plan was to make it free and try to grow the user base as much as possible. If that works, there will be many options to find revenue, right? It’s the model used all over the internet.
Right now is the best time in history for consumers
Do you realize how much you can get for free on the internet now? The onus is on the creators of the applications. They give away for free amazingly expensive, labor-intensive web platforms to help your life. They are dying to get you through their doors, after which they’ll ask you as unobtrusively as possible (and deceptively in many cases) if you can be a part of their financial gain somehow.
Bite the bullet
About the programming side of things, smart web-based businesses use pre-made, or ‘open source’ technology, make some cosmetic changes, and adapt it to their model. It’s cheap and usually bug-free. In my case, there were no ‘cookie cutter’ versions of what I was creating. Sure, open source features could work, for example plug in an audio player here and a blog interface there, but I wanted to create many unusual features which required major customization.
No matter how I looked at it, PikiFriends had to be made from scratch by a talented programmer, and I had to figure out how to make it happen.
In 2006 I met my current business partner, Tetsuji Hando, through a university professor I know and trust.
Mr. Hando, a former stock broker and a serial entrepreneur, was working on some great ideas in education with a lot of investor backing, so I started by being a consultant for his business. We worked very hard to develop several interesting projects, and grew to like and trust each other. Of course I shared my PikiFriends idea with him and he seemed interested.
One day we were eating lunch and discussing our projects, and he ‘popped the question.’