Disrupting Japan

New technology is always introduced with the promise of the good it can do for humanity. Most of the time the promised good never come to be. This is largely a structural problem ib how startups are funded, and some founders are creating a better way. Today we talk with Yosuke Kaneko, founder of  Sora Technology, who is using drones to fight malaria in Africa. The technology is a perfect fit, but it was hard to address this problem as a startup. We talk about the challenges of using technology to solve important, but only marginally profitable problems, and why the unique nature of Japan's startup ecosystem might provide the solution. It's a great conversation, and I think you'll enjoy it. Show Notes How drones can find mosquitos that humans can’t Why real done innovation continues to come from the global South Why it's getting harder to build a drone startups in Japan Moving from a good idea to getting the first contract The difficult business model of doing good How to continue growing long-term The impact of regulations on drone innovation The truth about the startup scene in Nagoya and Aichi The current state of drone startups in Japan How to get Japanese companies exporting again Links from the Founder Everything you ever wanted to know about Sora Technology Friend Yosuke on Facebook Connect with him on LinkedIn Leave a comment Transcript Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs. I'm Tim Romero, and thanks for joining me. Fortunately, most of us never have to think much about malaria, but it's one of the most deadly diseases in human history. Malaria was responsible for up to 5% of all the deaths of the 20th century, and it killed tens of billions of people before that. Even now, the disease continues to kill around 600,000 people every year. Well today, we sit down with Yosuke Kaneko, founder of Sora Technology, and we talk about a new approach to startup business models that can actually help save lives. Sora uses drones in Africa to identify water bodies with the highest chance of being mosquito breeding grounds, and then they work with government agencies to ensure that those water bodies get sprayed with insecticide. Yosuke and I talk about the challenges and the opportunities in working with global and national health organizations, when to pivot from solving the problem you want to solve onto solving a problem that actually needs to be solved, and the challenges involved in making a profitable business that is actually focused on doing good in the world. But you know, Yosuke tells that story much better than I can. So, let's get right to the interview. Interview Tim: We're sitting here with Yosuke Kaneko of Sora Technologies, who's using drones to combat malaria in Africa. So, thanks for sitting down with me. Yosuke: Thank you, Tim. Tim: Now, I explained very briefly what you guys are doing, but you can explain it much better than me. What is Sora Technology doing? Yosuke: Okay, so it's using drone, satellite, and AI, then analyzing environment data, such as the water and also the surface data. Then one of our flagship projects is, you mentioned, the malaria. Tim: So, how are you using drones to combat malaria? Yosuke: So ,do you know where is habitats of mosquitos? Tim: Well, I know when they're little, when they're larvae, they grow up in these shallow ponds and shallow pools. Yosuke: Yeah, you are right. You are right. Exactly. So we are searching the water bodies where mosquitos larvae is habitat. So, we are firstly searching from the sky, so satellite and drone. Then after that, we will find out high risk breeding site of mosquitos. So, the highest breeding site is only 30% of all water bodies. After that, we will spray insect site by drone and also by human. Tim: So, why is it important to do this by drone? Are the water bodies changing every year? Are they coming and going and evaporating? Are they hard to find? Yosuke: So, existing way is that they have to treat mosquito larvae, but they don't know where is the water bodies. So, that's why they open the maps. Then from their experience, okay, maybe this point, there are the water bodies. So, only their experience, they imagine where is the water bodies. And also they are spraying the 100% of the water bodies. So, that's why 70% of the insect site is just a waste of money. It's not good for environment. Tim: Do these water bodies form in different places every year? Yosuke: Almost decided place, but the detail is different by season and also the rainy volume, also the climate. Tim: Your drones are trying to identify the highest risk pools, what are the factors you're looking for? Yosuke: We are taking the water body sites and also depths and temperature and also the water bush information based on that we are put to our AI, then classify the highest breeding site. Tim: Now, you originally didn't start out doing anti-malarial activities, right? You started out with last mile drug delivery. Yosuke: Exactly. So, we slightly pivoted from original. Tim: Well, actually, then let's back up a bit and talk about that pivot and also talk about you. So, you started out interested in economics rather than communicable diseases or technology. So, how did you end up involved with drones and malaria? Yosuke: Before I established Sora technology, I worked at JAXA, Japanese NASA. I was the senior researcher of drone, flying car, and also low altitude control. Then actually in Japan, research and development, R&D is enough, but drone, the real data on ground and on site is the most important. That's why I believe the new tech, especially drone, will be started not from Japan, but global South, especially Africa. Tim: Yeah, I mean, it makes sense. Any new technology, you want to be deploying it where you're solving a real problem. But with your work at JAXA, was that also involving using drones for maybe agriculture or surveys, or was it a similar application space? Yosuke: Yes, similar. I was belong to disaster management team. So, before disaster, we took GIS data from satellites, Eros, which is a satellite named by JAXA. Then after the disaster, we will send the drone, then getting more detailed data, then overlay on the GIS. Tim: That sounds like a really worthwhile area of research. Yosuke: Yes, but this is for only disaster case. So, special case, not commercial case. So in regards of the commercial side, for example, drone delivery, we tested one time each quarter by NATO or something. It's not enough. R&D level is enough, but the commercial level not enough. So, I said our benchmark is Zipline, the San Francisco venture. They started medical drone delivery from Rwanda. Their valuation is around 7 billion US dollars. So global level, using Japan technology, then starting the global south, it's very general strategy. Tim: That makes sense. So, yeah, I can understand, well, not so much frustration, because as you meant, if your goal is research, having one test flight a quarter might be perfectly sufficient, but completely impractical for commercial development. So, once you got the idea of what you wanted to do, how did you move from that idea to your first contract to actually deliver these medicines? Yosuke: The first project is work with UNICEF, United Nations UNICEF, in Sierra Leone, Western African country. Project name, it's Medical Drone Delivery Project. We went to Sierra Leone based on this contract. Then we discussed, okay, that we have drone, then where's the medicine? Then they said, we don't have medicine. Tim: So, the problem is further upstream, yes. Yosuke: Yeah, because we don't have money. Then our counter partner is Science Technologies Ministries, so not Ministry of Health, so they don't have the real needs. That's why we discussed with Ministry of Health to know the real needs. Then Ministry of Health person said that we don't have enough items. So, if we can use technology for reducing the item, then I asked what is the current biggest issue? Then they said the malaria. We don't have enough items, so enough spray and insecticide. So, that's why if we can find out only high-breeding site, then reducing the insecticide, it's good for environment, good for health, and it's good for money. So, they said yes. Tim: So, they were willing to fund that pilot, or was that pilot also funded through UNICEF, philanthropic? Yosuke: Unfortunately, we could not with UNICEF, but Japanese METI supported our project. Then the same year, 2023, June, we started the pilot project. Tim: And what have been the results of the pilot? Yosuke: Actually, I was pretty surprised that we took the data from the drone, then we created POC level of the AI. Accuracy is over 80%. It was very good. Tim: So, did it allow them to spray more ponds? Did it decrease the cases of malaria in the coming year? Yosuke: So, in that time, we could not prove that level. We could prove only AI accuracy. But this year, we published work with Ghana University, and Noguchi Memorial Institute, which is very famous for infection disease, and Harvard Infection Disease Team. Then we already proved reducing the volume of the insect sites. And also the mosquito count is also reducing, and the suffering person is also reducing. Tim: I mean, that's fantastic. Is the government of Sierra Leone going to continue this program and expand it? Yosuke: Yes, we also testing in Ghana, more big sites, POC with JICA. JICA is a Japanese International Cooperation Agency. Now we are trying to update WHO manual. WHO agreed our strategy. Now we're working with them, more data we're getting in Mozambique. Also, last month, Ghana Ministry of Health explained to over 10 country Ministry of Health person this solution. It's very good. So, you must use that. Tim: Oh, fantastic. That is just really great to hear. I mean,

You might think that large Japanese companies have trouble innovating. Unfortunately if you believe that, you would be correct. Recently, however, there are a few reasons for hope. The first step to recovery is admitting you have a problem, and Japan Inc. now largely understands that their traditional R&D methods are broken, and are looking to startups for help and inspiration. Corporate venturing (spinning out internal projects as startups) is one such approach. But it's not an easy one. Today we sit down with Kenji Tateiwa and discuss the rewards and challenges of spinning Agile Energy X out of TEPCO. We talk about why it's hard to bring renewable energy onto the grid, how to nurture a startup inside very conservative organizations, and the future of corporate venturing in Japan. It's a great conversation, and I think you'll enjoy it. Show Notes Why it's hard to get more renewable energy onto the grid Introduction to demand response and demand management How to nurture a startup inside a conservative enterprise and how to spin out The financial challenges in the core business model The competitive landscape in energy services Why its hard to raise funds as a corporate spin-out Staffing challenges in corporate venturing Maintaining strategic independence from the parent company Can corporate venturing drive innovation back to the parent Links from the Founder Everything you ever wanted to know about Agile Energy X Japanese homepage Connect with Kenji on LinkedIn Yuri Group's paper on using Bitcoin Mining to support renewable energy Info in Japanese Kenji's article on how Stanford creates an innovative mindset Denki Shimbun's series on bitcoin mining Leave a comment Transcript Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs. I'm Tim Romero and thanks for joining me. Who says, large enterprises can't innovate?! Well, most people actually, and overall they're right. The larger an organization becomes, the more barriers to innovation it puts in place. It's almost a form of self-defense for the enterprise. Well, today we sit down with Kenji Tateiwa of Agile Energy X, and we explore corporate venturing in Japan. Kenji was a decades long employee of TEPCO, Japan's largest energy utility. And also my old employer. Kenji had an idea that he developed into a small internal project, but one that was simply not practical to run inside of TEPCO. So, he convinced leadership to give him the seed funding to spin it out into a new startup. But there have been some bumps in the road, both the things that all founders face, like customer acquisition and also challenges unique to corporate venturing, like transitioning from a subsidiary to a true startup. Kenji and I dive into the challenges of maintaining independence from the mothership and the mixed incentives of corporate ventures, how he convinced conservative management to take a chance on his startup idea. And why, despite all the challenges, this kind of corporate venturing is going to prove absolutely essential to innovation in Japan. But, you know, Kenji tells that story much better than I can. So, let's get right to the interview. Interview Tim: So, I'm sitting here with Kenji Tateiwa of Agile Energy X, who's helping get more renewable energy onto Japan's grid via Bitcoin mining. So, thanks for joining me. Kenji: Yeah, you're welcome, Tim. My pleasure. Tim: Now I gave a really brief introduction to what you do, but I think you can explain it much better than I can. So, what is Agile Energy X doing, and what's the problem you're trying to solve? Kenji: Yes, founded Agile Energy X as an inhouse startup within TEPCO with a mission to introduce as much renewable energy in Japan as possible using a flexible demand, including Bitcoin mining. Tim: So, how does having flexible demand help get renewables onto the grid? Kenji: So, the issue with renewable energy, and I mean variable renewable energy, like solar power and wind power cannot control how much power you supply from these energy sources. Tim: When the wind's blowing, the sun's shining, you got a lot of electricity. And when it's not, you don't. Kenji: That's right. And the issue of electricity is you always have to match the demand with the supply or else the grid frequency will fluctuate, and in a severe case, it will lead to a blackout. And the issue of balancing the grid, it's very challenging for the utilities. So, if there's not much demand to soak up the power generated by these variable renewable energy you have to shut down the renewable energy resources, which leads to curtailment or a wasted energy. Tim: Unlike you and me, most of our listeners have not worked for years in the energy industry, but the process of grid balancing is just fascinating. And I think people don't appreciate what a wonder of engineering it is. Basically, every electron you push onto the grid anywhere has to be taken off somewhere else in real time. It's moving almost to the speed of light. You just have to balance these power generation with the load caused by millions of millions of people randomly switching things on and off in real time. So, with Agile Energy X, when you've got excess energy, you spin up bitcoin mining? Kenji: That's right. The push for renewable energy has accelerated in Japan after the 2011 FIMA nuclear accident. Before that Japan used to depend about 25% in nuclear but then it dropped almost to 0% after 2011. And then the Japanese government pushed for renewable energy before the push for renewable energy power utilities. Primary function was to match the demand with the supply. So the power demand came first, and in order to match the demand, the fluctuation was controlled by mostly thermal power. But then we had this generation coming in independent of the demand. The utilities have now been tasked with something that they hadn't done before to match the demand with a uncontrollable supply from the variable renewable energy. Tim: So, suddenly they find that they have to manage both sides of the equation. Kenji: That's right. And the issue is the power demand is the utilities customers so you cannot control what the customer does, the customer behavior, it's up to the customers. If they want to use electricity, it's their choice. But there's a flexible customer, like a Bitcoin miner. Utilities can ask Bitcoin miners to turn up or turn down to match the supply. Tim: So, there's two things there. First is traditional demand response. As you said, they never really manage the demand side too much, but there was always a case where if the load was too big, the power companies could call up factories and say, Hey, we'll give you some money. And if you shut down for a while, are you taking advantage of demand response as well? Kenji: Yes, utilities have been taking advantage of demand response to some extent. However, the economic incentive was not sufficient to have enough resources that could cope with the amount of variability of renewable power generation. And also in Japan, utilities don't really want to force customers to change their behaviors, even if there are contracts that allows utilities to do. So, it's a Japanese way of doing business. Tim: Well, let's talk a bit about what curtailment is and why it's important. Kenji: Back in 2018, the first curtailment of renewable energy started in Japan in the Kyushu Island, the southern part of Japan, where there's abundant solar energy resources. The demand during the spring and fall during the daytime, when it's sunny and a lot of solar power generation happening, but not much air conditioning demand, then curtailment happened, meaning the utilities had to ask the renewable generators to stop generating because there is not much demand. And if they continue to generate power, it's going to overshoot the grid frequency. Tim: Actually, in Japan, curtailment rates are still very, very low. It's around like 2%, 2.5%. Kenji: It's increasing by the year. And depending on the location, the Kyushu area, it's getting quite high. April or May, during the daytime, some solar power generators are asked to curtail more than 50% of the time during April, May. Tim: And, and so with so much curtailment, it means that these project developers who want to put up wind farms, solar farms, can't make money. So, that really slows down the renewable development. It slows down people putting in renewable power. Kenji: Absolutely. So, it's not just the issue of existing solar generators or wind generators. It hinders the new development because as you mentioned, it will make the renewable generators difficult to finance because of the curtailment. The banks will not be willing to lend money to set up a project financing, because the uncertainty with the curtailment is a big issue for the profitability of the renewable projects. Tim: And so Agile Energy X acts as sort of a buyer of last resort. Instead of having to shut off the generation, you can say, hey, we're located close by. We'll use whatever energy you have and we'll buy it from you. Kenji: That's right. So Bitcoin miners like ourselves, we can be the buyer of last resort, but as well as buyer of first resort. Meaning like nowadays, everyone's trying to build AI data centers when it's going to take time. And depending on if the solar or wind or whatever generators come into line before the data centers are built and ready to offtake the power, Bitcoin miners can first take the electricity from the generators. And if the AI data centers comes along, then Bitcoin miners can move on to another place. Tim: Now this model's been used in other places, Texas in particular. Is this the first in Japan? Kenji: I think it'll be the first in a large scale at least, however, just solving the curtailment issue, there is not enough profitability.

It's tough to be a vegetarian in a world full of carnivores. It's even tougher to be a startup selling a vegan egg-substitute into a world full of carnivore-dominated market, but that's exactly what Umami United is doing. Umami United founder Hiro Yamazaki explains that the real diver for vegan-food adoption is not ethics or sustainability, but simple economics.  The startup's market traction seems to show that he and the team are on the right track. We talk about the importance of keeping an open mind about product-market fit, Japan's unusual dietary habits and how to go global on a limited budget. It's a great conversation, and I think you'll enjoy it. Show Notes Why are there so few vegetarians in Japan Overcoming the "vegetarian" stigma Why Japan has the world's 2nd highest per-capita egg consumption (really!) The different go-to-market strategies for Japan and overseas Why industrial kitchens want to move away from natural eggs The challenges in restaurant and home use Umami’s global expansion plans Why so many alternative food startups fail, and why Umami is different Why Japan is a perfect food tech market The future of food tech in Japan Links from the Founder Everything you ever wanted to know about Umami United Japanese homepage Umami United blog Check out Hiro's blog Connect with him on LinkedIn Friend him on Facebook Follow him on Twitter @Japanveggie Leave a comment Transcript Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs. I'm Tim Romero and thanks for joining me.   Eggs! We are going to talk about eggs and about things that are almost eggs. You know, in researching this episode, I learned far more about the egg industry than, well, more than I thought there was to know about the egg industry. It's complex, surprisingly global and fiercely competitive. Today we sit down with Hiro Yamazaki, the founder and CEO of Umami United, who's making a vegetarian egg substitute that is finding product market fit in overseas markets rather than in Japan. And for reasons that have surprisingly little to do with vegetarianism. Now Hiro and I talk about how to find product market fit when your initial strategy doesn't work out. Like you expect the best strategy for aggressively going global on a limited budget. And why the Japanese eat a hell of a lot more eggs than you probably think they do. I mean, seriously, this country eats so many eggs! It just blows my mind. The data's coming up in the podcast. But you know, Hiro tells that story much better than I can. So, let's get right to the interview. Interview Tim: So, we're sitting here with Hiro Yamazaki of Umami United, who has developed and is now marketing a plant-based egg substitute. So, thanks for sitting down with us. Hiro: Thank you so much for having me. Tim: What you're doing is really interesting. Hiro: Thank you. Tim: So, tell us a bit about the product. What exactly is it you're making? Hiro: Right now we're making a plant-based egg powder product. It's made out of konjaku, it's a root vegetable in Japan.  Specifically, we're focusing on the bakery application right now and baked good. There's so many eggs, but yeah, we are replacing the functional ingredient from the egg. Tim: So, as an egg substitute, is it similar in nutritional value to eggs? Is it similar in sort of the cooking functionality of eggs? What exactly is it substituting for? What part of the egg? Hiro: Yeah, right now we're more focusing on the egg functionality, like the coagulation forming, those kind of characteristics. But we started actually more scramble egg, omelets, those kind of in a savory application at the very beginning. But after one or two years, we decided to more focus on baked goods. Tim: Tell me about your customers. You mentioned that you're focusing on bakeries. Is this like commercial bakeries or more of the industrial side that are feeding, like schools and hospitals? What sort of bakeries? Hiro: Yeah. Most of our customers right now are industrial, like baked goods manufacturers making French kernels or donuts, those kind of things. Tim: I noticed on your website you also have direct to consumer products ss well. Is that more for a marketing? Hiro: Right. We started actually from e-commerce channels, but like you said, it's more like the marketing perspective. Tim: Okay. And the main positioning, is it for health benefits or vegetarian vegan lifestyle compliance? What's the main selling point? Hiro: Yeah, there are two big categories. One is the vegan, vegetarian, or allergy free. We call it like dietary restrictions. And then the other one is more supply cost because of the broad flu, avian flu. We're having that in every two or three years. And that's a huge issue in the industry because the cost and the supply is not stable. So, that's why our clients are looking for an ex-substitute, not only because of the vegan allergy reason, but also this supply chain issues. Tim: Yeah, actually I want to get back to that and dig into it much more deeply. But before we do that, I want to ask a little bit about you. I mean, you founded Umami United in December, 2021. But you've been involved in this alternative foods movement for quite a while. You also founded an organization called Plant-based Japan. Tell me a bit about that project. Hiro: Plant-Based Japan is kind of a media and consulting company focusing on the plant-based industry because back then a lot of the tourists coming to Japan after the Olympic game. There's so many demands about the veganism, the vegetarianism, but we did not have much options here in Japan. So that's why a lot of tourists needed the vegan, vegetarian information to find out like the specific products or restaurant. Tim: Yeah. But on a personal level are you a vegan or vegetarian yourself? How did you get interested in this particular space? Hiro: So, I used to be a vegan for a year or something, but it's not because I was vegan that I started to become in interested in this industry, but more like back to my, the college student. So, I was actually a volunteer tour guide in Tokyo. But the food dietary restrictions like a vegan, vegetarian, like halal, kosher, so many customers cannot dine together. Then I become interested in this, the food and diversity. Tim: That makes sense. It explains why kind of the plant-based Japan was the next logical step. Is trying to solve that problem. Hiro: Right, right. Yeah. Tim: Awesome. Let's look at the bigger market again. Japan is interesting in that, I mean, the Japanese diet is pretty healthy overall, but my impression is that there's not a lot of vegetarians or vegans in Japan. Hiro: It's very few. Yeah. Tim: So. has that limited the interest in this kind of a product in Japan? Hiro: Yes. I think it affects on limitation for the sales and the marketing for sure. But interestingly, yeah, Japan had a long history that we could not eat meat in over 1000 years, the meat consumption was banned. Tim: You have to go way back, but yeah, that's true. That is true. Hiro: Yeah. Yeah, yeah. Kind of funny. Yeah. Tim: Not so much anymore. So, what's driving it in Japan? Is it companies trying to serve that niche market of vegans and vegetarians or is it allergies or is it something else? Hiro: Yeah, there are few, like you mentioned, allergy is one of that, but it's only for the egg categories. But like for meat industry, like it's a different story. Companies are trying to solve more sustainable goals and also inbound. There are so many foreign tourists right now. There's huge demands. Tim: So, it's important to have those vegetarian or vegan options. Hiro: Right, right. Tim: So, in researching for this article, I learned a lot more than I expected about eggs in Japan. So, so Japanese people eat a lot of eggs. Hiro: Yeah. Japan is actually the second largest consumption of egg per capita. One of that number one is Mexico. I don't know why it's Mexico. But Japan is number two. Tim: That kind of blows my mind. So, I mean, on one hand it's great, the market's big, but it's confusing because how like Japanese traditional cuisine doesn't use a lot of eggs and Japan still overwhelmingly rice instead of bread. So, who is eating all these eggs? Hiro: I have no actual data, but like, this is my observation, but Japanese people would love to eat like a raw egg. A raw egg on top of the rice. If you go to like the gyudon’s place or pokeball place, there are so many like eggs on topping. I think that's one of the reasons. Tim: It's true. An awful lot of salads will have egg in it. Hiro: Right, right. So, we use eggs than we expected, I guess. And we also consume a lot of baked goods. But I also really, get surprised Japan is actually number two country. Tim: So, let's talk about your go-to market in Japan and then how you're looking at it overseas. In Japan, you mentioned your focus on industrial kitchens. So, mass market based goods. So, what is the value that your customer sees it? Hiro: So again, there are two, especially in Japan, most of our customers are using our products for their vegan or gluten-free applications. So special diet. Some of our potential customers trying to use it for reducing the accuses for their recipe because of the supply chain price issue. But when we talk to like US based manufacturers, it's a different story. In the US most of our prospects are trying to use our product for their cost supply issues because the egg supply is really, really unstable in the US. Tim: What is the price point for umami eggs versus natural eggs? Hiro: If the customers use our product for their baked goods, most of the cases cheaper compared to the egg. Of course, depending on the purchasing volume and then the act price because it always up and down. Tim: Well,

Join Ernie Higa, a market-entry expert who successfully introduced Domino's Pizza and Wendy's to Japan. He shares insights on adapting global brands to local tastes and the crucial balance of localization versus brand integrity. Discover how he identified market opportunities against the odds and the evolving Japanese attitudes toward entrepreneurship and failure. Ernie also discusses Wendy's innovative comeback by merging with First Kitchen to enhance customer experience. It's a fascinating dive into Japan's unique consumer landscape!

Japan has one of the longest lived and healthiest populations in the world, and let Japanese startups are playing a relatively small role in the recent longevity-tech boom. The longevity market includes everything from health-tech wearables, to foods and supplements, to lifestyle coaching, to invasive medical procedures. The offerings themselves range from the incredibly useful and helpful to the wasteful and the outright dangerous. To make sense of all this, today we talk with Bilal Kharouni the CEO of Ekei Labs, who explains his startup's pivots through multiple sectors of the budding longevity market. It's a great conversation, and I think you'll enjoy it. Show Notes What exactly is “biological age” Where health tracking apps are useful and where they are dangerous How to market supplements in Japan's tightly regulated  market The business and medical challenges in direct-to-consumer health tech Pivoting from supplements to consumer test kits to research The path for commercializing  today's university medical research Business models that work for startups in medical research Advice to founders coming to Japan to start a startup How to sell in Japan with limited Japanese abilities How foreign founders can recruit Japanese advisors for their startup How Japan’s new via restrictions will affect foreign entrepreneurs in Japan Links from the Founder Everything you ever wanted to know about Ekei Labs Connect with Bilal The Aging Consortium is work on the clinical translation of the biomarkers of aging Life Biosciences is developing epigenetic reprogramming (gene therapy) protocols Leave a comment Transcript Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs. I'm Tim Romero and thanks for joining me. Japan is one of the longest lived populations in the world, and as you get older, well, you start thinking more and more about getting older. Of course, getting older is much better than the alternative, but we all want to slow it down a bit and do it in a healthy way. Now those of you who know me won't be surprised to learn that once I got interested in this topic, I got a little obsessive. I have a smart scale and a smart watch and a smart ring all confidently telling me slightly conflicting things about the state of my health. And anti-aging startups are a mixed bag at best, ranging from difficult, boring, but very effective medical advice about diet and exercise to fund cutting edge wearables and trendy supplements and treatments that are a complete waste of money and everything in between. Well, today we sit down with Bilal Kharouni, the CEO of Ekei Labs, who's going to help us make sense of all this. Now, the Ekei Lab's journey and their pivots while trying to find product market fit in the anti-aging market is really a microcosm of the whole wellness industry from supplements to consumer facing tech to medical research to well, I’ll let Bilal explain where it all ends. Now, interestingly, Bilal and I had this conversation in Okinawa, home of Japan's longest lived population. And we talk about finding product market fit in health tech, how to sell to Japanese enterprises when your Japanese ability is limited, and how Japan's new visa restrictions are going to impact startups here. But, you know, Bilal tells that story much better than I can. So, let's get right to the interview. Interview Tim: I'm sitting here with Bilal Kharouni, the founder and CEO of Ekei Labs, who's selling direct to consumer longevity testing and support services. So thanks for sitting down with us. Bilal: Yeah, thanks for having me. Tim: Now you're based in Tokyo, but we're sitting here in Okinawa today. You've recently joined the OIST incubator, so tell me about that. Bilal: Yes, we work on aging and longevity. So for us, there's not a better place than the blue zone of Okinawa to really sit our lab and working on aging. Actually, we pivoted quite a lot from direct to consumer longevity tests. So we really have a platform that is more intended for joint research. We went much further in terms of research, so having both the lab and the talent and also the perfect location too. Tim: Well, I mean Okinawa famously as one of the longest lived populations in the world. Is that coincidence or does that inform your research in some ways? Bilal: So, it's pretty consciously I will say, the reason why Okinawa and people live the longest are part due to diet or social activities being surrounded by their loved ones, which is great. But what we're investigating is mostly therapeutics to increase healthy lifespan. So, it's a deep tech zone I would say. However, for people who have an interest in longevity and living longer and who wants to work on these topics, it's a very attractive location and it's an attractive location for hiring some of the best people. We had the chance having members quitting the job for Tokyo to join us in Okinawa to work with us. Tim: Well, I can certainly see the appeal of coming to work here. So, let's talk about biological age. Because this is something that fascinates me. But what exactly is it, like my smart scale at home tells me about biological age. I think this wearable also will give me a biological age, but what exactly is it? Bilal: So, it's a very interesting question, and that can be quite confusing for many people because as you're mentioning, you have so many different biological age for one chronological age. So, it's really looking at the spectrum. So that can be, for example, your cardiovascular health, your fitness or any kind of biomarkers and see how you benchmark compared to rest of population. So, you might be 32 years old, but for example, your cardiovascular system might correspond to a healthy individual of 18 years old. So, you could say that your cardiovascular health is of someone of 18 years old and… Tim: But is it something that is scientifically defined? Is there like an accepted way to measure these biomarkers and calculate it this way? Is there an accepted scientific consensus about how to calculate it? Bilal: There is not a scientific consensus yet and that's actually big challenge in our industry. We have different ways of measuring chronological age using, for example, evidence marker, glycome marker proteomics, and the big question in which ones have a clinical translation. Because I can give you a chronological age, but if it doesn't mean anything in terms of risk of the disease or physical conditions, it's frankly huge metrics. Tim: I'm also curious about. Okay, not necessarily the way you calculate it specifically, but industry-wide. So, when biological age is calculated, is the actual chronological age always used as an input or can it be calculated independently or is it more of like an adjustment factor? Bilal: So when you do the algorithm, you have a dataset with the metadata sets with the gender, that helps calibrate the chronological age. And ultimately you would want when you take input from a patient not knowing the chronological age and estimates the biological age independently of the chronological age and industry-wide, there are different clocks. And now there's a huge work for having this clinical and scientific validation. So each year, actually I'm going to Boston in October for the biomarkers of aging symposium that takes place at the Harvard Medical School. So that's really ongoing discussions in the field. Tim: So your offering also involves a mobile app? This app provides insights and advice on how people can improve their biological age. So, what kind of insights and what kind of lifestyle changes does it recommend? Bilal: So for the app, low hanging fruit for someone like the diet, sleep, physical activity, and we put this app for use for clinicians and they can be also very helpful for the clinicians who have both a surgical age metrics as well as information the lifestyle of their patients. Because can be quite difficult for the clinics to know how well the patient eat or sleep. And then the medical doctor can really guide the medical journey to help them in their longevity medical journey. Tim: So, what are the biomarkers you're looking at? I mean, you've recently been selling like a home test kit for that's like a blood sample. So, you've got the blood test and what other information goes into the calculation? Bilal: So we have two type of product services. So, the one actually describes is for our individual use and we use a biomarker called IgG glycome. And what is amazing with this biomarker, it is that is very responsive to interventions, an intervention of eight to 10 weeks and do another test. You can see a data, you can see a difference in this biomarker like, and what is also great with this biomarker that is extremely linked with chronic inflammations and chronic inflammations are linked with a myriad of chronic disease. Tim: So, is that like just a coincident marker or is that actually directly related to biological aging? Bilal: That's a great question. Menopause is probably one of the condition that is the most linked to medical aging. And when we say that so many times it's misdiagnosed and mis-documented. So, having ways of getting the early science through this IgG glycome measurements and then having better medication or better health optimization or better response from the medical doctors, we think is extremely important. And probably the first longevity drugs that we could see on the market will be a drug targeting menopause and perimenopause. That may be one of the first age related condition that we might be able to treat one day. Tim: Excellent. Let's take a step back for a minute and kind of talk about how Ekei Labs came to be and how we ended up in this room having this conversation. So, you actually launched in 2019 with a completely different business model.

Chiamin Lai, a general partner at Firstlight Capital focusing on physical AI in Japan, shares insights on Japan's struggle to maintain its robotics leadership. She discusses the impact of the labor shortage on AI adoption and highlights the need for industry collaboration. Chiamin also explores the disconnect between generative AI and robotics, advising startups to concentrate on vertical, task-specific robots. She predicts a future where Japan's unique solutions dominate the global market while cautioning against heavy hardware investments.

In this engaging discussion, Shri Dodani, a serial entrepreneur and co-founder of Global Hands-On VC, reveals unique insights into Japan's startup landscape. He explains the reasons behind Japanese VCs' reluctance to invest locally, despite the market's potential. Shri also shares the importance of nurturing 'attitude' in founders and how cultural differences impact execution. He highlights promising sectors like quantum computing and deep tech, while emphasizing the need for role models to inspire a new wave of global-minded entrepreneurs.

Taro Sasaki, founder of Hacobu, aims to revolutionize Japan's struggling logistics sector through digital transformation. He discusses the impending collapse of the industry, fueled by a dwindling driver workforce and outdated practices. Taro reveals how new regulations are turning the tide for modernization and shares insights on selling innovations to traditional businesses. He reflects on the deep value hidden within logistics data and stresses the importance of dreaming big in an industry resistant to change.

Reiji Yamanaka, managing director of the Kibo Impact Investment Fund, and Kelvin Song, program director of the Globis MBA program, discuss the evolving landscape of AI startups in 2025. They explore key business models, sustainable revenue strategies, and the critical importance of innovation in industries like accounting and legal tech. The duo addresses the transformative role of AI in app development and its implications for job markets, emphasizing the need for creative problem-solving in Japan's unique societal challenges.

Japan's declining birth rate makes global headlines, but most of the developed world will soon be facing the same problem. The real solution involves a lot of social and economic changes, but as you'll see, technology has a huge role to play as well. Today we sit down and talk with Kaz Kishida, CEO of Dioseve, about how their technology promises to transform IVF, the rapid timeline for global rollout, and safety issues and ethnical questions involved. It's a great conversation, and I think you'll enjoy it. Show Notes How Dioseve will make IVF far more successful Why over 7% of all babies born in Japan are from IVF Bio tech CEOs don’t need life science degrees Safety concerns Applications to rejuvenation and ani-aging Ethical questions around this kind of reseach Japan’s policies towards stem cell and genetic research Roadmap and go-to-market Why some babies will have three parents, and what that’s good How Dioseve's ovarian cell technology will change IVF Why Japan’s bio tech ecosystem remains under-developed It's not harder to build a bio tech startup in Japan, but it is different Links from our Guest Everything you ever wanted to know about Dioseve Friend Kaz on Facebook Leave a comment Transcript Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs. I'm Tim Romero and thanks for joining me. Today we're going to talk about making babies. Now, this is not something that startups or startup podcasts normally weighed into, but as you'll see in this case, it makes a lot of sense. Today we sit down with Kaz Kishida, co-founder and CEO of Dioseve. And Dioseve has developed a technique for growing mature human eggs from IPS cells. Now, this technology represents a huge step forward for IVF and for human fertility in general. Some parts of Dioseve’s technology could be in commercial use as soon as next year. Now, kaz, I dive deep into Dioseve's technology and the potential good it can do and why some future babies will have three parents. We also cover the tricky ethical and safety issues involved, and we explore exactly why that, in spite of all Japan has going for it. The biotech startup ecosystem here is still facing challenges. But, you know, Kaz, tells that story much better than I can. So, let's get right to the interview. Interview Tim: So, we're sitting here with Kaz Kishida of Dioseve who's helping to address fertility by using stem cells to create fertilizer eggs. So, thanks for sitting down with us. Kaz: Thank you very much for having me. Tim: Now I gave a very high level description of what you do in the intro, but can you explain it a little better than I can? Kaz: Okay. So, our company has technology to induce IPS cells and to another types of cells, including eggs and ovarian cells. Most of their cells are related to germ cells and reproduction. Tim: Well, this technique's not yet used in fertility treatments. But it's something in the future that holds a lot of potential. Kaz: Right, right. Currently, like In Vitro fertilization, the success rate is still remarkably low. And sometimes that vitamin journey is tough. But if we can deliver our products, say IPS cell derived ovarian cells, then the IVFs will be more accessible and the success rate will be enhanced so many women and can have their children using our technology. Tim: So why would the success rate be enhanced from using these eggs produced from stem cells as opposed to eggs harvested from the women directly? Kaz: So, in the standard protocol of In Vitro fertilization, the first step is to retrieve eggs from women. And then in many cases, those eggs are immature and immature eggs can't be fertilized with sperm. So, we can mature those immature eggs and we can make mature eggs, which can be used for fertilization. So, it directly enhance their success rate of IVF. Let me clarify that. And we have two technologies. The first one is create egg itself, but the other one is create ovaries, ovarian cells from IPS cells. Of course, if we create eggs, we can use those eggs for fertilization directly. But the other product, IPS cell derived ovarian cells that can support current In vitro fertilization procedure. Tim: And actually I was surprised at how common IVF is in Japan. Kaz: Yes, yes. Tim: 7% of all babies are born from IVF now. Kaz: Right, right. Over 60 K babies are born by IVF. Tim: So, what's driving that trend in Japan? Kaz: Strong tendency is increased age of married and having the first child. Before time, there are average was 29 years old, but now, and the first baby will be born in later stage of women's career and life stage. Of course the age is strongly rated to the pregnancy, and it is getting harder to get pregnant when women ages. That is biggest reason. Tim: It seems like Japan is really number one in the percentage of IVF births. But is the average age that women have their first children significantly higher in Japan than other nations? Kaz: Comparing to the US, yes. Their first child comes in the later stage for women. Tim: Oh, okay. Well, before we get deep into the technology and your go-to market plans, I want to take a step back and talk about you. So, you graduated from Waseda back in 2020, you went into investment banking. And so what led you from investment banking into Dioseve? Kaz: The fact is I already decided to start my own company when I was in my high school. And when I was in my university, I experienced some internships in some startups. And after that I noticed that their main job of CEO in a startup is to raise money. Tim: That's an important one. Yeah. Kaz: Yes. And I thought, okay, what is the best way to learn finance? I thought, okay, investment banking. That's why I decided to go investment bank. Tim: But that didn't last very long. Kaz: Yeah, I'm sorry for the company, but I learned finance, and I exited. Like I resigned. But I already declared that I will have my own company in the near future when I got an interview. And the company said, okay. Yes. So yeah, I joined them. Tim: So they probably just didn't think it was going to be in like two years. Kaz: Yeah. Tim: So, how did you come together with Dioseve? Why this area? Kaz: Okay. As I said I decided to start up my company when I was in my high school and I was diagnosed with Hepatitis C, and there is a kind of potential liver cancer. And my parent had that disease, and back then there was no treatment. But the doctor said, in three years, the new drug will come to Japan. And I waited for three years, and the doctor said, yes, now we have the treatment. And surprisingly, the drug has super good effect on hepatitis C. Actually, I, my parent and my grandparent all totally cured. So, I was amazed and I felt, okay, my life was saved by biotechnology. So, it's turn for me to save others by starting new biotech company. Tim: What did you study medicine or biology at university? Kaz: No. I studied geology. Tim: Geology. Kaz: Yeah. Totally different. Tim: Alright. So, how did you meet your founding team members? Kaz: VC called ANRI introduced me to Dr. Hamazaki, and we got along together and I said, okay, how about establishing our company? And he said, yes, let's do that. Tim: So, of the founding team, are you the only one without a medical background? Kaz: Right. Tim: It's just you. Kaz: Yeah. But as you can imagine, the finance is super important for startup. Tim: Well, no, I think that's a really important step. In fact, over the last 10 years in particular one of the most important things I've seen for Japan's deep tech startups is that, I mean, 10 years ago, it was just kind of assumed that the professor would be the CEO. Kaz: Yes. Yes. Tim: And that's changing, and that's a terrible model because academics tend to be horrible CEOs. That seems to be changing recently. Kaz: Yes. I think so. Tim: Let's talk a little more about the technology and the positioning in the market. Women in developed nations around the world are having children later in life. This is such an important social problem everywhere. And IVF was first introduced in the 1980s, and it's been hugely successful, but it doesn't seem like we've seen a whole lot of innovation in the last 40 years. Why is that? Kaz: You're correct. First of all, the invention of IVF was super innovative. After that, there was not many rooms for improvement because get eggs, fertilize is just super simple. But there was not many things we can do for that process. But the last and biggest room was maturation because eggs can be functional only after getting matured, IPS cell technology enabled to do that. Tim: So other than that, maturation, everything else about the system is pretty optimal. Kaz: Every doctor has their own opinion and every doctor thinks their protocol is optimal. But at least like ICSI, ICSI is a second innovation I think regarding IVF. ICSI is a kind of procedure which inserts sperm to eggs directly. Before time we just put sperm and egg to one dish and waiting for the fertilization. But in 1990s they did ICSI and that dramatically enhanced and the fertilization rate. Tim: So, what are the main sort of safety concerns around this kind of a technology? Kaz: The biggest one is genetic manipulation from their natural born babies. But fortunately we have technologies to assess the situation of in genetic expression. So, we can precisely evaluate abnormality. Tim: Okay, creating the mature eggs from stem cells is pretty amazing, and it has obvious applications to fertility treatments. So, I'm just curious, does the technology of other medical applications outside of fertility? Kaz: Yes. We have. So one example possibly of topic, but we can use this for rejuvenation. So, we can reverse on the age of cells by using our eggs. So, this is very conceptual stage, so I can't say, yes, we can do that.