Disrupting Japan

The single most common question I get asked are variations of "How do you start a business as a foreigner in Japan?"  or "What's it like to start a startup as a foreigner in Japan?" It's always been a hard question to answer simply because it is such a big one, that it can be hard to know where to start. Well, today we are going to start to answer that question, and over the next month or two, we are really going to dig into it. Jordan Fisher is CEO and co-founder of Zehitomo, which is an online marketplace for off-line services. This is not an easy space. There are many such sites in Japan, but Jordan explains why the fact that he and his co-founder are both foreigners has given them a competitive advantage not just in the marketplace, but in recruiting and marketing as well. Unsurprisingly, there are a few things that are much harder for foreign startup founders than for Japanese founders, and we talk about those as well. It's a great conversation, and I think you'll enjoy it. Show Notes Why charg

Japan had been a global leader in robotics for decades, but recently the traditional Japanese leaders have been losing ground to the better-funded and better-publicized firms coming out of America and China. Mujin is changing that. While iRobot and Boston Dynamics have been grabbing headlines and YouTube views, Mujin has been quietly breaking ground with a series of real-world commercial successes in deploying the next generation of industrial robots. Perhaps Mujin's largest achievement to date has been their project for Chinese e-commerce giant JD, in which they developed the world's first fully-automated logistics warehouse where robots unload the trucks, stock the shelves, and them pick and pack the items for shipment without human intervention. Today we talk with Issei Takino, who founded Mujin with his co-founder Rosen Diankov, and he explains why Japan looks at robots in a fundamentally different way than Western countries do, and how that will lead to a significant competitive advantage. It's an in

Twenty years ago, we all thought that starting a startup required a special and rare kind of talent. It was something you either had or you didn't. Today, founding and running a startup is considered more of a learnable skill. It has its own best practices,  industry standards, and common knowledge. And, in both startups and enterprises, I find it refreshing to talk to people who have succeeded by going against those industry standards. Peter Galante started what would become the wildly successful Japanese Pod 101 with no clear idea how to monetize and no clear business plan. He did, however, have a firm conviction that what he wanted to build had value and the people would flock to it. And he was right. Peter and I talk about how his unconventional business plan and his rejection of VC advice and standard best practices, actually resulted in a rapidly growing startup in a market protected from even his best-funded competitors. It's an interesting conversation, and I think you'll enjoy it. Show Notes

This is a rather personal episode. We have no guests this time. It’s just you and me. Today, rather than diving deep into a specific aspect of startups in Japan, we are going to take a hard look at both what is and what is not working within the Japanese startup ecosystem as a whole. And at the end, I'm going to answer the most common question I am asked by overseas audiences. "Where are the Japanese unicorns?" You might already know about Japan's two existing unicorns, but I'm going to explain where the next four will be coming from. I guarantee that it's from somewhere you would not have expected. So let's get right to it. UPDATE:  Evocative Machines are starting to take off in Japan. If you are interested in the subject, please check out The Evocative Machines Project. [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript Welcome to Disrupting Japan. Straight talk from Japan's most successful entrepreneurs. I'm Tim Romero, and thanks for joining me. Once again, I’ve got a s

If you've ever done business in Japan, someone probably walked you through the intricacies of Japanese business card culture. Chika Terada, the founder of Sansan, created one of Japan's most successful startups around the business card protocol. And even though Sansan has been expanding quickly and is on track for an IPO, Chika thinks that Japanese business card culture will soon disappear. Chika and I talk about the challenges of rapidly scaling a company, and how the IPO market in Japan will change in the next few years. We also talk about what Chika learned as his company expanded into other markets and how even B2B business is really a complex mix of business and culture. It's an interesting conversation, and I think you'll enjoy it. Show Notes Why business cards are not data, but an event marker Why Sansan wants to replace business cards How to save the corporate culture when you are committed to things that don't scale How stock options should be (and are) used at Japanese startups Why

Startups are changing how business is done in Japan, but medicine remains stubbornly resistant to innovation. In some ways, that's good. We are literally experimenting with peoples lives, so caution is definitely warranted. We don't want to rush things. However, Japan's national health insurance acts as a single buyer, and sometimes the only way to innovate is to go around them. That's exactly what Kenichi Ishii, the founder of Next Innovation has done. Their long-term strategy involves creating widespread and comprehensive telemedicine in Japan, but right now they have developed a basic approach that has reduced the cost of some medical treatments by more than 70% And business is booming. Ken and Next Innovation are both proudly from Osaka, and we also talk a lot about the state of the Osaka startup ecosystem. It's a great conversation, and I think you'll enjoy it. Show Notes Why medical startups need to innovate around Japan's national health insurance How to cross-sell in the medical market

Preferred Networks is making changes in Japan. Over the past few years, this AI startup has raised more than $130M in venture funding and grown to more than 130 people. If you live outside of Japan, you might not have heard of this team, but they are working with Toyota to create the next generation of driverless cars. They are working with Japan's most advanced industrial robot manufacturers to improve efficiency. They are also working with many financial institutions on fraud detection. Oh yes, and they also built Japan's most powerful commercial supercomputer. Today we sit down and talk with Daisuke Okanohara, the technical co-founder of Preferred Networks. Daisuke and I talk about the story behind Preferred Networks, he also shares his challenges and current strategies for maintaining the company's experimental and engineering culture as it grows larger and more structured. Daisuke also talks about his time at Google, how Japanese AI stacks up to China and the US, and why he’s convinced that their bi

Education is very hard to disrupt. That’s both good and bad. Education is so important to both individuals and society, it should not be changed on a whim, but over time it seems that our institutions of higher education have drifted away from meeting students real needs. Yoshito Hori, founder and CEO of Globis, is making radical changes. He turned a small training school into Japan's first independent and fully accredited business school with an MBA. Less than ten years later, Globis became Japan’s most popular MBA program. We talk about the need for change in education and about the successful, real-world pilot program Globis is running to modernize Japanese higher education. Yoshito also shares insights on how to teach innovative thinking and explains why such a high percentage of Globis MBAs go on to found starts or join them. It's a fascinating discussion and I think you'll really enjoy it. Show Notes Why most Japanese do not want to attend full-time MBA programs How to make an advanced degree

The insurance industry has proven very resistant to innovation. In fact, it has not really changed much in the past 200 years. The way insurance is sold and managed has changed, of course, but from the point of view of the consumer, things remain surpassingly like they were a century ago. Today we talk with someone who is changing that. Kazuya “Kazy” Hata is CEO of JustInCase, a new breed of Japanese insurance company that offers insurance over the smartphone and then monitors how you use your phone, your lifestyle, and your social connections to determine what your premium should be. We also talk about the next logical step for smart-phone-based insurance. Being able to ensure specific activities or possessions at will, maybe just for a few hours or while you are on a trip. It’s a great conversation, and I think you will really enjoy it. Show Notes Who actually buys long-term cell phone insurance What behavior might make you a "risky" smartphone user Why there are so few life sciences startups in

Blue Innovation attracted a lot of international attention last year when they announced the  T-Frend drone system. This dystopian drone flies around offices after hours reminding staff not to work overtime, and taking pictures of those who violate overtime policy so that management can be alerted. We’ll talk about this particular drone, of course, but Blue Innovation's technology is much broader and is making an impact an many more important, if perhaps less visible, areas. Founder and CEO Takayuki Kumada explains the early days of the company and why they decided to pivot into drones in the first place. We also talk about the future of drones in Japan and globally, about what’s really holding the industry back, and why the Japanese government crackdown on drones might have actually forced the industry to focus on a very specialized and very lucrative niche. It’s a great conversation, and I think you’ll enjoy it. Show Notes What is a drone integrator, and why are they important? How Blue Innovatio

Have you ever been at a crowded and noisy party and heard a conversation across the room? You catch pieces of it, and you know it is interesting, but you can’t quite make it out and you can quite push your way over to that side of the room to be a part of it. Well, that was the situation a lot of our guests found themselves in a few weeks ago, so today we are going to set things right. Last month 500 Startups and Disrupting Japan held a joint event that focused on how Japanese and foreign staff can work best together at startups. As the event, I had a great discussion with three startup founders who are leading multi-cultural teams.  They candidly shared their stories and advice and even told us about some of their biggest mistakes. It was a great discussion, the event was a huge success, and we’ll definitely be doing it again very soon. But in a way, the event was too successful. Way more people showed up than we expected and the place was packed. Everyone had a good time, but the room was so packed and

Hardware is hard. In fact, sometimes the simplest and most straightforward ideas turn out to be the hardest to implement. Today I’d like you to meet Kyohi Kang the founder and CEO of Atmoph. Atmoph is a programmable window which can display the sights and sounds of hundreds of scenic places from all over the world. It's an exciting project, and the team attracted a great deal of early interest. They even ran one of the most successful Kickstarter campaigns and a smaller, but still successful, Japanese campaign on Makuake. But this success almost bankrupted them. Kyohi and I discuss how this happened and how other startups can avoid falling into the same trap. We also discuss Kyoto and the fledgeling startup ecosystem that is just starting to spread its wings there. And we'll dive into detail about why, unlike most other startups, Atmoph has decided to remain a hardware startup rather than pivoting to software and licensing when presented with that option. It’s a great discussion, and I think you’ll enj

Right now, it looks like the most profitable business models that are emerging from the mapping of the human genome are not in the field of medicine, but in a variety of B2C business models focused on consumer marketing. That may be a surprising claim, but if the past 40 years of life sciences have taught us anything, it's that our genetic information will be both more valuable and harder to understand than we expect it to be. Today, I’d like you to meet Tomohiro Takano, CEO and founder of Awakens.  Awakens is opening up the genome to make it more accessible and understandable to you and me. They are designing a genetic marketplace that will serve both B2B and B2C clients, and they are working with other startups to develop applications that will leave some readers impressed and excited, and others appalled and concerned. So it’s probably best to let Tomo tell you about it. Show Notes Why people will share their DNA information How to choose your customers as a genetics startup Why developing B2B

We startup founders and investors like to talk about “moonshots”. It points out startups that have huge dreams, those that are solving hard problems, and those that will actually change the world if they succeed. Usually, the term moonshot is used metaphorically, but today I’d like to introduce you to a literal moonshot. Takeshi Hakamada, founder and CEO of ispace, plans on landing commercial payloads on the moon in the next two years. Ispace is in the process of developing lunar landers and lunar rovers, and they plan on using the increasingly inexpensive commercial launch companies like SpaceX and Blue Origin to send them to the moon. Ispace has secured a partnership with Japan’s space agency, and they have attracted more than $90 million in investment. It’s a great conversation and I think you’ll really enjoy it. Show Notes Why Japan's space program is being privatized How a lunar lander can be commercially viable by 2020 An overview of ispace's first ten lunar missions How much it costs to

Using artificial intelligence to change the way the education system works seems like a fool’s errand. When you combine the fluid and opaque nature of AI technology with the slow, bureaucratic decision making of education, you usually wind up with the perfect storm of stagnation, frustration, and rapidly burning through investor capital. Out guest today, however, thinks he’s found a way to make it work. Daisuke Inada, founder and CEO of Atama+, left a promising career at Mitsui to start an EdTech company he believes will change the way children learn. Interestingly, Daisuke’s vision is not the standard EdTech dream of online classes and automated learning. It’s one where human instructors are still very much involved and critical to the success of both the students and the programs. Of course, their role will change and the overall structure will look quite different from what we know today. It’s a fascinating discussion, and I think you’ll really enjoy it. Show Notes How to find a customer willing t

The global energy markets are transforming themselves right before our eyes. Very little fundamental change has occurred over the past 70 years, but 10 years from today the Japanese and global markets are going to look completely different.  Today we sit down with Yohei Kiguchi CEO in Enechange, Japan’s largest retail energy switching platforms, and we dive into detail about how these markets are changing. We talk about Enechange’s business model, of course, but we also discuss the most effective strategies for startups who need to compete against large incumbents, and that advice holds true for startups in Japan or anywhere else in the world. Yohei also has some interesting observations on why Japan is a better place to start a company than the UK or Europe. It’s a fascinating discussion, and I think you’ll enjoy it. Show Notes How to identify a promising startup opportunity in Japan What’s driving change in Japan’s energy markets How to appeal to Japanese investors from overseas The importanc

Having a free product tier is a time-proven way for startups to get a foot in the door by giving potential customers a low-risk way of evaluating your product. However, there are times when it's easier and much more profitable to simply make the sale. Yu Taniguchi s CEO of Vesper and creator of TableSolution.TableSolution is a SaaS product similar to OpenTable. It helps restaurant owners manage their reservations and better understand their customers. You might not have heard of them yet, but you will. Today they have thousands of paying customers including some of the world's largest hotel chains, they are profitable, and they are expanding globally. Yu and I talk aboutTableSolution's business model, of course, but you Yu also has some great advice and some counterintuitive insights about selling to mid-sized companies, expanding into new verticals and recruiting great staff. It’s a fascinating discussion, and I think you’ll enjoy it. Show Notes Two ways to differentiate your startup in a crowded i

Japanese labor law is very different from what is standard in the US or Europe, and more than a few foreigners have made simple mistakes that have cost them their jobs or their entire companies. Terrie Lloyd has started more than a dozen companies in Japan over the past 30 years and has hired hundreds of people here. Today Terrie shares a number of personal stories and also offers a lot of practical advice for westerners in Japan who need to hire, manage and retain Japanese staff, either for their own startup or as part of a larger organization. Of course, we talk about Japan Travel, Terrie’s latest venture, but we also cover the state of Japanese startups in general, how to best raise money from Japanese VCs, and we go over a few real-world examples of how you can protect yourself when things go horribly, horribly wrong. It’s an interesting discussion, and I think you’ll enjoy it. Show Notes One mistake all founders need to avoid when building a platform business Why Japanese VCs have a blind spot

Japanese fashion is unique, and so is the entire Japanese fashion industry. Today I would like to introduce you to a Japanese fashion startup with a genuinely unique business model. Tsubasa Koseki and his team at Facy, have created a fashion marketplace based on instant messaging and relationship building between shops and consumers. Interestingly, this market is not dominated by major labels or global companies, but by more local, mid-market brands. Tsubasa and I talk about his plans for Asian expansion, Facy’s chances for global domination in this niche, and the major differences between fashion retailing in Asia and in the West. It’s a fascinating discussion and a great inside look at fashion retailing. Show Notes What is the last untapped fashion market The reason behind the recent boom in startup founders from Todai How SNS use differs between Asia and the West Why you may not be able to trust Japanese e-commerce reviews The biggest mistake fashion startups keep making Why the global fa

There are a lot of passionate opinions about Japanese design. From the beauty and subtlety of the best Japanese anime to the design horrors of most corporate Powerpoint presentations, Japanese design covers a huge range. Things are changing though, and today we sit down and talk with Naofumi Tsuchiya, the founder and CEO of Goodpatch, one of Japan’s leading, and most richly valued, UI/UX design startups. We talk about how Japanese design is evolving and why we might be seeing (for better or worse) a more global design standard and sensibility. Goodpatch is one of the new breed of Japanese design firms, and they’ve been able to raise substantial venture funding. Nao and I also talk about how that venture money has forced his startup to move in very specific strategic directions. It’s a fascinating discussion, and I think you’ll enjoy it. UPDATE: The conversation below on the future of Goodpatch's two products is a bit confusing. Goodpatch has stopped development of Balto, but is continuing development on P