Netprice.com Ltd: A Man Who Loves Airlines Makes the World's Only Non-flying Airline Company

Nao Ito
President and CEO, Shop Airlines, Ltd.
Executive Officer, Chief of Staff, Office of the President, netprice.com, Ltd.

After graduating from Keio University (Shonan Fujisawa Campus) in 1997, Nao Ito participated in the establishment of an American corporation for Imagineer Co., Ltd. After gathering experience in Silicon Valley in the world of game software development, in 2000 he joined netprice, Ltd. (now netprice.com, Ltd.), where he oversaw sales and administration, and headed up the company's transition to a public corporation. In April of 2007, he assumed the role of President and CEO for Shop Airlines, Ltd., a netprice Group company working collaboratively with eBay Inc. He recently started sekaimon, an e-commerce service between Japan and the rest of the world. Nao Ito was born in Kyoto Prefecture.

Q: How did you come to join netprice?

Ito: In high school and university (Keio University, Shonan Fujisawa Campus), I was classmates with Teruhide Sato, who now represents netprice.com, a group company, as president and CEO. We played rugby together at university. After graduating, he went to Softbank and I went to a video game publisher called Imagineer. When he became CEO at netprice, a new business started by CyberAgent, he contacted me. At the time, I was working in Berkeley, California. He wanted to run a business together, and asked me to go back to Japan. It wasn't long before I did just that. That was eight years ago.

Q: So you were involved in the establishment of netprice?

Ito: That's right. netprice was attempting to create the next generation business model using the Internet, and was founded as a company specializing in e-commerce. When I joined, early in 2000, creating a new business model, attracting customers, and marketing was just beginning.

Q: Up until that time, had you been interested in starting a business?

Ito: No. I was more interested in creating new product and service structures than I was in management or entrepreneurship. As a child I studied at an international school in the Netherlands. I think the experience of that atmosphere without boundaries between languages, nationalities, cultures or religions had a large influence over my later course in life. After going back to Japan, I always thought it would be nice if I could create an environment like that myself. I studied international subjects in university, so after graduating I found work together with an overseas developer of online games targeting Japan.

I came to America for the first time on a business trip during my first year at the video game publisher. I met lots of talented businessmen, saw how great the work environment was, and thought I would love to work there sometime in the future. I was more interested in creating an international business environment between America and Japan than I was in starting up a new business per se. After returning to Japan, I immediately asked the president if we could develop business in America, and to my surprise, he gave his approval. I and two of my superiors, one American and one Japanese, began setting up a business in the U.S.

Q: For international work, you might have found employment at large trading companies or manufacturers.

Ito: That's right. To tell the truth, I considered taking that route. I was looking for a job with an airline company. Since I had been in the Netherlands, I had an affection for KLM Royal Dutch Airlines and other European airlines, but only mid-career positions were available. I also considered trading companies and banks, but that just didn't feel right. Just when I was beginning to get worried, by chance I learned from a pamphlet about a presentation by a venture video game publisher. After the presentation, they served beer! (laughs) I had the opportunity to speak directly with the president and other management. I liked the people so much, that I decided right away to join. Not only did I want to participate in the company's business, but I had a strong desire to work on something interesting with those people.

Q: What was your business plan like when you first joined netprice?

Ito: We didn't yet have any concrete business ideas at first. We thought an Internet shopping service would definitely be interesting. We were considering a new form of shopping that would combine the Internet with other media such as television and magazines. I also thought making connections with foreign media and Internet entities would be interesting. I was going to try lots of different things. We thought if we were going to create a company, we should try to make the kind of company that would have a place on the world map, one that would get lots of attention from the world. In order to do that, one important step was to list it on the stock exchange. Another step was to spread overseas. In the fourth year after establishment, we went public on the Tokyo Stock Exchange, and in 2007 took our first step overseas via cooperation with eBay.

Sato and I both first encountered the Internet in 1993 as university freshmen. Back then, Japan's homepage was little more than "Welcome to Japan" and a graphic of the national flag, but we were both shocked by the real-time availability of information from overseas, such as on NASA or American universities. I was drawn to this tool that promoted connection with the wider world. Right after joining the company, I had a broad vision of basing a business on the Internet, and of doing it there at netprice.

Q: In cooperation with eBay, netprice started an overseas auction site called sekaimon. Where did the name come from?

Ito: It's quite simple. It comes from the Japanese phrase sekai de kaimono, which means shop around the world. It also has nuances of the anime character Doraemon's four-dimensional pocket, from which he can withdraw all manner of objects. Oh, mon (gate) also signifies that the site serves as a gateway to the world. The legal name uses the Roman alphabet because even though we launched the service in Japan, we also wanted the service to find acceptance around the world.

Sekaimon was started on December 4, 2007. We announced it together with Yahoo! Japan and eBay, and received considerable exposure in the mass media. As a result, so many people tried to access it when it opened, that the server crashed. Our cries were as happy as they were distressed. We felt sorry for the inconvenience to our customers, but we had to close the site for a week in order to carry out maintenance. We practically stayed up all night cobbling together servers in the office and strengthening and tuning the system before reopening the site. Since then, even though we haven't yet begun full-on promotional activities, thanks to word of mouth among consumers, traffic is increasing rapidly.

We're advancing the project in coordination with eBay's technology and customer support teams in San Jose and around the world. As an American base, we established Shop Airlines America, with some help from JETRO BIC.

Q: Did you call it Shop Airlines because of your old fascination with airline companies?

Ito: Yes, I did. I thought, "That's it!" It was about the only thing I decided entirely on my own. (laughs) It's the only airline company in the world that never flies. When it comes to e-commerce entities such as sekaimon, even Internet businesses have to actually physically move something--not just exchange information. I settled on that name because I wanted to construct secure and stable channels--such as those that airlines operate--by which products would pass through our network and into the hands of consumers around the globe.

Q: I've heard that netprice Group uses business auditions in its recruiting activities. What are they like?

Ito: CEOs within netprice Group who are in their twenties and thirties talk about their businesses with students and have the students suggest their own business ideas. Then we invest in the plans that we adopt on the basis of the auditions. It's a system by which we support and raise both a student and a business plan. By 2011 we want to welcome 30 entrepreneurs into the group as CEOs. We want to provide a model for an ecosystem, as it were, like that of Silicon Valley to students who possess a fervent entrepreneurial spirit, and to build angel capabilities and structures for raising the next generation of businesses around the world.

Q: What kind of structures, specifically, do you have in mind?

Ito: An incubation system for continually directing the money the group has received from the market and the profits from emerging businesses within the group to the next generation of entrepreneurs and businesses. When making new investments, we don't just focus on each company's new projects. We want to raise new CEOs as business owners and cultivate business together with the talent behind it. I'd like it if, from within that structure, more corporations within the group went public.

Twice each month all the CEOs within the group gather for a business talk. These talks provide an opportunity for the CEOs to air the ideas they're coming up with 24 hours a day and to bounce them off each other. It can be fairly rigorous at times, but it can also be fun. It should be even more interesting once we reach 30 CEOs, three times the nine members we have at present. (laughs) Entertainment is necessary for business. The CEOs are rivals of each other, but they're also family, so they can air their frustrations and be blunt with each other. They each possess specific strengths and have authority to make decisions as well, so the talks move along quickly. If we each take on new challenges, generate synergy, and grow, it will lead to growth for the group as a whole. It's a pleasure to be creating an environment like that.

(Editor: Yoshihiko Mori)