Disrupting Japan

The developed world is facing a severe programmer shortage. Around the world, coding boot camps have stepped into this gap to teach newcomers basic programming skills quickly. But in like so many other areas, Japan is different. Coding boot camps have been slow to take off here, and programmers are taught by a patchwork of academic degrees, on the job training, and informal meetups and study sessions. Kani Munidasa, the co-founder of Code Chrysalis, is changing that. He's started one of the first Western-style coding boot camps in Japan, and the ecosystem is already seeing the results. Code Chrysalis has an amazing placement rate with grads receiving above-average starting salaries, but there is something more going on here as well. Kani and I talk about how the job market for programmers is changing in Japan and, more important perhaps, how their place in society is changing as well. It's a great conversation, and I think you'll enjoy it. Show Notes Why Japanese engineers don’t participate in open source projects The differences between Japanese and US junior developers Diversity on a programming team does not main what you think it doe How to learn to learn Why Code Chrysalis turns down 80% of its applicants Why Japanese enterprises are getting behind boot camps Why developer pay in Japan is so low Why so many engineers want to come to Japan anyway How to overcome the need for degrees and certificates Links from the Founder Everything you wanted to know about Code Chrysalis The Code Chrysalis blog Friend Kani on Facebook Follow him on Twitter @munidk A research-based approach to coding education How to Get Into Code Chrysalis 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. One of the most important developments in Japan over the past 10 years and perhaps, the most important way that things are different for startups today than they were 20 years ago is the existence of a startup ecosystem. Now, let me explain that because it’s not obvious, especially to younger entrepreneurs who have never had to run a startup the absence of a startup ecosystem. A startup ecosystem is not just a group of startups that operate in the same city. We had that during the dotcom era. There were even VC investments, occasional meet ups, and some mentoring, but we didn’t really have an ecosystem back then. We had a community for sure, but not that ecosystem. An ecosystem comes into being when startups start buying from and selling it to each other. When startups can target other startups with their innovative products, where our pool of employees move from startup to startup, taking their ideas and best practices, and work ethic with them. When an ecosystem developed, it’s an amazing cross-pollination of innovation and growth that is just awesome to be a part of. This is happening in Japan. It’s a relatively new and it’s fantastic. Today, I’d like you to meet Kani Munidasa, co-founder of Code Chrysalis, a startup that can only exist within a healthy startup ecosystem but also one that any healthy startup ecosystem needs in order to grow. Code Chrysalis is a coding boot camp where over 12 weeks, students learn of the skills they need to get jobs as programmers in Tokyo and as you will soon see, they are really getting jobs. In fact, after our conversation, there is something I want to ask you and I mean you, personally because it’s something that you might understand better than I do. I would ask you right now, but the question won’t really make a lot of sense until after you sit in on the conversation with me and Kani, and we cover a lot of ground. We talk about how to get a programming job in Tokyo, how to ramp up skills quickly, and why diversity in programming might not mean what you think it does. But you know, Kani tells that story much better than I can, so let us get right to the interview. [pro_ad_display_adzone id="1411"  info_text="Sponsored by"  font_color="grey"  ] Interview Tim: Cheers! So, I’m sitting here with Kani Munidasa, the co-founder of Code Chrysalis, a Tokyo-based coding boot camp. So, thanks for sitting down with me. Kani Munidasa: Thank you for having me, Tim. Tim: Well, listen, before we get started, you can probably explain it a lot better than I can: what exactly is Code Chrysalis? Kani: Sure. Code Chrysalis is a 12-week software engineering boot camp. We focus on creating versatile and autonomous software engineering leaders. The hard skills are given: you will be able to create full-stack software applications by the time you graduate, but we also have a very strong focus on soft skills like leadership, empathy, communication, and teamwork. Tim: Okay, that is a lot to condense into 12 weeks. Kani: True. Tim: Okay, and it’s a full-time program or is it a part-time program? Kani: It is a 12-week full-time program, so there’s absolutely no way you can hold a job while doing this program, you have to definitely get permission from your family before doing it because you won’t see them much too, and also, before you come in, have you do what’s called a pre-course which takes about anything from like a month to two months to complete. Tim: Just to make sure they have like, the minimum requirements to – alright. Kani: Exactly, we want all our students in the classroom starting the same foundation. Tim: What does the boot camp cost? Kani: The boot camp for the 12 weeks at the pre-course, and if the admissions process before that all included is hyaku-san-man, so 1.03 million. Tim: Hyaku-san-man – that’s kind of a weird number. Why not just even ¥1 million? Kani: We don’t like rounding up. I guess, the engineers. Tim: So, ¥1,030,000? Kani: Correct. Tim: Okay, and you guys are teaching everything in English, English only, right? Kani: That is correct. So, we believe that English is the lingua franca of technology. Our industry changes so often that technology just comes and goes so often, it would be important for you to be able to read the documentation firsthand, and then leverage that new learnings into your products, and solving a problem. Tim: I’ve noticed like, Japanese engineers tend to be able to read English reasonably well but speaking English and receiving instruction in English is a really different matter. So, has English only been a problem for some students? Has it really limited your pool of potential…? Kani: It’s definitely a bad business decision. We could probably get more students if we do this in Japanese. To combat the problem though, we did create a part-time program, it’s two months, seven days, it’s called the English communication intensive and here, we teach students to just communicate in the English that they currently have. It’s more like a confidence school. Anyone who has done K-12 education in Japan, I believe can speak English, but they are worried about their pronunciation or their grammar, or they just want to sound sophisticated with the right words. In this program, we boost their confidence to just get your thoughts out to be able to communicate. Tim: The instructor is now are all native English speakers. Do you plan on changing and then offering Japanese instruction and hiring Japanese instructors as well in the future, or are you planning on studying English only? Kani: We want to try and stay English only as much as we can, but we also want Japan’s engineering ecosystem or communities to have a voice globally. So, there’s so many open source projects that Japanese engineers are not taking part in. There are big large forums where engineers discuss things but again, we don’t hear their voice. At least, when our students graduating, to be engineers who can go toe to toe with the world, complete with Silicon Valley engineers. Tim: Okay, that’s pretty ambitious or a 12-week program. Actually, let us back up a bit and talk about you. So, I guess we have first met like, two years ago? Like, you were just thinking about setting this up when we first met, right? Kani: I do a lot of courage to start this whole thing on some mentors in Japan, and while we had spoken a lot, I did read a lot of what you are doing here, and it actually gave me a lot of energy kind of jump in and do this thing in Japan. Tim: Oh, thank you. Kani: Yeah. Tim: Yeah, I mean, Japan is a lot more dynamic than most people realize, but let us see, this was early 2017? Yeah, it’s awesome to see Code Chrysalis up and running you guys having such an impact, but before founding it, you and your cofounder Yan Fan were both working at a coding boot camp in San Francisco, Hack Reactor, right? Kani: Yan and I, we’re both graduates of the Hack Reactor. It’s another coding boot camp based out of San Francisco. She did teach at Hack Reactor and I actually also worked at Hack Reactor as a counselor after my graduation, but we weren’t working in the same time. She’s actually about two years my senior at Hack Reactor. Tim: Alright, was Hack Reactor sort of your inspiration and your blueprint for how you wanted to run Code Chrysalis here? Kani: Hack Reactor definitely inspired me want to get into education and do this in Japan. I know the cofounders very well, and we were initially actually talking about bringing Hack Reactor to Japan, but I also wanted to focus a lot on the soft skills. This is something that most boot camps, even in the US, do not focus on. It’s adequate to just teach the hard skills, and then find them jobs. What I want to do with this new concept of boot camp is to ensure the graduating class students to have the soft skills that will take them to the leadership levels, to be future CIOs and CTOs, and kind of lead Japan’s software industry. Tim: So,

For decades, Japan has been struggling with the economic need to attract more foreign residents to the country and the general social reluctance to do so. Over the years there have been some well-publicized failures and a few quiet successes, and Japan retains her image as a generally closed nation. But reality changes much faster than perception in Japan. Things are already changing and that change is about to accelerate. Today I'd like you to meet Nao Sugihara founder of MTIC, who is going to explain these trends in detail. Nao runs a recruiting platform called GaijinBank that deals exclusively with blue-collar, foreign labor, and he'll show you not only that Japan's has opened up far more than most people acknowledge, but that this trend will likely accelerate over the next 20 years. It's a great conversation, and I think you'll enjoy it. Show Notes Which companies hire foreigners for blue-collar work n Japan The biggest misunderstandings between Japanese companies and foreign staff The overtime gap with foreign workers The real reasons foreign workers object to overtime Japan's new guest visa program How to integrate more foreigners into Japanese society Lessons learned from the Latin American guest-worker program Why the foreign nurses programs never seem to work out well Links from the Founder Everything you wanted to know about MTIC Friend Nao on Facebook About GaijinBank Home Page Youtube Channel  Facebook All Jobs in Japan Leave a comment Transcript I love working with startups. I love talking with startup founders and I know that you do too. That is why you listen to the podcast and I thank you for that. When the traditional media focuses on startups, they tend to look at the crazy founders making outrageous claims or the newly minted billionaires, CEOs, and investors. That is all good fun, of course, but when we look a little deeper, startups tell us something else. Looking at what startups get started and what startups get funded, and what startups get traction, that tells us a lot about the kinds of problems that we, as a country, thin  are worth solving. What problems are important enough to attract time and money, and customers changes a lot from country to country, and it reveals a lot about the social priorities of the cultures that these startups operated, and it’s not always a pleasant revelation. Japan has always had a complex relationship with her foreign residents. Even today, there is a widespread intellectual acknowledgment that Japan needs to increase and encourage immigration but transforming that goal into actual policy enter real social acceptance, well, that is harder. Today, we sit down with Nao Sugihara of MTIC and were going to dive deep into this. Nao runs a recruiting platform called GaijinBank and while there are lots of job sites catering to foreign engineers and creative’s, socket deals exclusively with the blue-collar labor. Foreigners are working blue-collar jobs in Japan is actually an incredible aspect of the Japanese economy and one that is largely ignored, not only by the Japanese press, but even by the foreigners living in Japan, and you know, I have to admit, the things are different and, in some ways, much more encouraging than I expected. But you know, Nao 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" ] Interview Tim: So, I’m sitting here with Nao Sugihara of MTIC which is Make Tokyo an International City. Nao: Yes! Tim: So, thanks for sitting down with me. Nao: Thank you. Thank you for the opportunity like this. I’m happy to talk today. Tim: Wow, I’m glad to have you on, and I usually don’t interview founders of companies for like, recruiting companies, but what you are doing is really different. Nao: Thank you. Tim: You know, there is – I don’t know how many hundreds of different job sites for engineers and designers in Japan, but you’ve got a unique focus. Nao: Yeah. Our service name is GaijinBank and we are especially for blue-collar type of work. We focus on the foreigner in Japan. Tim: The job market for foreigners in blue-collar jobs is something that a lot of people don’t know outside Japan. So, tell me a little bit about your customers on the employer side. What kind of blue-collar jobs are being filled by foreigners in Japan? Nao: For example, hotel, front desk, and craning, or manufacturing and construction, and logistics, and caregiver. Tim: That seems quite a range of responsibilities, so something like factory work would not require a great deal of Japanese skills but someone working at the front desk of a hotel or being a caregiver, I imagine that would require some pretty high level of Japanese ability. Nao: Yes. Tim: So, where are these jobs? Are they in Tokyo or are they in the countryside? Are they all over Japan? Nao: Of course, like many demand came from around Tokyo, and we do like Tokyo, Chiba, Kanagawa mainly, but actually, the countryside has more demand. So, we do sometimes in Fukushima in Tohoku and Ehime in Shikoku and can be like also Nagoya. Tim: And are these permanent jobs? Are these temporary jobs? Nao: We do both. Our temporary dispatching position and also sometimes, we introduce directly to employers permanently. Tim: Now, in a minute, I want to dive deep into kind of this social impact that all this is happening, but looking at it from the employee side, who are taking these jobs? Nao: We have many candidates, more than, I think nationality-wise, 100 countries, but mainly Asian countries people. Half of our candidates is a resident visa holder such as permanent, spouse visa, long-term visa. 30% students intend to 20% is like working visa, like international, humanity visa. Tim: Okay, so my understanding was that for example, it’s almost impossible to get a permanent residency visa working at a factory. So, do they have permanent residency because of family members or for some other reason? Nao: Yes, some of them like, get married with Japanese people or got married with permanent residence visa holder, then they become like a spouse, and then stay here maybe 5 to 10 years, they become a permanent resident. Tim: So, when the employers contacted you, are they looking for foreign staff specifically or are they just looking for anyone to fill these positions and they can’t find Japanese or foreigners who are okay too? Nao: Yes, they don’t care about the nationality. The most cases they cannot find Japanese workers, and then they kind of adjust. Tim: What I imagined it for Japanese, particularly in these the blue-collar and very traditional industries, that’s a big adjustment. Do you guys help kind of bridge that communication gap? Nao: In many cases, there was a miscommunication. For example, a contract or like some direction in the workplace. It’s kind of very difficult to communicate in Japanese or English, especially in Korea, cannot speak English in most cases. So, they call us, and then we communicate in English or their mother tongue. Tim: Okay, so there are times you are actually providing an interpretation service so that they can give instructions to the employees? Nao: Yes. We send it like a very bilingual staff in the work location, and then they directly bridge Japanese and English, or mother tongue. Tim: So, I imagine a lot of cases, this is the employers first experience really working with a foreign staff. What are some of the differences between the expectation and reality? Just because the work culture in Japan is so different that it is in other places, so what kind of surprises or expectations are different? Nao: The foreigner has, of course, like have a different culture. For example, some staff, after two weeks start working, like they ask us like, “Can I have a break, like one month? I have to go back to my country,” and wow, and then these don’t happen for Japanese employees, I think. So, we try to make sure, if you have a break plan, please let me know first. Tim: That’s interesting. Nao: And also like, work time, as you can imagine, Japanese people are accepting of overwork, but some foreign staff don’t like. Tim: Oh, okay. Yeah, I can imagine that’s quite a surprise to a lot of foreign workers. [pro_ad_display_adzone id="1653"  info_text="Sponsored by"  font_color="grey”  ] Nao: We have to educate both sides. Employees, sometimes, you have to accept overwork, and do we educate also employers. If you have, they ask now in advance, and we inform. Tim: When the foreign workers are objecting to the over time, are the usually objecting because of pain mandatory because of time and they had other plans? Nao: Both. Sometimes, they have planned, so they just want to go home. Regarding payment, actually in blue-collar, the money is very well. Normally, employer pay all of overwork. Tim: Okay. So, it’s really more just a matter of scheduling and having control of your own time. That makes sense. Looking at Japan as a whole and how society is changing this way, your business of placing blue-collar – or let’s just say non-technical foreign staff, it seems like a really growth industry in Japan. Just a few weeks ago, maybe a month ago, the government announced the new guest worker visa program for 2019, and they are targeting 40,000 foreign workers in Japan for next year, and they announced they are hoping for 250,000 by the fifth year. Do you think those numbers are reasonable? Do you think we’re going to see that many foreign workers coming into Japan? Nao: Yes, that’s why I started this business. As you know, Japanese population shrink. In 2060, the population is going to be like, half. So, we need workers. Yeah, actually, some companies expect foreigner worker population,

The aerospace industry has been particularly resistant to disrupting in Japan. In the rest of the world, launch vehicle and spacecraft technology has made incredible gains over the past decade, but here in Japan its still mostly the same government contracts going to the same major contractors. Naomi Kurahara of InfoStellar, has come up with an innovative way to leverage existing aerospace infrastructure and to collaborate globally by renting out unused satellite ground-sataion time, Airbnb style. You see when an organization launches a satellite, they also build a ground station to communicate with it. The problem is, that as the satellite obits the Earthy, it’s only in communication range of the ground station for less than an hour a day. The rest of the time the ground station just sits there. By renting out that unused time ground-station operators earn extra income, and the satellite operators are able to communicate with their satellites as often as they need. It’s a great interview and I think you’ll enjoy it. Show Notes for Startups Why the Airbnb for satellites startup model makes sense The demand-side problem Why this market is much larger than it seems today The key growth drivers in the satellite market Why the Japanese aerospace industry can't innovate How to run a startup as an expectant mother What challenges women scientists still face in Japan How Japan could better support working moms Links from the Founder Learn about InfoStellar [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan Disrupting Japan, episode 56. Welcome to Disrupting Japan - straight talk from Japan's most successful entrepreneurs. I'm Tim Romero and thanks for joining me. Aerospace in Japan is particularly resistant to disruption. Over the past decade, the rest of the world has seen incredible gains in both launch vehicles and spacecrafts. But Japan has been moving slowly. Sometimes it seems as if she’s determined to stay the course with the same government contracts going to much the same corporate heavyweights year after year. Naomi Kurahara of InfoStellar once had plans of changing the Japanese aerospace industry. But along the way she went out on her own with a plan that bypassed Japan’s major players and targeted the global market. You see, when an organization launches a satellite, they usually also build an antenna and a ground station to communicate with that satellite. The problem is that as the satellite orbits the Earth, it’s only communications range with the ground station for less than an hour a day. The rest of the time the ground station just sits there. So, Naomi decided to pool all of the unused ground station time together and rent it out to satellite operators, Airbnb style. Everybody wins by sharing resources. The ground station operators get income by renting out their facilities and the satellite operators get to communicate with their satellites far more often. But Naomi explains it 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: Cheers! I’m sitting here with Naomi Kurahara, the CEO and fearless founder of InfoStellar, so thanks for sitting down with me. Naomi: Thank you for inviting me. Tim: Now, InfoStellar is basically time-sharing for satellite ground station, or Airbnb for satellites, but it’s a complex idea so why don’t you explain a little bit about what InfoStellar does. Naomi: Okay, the reason I started this business is the aerospace space has an issue for cost. Like satellite is expensive, and rocket is expensive, and ground station is expensive because, maybe, not many people are using. Tim: Well, aerospace is incredibly expensive but actually I think before we get into InfoStellar’s business model, I think it’s going to be best if you explain what ground stations are and how they work. Naomi: Okay, so there is three main components for space business. That’s the ride, or spacecraft, and the rocket, which delivers the spacecraft from ground to space, and after the delivery, the operator has to control the spacecraft somehow because most of spacecraft doesn’t have people on board. It could be a space station, maybe only space station. But most of the spacecraft do not have an operator, so the ground operator has to control this spacecraft. So we need to send some commands. For that, we use radio and radio communication. So the antenna system and some computers to process the commands. Tim: So the ground stations, they’re what’s around the big parabolic antennas that everyone’s used to seeing on the ground and they both get data from the satellite? Naomi: And to the satellite. Tim: And give instructions back to it? Okay. Now that that’s clear, tell us about InfoStellar’s business. Naomi: To go back to the issue of this business, the cost. The cost is so expensive in this business, it’s difficult to launch or start. And for the ground site, one ground station, including one dish antenna, maybe it costs $300,000. So to reduce the starter’s price, there is only one way to reduce the cost, which is to increase the usage. Tim: So increase the usage of the ground stations? Naomi: Yes. If only one person uses, maybe 1% or 2% of the whole time is used. Tim: So InfoStellar allows the sharing of these ground stations, right? So, traditionally, if I’m putting up a satellite—I build my satellite, I pay someone to launch it into orbit for me, do I usually build a dedicated ground station to track that satellite? Naomi: I say yes because most of the satellites, the government requires you to stop anytime. Make sense? So the many operators have to have one ground station at least. Tim: Now, how much downtime does a ground station have? If I’ve launched my satellite and I’ve got my ground station, in one day, how many minutes, or how many hours are that ground station and that satellite communicating? Naomi: It depends no location. For Japan, I can get only 30 minutes per day of communication time. Tim: 30 minutes per day? So 23 hours and 30 minutes, it’s just not being used? And that’s the time that InfoStellar wants to rent out and to share. Naomi: To reduce the cost, I want to make the usage higher. Tim: Right. That makes sense, renting out that unused capacity. Now, I don’t imagine that all ground stations are the same. They must have different frequencies and different ways of communicating with the satellites. How does InfoStellar work with that. Naomi: Well, all satellites have different but I can still categorize some satellites because the frequency, there is an allocation amount for satellites. For example, there is a band called X-band, it’s about 8GhZ so for satellites, can use about 8 to 8.4GhZ, and the other X-band satellites cannot use. Tim: Okay. So it is fairly standardized. All right. The protocol used to communicate between a ground station and a satellite must be completely different for every satellite so how does it work? Naomi: Just a program. The many satellites have a protocol or an option. So I have to make sure that every station can process the many, many satellites. Tim: Okay, but I would imagine the stations themselves, they don’t have to understand the data they’re getting, right? They just have to collect it and send it into the cloud and get it to where it has to go. Naomi: Correct. I have to think about the analog side and the digital side; for an analog signal or digital signal. For the antenna, they take care of the analog and for analog it’s more easier. Many satellites can be categorized or they have some subbed out frequencies. Tim: It sounds like there’s enough standardization so you can at least attack the problem. So, for any multi-sided marketplace, you’ve got the supply side and the demand side. And the biggest challenge is always getting both sides on board together. So let’s first talk about the supply side. Have you been able to get a good collection of ground stations signed up for this service? Naomi: Okay, they need the dish antenna but also I need to have another type of antenna called Yagi antenna. The antenna looks like a fishbone on the buildings or the houses—that’s called a Yagi antenna. So other types of antennas can receive or can transmit the UHF or VHF frequencies. It’s not VHF or UHF, it’s a type of frequency category. Tim: So who owns the ground stations that are signing up? Naomi: So, for Yagi antennas, the individual person. For the dish antenna, maybe a private company or sometimes a university has. Tim: All right. You’ve gotten ground stations throughout Southeast Asia on board? And how did you make those sales? How did you convince people to join this? Naomi: Well people who have antennas, the people usually have their own satellite because the two operating their satellites, they have their antennas or their ground station. So they have the same issue, they have the antenna on one station but the usage is 30 minutes to 1 hour per day. Tim: I see. So I guess on the supply side it’s an easier case because they’re not using it for 23 hours a day. Okay. So it’s very appealing to them. [pro_ad_display_adzone id="1652" info_text="Sponsored by" font_color="grey” ] Naomi: Yes, they have a maintenance cost issue. Sometimes the Yagi antenna requires maintenance to change frequencies or get some new functions, so they still need maintenance and maybe $5,000 to $10,000 per year. Tim: So $5,000 to $10,000 per year for maintenance costs? Naomi: Yes. So it’s not big but it still costs. Tim: Sure, it makes sense. If they can get a little bit of income to pay for the maintenance, it’s a great idea for them. That makes sense on the supply side. So let’s talk about the demand side. I’m curious, how big is this market?

There is something odd about the way we treat sleep.  We understand that it is essential for good health, but we are almost ashamed when we admit that we get enough of it. We are rightfully proud when we keep our resolutions to go to the gym more or to eat a more healthy diet, but if we get a good night's sleep, we tend to keep it to ourselves. In fact, when we talk about sleep at all, it's usually to brag about how little sleep we are getting. We seem to consider getting a healthy amount of sleep to be some kind of luxury, or worse, as evidence of laziness.  Today we are going to talk with Taka Kobayashi, the founder, and CEO of NeuroSpace, and he's going to explain how things got so bad, and what he plans to do about it.    Taka is is building a business around that idea that companies should not only encourage employees to get more sleep but that they should pay NeuroSpace a helthy sum to do so.  Most sleep-based startups have failed in the past, but Taka explains how NeuroSpace is doing things differently and how he his building on his initial successes. It's a great conversation, and I think you'll enjoy it. Show Notes Why sleep is really a skill The reason we ignore the importance of sleep How to fall asleep more quickly What your iWatch isn’t telling you about sleep The right way to track your sleep A way to overcome jet lag The real challenge facing all sleep startups The good and bad sides of Japanese govement startup grants  Links from the Founder Everything you wanted to know about  NeuroSpace Check out Taka's blog  Follow him on Twitter @kobat_jp Friend him on Facebook The ANA jet-lag project 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. Let’s talk about sleep. Are you feeling tired?  If you’re like most workers in Japan, the US, or Europe, the answer is yes, and oddly, even if you’re not feeling particularly tired, you probably won’t admit to be well-rested to your coworkers.  We, and by we, I mean all of the developed world, we have this funny relationship with sleep. We all know, we all acknowledge how important sleep is. Science and personal experience have proven conclusively that our own health and performance depend on it, but for some reason, we all like to brag about how little sleep we’re getting.  Normally, I’d call this macho bullshit, but women seem to be every bit as bad about this as men are. We seem to consider getting a healthy amount of sleep to be some kind of luxury or worse, as evidence of laziness.  Now, there are a lot of reasons for this and we are going to talk about them with Taka Kobayashi, the founder and CEO of NeuroSpace. NeuroSpace is doing something important but something very difficult. Taka is building a business model based on convincing companies that not only should they encourage their employees to get more sleep but that they should pay NeuroSpace to help them do so. Taka is fighting some deeply ingrained culture here, but he is making progress, and today, we will talk about some of the unlikely partners and bedfellows he finds himself with, why so many other startups in the space have failed to achieve product market fit, and most important, what NeuroSpace is doing different.  But you know, Taka 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: I’m sitting here with Taka Kobayashi of NeuroSpace who is a startup specializing in sleep. So, thanks for sitting down with me. Taka: Thank you. Tim: What NeuroSpace is doing is really fascinating but I think you can explain it better than me, so why don’t you tell us a bit about what NeuroSpace does? Taka: NeuroSpace is a company focusing on technology which is evaluating sleep relation and quality, and sleep skill improvement program for company. I found this company in 2013, a big motivation was my own serious sleep problem. Tim: You said something really interesting. You mentioned sleep as a skill, and I don’t think I’ve ever heard sleep described as a skill. So, what do you mean by that? How is it a skill? Taka: In general, anyone can improve like how to speak English and how to control bicycles, and so on. This is also a skill. Sleep also can be improved. For example, people suffering from wake up. There are some skill to wake up easy. Tim: I’ve never quite thought about it this way. So, is sleep really like a collection of different skills? Is there like a, for example, falling asleep quickly or getting deep sleep, or waking up fully? Are these things that you can train yourself to do? Taka: Yeah, of course, there are many kind of skill. To fall asleep, having good quality sleep, and easy to wake up, and so on, yeah. Tim: Okay. You know, we don’t really talk about sleep much in terms of our health. We talk a lot about diet and if you go to a bookstore, you’ll find lots and lots of books on exercise and lots and lots of books on diet, but we don’t really talk much about sleep. Why do you think that is? Taka: So, almost all people focusing on the time that we are active, but sleep is a very important thing in terms of consolidate our memory and eliminate our needless memory. Tim: So, do you think it’s just because we are not awake not conscious, we don’t think about it, whereas diet and exercise, it’s something we consciously do and get feedback? Taka: Maybe in the sleep time, all people does not have consciousness, so they cannot understand the importance. Tim: It almost doesn’t feel like something we actually do, right? It feels like almost something that sort of happens to us. You know, actually though, when people to talk about sleep, and I think this is true both in Japan and in the US, there’s almost kind of this macho culture where people kind of brag about how little sleep they are getting. Every day at the office, I hear someone saying, “Oh, yeah, I only got five hours of sleep last night,” and “Oh, yeah, this week has been –“ so, it’s almost like we’re trying to train ourselves not to sleep. Taka: Yeah. I understand the situation well. In the company view, many manager and leader don’t take care of employees’ sleep because sleep seems like spend time not active. Tim: Yeah, it seems like almost like it’s being lazy. Taka: Yeah, yeah, lazy, lazy, yeah. Tim: So, how do you get companies interested in helping their employees improve sleep when there is this culture of no, we don’t need sleep. Taka: In the NeuroSpace business, we promote importance of sleep in terms of productivity, concentration level. These conditions always depend on sleep condition. Tim: But I mean, it’s definitely true, having too little sleep, being sleep deprived is a lot like being drunk in terms of reaction time and judgment. So, the scientific data is really clearer, but is the data strong enough to counteract this business culture? Taka: Yeah, yeah, yes. In my opinion, this problem depends on culture, especially Japan and Korea have such kind of culture. Tim: Yeah, it seems like there would be a real kind of honne and tatemae problem. Taka: Yeah, absolutely, yeah. Tim: Thinking about it, most of the books and the blogs that focus on sleep seem to be telling people how to train themselves to get less sleep. Taka: Oh, yeah, yeah. Tim: So, there’s a lot of things like, “Okay, you don’t really need eight hours. You can train your body for six or four hours.” Is that possible and is that even healthy? Taka: No, the answer it’s impossible. It’s impossible. The reason why these kinds of books are popular is business. Almost all people want to make their sleep little. Simultaneously, they believe that that is a good thing. This is a fundamental problem. Tim: Right, right. So, how do you overcome that? Taka: We provide questionnaire for employees which can detect 10 types of sleep problems. After that, we analyze the answer and we provide the company three problem tendencies. Tim: So, what are you asking? Are you asking employees like, how much sleep they get a night or how well they sleep? Taka: Yeah, ideal sleep duration and real sleep duration, and how many times do you have difficulty to wake up for a week? Tim: Okay, so what’s you collect that data and once you have a profile of how well different employees are sleeping and how much, what do you do to improve the situation? Taka: Okay, we provide a seminar. I teach the skills to overcome such kind of sleep problem, difficulty to wake up and go to sleep, and wake up during sleep. Tim: What kind of things do you teach? So, for example, if someone is having trouble falling asleep, how do you train them or how do you teach them to train themselves to fall asleep faster? Taka: For example, people who suffer from difficulty to fall asleep, we give advices that having sunlight, especially in the morning makes people sleepy in the midnight, in nighttime. Tim: So, if someone gets exposed to sunlight early in the morning, by the time evening comes, they will be ready for sleep?     [pro_ad_display_adzone id="1652"  info_text="Sponsored by"  font_color="grey”  ] Taka: Yeah, exactly, yeah. Tim: Okay. So, I guess a lot of your techniques are just training the body to get into this kind of rhythm? Taka: Yeah, yeah. Some people trying to fall asleep have a rhythm problem. Tim: And what sort of results have you gotten? Taka: It depends on the company,

Whenever you hear someone claim that the Japanese will never do something for unspecified "cultural reasons", you know there is a fortune to be made. Lu Dong is the co-founder and CEO of Japan Foodie, a cashless payment system currently masquerading as a restaurant discovery application. Lu and I talk about the boom in inbound Chinese tourism that led to the creation of Japan Foodie, and how he and his team quickly managed to identify and dominate this massive and underserved market. We talk about how tourism is changing Japan, the best way to build a two-sided marketplace, the only way forward for most e-commerce platforms, the future of e-payments in Japan and the history of women's lingerie in China. It's a great conversation, and I think you'll enjoy it. Show Notes The real problems with Japan being a cash-based society What people really care about in a restaurant app How to build a two-sided marketplace Why e-commerce platforms are really advertising companies What happens in Japan after the Olympics Launching China's first major sexy lingerie brand How too much success can kill a startup When you should turn down VC money Why its harder to be an entrepreneur when you get older  The importance of corproate accelerators in Japan Links from the Founder Check out Japan Foodie Connect with Lu on LinkedIn Friend him on Facebook 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. One thing I have learned starting startups in Japan for 20 years is that every time you hear people claiming that Japanese people won’t do something because of unspecified cultural reasons, there’s a lot of money to be made. In the 90s, people claimed that e-commerce would never catch on because Japanese preferred the high touch, expensive department stores, but today, those department stores are struggling as every year, more and more commerce moves online. 10 years later, people were saying that online auctions would never work because Japanese people would simply not by used goods for cultural reasons. They were wrong, of course, and today, Yahoo! Auctions and Mercari, and dozens of others are thriving. When a behavior is widely described as a result of cultural reasons, it usually means that the behavior doesn’t really make sense, and we cannot explain it, and man, that is the perfect area to start looking for business opportunities. If you can discover the real reason for this behavior, and it’s usually a rational economic reason, if you can discover the real reason for this behavior and fix it, you can make a fortune. You might have heard that Japan is a cash-based society for cultural reasons, but we are already starting to see the cracks in that falsehood forming. Today, I’d like to introduce you to Lu Dong, the founder and CEO of Japan Foodie, a restaurant discovery app and yeah, there are a lot of those, but this one is special. Well, not so much the app, but the business model, and the perfectly rational way in which Japan’s cash-based culture will migrate to electronic payments, and it’s already working. In our conversation, Lu also provides some great advice for building multi-sited marketplaces, and he tells some pretty interesting stories about tourism, fundraising, and women’s lingerie. But you know, Lu tells that story much better than I can, so let us get right into the interview. [pro_ad_display_adzone id="1404"  info_text="Sponsored by"  font_color="grey" ] [Interview] Tim: So, I’m sitting here with Lu Dong, the founder of Japan Foodie and several other companies, so thanks for joining us. Lu: Thank you. Tim: You know, actually, recently, we’ve been focusing on sort of serial entrepreneurs in Japan, but before we talk about your other companies, let us talk about Japan Foodie. Lu: So, I started Japan Foodie in 2015. What is Japan Foodie? It’s basically a lot of friends from China, from the US, from all around the world come to Japan, to Tokyo. Whenever they know I’m in Tokyo, they always ask me, “Lu, hey, I’m in Tokyo next week – next month, where should I go to eat?” Right? So, they never asked me where should I go shopping? Where should I go sightseeing? But, all of them ask, where shall I go eat? A lot of times, I book restaurants for them, I give them instructions, and a lot of times, I also go to those restaurants with them to help them order. Tim: So, is the site really, is it more focused on restaurant discovery? Is it more focused on Japanese cuisine in general? In a nutshell, what are we – Lu: Yeah. In a nutshell, okay. So, basically, help tourists discover and book, and pay. That solves the three main pain points in terms of foreign tourists in Japan. They can’t find restaurants, they can’t communicate in terms of booking, and in store, in restaurant ordering, and finally, they can’t pay because 82% of the retail in Japan is done by cash. Tim: The payment pain point in particular is interesting because not only is so much cash, even the payment methods that aren’t cash tend to be Japan-only. They are like, Suica or the Rakuten Pay, or they are something that foreign visitors don’t have access to. Lu: Yeah, well, before I started the company, I spent 10 years in China, started two companies in the e-commerce area, so in this 10 years, e-commerce became mobile commerce, so everybody knows that 80% of the traffic right now is on mobile where the mobile payment – smartphone payment, that’s what people call it which in China, there are only two: WeChat Pay and AliPay, right, became the major payment tool for people’s daily life. So, people live on those, whereas they come to Japan, back to stone age. They can’t use not only the smartphone to pay, but also, a lot of places, they can’t even use credit cards. The only one thing they accept is cash, especially during lunch, they’re like, “No, no, no, for dinner, we accept credit card, but for lunch, only cash.” Tim: Really? Lu: Yeah. Tim: What’s the logic there? Lu: Exactly. So, I had a lot of questions. How come Japanese people love cash or how come the credit card or non-cash payment adoption rate is so low in Japan? The most answer I got are two. One is like, people love cash, period. The second answer is like, when people use cash, it’s easier to manage your expenses, whereas if you use credit card, you get broke very easily. Tim: Well, I don’t know, I mean, I think there’s a couple of simpler reasons, I think. I mean, if you look at the commissions that they charge the merchants, they’re much higher in Japan than they are overseas, there are laws that prevent the banks from aggressively doing consumer lending, so the banks don’t make as much money on credit cards, so they don’t push them as hard. Lu: These two questions I got from most Japanese, I don’t agree because Suica is so widely used. If you had a Suica and the other option is to buy other tickets using cash, you always choose the Suica option, right? Japanese people love cash, I think that’s – I don’t buy that. Tim: I agree. Any time you hear this kind of this general, oh, that’s Japanese culture, that’s the Japanese way, no, there is a business opportunity there. Lu: Exactly, exactly, and you are right. So, basically, the charge for credit card to the merchant in Japan is probably the highest in the world, I know. So, the lowest right now is probably Rakuten Pay among the other couple payments, it is around 3.25, and the payment cycle is about 45 days, right? And also, the POS machine, typically costs somewhere between a couple hundred dollars to a couple thousand dollars for the POS machine, and they charge a monthly fee, and the reason they don’t take credit cards for lunch, but they take for dinner because on top of all that, they charge you three or five yen per transaction, on top of all that. Tim: So, it is not so much that the Japanese consumers like cash. It’s that Japanese merchants hate credit cards. Lu: Hate, exactly, exactly. Tim: And, I don’t blame them. It’s great to see Japan Foodie taking off because I think you and I were talking about this like, just when you were starting out in like, the Starbucks in a basement of Roppongi Hills. It’s awesome to see you guys taking off this way. So, you mentioned like, the importance of discovery and reservations, and payments. So, of the three, is payments really the key or are they all sort of equally important? Lu: To the merchant and to the users, nobody cares about payment. You don’t go to a restaurant because you can pay with such and such payment, and to the merchant, they don’t care payment in a way because payments, whether it is 4% or 3%, it doesn’t affect that much of their business, if you think about that, right? So, what do they really care, I think what they really care for the users, is a wonderful experience. They really want to get the most out of it in their limited time in Japan. So, most value is actually discover and making sure you can get into that restaurant you really want to get in, and also, you want to know what is in there, right? A lot of times, you go to a kaiseki, you don’t even know what you are eating. So, a lot of value from the user, I think, is that, so we do a lot of content marketing, and for the merchant, what they really care is, they want to have a good client base and eventually, in the long-term, they want to make more money. I think they are the two things that they care. Tim: Okay, actually, let’s us dive into your customer acquisition strategy. Multi-sided markets are really fascinating because you sort of have to be two different things to two different groups of people. Lu: Yeah, better start with one. Tim: Well, which one has been more challenging, is it to pick up the restaurant owners to bring them on board,

Japanese thoughts on risk are changing, but they are changing slowly. Many people still consider failure to be a permanent condition, and that makes it hard to take risks, or in some cases even to be associated with risks. Today we talk with Hajime Hirose, one of Japan's new breed of serial entrepreneurs. Hajime has started companies in three different countries and several different industries.  We talk about the challenges and importance of going global and how a Japanese founder ended up running a Chinese company that IPOed in New York. And of course, we also talk about how difficult it is for startups to combat rumors in Japan, even when everyone knows those rumors to be false. It's a great conversation, and I think you'll enjoy it. Show Notes The road to China runs through Seattle Today's management crisis in Chinese and Indian companies Why leave Japan to start a startup Why not all publicity is good publicity in Japan Why the truth cannot fix lies How to survive when your competition is giving away their product for free What startups are best started outside Japan Links from the Founder Connect with Hajime on LinkedIn Hajime's latest project, Datadeck PTMind's PT Engine 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. You know, there aren’t many serial entrepreneurs in Japan. The reason for that is, well, the same reason why we don’t have a lot of angel investors in Japan. Until very recently, the idea of both startup success and startup failure was permanent. If your startup succeeded, you were expected to be running it until either you or the company expired, and if you failed, well, if you failed, you were done. Until very recently, failure was considered a permanent condition. No one was inclined to give you a second chance, but things are changing, and today, I would like to introduce you to Hajime Hirose, a Japanese serial entrepreneur who has built and sold startups and also bankrupted them. We talk about how Japanese attitudes towards startups are changing, but how in Japan, a bad rumor, even a completely unfounded rumor can kill and otherwise promising startup. We also talk about the importance and the difficulty of going global, and the unlikely tale of a Japanese man running a Chinese startup that ended up IPOing in New York, and we also talk about Hajime’s old startup story that wheezed its way through London, Shanghai, Redmond, Jakarta, and yes, of course, Tokyo. But you know, Hajime tells that story much better than I can, so let us get right to the interview. [Interview] [pro_ad_display_adzone id="1411"  info_text="Sponsored by"  font_color="grey"  ] Tim: Cheers! Hajime: Cheers! Tim: All right, so I am sitting here with Hajime Hirose, the what the future founder of BuzzElement, and a few other startups as well, so thanks for sitting down with me. Hajime: Well, thank you. I’m really excited because I’m a big fan of your show and I’m really thrilled to be on this side of the show. Tim: Well, listen, I’m excited to have you here because there are relatively few serial entrepreneurs in Japan. So, I’m looking forward to this conversation. Your first real international business was in China, but before we get to that, let us back up and talk about how you wound up there. Hajime: So, I was born in Tokyo, grew up in Yokohama, and I went to CIO for university, and I’ve been living outside of Japan for the last 26 years. Tim: And, you ended up working for Microsoft, right? Hajime: That’s right. Tim: Back when MSN was still a thing. Hajime: That’s right, yeah. So, that was back when Microsoft just bought Hotmail back in 1998. Tim: Oh, the good old days. Hajime: Yeah, that was good, that was really fun. So, I was lucky to be the only two Japanese guys on the project. My job was to grow with the project, so I was setting up the testing summers and writing tools, so that other people around the world can test it out. Tim: So, how did you wind up in China? Hajime: So, I worked for Microsoft for 10 years, from 1998 to 2008. Back in 2004, Microsoft decided that we need to go to China in order to secure more talents. My propriety was to hire a talent and also try to – so, my boss, right? He was a Caucasian guy. He thought I looked Chinese enough. He talked that I speak were spoke Chinese. Tim: Really? Please, tell me not. Hajime: No, I don’t know, I don’t know, but yeah, they sent to me there, right? So, during the week, I am one project, but then on weekends, I go around the universities around China to interview people and hire people. I get to meet a lot of smart people and I bring the men. Tim: How many people were they trying to hire? Hajime: Our plan was to hire 200 people within two years. Tim: Okay, that’s aggressive. Hajime: I did that. Tim: But, you eventually left to join a Chinese company. Hajime: That was back in 2007. That was when iPhone just came out and App Store just came out, and I thought, oh, wow, this is it, right? I thought, this is my chance where I can actually do my own startup. So, even before that, I have been wanting to do my own startup, but I was a little bit hesitant. Tim: So, your plan was to do a startup in China or to go back to the US into a startup? Hajime: I wasn’t thinking deep enough. I just knew that I want to do a startup somewhere. So, I bought my iPhone and Mac, and my friend, we went to Silicon Valley to visit VCs. I developed some app and showed it to the VC. I think they like the idea in general, but then other people find out that I was trying to leave Microsoft, so I got a headhunting offer from five companies. Tim: So, these were Chinese companies? Hajime: Technically, it was a Chinese company. It was all run by Chinese-Americans. Tim: But, I mean, they were companies in China. Hajime: Yeah, okay, that’s right, that’s right, yeah, and they said that they will give me a pre-IPO stock which was really attractive for me, and also, I used to manage the engineering team, but I didn’t really manage the whole company. With this job, I was able to manage the whole company. Of course, a subsidiary of that big company, but I get to manage the sales team and HR, and everything. I thought that that was a good experience that I could get. Tim: Well, what did the company do? Hajime: All right, so it was an IT solution company. Tim: So, system integrator? Hajime: That’s right, yeah. Do you know a company called Infosys? Tim: Yeah, of course, Sriram is a friend who has been on the show. Hajime: Oh, really? All right, so VanceInfo was the Infosys of China. Tim: And, they put you in charge of market entry in Europe, right? Hajime: Yes. So, when I got hired, I was in charge of the Software and Service group, so my clients were like, Nokia, Microsoft. I was able to grow this company three times, and then we went IPO on the New York Stock Exchange. Now, they need to expand even further, right? They sent me, a Japanese guy, the Europe. Tim: I see a pattern here and is kind of a confusing one. So, you are working for Microsoft, this American company that sends you to try not to do market entry, and then from China, they sent you to Europe to market entry. So, you are market entering into these markets you know nothing about? Hajime: Yeah, I guess I’m a firefighter. Tim: You are a fast learner, that is for sure. You were telling me before that this company, after their IPO, had some management challenges. Hajime: Before we IPO, we need to globalize our seIf, so, we brought in a global talent from the US, VP of sales, and stuff like that, but they could not really adapt into our culture because our core was so… I don’t know how to say it… Single-minded? Tim: This is something that Indian companies have a real problem with. Japanese companies used to have a big problem with, and it would be interesting if China is going through the same thing now. Let us talk about Japan because here we are, but Japanese companies, until very recently, were famous for having all of the top decision-makers the Japanese, all of the key decisions being made in Japanese, and it being very hard for anyone who is non-Japanese, no matter how qualified to really be part of the company. Is that the same thing that these Chinese companies are seeing? Hajime: Yeah, that’s exactly what happened. Even when we brought in a very talented salesperson from the US, on the C levels, we have a heated discussion and they talked in Chinese and we feel like we don’t belong there, and we feel like we are excluded in the boy’s group, I guess. So, that was a lesson that I learned: if you want to build a truly globalized company, I think you need to build a DNA as a global company from the get-go. Otherwise, it’s going to be very hard to change later on. Tim: These days we see a lot of Japanese companies doing that. Hajime: Hiring foreigners from the beginning? Tim: Hiring foreigners, being more inclusive from the beginning. Hajime: I don’t see many, but maybe more. Tim: Well, let’s just look at both of the extremes. I think there’s a lot of startups that because there’s so much for an engineering talent available, very early on, they will say, “Okay, we’re going to be multicultural. We’re going to be open to all languages and we will be bilingual internally,” and if you do it from day one, it is much easier to maintain, but I think we have also seen larger Japanese companies, like Uniqlo and Rakuten who have adopted English-only policies. We have seen companies like, okay, maybe this isn’t the best result, but like, Olympus, Matsuda were bringing in very senior foreign president and board members. So, I wonder if that’s something that the Chinese companies and some of the Indian companies,

The conventional wisdom is that traditional Japanese companies can't innovate. And traditionally, that's been true.  Hosoo, however, might be carrying on a 1200-year-old tradition, but they are hardly a conventional company. Today we talk with Masataka Hosoo, who is the 12th-generation leader of Hosoo, one of Japan's most famous kimono silk makers. And while the company used to provide kimono fabrics to emperors and shogun, times have changed. Masataka explains how he is changing with the times and working with not only fashion brands like Dior and Chanel, but companies like Panasonic to develop user interfaces that involve textiles rather than simple lights and buttons. We also talk about a possible innovation blueprint that Japan's other small businesses can follow. It's a great conversation, and I think you'll enjoy it. Show Notes How ancient weaving techniques are used in modern fashion When Japan hit peak-Kimono (it’s not when you think) Bringing kimono fashion to Paris How to retrain a 300-year old company to be innovative Why textiles should be seen as jewelry How traditional Japanese crafts can go global How other 300-year-old companies are reinventing themselves Why Kyoto might be Japan's next startup hub The 80/20 Rule for innovation in Japan Links from the Founder HOSOO global website This year's Hosoo Collection Hosoo's current design projects Videos of the fabric and the production process Kyoto's Go On project Panasonic's Kaden Lab 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. Who says traditional Japanese companies can’t innovate? Well, okay, actually, a lot of people say that. I mean, yeah, to be honest, almost everyone says that, but the point is, those people are wrong. Now, I have talked before about my work at Tepco and other large companies and the progress of they’re making their innovation programs, but today, we are going old school and I mean really old-school. Masataka Hosoo is a 12th generation leader of Hosoo, the company that bears his family name. Now, Hosoo is one of Japan’s most famous kimono makers. They used to provide fabrics to emperors and Shogun, but times have changed, and today, Masataka explains how he is innovating and changing with the times. Hosoo still makes kimono fabrics, of course, but they are also working with companies like Dior and Chanel to create new design ideas, and also with companies like Panasonic to change the way people interact with electronics. It is a great conversation, not only about fabrics and fashion, and the unexpected way that they affect our lives, but one of a unique approach to innovation and of punk rock, but you know, Masataka 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" ] [Interview] Tim: Cheers! Masataka: Cheers. Tim: So, I’m sitting here with Masataka Hosoo of Hosoo, one of the most innovative textile manufacturers in Japan. So, thanks for sitting down with me. Masataka: Thank you. Tim: Hosoo is a very different kind of company than the startups that usually come on the show. I mean, you were founded 330 years ago, but you are doing really new things. So, why don’t you tell us a little bit about who Hosoo is and what you are doing today? Masataka: Okay, now, Hosoo is a family business and we had been making kimono more than 300 years in Kyoto. Of course, Kyoto is a 1000-year-old chapter and our textile called Nishijin textiles. Nishijin is a district’s old name in the center of Kyoto about 3 km², and this area had been making textile more than 1200 years, and before, our client is Imperial Kyoto, Shogun at the top of a samurai. Tim: So, Nishijin-ori, I mean, you mentioned its 1200 years old. Is it the same technique today as it was 1200 years ago, or has it been improved along the way? Masataka: I think so, yes. The textile improves so every year, every year, so sometimes, our special material 400 years ago, developed, we called Haku, it’s a Japanese paper put on the cold leaf, after that, cut. The material is developed 400 years ago. Now, still, we use it. Tim: We will put up some links on the site to the videos you have on your site because it is really an amazing process to watch, but these days, you are also working with a Dior and Chanel, and a lot of modern designers. Masataka: Our company, we still make kimono, and as a side, we make textile and we provide to robust luxury market such as Christian Dior, Chanel, Louis Vuitton. We provide textile, something for clothing. Sometimes, for upholstery. Tim: Okay, so material you are using this for their interior design and fabrics, not the fabrics of the clothing. Masataka: Yes, sometimes, we have a project with the fashion house. They would forge clothes for the Paris Collections. Now, we worked with three categories. One is for interior project, one is fashion project, and one is contemporary art project now. Tim: All right. Well, listen, I want to dive into each of those a little bit later, but before we do that, let us back up a bit and talk about you. Masataka: About me? Okay. Tim: So, Hosoo has been a family business for 330 years. You are the 12th generation? Masataka: Yes, I’m 12th, yes. Them: That’s amazing? And, you took over the company about 10 years ago. Masataka: Yes, 10 years ago. Tim: All right, so let us step back to that time. So, you were saying at that time, Hosoo had been continuing its tradition of making kimonos, kimono fabrics, right? Masataka: Yes. Tim: That is definitely a shrinking market, so actually, in Japan, when did the kimono market peak? Masataka: Actual peak is 70s or 80s. Tim: 70s and 80s? Oh, I’m surprised it’s that late. Masataka: Yeah. Of course, the kimono market, before, 100 or 200 years ago, there were people – everyone – Tim: Had to have a kimono. Masataka: The kimono, yes, and 150 years ago, Western countries came to Japan, but our textile, Nishijin, is very high-end, so before, general people never own Nishijin because that is only high-end. Tim: But, the bubble era. So, during the bubble era, everyone could afford really high-end kimono. Masataka: Yeah, turning point, I think, 150 years ago in Meiji Period, everything that changed. Tim: Sure, sure, and the men changed very quickly, the women took a few more decades. It makes sense. So, yeah, the increasing wealth is what allowed so many people to buy it. After that, was it simply fashion changed? Masataka: Yes. So, these 30 years, the kimono market is shrinking – we have 19% loss, become a 10%. Tim: Wow. Masataka: And, the Nishijin textile, same as well. Tim: okay, so when you were growing up in this family as the 12th generation, that is a lot of expectations, and I’m sure a lot of pressure. Was this something you always wanted to do? Masataka: When I was a child, I don’t like my family business because I feel very conservative. I want to do the more creative things, and after graduating university, I started my own company. Tim: Ah, really? What did  that company do? Masataka: Before, I do the musicians. Tim: Really? Masataka: Yeah, really change my background. Tim: I was a professional musician too. Masataka: Oh, really? Tim: First time I came to Japan, Japanese record company brought me to Japan. Masataka: Oh, really? Tim: Yeah. So, you did that for a couple of years? Masataka: I make using, sometimes, I work with commercial things, but the strangers are not so good because sometimes, I get project, but sometimes the industry is a very – most of the big market, they have to – and Tim: It’s hard to make money as a musician. Masataka: Yeah, I think so. Yeah, I tried to do the best job, but the business is very hard, and I started a fashion house, and it’s a concept with fashion, music, design. [pro_ad_display_adzone id="1653"  info_text="Sponsored by"  font_color="grey”  ] Tim: So, when you were moving away from the pure music and expanding it to kind of music and fashion house, was that on your own or was that as part of Hosoo? Masataka: This is independent. Tim: Completely independent? Masataka: Yeah, I never think about joining my family business. Tim: So, what changed your mind? Masataka: 12 years ago. My father is CEO of my company and he participated in the exhibition in France, like a cusion. Tim: Right, right. It was on like a chair. Masataka: They fasten the chairs and a visit 2006. Tim: Okay, so your father was the one that kind of took that first step? Masataka: Yeah, and this is kind of like digital marketing. I think my family business is more conservative kimono, but I feel kimono expanded over the market. Tim: So, it kind of changed your impression of your dad? Masataka: Yeah, but I don’t know, because that is 2006. That is the marketing, never built a business model, just for testing. Tim: But, still, for a 300 – well, then, it was a 320-year-old company, especially something as traditional – I mean, textiles are traditional and kimono textiles must be the most traditional market imaginable. So, this seems like a pretty big step. Masataka: Yeah, I think so. Yeah, I decided back in my family business because I found a family business, it is very creative. Tim: So, after that first test marketing in 2006 in Paris, what was the next step? Masataka: I went back to my family business and I started challenge to get the new market for overseas, but before, people never do that. Yeah, the first steps, I participated in many kinds of exhibitions Milano Salons and participated in exhibitions in Frankfurt, and sometimes, in Paris, and I bring to the cushion with our textile.

Disrupting Japan is four years old, so we decided to invite a few hundred movers and shakers from Tokyo’s startup community over to have few drinks and to hear three of Japan’s most successful foreign startup CEOs talk about what it takes to succeed in Japanese when you are not Japanese. Our panel included some of the most influential foreign startup founders in Japan. Tim Romero (@timoth3y) - Moderator Paul Chapman (@pchap10k) - CEO, Moneytree Jay Winder (@itsjaydesu) - CEO, Make Leaps Casey Wahl (@caseydai2asa9sa ) - CEO, Wahl & Case We talk about strategies for growth, how to leverage your "foreignness" to your advantage, how to best manage multi-cultural teams, and what the future looks like for foreigners in Japan. It's a great conversation, and I think you'll enjoy it. On a personal note, thank you for reading and listening and for being a part of Disrupting Japan. When I started this project ago, I never imagined how large and influential the show would become, or how large and passionate the worldwide interest in Japanese innovation truly is. I want to offer a sincere thank you to everyone who has pitched in to help make Disrupting Japan a success. There is no way I could have done this alone. But the best is yet to come. There is an amazing amount of innovation going on right now in Japan, and I look forward to bringing it to you. Thanks for listening! Leave a comment A Special Note For those of you who listened to the podcast know that the recording equipment cut out about half-way through the show. Fortunately, Jason Ball from Business In Japan was live streaming the show. Although the audio quality wasn't high enough for the podcast, you can watch the whole show (minus a bit of Q&A) online.  Also, the transcript below represents the full show.   Transcript Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for coming out tonight. Now, you guys are awesome! [applause] You know, actually, that’s exactly what I hear in my head every time I say that line. Now, for our listeners at home or wherever you may be in the podcast land, we got a special show for you tonight. To celebrate Disrupting Japan’s 4th anniversary, we are podcasting live from Super Deluxe in Roppongi with some of the most innovative people on the face of the planet, that is Japan’s startup ecosystem. So, let’s everyone get their drinks together for a kampai, and listeners at home, feel free to drink along with us. Over the last four years, Disrupting Japan has become bigger and more influential than I ever imagined it could be. Thank you so much for everything you’ve done to support the show. Thank you for listening. It’s been an amazing four years, and the next four years are going to be even better. So, kampai! Audience: Kampai! [applause] [pro_ad_display_adzone id="1411"  info_text="Sponsored by"  font_color="grey"  ] Tim: For these anniversary shows every year, we have a theme and this year, it is foreign founders in Japan, and on stage tonight, we have three – well,  I guess four fearless foreign founders who have taken very different roads to developing their companies here in Japan. So, with introductions, on my far left is Jay Winder who has established MakeLeaps which is Japan’s leading SaaS invoicing system, and before that, you had another company, but I think a lot of you know Jay for running the Hacker News meetup here in Japan. [applause] In the middle, we’ve got Paul Chapman, co-founder and CEO of Moneytree which is one of Japan’s fastest-rising fintech startups, and a true B2C SaaS success story in Japan. Paul Chapman: Thanks, Tim. Tim: And on my immediate left is Casey Wahl, CEO and founder of Wahl & Case which is a recruiting company which doesn’t sound that startup-y to begin with, but Casey’s also founded Red Brick Ventures which was an accelerator that spun out several startups. His company is deeply involved in artificial intelligence projects. And, you are now on the long hard march towards IPO. So, you’re doing something right. Casey Wahl: That’s correct. Thank you. [applause] Tim: Okay, I want to start this out on a positive note. So, I don’t know, I’m someone who’s on the firm belief there’s not real fundamental advantages or disadvantages; it’s just differences that you can take advantage of. So, what I’d like to lead with is, let’s talk about what advantages foreign founders have in Japan. Jay, you want to lead that off? Jay: Yeah, I think that’s a really good point you just made, Tim, where there’s good things and there’s bad things, and at the end of the day, you just have to figure out how to make something work, right? Actually, I think one of my favorite quotes about entrepreneurship that I think is really interesting is, “Entrepreneurship is the pursuit of a goal without regard to currently held resources,” right? And so, that means how much money you have in your bank account, it even means how much are in your current skillset, right? It even means how society is kind of currently configured right now. You’ll have advantages, perhaps, in some areas, and you won’t have advantages in other areas, and you have to understand those things and move forward the best way that you can at the end of the day. So, yeah, there’s good things and bad things and it’s your job to figure out the bad things and compensate or offset them. Tim: So, what are the good things you got working for you as a foreigner? Jay: Novelty, right? Like, if you turn up to a meeting, it’s like, “Oh, that foreigner, yeah, what’s he doing here?” It’s like, “Oh, he’s raising money.” It’s like, “Oh, hey, for what?” It’s like, “Oh, an invoicing company to help Japanese companies send invoices.” It’s like, “But, he’s a foreigner.” Honestly, that’s kind of a fair point, right? I am foreign, right? And so, for a Japanese person who doesn’t understand much about me or MakeLeaps, to think that somebody could come to Japan, understand all the intricacies of how Japanese companies communicate with each other to the depth where companies would trust that company to putting all their financial details, that’s a fair point. So, that’s something that we need to offset, right, by having a really solid team full of people that are really competent and have a lot of expertise and experience. Tim: So, kind of just generates that curiosity and makes it easier to start the conversation? Jay: Yeah, that’s right. Casey: So, Jay, how did you get there? How did you get there where you can get between the Japanese companies where they, as a foreign founder? Jay: Well, that’s a good question, Casey, I’m glad you asked. Casey: Where they actually trust you well enough to do it, like what’s the advantage to get to that point? It’s a lot of discipline, I just know. Jay: Sure. So, essentially, it is momentum, right? Because I remember, when you’re first starting out, you’re like, “Hey, I’ve got this idea,” like in Japan, people tend to use Microsoft Excel for managing their invoicing, and Microsoft Excel was released in 1982. So it’s not really like Microsoft Excel is like, traditional Japanese business software, right? Like, people just kind of adopted that and started using it for all sorts of different things in Japan. So, we’re like, “Hey, we’ve got a new way of doing things. How about this?” and people were like, “How about no? How about we just keep doing things the same way we’ve always done things?” like, “Well, I don’t know, okay, fair point,” right? So, from that point, you have to kind of go out and just get a first customer, right? Just get somebody to use the software, and at that point, you’re not even worried about how much money you’re making. It’s like, “Will you use this? Will this be interesting for you?” Tim: While you were doing that, did you ever kind of play on your foreignness? Did you ever kind of say, “Oh, well, this is how they do it in San Francisco, and you should take a look at it for that reason.” Jay: Not so much. I found what’s much more convincing is if you get some customers, get some momentum, get some user testimonials from them, and then say, “Hey, whatever you want to do is fine, but your competitor is doing things now with MakeLeaps, and they say it’s pretty good,” or you don’t need to be that direct necessarily, but, “Other companies are starting to adopt this and it’s giving them these benefits, so if you’d like to consider it, we’re very happy to give you a demo at your office,” kind of thing, and then once you got enough of that, it’s easy to kind of build off that momentum. Tim: Casey, what about you? I mean, obviously, it’s an advantage when you’re selling to foreign companies, but when you’re selling directly to Japanese companies, does being a foreigner come with any advantages? Casey: I think the novelty part there and the willingness that you can break rules and you don’t mind skipping out some of the processes that a usual Japanese salesperson would go through, you can go straight to the top a lot. Even when I was 25, 24, I can meet big company CEOs. I don’t think you could do that anywhere else, having been a foreigner here in Japan, but I think ultimately, kind of where we are with our SaaS products, is we need a Japanese sales team to kind of take it through. We’re kind of feeling that at some point, we have to hire this Japanese team to work through the Japanese processes, and being a foreigner is a disadvantage to go through large enterprise sales. Tim: Paul? Paul Chapman: I agree with Jay that novelty is useful. You speak Japanese pretty well, right? Jay: Yeah. I think you speak Japanese pretty well. Paul: I think I’m speaking English now, but sometimes, I can’t tell. No, but that helps, of course, if you could speak to people in their own language and even having a face like this,

There are a lot of aerospace startups in Japan these days. We are seeing innovation in everything from component manufacturing to satellite constellations to literal moonshots. All of those, however, depend on the ability to place new satellites in orbit, and that is getting harder and harder due to the ever-increasing amount of orbital debris. It's simply getting too crowded up there. Nobu Okada founded Astroscale to solve this problem. Today we sit down and talk about his solution, and we also dive into the very real political and financing challenges that have prevented this problem from being solved. In many ways, the removal of space debris of a classic Tragedy of the Commons problem. Everyone agrees that it is an important problem that should be solved, but no one wants to spend their own money to solve it. Well, Nobu and his team have developed a business model that they believe will be able to address this problem.  It's an innovative and important approach. And yes, we also talk about dancing satellites. It's a great conversation, and I think you'll enjoy it. Show Notes What is this Kessler Syndrome and why do we need to worry about it Why dreams of being an astronaut did not work out Why aerospace startups need their own manufacturing facilities How to bring down a satellite The trigger leading world governments to finally get serious about space clean up What are your options when your satellite fails to launch The single biggest risk in the space debris removal business Why there are so many aerospace startups in Japan recently Links from the Founder Check out Astroscale and watch the dancing satellites for yourself Friend them on Facebook Follow Nobu on Twitter @nobuokada 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. There are a surprising number of new aerospace startups in Japan and today, you will be meeting the founder of one of the most innovative one. Nobu Okada founded Astroscale to solve the problem with space debris. You see, every year, we are putting more and more satellites into orbit, and it’s gotten kind of crowded up there. There are zombie satellites that we have lost control over and there are satellites that have collided, resulting in thousands of small pieces of debris zipping around in random orbits at thousands of miles per hour, just waiting to crash into other satellites and begin a chain reaction. Well, Nobu and the team want to do something about that. They have a plan to start de-orbiting this debris, and the technology side is fascinating. I mean, you might think that you have no real desire to know how to de-orbit a satellite, but trust me, you want to know how to de-orbit a satellite. It is really that cool. Of course, Nobu and I cover much more than the technology. A big part of the story is how Astroscale has begun to build international recognition and consensus, and how they have actually constructed a business model around debris removal, and we also talk about the forces driving the sudden growth of aerospace startups and talk a bit about dancing satellite, but you know, Nobu 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" ] [Interview] Tim: We are sitting here with Nobu Okada, the CEO and founder of Astros scale was cleaning up space, so thanks for sitting down with us. Nobu: It is a great pleasure to meet with you and thank you for this great opportunity to be on your podcast. Tim: I’m delighted to have you, and I’ve got to say, Astroscale is not like your typical startup. You have a really unique mission, so can you kind of explain what your vision is and what you are trying to do? Nobu: Our mission is to secure long-term space flight safety by removing the space debris, so space debris is jumping space. They are made of rocket upper bodies and old satellites, and fragments caused by the explosion, the collision among them. Tim: How much space debris is up there? Nobu: There are a variety of sizes of debris. If we count the object which is larger than 10 cm, there are more than 23,000, and the bigger ones are like, 8 m, 10 m, like a double-decker bus. Tim: Okay, so it’s quite a range of sizes? Nobu: Yeah, the small one is like, 1 mm, less than 1 mm, so yeah, it is a wide range. Tim: And even like a 1 mm sized object can do a tremendous amount of damage to a satellite or a spacecraft. Nobu: Yeah, right, they are flying with 7 to 8 km/s which means 40 times faster than the Bullet, and so it is quite fast, and they have a huge power to blow up other objects in space. Tim: Part of the problem as I understand it is that space debris kind of multiplies on its own, that these larger objects will collide with each other and make more and more smaller objects, and the worst-case scenario is of the Kessler condition where there’s so many of these tiny objects, it becomes extremely difficult to launch a satellite or to launch a rocket. Nobu: Yeah, that’s right. The density of the space debris has reached a certain threshold where what you said, it’s Kessler syndrome which is kind of the situation where a chain reaction of the collision happens. We already reached that threshold, so it is kind of a consensus among the space industries that we should remove large objects now before they get smaller. Tim: Okay, so we are really at that tipping point where if we don’t do something now, we won’t be able to do anything in the future. Nobu: That’s right. There are so many discussions and papers, research works when we would not be able to use the space anymore, and we don’t know; it all depends when catastrophic collisions happen. We don’t know, it might happen 100 years later or today, we don’t know. So, we should develop the technologies, business model, and regulations ready for removing the debris. Tim: Okay. I want to get into the details of exactly how Astroscale is doing this and the challenges you’re facing, but before that, I want to talk a little about you. You founded Astroscale back in 2013 and at that time, you had no background in aerospace at all, so what attracted you to this problem and what was the trigger that made you decide, I’m going to start a startup to remove space debris? Nobu: When I was 15, I went to NASA in America. There was a space camp program where we can have kind of a junior training to become astronauts. It’s kind of a fun and entertainment. Tim: I remember space camp well. I wanted to go so bad when I was a kid. I never had the chance. Nobu: But it’s fun. It’s fun and I met with real astronauts and NASA engineers, and they ignited a passion within my mindset, but what I found, there is no astronaut’s job – physician can be an astronaut, or a pilot can be an astronaut, but there’s no astronaut’s job. Tim: So, they take someone who’s got the necessary specialty, and in the train that person to be an astronaut? Nobu: Right. Right, that’s right. So, what I learned is I have to have some major and specialty somewhere else, and then change my career path toward astronaut, and then I went to the government, the Japanese Minister of Finance and I was working for a consulting firm. I ran two IT companies. Tim: Well, this seems like an unusual path to become an astronaut. I mean, they don’t send out too many management consultants or financial types. Nobu: I was almost forgetting about that, and then when I turned 40, when I was 39, I came to midlife crisis, kind of a typical situation where people feel about what should we do. I have several people who I respect, and then they did something good during their 40 years, but when I was 39, I had no idea what should I do during my 40s? All of a sudden, I remember the days in NASA, space. Space is something I really wanted to do. At the time, I had been running an IT company for 10 years, I had been dedicated into software industry. I felt like I really want to work on hardware too, and that keyword: space, and then I attended a couple of the space conferences to see what are the hot topics, and then I found that space debris was a growing threat, and then there was a space debris conference – I mean, dedicated for space debris in Germany in 2013, April, and what I saw were research concept simulations. I didn’t see any actions. Tim: Yeah, well, I think the aerospace in general and space in particular is very much in the old decades long government research financing cycle. I can understand your attraction to the problem and thinking okay, we can apply modern business methods in modern start of initiatives to this seemingly intractable problem, but once you have that motivation, what is your next step? I mean, did you start talking to researchers? How did you get your technical team together, so you could credibly address this problem? Nobu: I had a wide range of options. I can join the space agency, or I can be an independent consultant to advocate to this issue, or I can go to the university, and graduate school, and to study again, or I start up and give solutions. I had no idea about engineering. If you Google supply development – how to develop supplies – there’s nothing, actually. There is so many papers coming up but it’s very hard to understand. Tim: Yeah, yeah. I mean, it is an incredibly specialized field. Nobu: Right. So, what I did is I got CD-ROMs from the space conferences printed out and I read all the papers. Tim: Just hundreds of papers? Nobu: 700. Tim: Wow, okay. Nobu: I had intensive readings for 300. First reading, I got stuck in each jargon, and I tried to read through again and again. I got all the jargons in the end, and then I came up with hypotheses how to solve this issue,

There are relatively few biotech startups in Japan. Few investors are willing to write the multi-million dollar checks and have the decades-long patience that is required to really succeed investing in this industry. But startups find a way, and an innovative biotech ecosystem has started to develop in Japan despite the lack of traditional funding. In fact, we might be seeing a new, uniquely Japanese, model of innovation that we'll call "the innovation supply chain". Today, we get a first-hand look at how this innovation supply chain functions, as we sit down with Yuki Shimahara the CEO and founder of LPixel.  LPixel uses AI image analysis to detect potential problems in patients MRI and CT scans. The technology itself is fascinating, but Yuki and I also talk about how medical research and medical innovation might be taking a very different path in Japan than it is in the West. It's a great conversation, and I think you'll really enjoy it. Show Notes The real problem with using AI for medical diagnosis AI's deep roots in medicine How safe is medical AI, both in theory and in practice Are we about to see an App Store for medical devices? Why doctors have mixed feeling about AI in medicine How to maintain a competitive advantage in a crowded AI marketplace Links from the Founder Everything you ever wanted to know about LPixel Connect with LPixel on LinkedIn Friend Yuki on Facebook 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. You know, we’ve talked a lot about biotech in Japan on this show before and quite a bit, really. We have gone into the fact that the Japanese biotech venture ecosystem is really being held back by the lack of investors willing to write of the large checks required knowing that they won’t see any returns for over a decade. So, things are hard for life sciences in Japan. However, in the words of Dr. Malcolm, "Life finds a way" or in our case today, "Life sciences find a way." There’s a growing number of impressive life sciences startups emerging in Japan and they are adapting it and evolving so that they can innovate within the capital constraints they find themselves in. Today, we sit down with Yuki Shimahara, founder and CEO of LPixel. Now, LPixel applies artificial intelligence to medical imaging and detects a wide variety of conditions from CT scans and MRIs. Yuki is still a PhD candidate at the University of Tokyo but he is running a company with more than 40 employees, so you can imagine, he is a pretty busy guy, but he took some time to sit down with Disrupting Japan and talk about how AI is being used in medicine, the challenges facing life sciences in Japan, and between the two of us, we sketch out a new way forward for Japanese innovation, an innovation model that is distinctly different from that in the US, but that might just be the way forward in Japan. Oh, and as you know, my goal here at Disrupting Japan is always to bring you amazing insights from Japanese entrepreneurs in their natural habitat. This week, that habitat was a large concrete wall to conference room that makes it sound like we are talking at a vast underground cavern. It sounds a bit odd at first, but if you join us for the next 20 minutes in our underground layer, I guarantee you that you will leave thinking very differently about life sciences in Japan, but you know, Yuki tells us 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 Yuki Shimahara of LPixel and things were sitting down with me today. Yuki: Thank you. Tim: So, LPixel is a cloud-based AI image analysis that you are using mostly for life sciences and related research, but you can probably explain it much better than I can. Yuki: so, LPixel is a start up from researcher realm in the Tokyo University, so our major is bio-image infomatics, so our core value is we combine life science and image analysis. Due to the evolution of CTs and MRI, and microscopy and so on, we have many, many data these days. We do bio experiments and develop microscope, and then analyze image data. Tim: Well, I think image data analysis, in general, is one of the most interesting areas of AI in machine learning right now. LPixel offers a dozen different products and services, so are these products meant to be kind of different pieces that can integrate together, like AWS? Are they one-off independent products that different customers would sign up for? How exactly does the system work? Yuki: Okay, so let me explain the one example, image analysis for medical image diagnosis. So, we provide the technology a name of EIRL, so EIRL is image diagnostic support system for medical doctor. So, for now, only human medical doctor diagnoses, CT and MRI images, and the number of diagnostics is increasing. Our solution is very simple: we provide AI for them, we would like to decrease misdiagnosis and medical expenses as well. Tim: Okay, actually, let’s dig into that right now because that’s interesting. So, I know you have been working with National Cancer Center of Japan to better detect cancer and other types of diseases, so what is involved in getting certification for a diagnostic tool like this? Medical diagnosis is a very different type of business than most AI imaging. Yuki: To be honest, AI is very new technology for medical doctor. This kind of AI defined as medical devices, that means we need to get approval as medical devices. Yeah, so we need to do the clinical tests, and then we need to make medical doctor decide to use or does not use our system. Tim: This is what is interesting because I mean, before, you mentioned alike, AI is a new application for medicine, but actually, medicine was one of the very first applications for AI going back into light, the early 80s, the expert systems, so I mean, it has a long history with medicine, but it doesn’t seem that it’s really made an impact yet, and so like at the clinical trials, is there a specific number you have to hit? So, for example, does it have to be 98% accurate with .01% false positives or is there a specific number you need for certification, or is it more complicated than that? Yuki: oh, that’s a good question, so yes, the answer is very complicated. So, we cannot decide the exact number because it depends on diseases and it depends on yes, do we want to say for getting approval, sometimes, very difficult. Tim: Medicine is such an unusual field because in some ways, it is so data-driven and in some ways, it is very vague, and so when you’re looking at a diagnostic device, not just a medical device, but a diagnostic device which is even harder to get certification for, so if we are saying something like diagnosing a melanoma, is there a baseline, the we know that medical doctors are accurate 95% of the time? Is there a baseline or is that kind of unknown? Yuki: It depends on diseases. 100% is impossible in medical field, right? In some diseases, 80% is highest. It depends on the diseases. So, we need to prove that this number is reasonable, so need to compare the human accuracy and the AI accuracy, or I need to sometimes compare with only human doctor or human doctor with AI. Tim: So, there is no specific number you have to reach. It’s up to you to say, this is our number, and this is why that number is good enough, you just have to convince the regulator? Yuki: Exactly. Tim: All right. So, how do you see AI working with medicine? Do you see it as the AI would tell the doctor, hey, pay extra attention to this? Do you think the doctors would ask the AI to double check their work? How do you see doctors and AI working together? Yuki: As a first step, I think the AI is just supporting diagnosis, so it is kind of the tracking system for now. So, sometimes, two medical doctors diagnoses one patient, but I think it can be the change, the medical doctor and AI. Tim: You see AI maybe someday acting sort of a prescreening? So, for example, right now, if someone gets an MRI or a CAT scan, the radiologist has to look at it and analyze it. He may not know specifically what he is looking for, but easier time where we might have like, 300 different little AI programs, like this one is designed to detect pancreatic cancer and this one is designed to detect this type of two more, DC every Scan being run through all of these different algorithms, and that maybe after that, the doctors, they can give their advice to the doctor and say, look for these things? Yuki: Yes, I believe that only one company cannot cover all diseases, so our company is kind of an app vendor, and I think that can be a platform. It is like an app store, so we provide the app on the platform and we can get the profit after paying the platform fee. Tim: What has been the reaction from the doctors themselves towards AI technology like this? Yuki: The questionnaire from around 2000 medical doctors, it says around 80% of medical doctors is interested in using AI, but only 1 to 2% of medical doctors use AIA. Tim: why do you think – because that’s a huge gap? Why do you think that is? If there’s so much interest in it, why aren’t doctors using it more? Yuki: One thing we think, we need to think about user interface and the user experience, and kind of workflow. For example, medical doctor is very busy, so they don’t want to use new application. I think that we need to integrate our AI, the software or workstation, so what medical doctor used. Tim: That makes sense, that makes sense. Yuki: Yes, so that’s why we have strong relationship with the vendor, like Fujifilm, number one share in Japan, and Canon and so on.