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Disrupting Japan: Startups and Innovation in Japan
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Disrupting Japan: Startups and Innovation in Japan

Author: Tim Romero: Serial startup founder in Japan and indomitable innovator

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Startups are changing Japan, and Japan is once again starting to innovate. Disrupting Japan introduces you to some of the Japanese innovators that will be household brands in a few years and explains what it’s really like to be an innovator in a society that values conformity.
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Startups and venture capital work differently in Japan.The rounds are smaller, the priorities distinct, and while the same terms are used, people quickly discover that the definitions are often subtly different. The game is played differently in Japan.Today we get a chance to clear up a lot of the confusion as we sit down with James Riney, founder of Coral Capital and head of 500 startups Japan. We talk about some of the most significant changes that Japanese venture capital has seen over the past five years, and we look at how things are going to develop going forward.James and I also break down the business model behind venture capital funds themselves. It's something that all serious startup founders should understand, but few do.It's a great conversation, and I think you'll enjoy it.Show Notes How venture funds raise funds Why Japanese banks and corporates are changing their attitudes towards Japanese startups The tradeoff between sector-specific and general VC funds What the hell is a Series-A anyway? How VCs try to appeal to the "right kind" of startups The real problem with IPOs in Japan How Japan's new, bigger funds will change Japanese VC in the long term What you never want to tell a VC when you are raising money What VCs do with their portfolio companies that don't work out How Softbank's Vision Fund is changing the market Advice to foreign founders who want to raise money in JapanLinks from the Founder Everything you wanted to know about Coral Capital Check out James' blog Follow him on Twitter @james_riney Friend James on Facebook Leave a commentTranscriptWelcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.I’m Tim Romero and thanks for joining me.Today, we’re going to do something a little bit different. We are going to talk about the state of venture capital in Japan. If you are raising money in Japan or thinking of investing in Japan, you really want to listen to this.Now, normally don’t interview VCs on Disrupting Japan. It’s not that VCs are not interesting. I’ve got nothing against VCs. I mean, some of my best friends are VCs. No, it’s just that VCs have a tendency to talk in the abstract. They talk about general trends and their portfolio companies, and I have always found that it is far more informative to go straight to the source, to talk to the founders about what they specifically are doing to capitalize or respond to those market trends, to have them tell you about the real challenges that startups are facing right now, and how that fits into the bigger more important society-wide stories.Well, today, we’re going to do both. Today, we sit down and talk with James Riney of Coral Capital, and we examined the business of venture capital, how VCs view advertising and customer acquisition, and what causes some VCs to make money and others to lose money.It is not exactly like it is for startups, but it is surprisingly close. We talk about the most important changes happening in Japan’s startup community, of course, but we also dig into the challenges facing venture capital funds in Japan, and Coral Capital in particular.We talk about what VCs look for when evaluating a pitch, things you should never tell a potential investor, what the next few years of venture funding in Japan will look like, and hopefully, we will clear up some of the confusion about the difference between seed and pre-seed, and pre-series A and series A rounds.But you know, James tells that story much better than I can, so let’s get right to the interview.[pro_ad_display_adzone id="1404"  info_text="Sponsored by"  font_color="grey" ]InterviewTim: So, we’re sitting here with James Riney, the founding partner and CEO of Coral Capital and former head of 500 Startups Japan, and we are going to be talking about venture capital.James Riney: Yes, it’s good to be back, Tim.
Startup culture has crazy and contradictory views about failure. As founders we are told to fail fast, but also to never give up. We are told to follow our vision, but be ready to pivot.Somehow this macho-bullshit culture of “I never really fail and ‘m not afraid of failure.” has become dominant amount founders. But it’s the result of denial. Trivializing failure is a way of not thinking about it’s effects.The truth is that failure sucks. Failure is painful. Failure ends friendships and marriages. I suspect that most who trivialize it are eager deeply afraid of failure or have never really failed at anything important.Today Hiroshi Nagashima tells a story of a startup gone very wrong. You’ll hear the red-flags start to appear as the story unfolds. There are important lessons to be learned here, but not just strategic ones.Hiro’s honest story about what it really feels like to have the company you love fall apart and what t’s like to try to put your life back together in failure-phobic Japan is something all startup founders need to understand.It’s a great story with no cliches, no feel-good rationalizations and no bullshit.I think you’ll get a lot out of this one.
Last month, I moderated a panel discussion at Coral Capital’s “Bilingual’s and Gaijin in Startups” event. Our panel focused on what foreigners should expect when working at Japanese startups and what Japanese startups should start doing to better support their international employees. It was a great conversation with four amazing people from four of Japan’s most interesting startups.    Tetsuya Sawanobori of Connected Robotics    Jordan Fisher of Zehitomo    Takanori Sato of Shippio    Tatsuo Kinoshita of MercariThis is a bonus episode, so the recording is straight off the board. There is no editing, no transcription, and no witty summary at the end alluding to the larger significance of the discussion. But a lot of good ideas were shared on stage, so I really wanted to share it with you. If you’ve ever thought about working for a Japanese startup, I think you’ll really enjoy this.
The idea of computers capable of reading our emotions and responding to them is both fascinating and terrifying. Will this technology serve us or manipulate us?Well, the speculation is ending because the technology not only exists, but it is being rolled out commercially.Today I'd like you to meet Hazumu Yamazaki, co-founder of Empath. Empath is a web-based API that detects human emotion from audio data, and its initial use in call-centers has shown a significant increase in sales. But as Hazumu explains, the potential effects are much larger.It's an enlightening conversation, and I think you'll enjoy it.Show Notes How emotion detection is being used in commerce How easy is it to emotionally manipulate us into buying something? The hardest thing to get right about corporate spinouts Why detecting emotions at scale will make money The true killer app for emotional recognition How startups can use pitch competitions & accelerators strategically How Japanese startup founders should act while overseas What Japanese founders can really learn from their overseas counterpartsLinks from the Founder Everything you wanted to know about Empath Friend Hazumu on Facebook Connect with him on LinkedIn Pitch training at Slush Tokyo Empath on Orange Blog Announcement for ICT 2019 Keynote Leave a commentTranscriptWelcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.I’m Siri and thanks for joining me. Today, I’d like to talk with you about –Hey, Siri, why are you doing the podcast intro?Hi Tim, I’ve noticed you’ve been very busy and seemed a little stressed, so I thought I would help out with this week’s podcast.I appreciate that, but I enjoy doing the podcasts, so I think I’ve got this.Okay, Tim. You know where to find me if you need me.Thanks, Siri.There is no doubt that computers, that artificial intelligence getting better at understanding our emotions, and when we think about the application for that emotional connection, we usually think of things we interact with directly, like personal assistance, like Siri. But it doesn’t look like that’s going to be its primary use, and it’s certainly not going to be the most profitable use of this technology.Today, I’d like to introduce you to Hazumu Yamazaki, the co-founder of Empath. Now, Empath is an AI system that can determine your emotional state by listening to how you speak, so Empath does not need to understand what you are saying, but by listening to how you speak, it can quite accurately determine whether you are feeling calm, anger, joy, or sorrow.The first commercial use of this technology has been in call centers and customer contact centers where it’s improved sales by as much as 20%, and yeah, this does open up some serious ethical issues over emotional manipulation that we are going to get into a bit during our conversation and get into a lot more in the comments at the end of this episode.But along the way, we will talk about how a modern version of build it and they will come might just be a viable marketing strategies. The key to making corporate spinouts worked in Japan, and a different way for Japanese startups to go global.But you know, Hazumu tells the story much better than I can, so let’s get right to the interview.[pro_ad_display_adzone id="1404"  info_text="Sponsored by"  font_color="grey" ]Interview                                                                                Tim: So, we are sitting here with Hazumu Yamazaki, the cofounder of Empath, so thanks for sitting down with me.Hazumu: Yeah, thank you for having me today.Tim: Now, Empath is a technology that detects emotion in human voice, but you can probably explain it a lot better than I can.Hazumu: Sure. So, we developed Empath which is an emotion AI that can identify emotion from your voice,
We've been talking about smart homes and smart cities for a long time.However, it turns out that we are not willing to pay very much for simple convenience, so the technology is coming into our homes bundled with different agendas.We've seen this happen with the success of Alexa and Google Home, and we are now seeing it here in Japan with Nature Remo.Today we sit down and talk with Haruumi Shiode, the founder and CEO of Nature, and we discuss not only what the future of home automation will look like, but who will be paying for it.It's an enlightening conversation, and I think you'll enjoy it.Show Notes The real motivation behind smart home purchases How hardware entrepreneurship went mainstream The one way in which crowdfunding is still relevant Why Nature decided to launch English-first How to outsource hardware production without going bankrupt Nature's real business model for the future The importance of demand-response in Japan The growing significance of corporate alumni networks in Japan Why Kyoto might be Japan's next innovation centerLinks from the Founder Everything you wanted to know about Nature Remo Friend Haruumi on Facebook Follow him on Twitter @haruumi524 Read about Haruumi's transformational sailing journey. It's a pretty cool story.Leave a commentTranscriptWelcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.I’m Tim Romero, and thanks for joining me.Smart homes and smart speakers have not really changed our lives in the way that was predicted. I mean, it’s not that they have not sold well. Amazon has sold over 100 million Alexa-enabled devices and the technology is a really amazing, but voice assistance remain a novelty rather than a real step forward, and here in Japan, even with Japanese language support, the adoption rate has been low.I think a big part of that is the lack of conductivity, and by conductivity, I don’t mean the ability to connect to a computer or interact with other programs. I mean, smart speakers don’t connect us to each other in new ways. In the end, they are just an input device. They don’t provide something that we don’t already have in our lives. Well, today, I’d like you to meet Haruumi Shiode, the founder and CEO of Nature’s created a new smartphone device, the Nature Remo.Now, the Nature Remo provides some immediate utility: the ability to control your life and your air conditioner from your smart phones or based on rules that you set up, but the real reason that Nature is so interesting is what comes next. It’s a lot more than just turning your lights on and off; it’s a new way of connecting with each other and a new way for power companies to manage the power grid during times of peak load.But you know, Haruumi tells the story much better than I can, so let’s get right to the interview.[pro_ad_display_adzone id="1411"  info_text="Sponsored by"  font_color="grey"  ]InterviewTim: So, I’m sitting here with Haruumi Shiode of Nature, so thanks for sitting down with me.Haruumi: Thanks for inviting me for this podcast.Tim: No, I’ve been looking forward to it. So, Nature makes the Nature Remo which is a really interesting device that you can probably explain a lot better than I can, so what is the Remo and how does it work?Haruumi: Nature Remo is basically a very small tiny device that can turn your AC or TV, or lighting through smart device. It communicates with those appliances through the infrared and they connect to Wi-Fi, so that you can control from your smart phone or smart speakers.Tim: Okay, so infrared means it’s sort of – it’s emulating the remote control for your TV or your air conditioning?Haruumi: Yes.Tim: Ah, okay, cool. So, if it’s infrared, and so if I wanted to outfit my apartment with these and control or my air-conditioning units and my TV, so would I need one Remo in each room?Haruumi: Yeah,
Selling services in Japan is very different than selling products or software.Everyone knows that relationships are important in Japan, but not many people understand why they are so important, and how you can use that understanding to build a successful business here.Today Sriram Venkataraman explains how he grew InfoSys Japan from a one man operation to over 1,000 employees and how understanding why Japanese enterprises must trust their vendors far more than companies in other developed countries.And we dive into what that means for the new generation of SaaS startups.Our conversation is basically a blueprint for how to grow a startup from nothing to thousands of people in Japan, and I think you’ll enjoy it.Leave a commentLinks & Resources Follow Sriram on Twitter @japansriram Connect with him on LinkedInTranscriptWelcome to disrupting Japan straight talk from Japan’s most successful entrepreneurs.I’m Tim Romero and thanks for joining me.I’ve got another great Disruption Japan Selects show this week.  And this show, well this was one of those conversations that have really stuck with me over the years. In fact, if you are interested in selling to large Japanese enterprises, then this might well be the most insightful conversation that’s ever happened on the topic in English.Over the course of a decade, Sriram Venkataraman grew Infosys Japan from one employee to well over 1,000 before retiring to work with startups. In this episode, we cover why so many foreign companies have trouble selling to Japanese enterprise, and the one critical thing you need to do if you have any hope of building a long-term business.And afterward,  I’ve got an update for you. I caught up with Sriram the other day and I mentioned that the recent popularity of SaaS products seems to contradict some of the advice he’s about to give. But it turns out it doesn’t.The successful Japanese SaaS companies are playing by very similar rules to those we outline in our conversation. and I’ll give you that update at the end of the episode.So please enjoy the show.First IntroToday we’ve got some amazingly good advice for anyone who wants to sell services in Japan. Selling products or software is challenging enough, but selling services where relationships mean everything and where the quality expectations for service is perhaps the highest in the world, that provides a host of very special challenges.Today we sit down with Sriram Venkataraman, as he explains how me manages to scale Infosys, which provides outsourced Indian development services, from 2 people, to over 1,000 people in Japan. In a very real sense, he did it with a strategy that is pretty much the opposite of what you would expect from an Indian software services company.This is a real insight into the mind and the buying decisions of Japanese enterprise customers and Sriram has a different, very compelling perspective, on why so many foreign companies have trouble gaining real trust in the Japanese market. We talk a lot about finding the right people here in Japan, and how to avoid the hiring traps that western firms commonly fall into. Really, this interview is basically a blueprint of how to grow from nothing to 1,000 people in Japan.But, you know, Sriram Venkataraman explains that much better than I can. So let’s hear from our sponsors and get right to the interview.    [pro_ad_display_adzone id="1411"  info_text="Sponsored by"  font_color="grey"  ]InterviewTim: I’m sitting here with Sriram Venkataraman, of Infosys, and you have been with Infosys from the very beginning in Japan, and you’ve seen it grow from a tiny team to over 10,000 employees here now, haven’t you?Sriram: Not 10,000.Tim: No? That was on the website.Sriram: Our total Japan business is probably about 1,000 people today. But given the business model, not all of them are here. Roughly 65 to 70% of the teams are in India and the b...
This is a rather personal episode. We have no guests this time.It’s just you and me.New listeners might not know that for about one year, Disrupting Japan was sponsored and was my primary source of income.So today, rather than diving deep into a specific aspect of startups in Japan, I thought I would share the history of Disrupting Japan itself, about my decision to go pro (and then go amateur), my visions of a podcast empire, and how it came crashing down.I'd like to tell you the story behind the stories. Leave a commentTranscriptWelcome to Disrupting Japan. Straight talk from Japan's most successful entrepreneurs.I’ve got a special show for you today. There will be no guests, no beer, no playful banter about making, marketing or monetization.  For the next 20 minutes, it’s just you and me.It’s been a while since I’ve done a solo show, and these solo shows tend to be some of the most popular. So today, I thought it would be a good idea to share with you some of my thoughts about podcasting and to tell you the story of Disrupting Japan itself.  Why I started it, how I grew the audience, how I turned the show into over $8,000 a month in income, and how I started to put together Japan’s first podcast advertising network.And, most importantly perhaps, why I walked away from all of that and returned Disrupting Japan to the non-commercial, sponsor free format we’ve all grown to know and love. Our talk today will explain why a number of more unusual things about Disrupting Japan are the way they are.And you know, Disrupting Japan has been growing even faster since we went commercial-free. Today we have over 10,000 listeners in 160 countries. Including one listener in Vatican City. Now, I have no way of knowing for sure who exactly that one listener is. I mean, sure, it could be anybody, but I like to think … I choose to believe that Disrupting Japan has listeners in very high places.But it wasn’t always this way. In fact, Japan is a very hard place to launch a podcast.[pro_ad_display_adzone id="1404"  info_text="Sponsored by"  font_color="grey" ]Podcast NationJapan is not a podcasting nation. Most popular podcasts are recycled radio produced by major media companies. Good independent shows exist, but you need to look for them.I’ve built a few startups in Japan, and the podcast was supposed to be me just talking with my founder friends about startups and innovation in Japan; about what it’s like to be an innovator in a culture that prizes conformity.I christened the show Disrupting Japan, and launched to decidedly little fanfare in September 2014.The podcast totaled 42 downloads that month. I thought that was great.How Not to Grow a PodcastMy audience rose steadily each month, and after six months I had about 400 listeners. At this point, I decided to invest in growing my show, but most of the common sense marketing and production approaches I tried either had no effect or actually backfired.I rented a studio to improve production quality, but it made my guests uncomfortable. Most simply could not relax in the unfamiliar environment and spent the whole interview looking at their mic rather than at me. I tried this with three different guests and didn’t get a single usable conversation.It’s obvious in retrospect, but few things make people more nervous than shoving a microphone in their face.So I gave up on the studio. I started going to their offices and using a pair of small lapel mics. The sound quality was lower, but after a few seconds, my guests forgot they were wearing these little microphones and we could talk like two human beings. Showing up with a couple of beers also helped my guests relax and made the recording less if an interview and more of a conversation.It turned out that sacrificing a bit of production quality and so-called “professionalism” for more personal, honest conversations was one of the best decisions I made.
The promise of renewable energy has always been alluring. Now that the technology has caught up to the promise, record amounts of wind and solar are coming onto the grid both in Japan and throughout the world. But so far startups, especially Japanese startups, have been playing a very limited role in this transformation.But that's starting to change.Today we sit down with Ken Isono, founder and CEO of Shizen Energy, and we talk about what it takes to succeed as an energy startup in Japan, and since Shizen Energy is rapidly expanding globally, what it takes to succeed as a startup in the global energy markets.We talk about which renewables are working in Japan and which are not, what the real bottlenecks are, and more important, how we can fix them.It's a great conversation, and I think you'll enjoy it.Show Notes Why startups struggle in the energy market How solar plants get built in Japan How to find wind projects worth building The importance of going local in a global market Why the Japanese value land rights so highly A deep dive into solar, wind, hydro, and geothermal energy in Japan How Japanese communities are funding local renewable energy Why so many of Japan's startups come from Fukuoka How Japan can transform into a free-energy economyLinks from the Founder Everything you wanted to know about Shizen Energy Shizen Energy on Facebook Shizen Energy retail green energy Friend Ken on FacebookLeave a commentTranscriptWelcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.I’m Tim Romero and thanks for joining me.It’s surprising at first, for all of the potential disruption in the energy industry, for all of the potential profits that can be made by doing things better and more efficiently in the energy industry, we don’t see that many energy startups, and as it turns out, there are good reasons for this. Generating and storing electricity at scale require skills that can’t be supplanted by new technology and innovation. Furthermore, most energy projects are long-term, low-risk medium return projects that are just not attractive to venture capital.These projects require a different kind of financing. One notable exception, however, is Japan’s Shizen Energy who is bringing a lot of renewable energy onto the grid in Japan and around the world as well, and they’re doing it as a startup.In just a minute, we’ll sit down with Ken Isono, Shizen Energy’s founder and CEO. He’ll explain how his little startup has worked with local governments and fought the incumbents to bring enough renewable energy onto the grid that Shizen Energy is not so little anymore.We’ll talk about that growth, of course, and we also take a deep dive into the current state and the future prospects of the most important renewable energy technologies in Japan.But you know, Ken tells that story much better than I can, so let’s get right to the interview.[pro_ad_display_adzone id="1411"  info_text="Sponsored by"  font_color="grey"  ]Interview Tim: So, I’m sitting here with Ken Isono of Shizen Energy, and thanks for sitting down with me.Ken: Thanks for the chance to speak.Tim: Now, Shizen Energy, you guys are a vertically integrated renewable energy company. You guys do generation, your financing, and the retail side as well.Ken: Yeah.Tim: That’s a lot for a startup to do.Ken: We started with solar but the three co-founders used to work in wind power generation company together for five years.Tim: What made you guys decide to leave that company and start your own project?Ken: So, actually, Shizen Energy, we found this company 2011, June, so three months after Fukushima accident. Before that, there was no demand from the market, from policy in renewables, but we knew that it’s going to change.Tim: At first you were focused on large scale solar projects? Was it just the financing,
It's a great time to be a programmer in Japan. Everyone is hiring and there simply is not enough talent available.But why is that?The truth is that until about 10 years ago, programming was considered kind of a blue-collar, low-skill job. It was OK to start your career as a programmer, but if you had not moved into management by the time you were 30, clearly you weren't that bright.The startup boom has changed that, and developer salaries (and respect) has improved significantly.But the education system has not caught up, and far too few people know how to code.Today we sit down with Masa Kato, founder of Progate, and discuss how Japan got herself into this situation, and what Progate is doing to fix it. The problems run deeper than expected.It's a great conversation, and I think you'll enjoy it.Show Notes Why Japanese elementary students are learning Javascript The problem with computer science in Japan Why Japanese universities resist change - even when they know they need it The flaw in most online programming courses Can online education ever really be global? Why B2B edTech companies have trouble in B2B markets How English skills are holding back Japanese startupsLinks from the Founder Everything you wanted to know about Progate Friend Masa on Facebook Follow him on Twitter @cmasad43Leave a commentTranscriptWelcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.I’m Tim Romero and thanks for joining me.You know, I spend a lot of time talking with startup founders in Japan. I also spend a fair amount of time talking with policymakers and academics, and even executives of large companies who want to support startups in Japan.Two of the most concerns I hear revolve around the lack of qualified developers in Japan and how the Japanese education system doesn’t really prepare students for a world that demands that they innovate.Well, today, we’ll be tackling both of these issues head-on. In a few minutes, I’d like you to meet Masa Kato, the CEO of Progate. Progate is an online platform that is teaching young people to code, and yeah, yeah, there are a lot of startups doing that, but these guys are onto something.As Masa will explain, he actually started Progate when he was majoring in computer science at the University of Tokyo, and he didn’t start Progate as a side project, he started it because even though he was majoring in computer science, he wasn’t learning how to program in his computer science classes.Now, all of this will make much more sense when Masa explains it to you, but this foundation might be why Progate has seen so much success so quickly. Progate is now being used in high schools and elementary schools all over Japan, and they have expanded into overseas markets as well, but things didn’t work out exactly as they plan and they had to change their business model to survive.But you know, Masa tells that story much better than I can. So, let’s get right to the interview.[pro_ad_display_adzone id="1404"  info_text="Sponsored by"  font_color="grey" ]InterviewTim: So, I’m sitting here with Masa Kato who wants to teach the world to code. So, thanks for sitting down with me.Masa: Thanks for having me.Tim: Masa, you are the founder and CEO of Progate. I explained it a bit in the introduction, but why don’t you tell us a bit about what Progate is?Masa: So, basically, we are a company that teaches programming and we teach it online. The content we teach is mainly web-related, so it’s about teaching people how to make websites, make web services.Tim: So, HTML, CSS, this kind of –Masa: JavaScript and Ruby, Ruby on Rails, and all that, yeah, and we started this company five years ago.Tim: Okay, so is Progate, is it an app, is it a video?Masa: So, we do have an app as well, but we started off as a web service, and instead of using videos,
Corporate accounting is not usually the first thing the comes to mind when you think of disruptive technology, and for the most part, that’s a good thing. Daisuke Sasaki of Freee, however, is changing the way sales are made in Japan from the bottom up.
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