On a recent trip to Japan's devastated northeast coast, venture capitalist Yoshihito Hori chanced upon a group of fishermen outside an evacuation center collecting wood from the debris where homes once stood. They were pulling out the nails and cutting it up to sell as firewood for 500 yen ($6.37) a bundle.

The quake that triggered a once-in-a-thousand year tsunami had destroyed the port and boats that provided their livelihood, forcing the men to become small-time entrepreneurs to get by.

History tells us that after a major quake or war there are more entrepreneurs coming up, says Hori, the founder of Globis Capital Partners and Globis Business School.

Many of Japan's best-known firms, Sony and Honda included, grew from ventures that got their start amid the wreckage of World War II as America dismantled Japan's military-industrial complex.

Two generations on, however, entrepreneurs struggle to survive beneath a canopy of sprawling conglomerates able to lavish money on in-house research and development.

As a career option, entrepreneurship is not encouraged or valued. Most graduates -- at the urging of mom and dad -- pick the safety but low return of a salaryman or civil servant job.


In its 2010 annual report, the Global Entrepreneurship Monitor, which ranks attitudes toward entrepreneurship by country, the perception toward starting businesses in Japan was the worst among 22 developed nations.

Japan's score of 5.9 is less than a fifth of the average at 33.4. The United States was at 34.8, with Australia at 45.7 and Sweden at the top of the rankings with 66.1.

According to a survey by the Japan Venture Capital Association, investment in startups in Japan dipped by 23 percent in 2010 to 15.1 billion yen.

Overall, the value of venture funds in Japan stands at around $22 billion compared with $190 billion in the United States.

The hope of venture capitalists is that the quake that shook Fukushima will jolt attitudes enough to nurture a new generation of entrepreneurs.

I am always saying the next Sony is going to come out of Fukushima. It's why I am trying so hard to find that next company, says William Saito, a start-up investor who moved to Tokyo after selling his biometric technology company in California to Microsoft.

Five months after the quake, a few green shoots are appearing, but mostly in niche areas.

One company is making air-conditioned jackets and ventilated shoes to deal with a power squeeze in the sweltering summer. Another is selling steel 'arks' designed to float occupants out of harm's way should a monster tsunami strike again.

But adding to expectation that business activity will expand beyond quirky products is an example from Japan's last big deadly earthquake in 1995 centered on the western Japan city of Kobe that killed more than 6,000 people.

It spurred Hiroshi Mikitani, who after loss of two family members in the disaster, set up Rakuten, convinced that if he didn't act on his business idea, fate may rob him of his chance. Today it is Japan's largest online shopping mall with a value of $14 billion.


Rather than a dotcom, however, the next big idea may be in energy.

After destroying large swathes of northeastern Japan, the temblor now threatens to fell one of the biggest trees in Japan's corporate forest, Tokyo Electric Power.

The sole provider of power to Tokyo and the surrounding region and owner of the stricken Fukushima nuclear plant, Tepco, as it is known, is now facing a taxpayer funded bailout and the prospect of a break-up.

Such a move would show that there aren't any sacred cows anymore, says Saito. They transcended the word too-big-to-fail.

Shuhei Abe, the founder of investment firm Sparx Group, wants the giant disbanded to give other companies a chance to grow.

Energy all of a sudden has become a very big issue, says Abe, who wants to see Tepco split into three parts; generation, transmission and at the delivery point retailers to package it to households and businesses.

The Tepco kingdom is almost like a government, sometimes stronger than the government. If you don't pay tax you can live, if you don't pay your bill to Tepco you have no life, nothing.

Already leading the entrepreneur charge on Tepco's weakened ramparts is Masayoshi Son, the founder of Softbank, Japan's fastest growing mobile phone company and owner of 35 percent of Yahoo Japan.

Son, an ethnic Korean born in Japan, is promising hundreds of million dollars of investment to construct an archipelago of solar power plants across Japan that would sell electricity to a deregulated grid.

By cracking open Japan's largely closed energy market, Son may open the door to smaller ventures supplying equipment and services to his new company.


Like their postwar forbears, ventures that emerge from the wreckage of Japan's latest disaster, will have to succeed globally as well as in Japan, says Yoshikazu Tanaka the founder of Japan's biggest social game site Gree.

Named by Forbes magazine in 2010 as Asia's youngest self-made billionaire, 30-something Tanaka is the poster boy for many of Japan's wannabe entrepreneurs.

The important point is finding a company that can sell its services or goods globally, explains Tanaka. Being coddled at home, where there are fewer rival ventures, has been a stumbling block, says Tanaka, who is trying to take his company to China and North America. In the U.S. you have 10 or 15 times as many competitors.

Investor Saito, who describes his own experience in California as a knife fight, won't put any money into a company unless he is sure it has a chance of succeeding overseas.

Recently he has made the recipients of his cash relocate to Dubai to learn what he calls the last mile of doing business.


Even with enough cash and management expertise, however, ventures may still lack one crucial ingredient; political leadership strong enough to force giants like Tepco to splinter, shove bureaucracy aside and give new companies the space to flourish.

Embroiled in infighting around the refusal of Japan's increasingly isolated prime minister, Naoto Kan, to step down, such political boldness remains a rarity.

Such strong political leadership is unlikely, Kazuhiki Toyama, CEO of consultancy Industrial Growth Platform, told 500 young managers and entrepreneurs gathered for a recent weekend conference.

The event organized by Globis' Hori was at the 45-storey Okura hotel in Hamamatsu central Japan, a building designed to look like a harmonica.

Attendants talked about the quake's aftermath in the venue's stuffy function rooms -- the hotel had turned down the air-conditioning to save power -- but most discussion focused on another potential catastrophe, which if Fukushima proves too little to prod entrepreneurship, may give ventures a second chance.

With national debt already twice GDP and growing by more than the size of the Greek economy every year, Japan may be heading for wealth destroying financial turmoil.

When asked by a moderator who among them thought Japan will go bankrupt, nearly everyone raised their hands.

It would be very sad if we had to have another reboot, says Saito.

Hori, one of the first investors in Tanaka's Gree, says he will still keep looking for a start-up gem in Fukushima.

He admits it may take some time to find something that is going to offer attractive returns.

First up, he is planning to start by offering micro financing deals of as little as $10,000, enough for unemployed fishermen to make a fresh start.

($1 = 78.490 Japanese Yen)

(Editing by Lincoln Feast)