While American AI startups are dominating the headlines, one Japanese company has begun rolling out "AI employees" to famously cautious  Japanese enterprise customers.

Today we talk with Shota Nakagawa the CEO of Caster and discuss their model of human-AI collaboration, why Japan is positioned to lead real-world AI deployment, and the big steps needed for Japan to catch up with the West.

It's a great conversation, and I think you'll enjoy it.


Show Notes


Caster’s new model for gig-workers
Why almost 90% of Caster's workforce are women
How remote work is evolving differently in Japan than in the US
Can remote work really revitalise rural Japan?
Why Caster uses full time staff rather than gig workers
How AI employees could be the solution to Japan’s labor shortage
How Caster makes extensive use of AI in their workflow today
What is responsoble for the low level of trust that Japanese have in AI and how to fix it
Which tasks AI agents will take over and which they will never do


Links from our Guest

Everything you ever wanted to know about Caster

Follow Caster on X @caster_jp
Friend Caster on Facebook


Friend Shota on Facebook
Follow him on X @nakasy000

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Errata

Caster's percentage of female employees is about 87% not 95%.
Caster was founded in Tokyo, later moved to Miyazaki, and then moved back to Tokyo after the IPO

Transcript
Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs.
I'm Tim Romero, and thanks for joining me.
While American CEOs are competing to see how quickly they can leverage AI to replace both full-time employees and gig workers alike, one Japanese company is taking a different approach and they're already rolling out their AI workforce.
Today we sit down with Shota Nakagawa, founder and CEO of Caster. Now, Caster is a remarkably progressive and innovative Japanese company. They were a strong and vocal advocate of remote work years before the pandemic hit, and even after their IPO, their 800 person workforce remains fully remote with our corporate headquarters located in a shared office space in Tokyo.
Caster has now begun rolling out its AI workforce, and they're taking a very Japanese approach. Rather than leveraging a collection of flexible gig workers or freelancers, Caster continues to build a long-term full-time workforce who is co-developing and already working alongside their AI employees.
If history is any guide, Caster’s thinking today might tell us what the Japanese market will be thinking 10 years from now.
Shota and I talk about the long-term AI trends in Japan, how Caster solve the problem of corporate, Japan's deep skepticism about AI and whether or not AI can really provide a solution to the economic problems associated with Japan's declining population.
But, you know, Shota tells that story much better than I can. So, let's get right to the interview.

Interview
Tim: So, I'm sitting here with Shota Nakagawa, the founder and CEO of Caster, who is creator of an outsourcing platform and a relentless advocate of remote work. So thanks for sitting down with me.
Shota: Thank you very much.
Tim: So, I explained very briefly what Caster did in the intro, but I think you can explain it much better than I can. So, what does Caster do? Why is it unique?
Shota: People are all work remote every day, every day.
Tim: So, the entire company is remote.
Shota: Yeah, yeah. All people.
Tim: That's pretty unusual. And we're here today actually sitting in a share office space to have this conversation. Well, actually let's talk about that in detail later. But first, let's talk a little more about Caster. So, what do you do for your customers?
Shota: BPO, business process outsourcing, client about SMB small business, want back office service.
Tim: So, what kind of back office services, is it like recruiting, accounting?
Shota: Many types.
Tim: So, I think what Caster's most compared to are other services like Upwork or freelancing platforms. But what you guys are doing is a little bit different.
Shota: Yeah. Most different point is trust, Caster is B2B business. Upwork is a B2C business. Trust is all different.
Tim: So, in practice that means if in the Upwork model, if something goes wrong, it's the problem with the freelancer you hired. In the Caster model, if something goes wrong, Caster has to fix it.
Shota: Exactly.
Tim: Okay. And the other thing I've noticed, you use full-time staff rather than freelancers.
Shota: Yes. Yes, exactly.
Tim: So, tell me about your customers. Are they startups? Are they enterprises? Who uses Caster?
Shota: Startups, small business and lawyer, tax lawyers and social security specialists and consulting. About 30% is startup and 20% is professional lawyer, tax professional.
Tim: Okay. And tell me about your employees. If everyone is remote, where are they? What kind of people are they?
Shota: Many different. Many different. 70% are living in the local area, not Tokyo all over Japan from Hokkaido to Okinawa.
Tim: Do they fit any particular type of profile? For example, are there a lot of retirees reentering the market or there part-timers? What type of people?
Shota: 95% people is women. Very unique.
Tim: 95% are women? Why is that?
Shota: Japanese unique point. The women’s usual job is so secure. Women want a remote work job in Japan.
Tim: And is that just, are a lot of them like working mothers who want to work remotely because of children? 95% just seems really high. So, I'm curious about what the strong point is there.
Shota: The point, just could say half people have children to have lifestyle and half people local pay, so low. Caster paid to standard price attractive for the people.
Tim: I can imagine Corona changed everyone's thinking about remote work in Japan and all over the world actually. But let's take a step back because you were advocating for remote work a long time before Corona. From the very beginning when you founded Caster in 2014, you were talking about remote work, but what was the attitude towards remote work 10 years ago when you first started?
Shota: It's impossible. They say it's impossible.
Tim: Why did they think it was impossible?
Shota: Why? Because they have not tried.
Tim: Okay. That was my experience too. Corporate Japan spent 20 years saying remote work was impossible. When Corona hit in three weeks, everyone kind of figured out how to make it happen. But what was the biggest excuse companies used when they said they couldn't do remote work?
Shota: Fear to something they don't know.
Tim: Wow. So, it is just the unknown. Coming back to Caster and post Corona, you have around 800 staff now.
Shota: Yeah. Yeah.
Tim: Everyone's working remotely. This is a really unusual management style in Japan. So, what did you have to change about Caster's culture or management style to make this work in Japan?
Shota: Almost no management.
Tim: That sounds very dangerous.
Shota: Yeah. Almost no management, because remote is digital work. All actions tracking every time, but we not see all action every time.
Tim: So just measuring the results.
Shota: No, trust comes with and result.
Tim: I've noticed that another different thing about Caster when compared to other platforms is that you tend to assign like a project manager for each customer. So, does the project manager act as kind of that management layer?
Shota: Yes. Yes.
Tim: But what about the feeling from the workers? Do your workers ever want to get together and have that kind of social connection that's so important in many Japanese companies?
Shota: A little, but I don't know.
Tim: Okay. Well let's talk about the management approach, because Caster was founded in Miyazaki. But we are here in Tokyo even though it's a shared office, which is great. So, was it the IPO, was it interacting with investors? So it seems like there's some aspects of business still need to be done face to face in Japan.
Shota: Yes. Good time. If they want me come.
Tim: Visit customers, is it investors?
Shota: People who have power.
Tim: So, that would be investors.
Shota: Yeah. Yeah. Investors.
Tim: But still, I think that running a public company out of a shared office is absolutely amazing. So after Corona, we've seen a lot of talk about remote work and some changes in attitudes. It seems that startups, small offices are adopting it very quickly, but do you think Japanese enterprises are still mistrustful of remote work, or are they embracing it more and more?
Shota: Change after Corona enterprise company decrease new hiring, difficult hiring people in Japan and now enterprise companies change the slowly but many remote work people hiring more.
Tim: So, is it just they can't find the staff they need? Or is it that new hires want to work remotely and are demanding to work remotely?
Shota: Yeah, both of those are happening. Big company want many higher level people about marketing and professional. You can't find them.
Tim: I think it's interesting that recently in the US there's a real backlash against remote work. A lot of companies are forcing people to come back to the office. But in Japan, companies, as you say, they're slowly starting to embrace remote work more. Well, I'm going to be a little bit skeptical here. So I'm a huge fan of remote work. I've hired remote workers. I've been a remote worker. So, 70% of Caster's workforce is outside of Tokyo. And people love to look at remote work as a way of revitalizing rural areas of Japan. And during Covid, we saw that a lot of people left Tokyo, but afterwards it seems that people have come back and that the population of Tokyo is growing again. And population of rural areas is going down again. So, is there a way to reverse the trend long term?
Shota: Do you know about 2030 population? It labor population decrease about 5 million people. About 2040 decrease by 10 million.