Tom Kelley shares his dream to dial up entrepreneurship in Japan

First published by The Japan Times

A little wave of euphoria often overwhelms Tom Kelley, while sitting at a yakitori bar in Shibuya or elsewhere in Japan. "How lucky I am to be right here, right now," he tells himself. He could be sitting at any one of IDEO’s nine worldwide offices—but the Tokyo studio is his favorite.

Since 2015, Tom spends about one week of each month in Tokyo to help unlock Japan’s creative potential through D4V (Design for Ventures), a Japan-focused venture capital firm that works in partnership with IDEO. IDEO is an internationally renowned design consultancy founded in Palo Alto, California.

On his first trip to Japan in 1985, Tom stayed on after finishing business to explore the country. Visiting Kyoto, he had a super-magical encounter at a lovely little izakaya. He ‘connected’ with its owner, even though neither spoke the others’ language. “It ended with me sitting at the bar talking with the owner and him singing, ‘I left my heart in San Francisco’,” he recounts. After, he thought to himself, "I've got to come back."

Two years later, he met the woman of his dreams at a bus stop in Australia. A young Japanese lady had been waiting for a bus operating on a holiday schedule, so he offered her a lift. “Nihonjin desu ka?” he asked. A year later they married.

Tom’s brother, David Kelley, asked Tom to join IDEO at about the same time. David sought in Tom a business-minded partner to complement his own creativity. Tom was looking for adventure, having until then followed a traditional MBA career path. He joined IDEO in 1987 and discovered the design world to be more fun. IDEO was then a small design studio with 15 staff. Thirty-two years later, the firm, in which Tom is one of many worldwide partners, employs around 750 people.

Both brothers are well-known in creative circles. David led the IDEO team that designed the first computer mouse for Steve Jobs. David also advanced the field of design, developing a human-centered approach to innovation called ‘design thinking’. Tom, on the other hand, co-authored three best-selling books on the subject. The books led to speaking engagements in 40 countries. Together, they changed how people go about the task of innovating.

Design thinking now forms part of the lexicon of entrepreneurs worldwide. It is a codified approach to innovation in which unstructured tasks are broken down into more manageable ones. Many quick, cheap experiments are used to test ideas for validity. Other human-centered tools, including empathy and storytelling, help share ideas and make the one’s which work “stick”.

Neither Tom nor his brother invented design thinking—the underlying concepts are as old as time. But they did reframe them in ways which make creativity and innovation accessible to everyone. Once people understand the method, they can innovate with confidence. “Everybody has the potential for creative confidence,” says Tom.

David’s brush with cancer in 2007 caused Tom to reexamine his life. The brothers have always been close to each other. After David’s recovery, the two decided to do more together. They took a fun trip to Japan. Later, they co-authored Tom’s third book, “Creative Confidence: Unleashing the Creative Potential Within Us All”. Following the book’s 2014 promotional tour, Tom expressed a growing personal interest to expand IDEO’s Japan offices, previously opened in 2011.

As its chairman, Tom now focuses on dialing up entrepreneurship in Japan through IDEO’s venture capital partner. D4V has $50m under management and currently invests in 40 startup companies. “My goal is to unlock the creative confidence of Japanese entrepreneurs, so that entrepreneurship can be a big part of the business story of Japan and the growth of the Japanese economy,” he explains.

Why not invest in Israel or Indonesia instead of Japan? After all, Japan repeatedly scores low across many categories in global entrepreneurship studies. Japanese firms also fail to quickly implement new ideas. Besides his love for its culture and people, Tom sees opportunities in Japan that are not available elsewhere.

For starters, the country may be more creative than studies reveal or that even the Japanese themselves believe. By some measures it is the most creative nation on the planet. For example, Japan leads in quality innovation. “Creativity is bubbling up in Japan,” says Tom. “It's just a question of unlocking it.”

Once unlocked, there are opportunities for explosive growth not present in countries with more mature entrepreneurship ecosystems. Economists generally believe entrepreneurship has an oversized impact on an economy. Perhaps every one percent increase in entrepreneurial activity adds one-half percent to a nation’s GDP. If true, kick-starting Japan’s startup culture could cause the nation’s per-capita GDP, currently 29% below US levels, to rise substantially.

Tom compares Japan’s growing entrepreneurship culture to that of new promising technologies which he experienced many times during his lifetime in Silicon Valley. After a long gestation period, a technology like virtual reality or artificial intelligence reaches an inflection point before taking off. The period following the inflection point “could not be more fun,” says Tom. From a business viewpoint, there is (also) a big opportunity.”

Talking about his legacy, Tom says, “I would like to look back and say we—IDEO Tokyo and the D4V part of it— moved the needle on entrepreneurship in Japan. That would be a sweet result to look back on at the end of my career.”

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