Disrupting Japan

Selling innovative software to conservative Japanese businesses is never easy, but it’s particularly challenging in the cutthroat and low-margin restaurant industry. Today, we sit down with Masao “TJ” Tejima and talk about how he brought OpenTable into Japan, and why it took him much longer than he had originally hoped. It’s a wide-ranging and deep-diving discussion on how to identify which companies are most suitable for Japan market entry and TJ’s rather extreme approach to maintaining a consistent corporate culture between Japan and corporate headquarters. We also take a look at some of the biggest mistakes Western companies make when hiring a Japan Country Manager and a few simple ways those mistakes can be avoided. It’s a fascinating discussion, and I think you’ll really enjoy it Show Notes Why leave a  company after a successful market entry? How to build a product around a human network Why you need to run market entry like a startup OpenTable's real business model and how is was adapted for Japan How to sell new technology to traditional low-margin businesses The danger of over-localization Why the Japanese fast followers ran into problems How to build a global culture at a Japanese subsidiary The one type of Japanese General Manager foreign companies need to beware of Links Masao's official bio Sports for Life is Masao's latest project is running the Asia Pacific Corporate Games [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript   Disrupting Japan, episode 88. Welcome to Disrupting Japan. Straight talk from the CEOs breaking into Japan. I am Tim Romero and thanks for joining me. Today, we’re going to be sitting down with Masao Tejima or "TJ" as his friends call him and I have to admit, that this interview did not exactly goes as planned. A few days beforehand, TJ and I agreed to sit down and talk about how he brought Open Table to Japan. And he used that experience as a jumping off point to give advice about how to bring in innovative software company to Japan and then sell to very conservative Japanese companies - and we did that. And then in the next forty minutes, you’re going to be hearing all about it. However, Open Table was not TJ’s first Japan market entry. He also brought in Macomedia and before that all this. And our simple talk, meandered him into ninety minutes history of desktop publishing in Japan and how he had to forge strategic alliances and corporate standards that allowed the technology to take route. I walked away with the makings of two amazing stories on tape. So, here’s what we’re going to do. Today, we’re going to tell you the much more recent story of how Open Table entered the Japanese market. And a bit later, we’ll have TJ on again to give us the blueprint of the right technology can let you disrupt an entire industry in only a few years, even in Japan. Today, we’re going to learn about how to identify what companies are most suitable for Japan market entry and talk about TJ’s rather extreme approach to maintaining a consistent corporate culture between Japan and corporate headquarters. We’ll talk about effective techniques for selling innovative software to conservative Japanese businesses and we’ll look at some of the biggest mistakes companies make in hiring their Japan Country Managers. But you know, TJ tells that story much better than I can. So, let’s hear from our sponsor and get right to the interview. [pro_ad_display_adzone id="1411"  info_text="Sponsored by"  font_color="grey"  ] [Interview] Tim: So I am sitting here with TJ Tejima of well formerly, Japan CEO of Open Table. So, thanks for sitting down with me. TJ: Thank you very much. Tim: So before we get started with the history of this market entry and what went right and what went wrong, can you give us a brief explanation of what Open Table’s business model is? TJ: It was 2000 or 2002, I was a General Manager of Macomedia which has Aldus, Adobe. I have to be in San Francisco because headquarter is in San Francisco. I have to have a lunch, I have to have a dinner, but I try to make a reservation so sometime, Japanese restos not completely made then I found the system so-called Open Table Reservation System, in the website. And oh, it is great so I tried to use this type of system in Japan in the future and this was a first impression about this service, as a diner. Tim: Okay, so you approached the Open Table team and said I want to bring this company to Japan? TJ: I searched executive member of Open Table, fortunately, there are two people whom I know. Tim: Okay. TJ: And I send an email to them and I would like to have a meeting with you guys, I’d like to know the back ground of Open Table. It was 2004 and I already left Macomedia. So I would like to find a new type of a technology business after I designed Macomedia and I did several investment and they establish several business. Tim: Why did you leave both Aldus and Macomedia? TJ: So I think, it took maybe three years plus two short, but the six years is too long. The technology and marketing innovation is my hobby. Tim: So, was it, you were feeling that you needed a new challenge or just there’s a bigger opportunity with another technology? TJ: Everything, everything. I do not want boring so many smart people in the market as a human resource. Very smart people can manage company very well and can grow the company very well. I don’t have this type of capability at all. I established a business, I created the human network first then product has come next – this is what I did. So, I always establish start-up company first then three to six years, I have to find another option. Tim: I think this is really interesting because I’ve always thought, market entry companies follow the same path as start-up companies. And oftentimes, the person to grow a start-up from zero people to thirty people is very different from the person you want to grow it with thirty to three hundred. And with market entry, it’s very much the same I think. TJ: Yes, totally agree with you. Especially the first people who must open the door for the market, these people has to have a somewhere clear vision because these people can write the regulation of this market.  But after some market is bigger, so many people can write additional writing the regulation or change the regulation, quickly. Tim: So by regulation, you didn’t mean like government regulation, you mean more of the industry standard, the way things are done in the industry? TJ: The industry standard of a technology like a baseline, How to consider baseline, How to Write the license, How to Use Ruby and how to transfer the Beta Technology from server to computer or Samson back then. Tim: But now getting back to OpenTable, it seems to me that now from OpenTables’ perspective, I’m sure they were very happy to be contacted, you could just say, “Look, I brought in Aldus and that was a success, I brought in Macomedia, that was a success.” But from your point of view, it seems OpenTable is a very different kind of company. It was focused on particular service rather than a new technology trend that was going to change the market. So, what attracted you to Open Table? Did you just think it was a fantastic service that you wanted to introduce or what was it? TJ: In terms of diners, open to provide internet reservation system to the diners – I thought like that. But actually, I understood open to provide reservation taking technology to the customer. Customer management technology to the reservation, they combined these two technologies together, parked in the wrong computer, two provider (to) these to the restaurants. Also, the knowledge of hospitality by (the) technology. This is totally similar to the DTP, totally similar internet. Tim: Okay. Yeah I see. So, you were viewing it as modernization of restaurants which is another paper-based business. TJ: That’s right, that’s right. So, OpenTable system for the restaurant is totally same as a Illustrator or Photoshop for designers. Tim: That makes sense. So, why was OpenTable interested in Japan? Was it they kind of met you and you convinced them that Japan was important or was Japan part of their global strategy before that? TJ: Well, I contacted OpenTable guy to in 2004. They didn’t consider that they extend their market to Japan at all because the market of a restaurant reservation in US was still enough for them. So, they have to invest a lot of money. So, they thought the timing to be global company must be two years later or three years later. It is the reason why actual establishment of OpenTable Japan was in 2006. It took two years to convince them. Tim: And when they came into Japan, was it a only on subsidiary? Was it a JV? TJ: Only subsidiary. Tim: What did the initial team look like? You’ve been working with them for two years, so you obviously had a good relationship with the founders. In 2006, what kind of team did you put together on the ground? TJ: I hired the best Product Manager who used to work with me in the Adobe and I picked several guys from them and also I picked the General Manager of restaurant, whom I know very much. Tim: Okay. TJ: And also the establishment of a hotel. Tim: So, very small team – four or five people? TJ: Yes, four or five people which was in the T&T office like an incubational office in as fast, two years. Tim: So, what was your approach to the market? ‘Cause the US market and the Japanese market is quite different in this respect. A lot of Japanese restaurants don’t take reservations, it’s not a common thing. What was your approach to getting customers? Did you just start with the high-run more expensive restaurants or did you try to convince people that this type of assistance will be better for them?

Education is one of the hardest sectors to disrupt -- or even improve upon -- and most EdTech startups struggle. Today we sit down with Go Arai and we talk about how his company, Arcterus, is taking a bottom-up approach to improving education. Arcterus has developed a service called Clear, which profits by helping students help each other study. Clear is basically a study-notebook sharing platform, and now Go and his team are building it out into something much more than that. We talk about Arcterus’ recent Asian expansion and why some seemingly small cultural differences made their product unviable in certain countries. We also explore why it's sometimes hard for Japanese startups to pivot and the effects of the company and the team when a radical change in direction is needed. It’s a fascinating discussion, and I think you’ll enjoy it. Show Notes for Startups Why notebook sharing works in Japan but not in America How lessons from a corporate  turnaround were applied to a startup How a terrible skiing accident ended up launching a startup Why it took the team five pivots to find product-market fit What makes pivoting hard in Japan How to use Twitter to drive business Why other Asian countries are ahead of Japan in EdTech What today's textbooks will evolve into Links from the Founder Arcterus Homepage Everything you ever wanted to know about Clear Friend Go on Facebook [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan   Disrupting Japan, episode 87. Welcome to Disrupting Japan. Straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for joining me. You know, for a few very good reasons and many very bad reasons, education is particularly hard to disrupt. I think a big part of this is that the goal of public education is far more than imparting a set of skills onto the students. Although my libertarian friends might disagree, public schooling provides not only the hard skills that students need to function in the society, but universal education provides us with a shared experience and shared frame of reference that helps us define society. It’s something that binds us together. Now, different countries have different approaches to creating this shared experience. In Japan, the Ministry of Education defines precisely what every child in the countries learning, in any given week. In America, there are no national requirements at all, and tremendous latitude is given to the states and to the individual school boards. One approach is not necessarily better than the other but startups that try to disrupt the way we impart skills to our children at the expense of that shared experience, are likely to fail. Or worse, succeed and do long term harm to our society. Well today, we’re going to sit down and talk with Go Arai, CEO of Arcterus, a EdTech startup that is trying to help students learn more effectively but also contribute, just a little bit, to that shared experience. Arcterus is a platform that allows students that share their study notebooks with other students and then profit from that sharing. We also talk about Arcterus’ recent Asian expansion. You know, we in the west often make the mistake of thinking about "Asian" culture. But there really is no such thing as Asian culture. Asian countries have an incredible diversity of cultures and Arcterus ran straight into that as they discovered that very specific cultural traits determine whether they will succeed or fail in a specific country. But you know Go tells that story better much I can. So, let’s hear from our sponsor and then get right into the interview. [pro_ad_display_adzone id="1404"  info_text="Sponsored by"  font_color="grey" ] (Interview) Tim: So we’re sitting here with Go Arai of Arcterus it’s a social learning app based on notebook sharing, but you can probably explain it much better than I can, so why don’t you tell us a bit about Arcterus and about your products? Go: The main product that we have is called Clear. It’s a platform for the students to share their study notebooks like Youtube users can publish their notebook, others users can see it and use them as textbook to solve their study problems and if you are very popular user, you can sell your notebook in the platform. Globally, we call it “Youtube of Study Notebooks”. In Japan, we call it a “Cookpad of Study Notebooks” Tim: Cookpad being a really popular sharing recipe site here in Japan. Go: Yes, yes. It’s very popular in Japan. Tim: Tell me about your customers. Who are your main users? The high school, or junior highschool, college or crams schools? Go: The users are mainly middle school students and highschool students. We also have university students and also primary school students. They use it mainly for preparing for school exams and entrance exams. So, when they difficulties solving the mathematic problems, they look into the notebooks in Clear. Tim: I can see why in Japan it’s easier to market a product like that because the curriculum is very standardized throughout Japan. The National Government has pretty much established the curriculum you know, every tenth grader in Japan is learning the same part in history this week as every other tenth grader? Go: Yes, exactly. So that is something, that’s something that might be a little different from the case in the States as you say, the learning and the studying of standardized across the country and that makes it easier and more sense for the users to publish their notebook. Tim: About how many active users do you have now? Go: Accumulated users is almost one point five million (1.5M) users globally. Tim: Before we dig into the company in detail and into your marketing strategies, I want to talk a bit about you. Go: Okay, yeah. Tim: So, you seem kind of an unlikely entrepreneur. Your background was management consulting and you worked in the management of hospitality industry for a number of years. So, why start an Ed Tech company? Go: Yes, so right before starting out there I was CEO of turnaround business between Hoshino Resort and a private equity fund and that was about almost ten years ago. I had this business plan regarding education and I proposed this to Mr. Hoshino, to the joint venture with me and Mr. Hoshino agreed to do this business with me. But after I did this feasability study, I find that this business won't make money. When I told that to Mr. Hoshino, he told me that, he said that the thing I am lacking here is management experience and he offered this position to manage a new business that they are studying in Hoshino Resort and that was the ski resort turn around business Tim: You went into the path of your career strictly to learn how to manage people or learn how to manage companies? Go: Learn how to manage company, learn how to do marketing and make money, and yeah manage the team. Tim: It’s always interesting to when I talk to people who used to work at Oracle, Mitsubishi who are now running companies about how little they have learned applies to start-ups, but coming from a mid-sized company and one where you are expected to turn things around. Was you experience the same? Did you find that what you have learned there apply to start-ups or did you have to learn everything all over again once you started your company? Go: Similar I think between turnaround business and start-up business is that both are in chaotic situation of strong leadership and strong will of their management is the key. What I learn in that situation from Mr. Hoshino can be applied to a lot to what I’m doing right now. So, yeah start-up is a, I would call it a series of pivots. Every single time of pivoting, you need to lead your team members with strong will with strong will. Tim: So was the Ed Tech start-up you had in your mind this whole time you were doing the turnaround business? Go: The basic concept is very similar. We call it ‘adaptive learning’. A lot of people use this term for adapting the contents and the way they learn, to study. Our product is based on that concept and I always had that concept in my mind even before joining management consulting. Tim: Okay, so what was the final trigger that made you decide to take the plunge and to start the company? Go: There were two triggers: one is that my very good friend from business school decided to join me he had a very good experience in start-ups, he decided to join me. Another trigger is very interesting so when I was working in a ski resort, and I was skiing outside of the course with my team members, I had an incident with a tree. I bumped into a tree and I broke my three of m rib bones and two of them stick into my lung and the lungs was exploded Tim: Wow. That’s pretty serious.   Go: Yeah, that was pretty serious actually. So I couldn’t move and all my team members went down to the course. I was along in a ski resort outside of the course, injured. I thought I was going to die and luckily someone in my team found out that I was lost and I came back and called the rescue team and I luckily I got rescued and sent to a hospital. During that time waiting for my team, waiting for rescue if I can live through it and get back to Tokyo, I have to restart my career as entrepreneur and education. Tim: I can see an experience like that and being in the hospital just makes you stop and think about a lot of things in your life but what exactly about that experience made you change? What was it? Go: When I though I was going to die, I didn’t want to die before finishing what I was going to do, what I wanted to do and what I wanted do when I started my career as a management in the turnaround business, is provide a new education service to the world. Tim: Now,

The translation and localization industry has seen some impressive innovations over the past decade, but in many ways, it has remained stubbornly resistant to change. Today we sit down and talk with Jeff Sandford co-founder of Wovn.io. The Wovn team has developed a way to take the pain out of web localization and translation. They promise to do it all with a single line of code. We talk a bit about the mechanics of web-site localization and state of the industry as a whole, and we also discuss some important but surprising differences between with makes compelling UI/UX design for Japanese and for Western users, and what kinds of tasks machine translation can really be trusted with. Jeff also explains why he decided to start a company with someone he had never meet. It’s a great discussion, and I think you’ll really enjoy it. Show Notes for Startups Why website translation is important but often overlooked Why Jeff chose to start a company with someone he had never met  How to combat Japan's "Design by Committee" problem Why you should not trust machine translation for e-commerce When you need to change from a bottom-up to top-down sales strategy The challenges of working with Japanese enterprise customers as a startup Advice for foreign engineers and founders who want to come to Japan Why Japan needs to get uncomfortable Links from the Founder Wovn.io homepage Wovn.io on Twitter Wovn.io on Facebook [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan Disrupting Japan, episode 86. Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I'm Tim Romero and thanks for joining me. Today we’re going to talk about something that you and I, and probably everyone else listening right now has struggled with. Translation and localization. It’s been an industry that has both seen some impressive innovations over the past decade, but is also somehow quite resistant to change. Localization is a part of business that almost every firm has to deal with, but almost no one looks forward to. It’s a lot like dealing with lawyers in that way, I suppose. Well, today we sit down with Jeff Sandford, cofounder of Wovn.io who say they’ve developed a one line of code method for taking the pain out of localization and translation. We talk a bit about the mechanics of website localization and the state of the industry as a whole, of course. We also talk about the important and surprising differences between what makes great UI/UX with Japanese and western users. And what kind of tasks machine translation can really be trusted with. And Jeff shares a story of what made him decide to start a company with a cofounder who he’d never even met before. But you know, Jeff tells that story much better than I can. So let’s hear from our sponsor, and get right to the interview. [pro_ad_display_adzone id="1411"  info_text="Sponsored by"  font_color="grey"  ] [Interview] Tim: Cheers. Jeff: Cheers. Tim: So I’m sitting with Jeff, cofounder of Minimal Technologies and the creator of Wovn.io. And thanks for sitting down with me today. Jeff: Thank you very much. Good to be here. Tim: Wovn.io at a high level is simply localization for a website. But it’s more than that. It’s more interesting than that so why don’t you tell us a bit about what it is. Jeff: So often people when you tell them you do website localization, they think translation, which it actually isn’t. Translation is a very integral part of it, but what we focus on is the system of localizing a website. So let’s say you have an English website, and you’ll like to create a Chinese version or Spanish version of that website, we handle all of the details of actually creating those versions, and also managing them and serving them to users. Tim: Now there’s a lot of companies that are doing that, but you guys have a particularly interesting approach to it. The Wovn.io promise, as it were, is the ultimate in simplicity, right? Jeff: Right. Tim: It’s a single line of code copied into your webpage. Jeff: Exactly. Yes. In the simplest case, you can really take a website, even a relatively large website, and have the entire thing translated within minutes. That’s the promise. That’s the goal. Right? Tim: You get little pieces out of JavaScript code. You sign up a Wovn.io. You get your API key. You put that code in your website, and suddenly the whole website is Wovn.io enabled? Jeff: Yes, that’s it. Tim: And how do you localize? How do you translate? How do you actually get the Chinese and the Japanese onto the page? Jeff: Okay, okay. So the next step is actually creating those translations and putting them in place. So what a lot of people do, especially larger websites or people who have websites that constantly change, is they use our automatic translation features and automatic page creation features. So you turn those on, and we will automatically add all the pages on your website. We’ll automatically translate all of your content and publish it for users to see. Now if you don’t want to do it automatically, you can also all the pages added for you, and then go and translate everything yourself. A very common use case is to do the automatic translation, and then go back and edit, and modify it, and improve it yourself. Tim: Well, that would make a lot of sense. But actually tell me a bit about the use cases. Tell me about your customers. Who’s using Wovn? Jeff: A lot of our customers tend to be surprisingly ecommerce sort of sites and larger websites here in Japan. Surprisingly enough, Japanese companies haven’t quite gotten on board with localization yet on their websites. And specifically it’s the Tokyo Lymbix, which is coming up. It has really lit a fire under them to start working on this. Tim: Well ecommerce makes sense because that way someone puts up a new product, it’s automatically translated into two or three additional languages, and they can go back and refine that later. Jeff: Exactly, and you can see right then the cost benefit of it as well. Tim: Right. And so who else it? Like a travel industry site or is it a— Jeff: That’s another one. Travel industry, tourism in general, and then also restaurants or things that have a lot have a lot of foot traffic from tourists and things like that is also pretty common. Hotels is another one. Tim: And about how many clients do you have now? How many sites are being translated or being localized by Wovn.io? Jeff: Alright, so this changes all the time, but I think right now— Tim: Hopefully it’s going up. Jeff: It is going up. I think currently it’s about 8,000. Tim: Alright. Jeff: So yeah, 8,000 websites. Tim: Okay, and of those 8,000 sites, how many are paying and how many are on the free tier? Jeff: Good question. So right now the paid ones are definitely on the smaller side of it. Tim: They always are. Jeff: Well, definitely. It’s that most of our paid users are Japanese right now. Tim: I want to dig down into that a little bit later, and talk about your overall sales and marketing strategy. But before we do, let me back up a bit and let’s talk a little bit about you. Jeff: Sure. Tim: You cofounded this company in 2014 with Hayashi-san? Jeff: Yes. Tim: Well, let’s back up a bit. What brought you to Japan the first time? Jeff: Good question. This is the question you always get as a foreigner in Japan. Tim: It’s obligatory. Jeff: Initially, I just really wanted the experience to live outside of my home country. I had a computer science degree, so I could have been a developer. But I had this fear that if I jumped into a career in English, I would never learn Japanese. I did not want to get stuck in an English bubble, which a lot of people do here. Tim: It’s easy to do here. Jeff: Especially with the internet these days. It’s so easy to live in your own world in Japan. Because of that, I decided to do something I knew I really wouldn’t enjoy that much to force myself to learn Japanese so that I can work in a Japanese company or in a company that I could speak Japanese. So I started out by being an English teacher. I did it for about two and a half years. Had enough of that. Tim: Yeah, two years is a pretty— Jeff: Yeah. Tim: Yeah, it’s a tough job. Jeff: I don’t hate it, but it’s definitely not what is going to be my career, and I definitely knew it wasn’t going to be so I wanted to move forward. But definitely I think teaching is much more difficult than people give it credit for. Tim: It’s a tough, tough job. Jeff: I’ve always done some freelance for development and things so after that, I continued to kind of work full-time. I lived in Japan for a little bit doing freelance web development, actually. And then I had some awesome weddings back in the States. So I’m back from some weddings, actually. So when I was back in the States for that, that’s when I got connected with Takuharu Hayashi. We actually had a few Skype meetings, and decided over Skype to do it. One of my good friends here, a guy from New Zealand is the one who said, “Hey, Jeff, there’s this guy who is looking to cofound with somebody. He’s looking for somebody who speaks English, or someone who’s foreign, who has experience globally. So what do you thing?” So I connected with him. We decided to do it before even seeing each other. We decided over Skype. I came to Japan to work, to cofound with this person, and I never met this person. Tim: Okay, and the company you two have built is a very multinational team, right? Jeff: Yes. Tim: Usually when I see start-ups in Japan that have a good multicultural team to them, it’s usually foreign engineers and Japanese support and sales. And it’s that kind of how it’s worked out for you guys? Jeff: It is similar, actually.

Seeking help for even minor mental health problems still carries a stigma in Japan. This is particularly unfortunate because clinical research shows that a significant portion of Japanese adults suffer from depression or other mental illnesses. Ayako Shimizu, the founder of Hikari Labs, has an innovative approach that represents a huge step forward in addressing this problem. Hikari Labs develops and distributes video games based on cognitive behavior therapy, and these games enable players to literally train their brains out of depression. Her approach bypasses both the stigma and costs involved in seeking treatment. Even in conservative Japan, she is seeing increasing and enthusiastic adoption by corporate wellness programs. But this whole project was almost shut down by the very people who should have been helping her. Ayako has a fascinating story, and I think you’ll really enjoy it. Show Notes for Startups How gaming can treat depression and reduce suicide rates Why marketing mental health games is so challenging The changing profiles of Japanese who suffer depression Why women have higher rates of depression, but lower rates of suicide How Ayako's University tried to put a stop to this project How to build a business model around mental health Why conservative corporations are on the forefront of improving mental health in Japan Links from the Founder Hikari Labs homepage Online counseling YouTube video Todai Shinbun article Follow Ayako on Twitter @Hikari_Lab_Inc Friend her on Facebook Try out SPARX SPARX for iPhone/iPad SPARX for Android Clinical Journal on SPARX [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan   Disrupting Japan, episode 85. Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I'm Tim Romero and thanks for joining me. Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I'm Tim Romero and thanks for joining me. Now long-term listeners know that this show is not really about start-ups. Well, of course it’s about start-ups, but it’s about so much more than that. Japanese start-ups give us a unique perspective on Japanese society. Looking at the problems that need to be solved, the path people are taking to try to solve them, and seeing what challenges society throw up against them can tell us more about a country or a society than mountains of surveys and piles of longitudinal studies. Start-ups tell us the kind of future that people envision, and how the present plans on resisting the future. Nowhere is this more true than with today’s guest. Ayako Shimizu, founder of Hikari Labs. Ayako is developing and marketing video games to treat mental illness, and she has the clinical data that shows the approach has real therapeutic value. And yet, perhaps unsurprisingly, Japanese academia and the medical industry as a whole have been—Well, let’s just say less supportive of her efforts. But still she’s seen steady increases in both the number of users and growing interest from a surprising segment of corporate Japan. But you know, Ayako tells that story much better than I can. So let’s here from our sponsor and 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 Ayako Shimizu of Hikari Labs, and thanks for sitting down with me. Ayako: Thank you, Tim, for inviting me here. Tim: Now Hikari Labs is focused on improving mental health through software, I guess. But why don’t you tell us a bit about what Hikari Labs does and what it’s mission is. Ayako: Okay, well Hikari Labs currently have two services. One is online counseling called Kokoro Works, and another one is this game application called Sparx, which was developed at the University of Auckland in New Zealand. And our mission is to help shape a society that’s the psychological care is more reachable to people. Tim: Let’s talk about each of these individually. Ayako: Yeah. Tim: And later on, we’re also going to talk about your new AI project. Ayako: Okay, okay. Tim: But the Sparx project is really interesting. It’s a role-playing game that’s based on behavioral therapy. So what exactly is cognitive behavioral therapy? Ayako: Cognitive behavioral therapy is one kind of counseling, which effect has been proven in many studies for depression and for anxiety disorders. It’s basic level. Cognitive behavioral therapy considers that thoughts, emotion, and behavior are interconnected. So it aims to change one’s emotional behavior through altering one’s thought. So for example, if you say, ‘Well, there are several bad things that happened today, and today wasn’t a good thing at all.’, which is one cognitive distortion called over-generalization. Having a few bad things that day, doesn’t make our entire bad day. It’s your cognition that makes that entire day a bad day. If that’s— Tim: No, it’s you’re focusing on the bad things that happened. Ayako: Yeah, yeah, yeah, yeah, yeah. So cognitive-behavioral therapy, or CBT, tries to adjust people’s thought in a little bit more positive world or in a more realistic way. Tim: So I could see how that would work in a counseling session where you would have a therapist that would just kind of guide the patient towards the more positive things. But how does that work in the Sparx role-playing game? Ayako: Yeah, so Sparx is a role-playing game, and it’s based on CBT methodology. All of its works is very unique. So your avatar is in a fantasy would, which balance of mood was destroyed. So it’s a very negative world, and your avatar goes in the world and saves the world through learning CBT. So those negative feeling character attack you, and you have to defend yourself by giving more positive comments or realistic comments. Tim: I see. So in a sense, the game play is having the character counteract these negative thoughts and negative directions— Ayako: Yeah, yeah, yeah, yeah, yeah. Tim: —and that trains the person to do the same things? Ayako: And it makes you learn different kinds of cognitive distortions. So through playing game, you learn a different kind of cognitive distortion, and in real life you kind of notice, ‘I’m feeling down, but this might be that kind of cognitive distortion I’m having. I can maybe adjust the way I feel.’ Tim: That’s a really interesting idea. Is there any clinical data or studies that back whether it’s effective or not? Ayako: Yeah, actually this was created by the medical team of the University of Auckland in New Zealand. The suicidal rate among the teen is very high in New Zealand, so it was originally a national project. The developers of Sparx found that the remission rate of depression was 43.7%, which is pretty high. And they concluded that Sparx was as effective as face-to-face therapy. Tim: So you brought this game to Japan last year in 2016, right? Ayako: Yeah, yeah, yeah, yeah, yeah. Tim: So how has it been received in Japan? Ayako: Well, I haven’t been started advertisement a lot. So even though I haven’t done much advertisement, I think it’s been spreading among those people who need help. Tim: So how many users do you have? Ayako: Forgive me, it’s very small proportion. It’s around 2,000 users, but it was originally 1,000 yen. And now we changed it to 2,000 yen. But most of the applications are free these days. I think 2,000 users is pretty good without any advertisement. Tim: This is interesting. To try to market this as a game, which—in one sense it is, but the game business model doesn’t really apply as well. Ayako: Yeah, it doesn’t. No. Tim: Are you marketing this as a game? Are you marketing this as therapy, or kind of self-help? Or how do you present it? Ayako: Yeah, I’m marketing this as a self-help tool. But a lot of times, many kinds of self-help applications are ready. But then those applications seems too serious for some people. So by saying this is a self-help but still a role-playing game, then those people are a little bit still hesitant to reach some therapy, they’re more open to use. Tim: So who are you targeting with the game? Is it teens? Is it young adults? Is it the whole spectrum of everyone that plays games? Ayako: No it was—I was open to anyone, but then I found out most of the users are male aged from 30 to 50, which is very interesting because those are the age that has high rate of depression. And plus those are the age that are used to using smart phones. Tim: So in New Zealand, it was targeting teens, but in Japan you’ve seen the biggest used among 30 to 50. That’s interesting. Ayako: That is interesting, and what’s more interesting is that depression rate is much higher in female than male. But at the same time, the suicidal rate in Japan— the male rate of suicide is twice as female. Which means is that a lot of male who have depression doesn’t seek any care but decides to suicide. So what I see is since it’s a game, and it seems more lighter than all the other treatment, I think a lot of males are open to using it. If that makes since? Tim: I think that does make sense. A little later on I want to talk about kind of the social stigma about depression in Japan. But why is it that women in Japan have a higher rate of depression but the suicide rate is higher among men? Do women seek out help more? Ayako: Yeah, yeah, yeah. They do. They are more talkative. So that’s what researchers say women are more open to talk about their problems, but male are not. Even though male have a lot of friends, they don’t talk about themselves that much. Tim: Okay. That’s pretty universal? Ayako: Yeah, it is. It is a very universal thing. Tim: Okay,

Today we sit down with Dave McClure under the cherry blossoms and talk about startups, funding, failure Dave has long been involved in Japan and in the startup community here, and in this episode, we talk about the progress Japan has made in the past decade and the changes that still need to be made. We go over what Dave sees as the gaps in the Japan’s venture capital ecosystem and also dispel some of the pervasive myths that have spread throughout Silicon Vally and the entire startup world. We spend a bit of time diving into what Dave and 500 Startups consider to be a risky business model, and it may not be what you expect, but it’s great advice for anyone thinking of starting a company. It’s a great discussion, and I think you’ll enjoy it. Show Notes for Startups Who is doing most of the investing in Japan right now Why Japan needs more angel investors What startups should be looking for in investors How to find a startup idea What Japan should learn from Silicon Valley and what it should ignore Which business models are truly unproven The one thing Japan should change to encourage startups How to really learn from failure Links from the Founder 500 Startups 500 Startups Japan Follow Dave on Twitter @davemcclure Friend him on Facebook Connect with him on LinkedIn   [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan Disrupting Japan, episode 84. Welcome to Disrupting Japan, straight talk from CEOs breaking into Japan. I'm Tim Romero and thanks for listening. Japan, well most of the world really has an unhealthy obsession with Silicon Valley. I’ve been to Japanese language start-up events here in Tokyo where the phrases Silicon Valley, or San Francisco, were mentioned more than twice as often as Tokyo or Japan. And yes, I actually did keep count. And I’m sure none of my friends are the least bit surprised by that. My point is that while Japan can learn a lot from Silicon Valley, the reverse is also true. There are a lot of things going right in Japan, and many things that are developing differently here than they are in Silicon Valley. Well, today we sit down with Dave McClure, founder of 500 Startups, and we talk under the cherry blossoms about start-ups funding failure, and about some of the most pervasive myths surrounding start-ups and start-up founders. For our listeners who are not familiar with the Japanese tradition of Hanami, or cherry blossom viewing, I’ll explain it to you in both theory and practice because those two can be a bit different. In theory, Hinami is a time to reflect on the transitory nature of beauty, of our possessions, and of life itself. The cherry blossoms bloom only for a few days a year before their pedals fall. And almost everyone in Japan no matter how busy or sick will make at least a little time to go out and walk among the blossoms. The trees really are beautiful, and that beauty is made all the more precious by the fact that they can only be appreciated for such a brief period of time. In practice, people from all over Japan get together with their friends under the cherry blossom trees, get rip-roaringly drunk, sing karaoke, and have a great and boisterous time.  So when Dave and I are talking and in the background, you hear school girls laughing, drunken cheering, and people suddenly breaking into song, you’ll know what’s going on. It was a great party and a great discussion. So let’s hear from our sponsor and get right to the interview. [pro_ad_display_adzone id="1411"  info_text="Sponsored by"  font_color="grey"  ] [Interview] Tim: Cheers. Dave: Cheers. Tim: So I’m sitting hear with the indomitable and encourageable Dave McClure. Dave: Encourageable sounds right. Tim: So thanks for sitting down. I really do appreciate your time. Dave: Yeah. Tim: You’ve had ties to Japan for a long time. Dave: Yes, probably about 20 years or more. Tim: And you’ve been actively involved in investing here for about, what, 10 years? Dave: Maybe seven. I think the first investment I made was a company called Gengo that was, I guess back in 2010. Although I met the founders a few years before that. Tim: In the past, you’ve talked a lot about how much the start-up ecosystem has changed here obviously for the better in the last 10 years. Dave: Yeah, definitely. Tim: Let’s stroll down a bit on the VC side because those same technological trends, cloud computing, the sharing even information of open source that has allowed start-ups to be started for next to nothing has allowed venture capitalists to start for next to nothing. Dave: Well, next to nothing let’s say for companies maybe for half a million to a million dollars, and for VCs maybe five to twenty-five million dollars, but that necessarily fall from trees, or from cherry blossoms, I guess I would say while we’re here. But yes, it is a lot easier to secure capital from the entrepreneurs and from investors. Tim: What’s your opinion of sort of the high level of the current state of the funding ecosystem here in Japan? So there’s a lot of seed funds, there’s a lot of traditional funds that are available for like mezzanine financing. Dave: Right. Well, there’s not a lot of angel investors. There’s not a lot of funds that are being run by operational ex-entrepreneurs. I think a lot of the capital that you see in Japan is coming from more traditional financial sectors either government related or financial services related—certainly a lot of corporate entities that are doing investments. But some of those folks are maybe less family with the risk-taking that an entrepreneur has. There are a few folks who I think have been—maybe prior to gaming companies like Gree or DeNA—They probably have a little bit better appreciation or maybe Rakuten or SoftBank. But I think still a lot of the capital sources are more traditional. And so there’s maybe a different thought process or framework around how to deploy that capital that’s more conservative. Tim: Is it hurting the ecosystem, or is it something you just is just different? Dave: Well, I don’t know if it’s hurting it necessarily any more than in the past. I would probably prefer that at least an early stage of capital come from folks who have operational experience and understand needs of entrepreneurs a little more. But capital is good. I think having some amount of capital is certainly better than none. And as you mentioned, I think there’s a lot more informed sources of capital than there may have been 5, 10, 15 years ago for sure. But there’s definitely got to be people who have an eye for what products are functional, what type of these cases are going to work. Maybe who are more grounded in what the actual problems to be solved are. I think sometimes there’s a little bit too much fascination with sexy topics just because everybody talks about robotics, or talks about AR, VR, or talks about drugs. You get a lot of capital flying at very glamourous, shall I say, types of business. Tim: Well, the trends happen all over the place. But for example, from a start-up point of view, among young Japanese entrepreneurs, there is this kind of idea that the natural first step is joining an accelerated. An accelerator—The way I see it is an accelerator—$50,000 in working capital is not really going to get you very far. And it seems like you’re— Dave: Yeah, maybe 6 to 12 months, but it probably won’t get you to a real company of any scale unless you get a little bit more capital or maybe can sell products and bootstrap your way there through cash flow. Tim: So what should start-ups be looking for? Is it that operational experience that you were talking about before? Dave: Well, I hesitate to put everything into the same bucket or category because different businesses lend themselves differently to how they grow. And I think sometimes we’re guilty of just assuming that all companies are similar, and that’s not really the case, I think. You have people running a ramen shop, and you have people running an automotive sort of business, and you have people running internet businesses, and there really are different capital needs, and different growth structures, different customer base. So I think sometimes people get too much in this glamorous kind of worship mode about start-ups, when I’d rather they really focus on who is the customer and what is the problem you’re trying to solve, and be passionate about that. Because I think we’ve—We’re at the point where not entrepreneurs are so glamorous, it’s more sexy than starting a band. I feel like people— Tim: Yeah. Dave: —do a start-up just to be cool. And turns out running a start-up is actually pretty hard, and pretty painful, and doesn’t pay very well— Tim: Yeah. Dave: —and is not for the faint of heart. Tim: Yeah, I agree. It’s astounding how the attitude has changed. I was in high school, everyone was starting a band, and now everyone’s writing an app. Tim: I guess for some folks they will find their way to success, but it’s a better structure—In my opinion it’s better when entrepreneurs start businesses because they’ve had a frustration, or a pain, or this problem that they’re trying to solve that they’ve understood for a while, or they know the customer, and what the needs of those customers are, and how they’re going to address that. As opposed to just, ‘Hey, I’m a coder, and I want to be a start-up entrepreneur. And what’s the brightest, shiny object around the corner that I can build some apps around?’ Tim: Well, at the end, it’s you’re building a business. You’re not building a product. Dave: Yeah, and I think people sometimes forget that. So there’s a giant risk in going from just a concept and idea to a functional product. And even with a functional product,

Growing our meat in a lab or factory has been a science fiction staple for decades, but much like jetpacks, it has never quite worked out in practice -- at least not at scale. Yuki Hanyu and his team at Shojinmeat, however, are changing that. Actually, scientists have been growing muscle tissue in labs for more than 100 years, but Shojinmeat has developed techniques that bring the cost down to less than one 1,000th of traditional approaches. Now, that still leaves it too expensive for most commercial applications, but Yuki explains how his team (and others) will bring the costs down into the commercial range very soon. We also talk about both why Japanese life-sciences startups have such a hard time raising money in Japan and how Shojinmeat found a way to make the system work for them. It’s a great discussion, and I think you’ll enjoy it. Show Notes for Startups How do you grow meat in the Lab? Why cellular agriculture doesn’t get funding Is lab-grown meat kosher? Combining open research and patent protection How to bring down the cost of cultured meat Solving the taste problem How cultured meat will become available Links from the Founder Everything you ever wanted to know about Shojinmeat How Integriculture is commercializing lab-grown meat Check out Yuki's blog Follow him on twitter @yukihanyu1 New Havest talks about Yuki's project [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan Disrupting Japan, episode 83. Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I'm Tim Romero and thanks for joining me. Today we’re going to talk about the future of meat. Many would say the future of humanity, but really today we’re just going to talk about the meat. Yuki Hanyu and his team at ShojinMeat are growing meat in the lab, and they’re doing it at a tiny fraction of the cost of traditional methods. Actually, it turns out that lab-grown meat or cellular agriculture—as the discipline is actually called—is not particularly new. It’s been in active development all over the world for well over 100 years. What’s different about ShojinMeat, however is that they’ve been able to bring the cost down by an astounding three orders of magnitude. And that brings a technology within striking distance of a lot of practical uses. We dive into the actual science behind cellular agriculture. And if you can follow all of it, it means that you’re a huge biology nerd, and I love you for it. Otherwise, it would be good just to let the science wash over you. It’s a pretty amazing topic. Another thing we talk about is why Japanese life sciences start-ups have such a hard time both raising money and growing here in Japan. And how ShojinMeat meat has found a way to make the system work for them. But you know, Yuki tells that story much better than I can so let’s hear from our sponsor, and 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 Yuki Hanyu of ShojinMeat, and thanks for sitting down with me. Yuki: Thank you very much for inviting me to the podcast. Tim: Today we’re going to talk about meat. Yuki: Yeah, meat. Tim: And most specifically, cellular agriculture. So to get started. Why don’t you explain what what ShojinMeat is? Yuki: We are a collection of volunteer students, artists, and people of various disciplines to develop cultured meat technology. Tim: So it’s a bio-hacker community here in Tokyo, right? Yuki: Yes. Tim: So how long have you been doing this. Yuki: If you’re talking about active wet novelty work, that will be about a year and a half. Tim: Okay. Yuki: And if you’re talking about people building a team, that would be about two and a half years. Tim: Alright. Okay, well actually before we go forward in this, let’s step back a bit and talk about the process. So exactly how does the process work? What are you doing? Yuki: So the basic ideas of cultures meat is quite simple. Basically you take this animal, get a few cells from that animal—It could be chicken, beef, pork—anything. You don’t even need to kill that animal. You take the few cells and then you get this into a culture medium, and grow the cells in culture medium. And at the end you get a mass of cells, which is basically meat. Tim: Okay. Now when you say, “Any cell.” Is it really any cell or any muscle cells? Do you need stems cells or anything at all will work? Yuki: Actually, most specifically there’s a special type of cells called myosatellite cells or myoblast cells. And those cells are so called the stem cell of muscle cells. Tim: Okay. In your own work, are you working with cattle, or pork, or chicken, or what type of meat are you growing? Yuki: For experiment, we’re using mostly muscles cells, and for actual foods development work, we’re using chicken now. Tim: Chicken? Yuki: Yes. Tim: Okay. Yuki: And the beauty’s the method that we discovered for mouse is actually directly applicable to chicken cells as well, and so is it for cattle, pork, or anything. Tim: Why choose chicken? Is that simpler than beef or pork? Yuki: Because it is easier to get the cells. Tim: Okay, very practical reason. Yuki: Yes. Tim: Okay, so you grow these cells in a broth. How much time and money does it take to grow enough meat to eat? So if I wanted to grow enough for a 200-gram chicken sandwich. How much time and money would that take. Yuki: The time would be about 20 days, but the money is the very important part—because with the current technology, it costs ridiculous amounts such as 10,000, 20,000 US dollars or something. It’s very, very expensive. Tim: 10 to 20,000 dollars? Okay. Yuki: Yes. And making that cheap is the most important technological hurdle. Tim: Okay, that’s an expensive sandwich. A little later on, I want to get back to the technological hurdles, and what you’re trying to optimize to bring the costs down. But what does it taste like? Does it taste like chicken? That’s kind of a joke, but does it actually taste like chicken? Yuki: Well, when we cooked it, it tasted like fried piece of KFC. Tim: Okay, so you used like seasoning and— Yuki: Yes, because you don’t eat raw meat. Tim: Yes, that’s true. So lab grown meat, does it have a similar consistency and texture as regular meat, or is it different somehow? Yuki: At the moment with our current limited technology, it’s just aggregative muscle cells. But in the future as the technology matures, it will be a question of what sort of meat do you want. Tim: Excellent. Yuki: Yeah, so you can have any texture, even any taste really. Tim: Well, actually before we dive into the meat, I want to ask you a little bit about you. So before starting ShojinMeat, you studied at Oxford, and then at Tohoku University, and went on to as a researcher at Toshiba. And none of this had to do with cellular agriculture. So why the big change? Why leave a steady research position to start growing meat? Yuki: Well, the idea of culturing meat has been around for longer. And for me personally, I already knew the idea when I was five or eight reading science fiction manga. Tim: Really? Okay. Yuki: As well as the culture meat, I was also fascinated with all the kilometers, skyscrapers, star shapes, and those things. Well, general science fiction— Tim: Sure. Yuki: —that a lot of young boys are into. I somehow never grew from it, and just kept going. My degree in Oxford was Chemistry, and more into organic and biological. And with that speciality, I moved into battery research. It was sort of like science fiction—as a mid-twenty-first science fiction where everywhere is covered with solar panels and renewable energy and those things. Tim: So continuing this science fiction theme? Yuki: Yes. After that, I realized that I actually need to study systems engineering in addition to my specialty in chemistry, battery technology—those things. That’s why I went into Toshiba research development center, system engineering laboratory, and then I came to the position of I have to choose which science fiction dream I should pursue? Tim: Okay. Yuki: Then I thought about my topic, chemistry more so biological. And the cultured meat is what the world needs now, so I go for that. Tim: Okay, and it seems like something at least in Japan you pretty much have to do on your own. This isn’t a subject of research at any of the corporations or the large universities that I know of. Yuki: It’s actually the same with any country. The cellular agriculture is not established as a discipline yet because there’s no discipline. There’s no expert. And there’s no way to fund that sort of discipline. So we have to establish that first. Tim: Alright. [pro_ad_display_adzone id="1653"  info_text="Sponsored by"  font_color="grey”  ] Yuki: That’s what New Harvest, the leading NPO on this field, is doing. Tim: Okay, so I’ve heard people talk about lab grown meat in terms of sustainability and cruelty to animals, but your motivation was really—it was cool and futuristic. Yuki: Yes, and it is also—the technology it uses is actually a large scale cell culture. It has a lot more applications than cultured meat. Using the same technology, you can grow, say, kidney or liver cells. And the medical applications of that are also huge. Tim: Okay, but I can see even in the near term the medical uses might adopt this technology much sooner than just general food because if you can grow skin for grafting or, like you said, liver cells, it’s worth a lot more money than a chicken sandwich. Yuki: Yeah, Tim: So you started ShojinMeat in 2015. Yuki: Yeah. Tim: And what does the name mean? Yuki: Shojin actually means—it’s originally a Buddhist term.

Many VR startups are a solution is search of a problem, but Holoeyes is already in use at hospitals around Japan. Although the medical industry is one the most highly regulated, conservative and hard to disrupt, Holoeyes has made inroads by solving a very specific problem for surgeons. Today we sit down with Naoji Taniguchi, CEO of Holoeyes, and talk about the steps his startup had to take to sell into the medical market in Japan and to win over traditionally conservative doctors. Holoeyes builds up virtual reality models of organs from CT scans, and lets doctors analyze and discuss these matters much more directly and clearly than they could before. It’s a great interview and I think you’ll enjoy it. Show Notes for Startups How VR can actually save hospitals money and improve outcomes Why the world needs a GitHub of surgery What Japanese startups get out of accelerator programs Why the real value in surgical VR is not what you think How Holoeyes achieves medical quality in low-spec devices How Holoeyes convinced conservative doctors and hospitals to try a new technology Advice for startups trying to sell to doctors Why more and more medical professionals will be getting involved in startups in Japan Links from the Founder Everything you ever wanted to know about Holoeyes Follow Naoji on Medium Follow him on twitter @tani_yang Friend Naoji on Facebook See Holoeyes in action https://www.youtube.com/watch?v=nrYlsSldXSM https://www.youtube.com/watch?v=Fu9RU03PPho https://www.youtube.com/watch?v=ANN64JeUjog&t=2s [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan Disrupting Japan, episode 82. Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero, and thanks for joining me. The medical industry is one of the world’s most highly regulated and hard to disrupt. And for the most part, that’s a good thing. But there are a number of innovative start-ups that have ways of improving things. Not disruptive change, mind you, but simple, more cautious, incremental change that will make life better for everyone. Holoeyes is one of those questions. And today we sit down with Naoji Taniguchi and we talk about how their VR solution is winning over doctors all over Japan, and changing the way surgery is done. Holoeyes builds up a virtual reality model of organs from CT scans, and let’s doctors analyze and discuss these matters much more directly and efficiently than they could before. We’ll get into the details during the interview. But one of the things that impressed me the most about Holoeyes, is that is is already in use today. So much VR tech and so many VR companies have an amazing wow factor, but only the promise of future applications. But you know, Naoji tells that story much better than I can. So let’s hear from our sponsor and 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 Naoji Taniguchi of Holoeyes. Naoji: Yeah. Tim: This is an application that uses AR and VR for medical training, and thanks for sitting down with me. Naoji: Okay. Tim: Can you tell me a bit more about the application and how it’s used? Naoji: Holoeyes make customized model for each patient. For VR, our mixed reality, our product helps communication between doctor, surgery team members, or training senior doctors and new doctors. Tim: So let’s just walk through from start to finish how it’s used. So how do you build up this VR model? Naoji: Partially use Diacom Viewer. Diacom Viewer is viewer of CT scan image. Now we are trying to use deep learning to automate, create, make part of a model from CT scan image. Tim: Okay, so it’s laterally taking a CT scan and building up the VR image kind of slice by slice? Naoji: Yes, yes. Tim: Alright, that makes sense. And then the doctors can use this to communicate and to show the model. Naoji: Yes. Tim: Now the demo I saw was basically viewing the model and using AR to zoom in and to rotate. What is the application for that? Would that be for example, teaching— Naoji: What they call 3-D movement. I think 3-D movement is very important for surgery. Before our product, doctors have to write in tickets some procedure of surgery. So it is very complex. So using our product, doctors do surgical procedure with game controller and head-mount display this way. They record the whole procedure of surgery. Tim: So for example, the lead surgeon could run the entire operation with the surgical team before the surgery, and say, ‘This is what we’re going to do.’ And then everyone will be able to see it. And then when it comes time for the surgery, everyone understands? Naoji: Yeah, so it’s like private mode and car racing game. Tim: Okay. Naoji: Do you know? Tim: Yeah, yeah, yeah. Naoji: It’s like that. And in using VR we can see the movement at any angle. Tim: Okay, so it’s also used after the surgery to evaluate how it went— Naoji: Yeah, yeah, yeah. Tim: —and if there were any problems? Okay. Naoji: We archive VR model on our crowd server. So we will be GitHub of surgery. Tim: Okay. Naoji: So GitHub has open public repository. Also GitHub has private repository to read. So if they shall want their data to be public— Tim: Well, that’s what I wasn’t asking. But there are very strong laws all over the world about sharing patient data? Naoji: Yeah. So our patients, they’re objective is cure so data is not important for them. But for doctors, it’s a treasure. Tim: Sure, yeah. It’s extremely important. So far have you found patient’s being very willing to share their data. Naoji: Nowadays the data is thought about very personal, but we use polygon. Polygon data don’t have personal information. Name, or age, or the patient’s living address. Tim: Okay, so if you reduce the model to all polygons, and take off all personal information, then it’s fine? Oh, okay. So what platform are you using for this? Both the hardware and the software side. [pro_ad_display_adzone id="1652"  info_text="Sponsored by"  font_color="grey”  ] Naoji: Well, hardware we are using HTC Vive using Windows PC. Tim: Okay. Naoji: And Microsoft Hololens using smart phone. Both device has good point and bad point. For HTC Vive, it’s a little bit expensive, but smartphone is very cheap and everyone have. But HTC Vive can display very detailed, how polygon model, and good personal tracking. Tim: Right, right. Naoji: But smartphone is very cheap. We use crowd server to store our data. The device download that data. Why is a high polygon called HTC Vive, and design a polygon model for a smart phone? Tim: Medical imaging is one of the most demanding and challenging areas for image processing. Naoji: Yeah. Tim: The resolution has to be much, much higher than almost any other type of application. There’s very little tolerance for the artifacts of glossy compression. So is the resolution of your VR models, is it high enough for medical use? Naoji: Some part is enough. For the liver we provide like a map. It’s not a photo. So we will use map to go 3-D. Tim: Okay, so it’s really more of a reference, and it’s not a diagnostic tool so it doesn’t have to be that accurate. Naoji: Yeah, yeah. So we will show thick veins. So if we provide all veins in liver, doctors will confuse. Tim: Alright. Okay, okay. That makes sense. A little later I want to dive deeper into the application, but for now let me ask you a bit about you and your co-founder. So your background is in physics and aeronautical engineering. Naoji: Yeah, yeah, yeah, yeah: Tim: And your co-founder, Sugimoto-san is a surgeon? Naoji: Yes. Tim: How did you two come together on this project? Naoji: I have a friend. He’s working as an editor. The publisher has 36 book on medical for families. The old data is digital. So he ordered me, can you create some digital service using this data. So  I thought the data in the book is like databased. During the project, I researched a lot of medical information. And I found article of Sugimoto-san. He saying modern medical needs 8K video image, so at same time I was doing a lot of interactive project. So I thought, ‘I’m interested.’ And I thought we would get on well. I found his Twitter account. Tim: Okay. Naoji: And I messaged him. And after that, we talked together at Tokyo. Tim: Oh, alright. Does he act more as an advisor, or is Sugimoto-san involved in the day-to-day operation of the company? Naoji: Yeah, day-to-day he does operation. So he use our product at hospital and looking for doctors who will use our product. Tim: So right now you’re still in the development phase. You haven’t started charging for— Naoji: Yeah. Tim: —the use of Holoeyes yet? Right? Can you tell me a bit about your users and your partners? Who’s using Holoeyes today? Naoji: Our first customer is Doctor Sugimoto and second is Bokuto Hospital in Tokyo. Some will be Sano Hospital. He’s a dentist. It is very useful for implants to see the bones. Tim: To have like a false tooth implanted. Naoji: Yeah, yeah, yeah, yeah. Tim: Right. So is the main application now the planning of surgeries? Naoji: Yeah. First is planning surgery, and next is training tool or education tool for young doctor. Tim: So you were also apart of the Recruit Holding’s accelerator. Naoji: Yes. Tim: Was that valuable for you? Naoji: Yes. For medical they don’t do nothing, because Recruit is not medical company. Tim: Right. Naoji: But our business is for medical, but our business model is for internet technology company. We are using crowd server, and we will stocl our patients’ data, we make value from the data. So it’s like—

It’s often surprising to discover which problems are hard for AI. We hear stories about artificial intelligence being better than the most skilled humans at go, chess, Jeopardy, and better than many at driving a car, and we assume that computers will be as smart as we are very soon. Then we discover how hard it is for AI to fold the laundry. Shin Sakane and his team at Seven Dreamers have been working on this particular problem for 12 years, and they are now rolling out the first commercially available laundry-folding robot. They will be first to the global market and have secured a production partnership with Panasonic. Shin and I talk a lot about AI and innovation in Japan, and also cover his rather unusual corse to innovation here. Seven Dreamers is not your typical venture-backed startup, and they might just provide a blueprint for innovation that many existing Japanese firms can follow. It’s a great interview, and I think you’ll enjoy it. Show Notes for Startups Why AI can drive a car but not fold socks Why starting a company in Japan is different today Shin’s formula  for developing innovative products How to work with large Japanese companies Why the future of laundry is more disrupting than you imagine Why big data wants to hack your washing machine The need to go global quickly Can Japan once again lead the world in AI Links from the Founder Everything you ever wanted to know about Laundroid Friend Shin  on Facebook Seven Dreamers Homepage Find out more about Laundroid on Facebook or Twitter Nastent website Find out more about Nastent on Facebook or Twitter The carbon-fiber golf shafts on the Web and on Facebook [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan   Disrupting Japan, episode 81. Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I'm Tim Romero and thanks for joining me. You know, the term artificial intelligence is thrown around far too loosely these days. Every start-up using decision trees, Bayesian algorithms, or the simplest machine learning techniques, label themselves as world leaders in AI. Now there’s no question that projects like Google’s driverless cars and IBM’s Watson have pushed the limits of what’s possible, and have introduced astounding innovations in AI over the past few years. But sometimes it’s surprising to take a look at the kinds of problems that are extremely difficult for AI. It turns out that folding laundry is one of those problems. Today we sit down with Shin Sakane, CEO of Seven Dreamers and inventor of the Laundroid. The first commercially available fully automatic laundry folding robot. We talk a lot about AI in general. And the importance and the risk of attacking the really hard problems. And what he and his firm had to go through to make Laundroid a reality. It’s also worth noting that Seven Dreamers is not your typical venture back start-up. And Shin and I talk a lot about the role that mid-size companies have to play in kick-starting the Japanese economy and returning Japan to the global leader in innovation she was in the 60s and 70s. But you know, Shin tells that story better than I can. So let’s hear from our sponsor and 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 Shin Sakane of Seven Dreamers, and we’ve been bumping into each other for a long time now. Shin: Right. Tim: So thanks for finally making time and sitting down with me. Shin: Thank you very much for coming. Tim: We’re here to talk a lot about the Laundroid. Now it’s a robot that folds clothes, which I guess is the simple way of explaining it, but why don’t you tell us more about what it is. Shin: Okay. We’ve been working on this project for the last 12 years almost. Tim: Wow. Shin: Yeah. We started back in 2005. This robot really folds daily life clothes and separate by categories or by family members. Tim: Oh, okay. Shin: Yeah. Tim: So it can put all the shirts in one pile, or it can put all of dad’s clothes in one pile, and mom’s in the other— Shin: Well, actually the key feature of Laundroid is that after you dry your clothing, you just put up to say around 30 clothes into insert box at the bottom. Then artificial intelligence and robotics with vision analysis technology, robot arms pick one clothing by one, and then it folds and put in the pick up box. If you choose separate by clothing category mode, then Laundroid puts towels in the towel tray, and t-shirts in the t-shirt tray. Tim: Okay, and since this is a audio podcast, I guess we have to— The Laundroid, it’s a large machine, it’s about— What, two meters tall? Shin: Yeah, about that. Tim: And about 75 centimeters squared? Shin: Right now it’s a little thinner. About 60 centimeters deep. Yes. And then 87 centimeters wide. Tim: Okay. Shin: So it’s a little thinner and wider. Tim: And it is literally a black box. Shin: Yeah. Tim: It kind of reminds me of HAL in a way. Shin: Yeah. Tim: Well, it does have— It’s this big black monolith. Shin: Right. Exactly. Tim: With a bright circle on the front of it. Shin: Right. Tim: So you simply put up to 30 articles of what clothes in the bottom? Shin: Right. Tim: And then it sorts it on the shelves in the middle? Shin: Right. Exactly. Tim: Excellent. Shin: And then if you want to separate by family members mode, in order to use this separation mode, you have to do very simple one-time registration process for each family member. If I purchase Laundroid, the first day what I do is put everything into the box. Just myself— my clothes. And then with your smart phone, register as a father, “father’s clothes”. Tim: Oh, okay. Shin: Yeah, robot arm put up one clothes by one, and then it takes so many pictures of each item. Tim: So it learns by example. Shin: Yeah, exactly. And it does automatically. It can remember the features of each clothing. Tim: The field of AI is fascinating from the inside, but it’s very interesting from the outside in that— So you guys have been working on this for 12 years— Shin: Yeah. Tim: —to get to the point where you’re ready for production? Shin: Right. Tim: Why is this a hard problem? Why does AI have trouble folding clothes? Shin: It was very hard, but not that hard to develop a robot to just fold, for example, t-shirt, towels, and pants. It took us about 3 years about to achieve that. But the condition is that we have to place say t-shirt, pants at a certain place first, then robot automatically folds. Tim: Oh, okay. Shin: That wasn’t that hard. That was hard, but that’s not that hard. The hardest part was just dump random clothing in the box, and then robot pick up one shirt or one clothing, and then reorganizes if this is t-shirt, or pants, or towels. And then reorganizes it if it’s upside down, or flipped, or something like that, and then place in a certain location in order to start folding. That’s the hardest part. Tim: Okay, it’s not the folding that’s difficult. It’s the getting ready for the folding that’s— Shin: Right, right. It’s so easy for human beings, but it’s so hard for robots and artificial intelligence. Tim: So for example, there is a group in Berkley who’s built a robot that all it does is fold towels. Shin: Yes. Tim: Towels have to be the simplest thing possible to fold. Shin: Right. Tim: They’re all the same shape. There’s no real upside down to them. And it takes about a minute and a half per towel. Shin: Right. Tim: It does seem like folding clothes is one of those difficult problems. Shin: Well, yeah it is difficult. But there are already three organizations who tried it, who achieved doing this rather than Seven Dreamers. One is as you mentioned, Berkley. Also like Berkley, one of the Berkley group achieved to also fold t-shirt just by using two industrial robot arms. But even when they do it, they have to place t-shirt in certain place first, then they start folding, right? So they achieved that, and you can see that on YouTube. And we think it’s worthless because— Tim: Right, right. By the time you take— Shin: Right, right. Tim: The time it takes to position the towel. Shin: Right, right. I might as well just fold it after for additional 5 seconds. So there’s another organization or company called Foldmate which is a US based venture start-up company I think based in Silicon Valley. Their machine— or from the CG picture— I don’t know if it’s real or not— but also customer has to place t-shirt or towel in a certain place. Tim: Yeah, I have seen that, you have to clip it in— Shin: Yes, exactly. Tim: —the machine, right? Shin: That’s what it is. Yes. So that’s another thing that we had that technology already back in 2008 and we didn’t commercialize because we thought no one is going to buy it because it’s really hard to do it. You know? Tim: Right. Shin: It’s too much trouble— hassle doing it. The third organization is the University of Tokyo. They’re the one who tried to do something similar to what we’ve done. But they could not also pick up the clothing and place from the random— Tim: Okay. [pro_ad_display_adzone id="1653"  info_text="Sponsored by"  font_color="grey”  ]   Shin: —so they gave up. Tim: So that’s the hard part. Shin: Yeah, that’s the hard part. Tim: And so Laundroid can fold anything? Pants, and shirts, and socks, and everything? Shin: Yeah, pretty much all the regular clothes including t-shirt, and long sleeved shirt, and pants, shorts, and towels. And there are three things Laundroid can not do. One is Laundroid can not flip clothes. Meaning that the t-shirt has to be— Tim: If it’s inside out? Shin: Right, right. Exactly.

It’s hard to make money with music apps. The competition is intense, and most people simply are not willing to pay much for music apps; either because music is something they only do casually or because if it’s something they do professionally, they probably don’t have money. Akinori Fumihara of Nana, however, is succeeding despite the odds. Nana is a collaborative music creation app, where different users upload and submit different tracks to a song, which can be edited and remixed by others to create an unlimited number of arrangements. Today Nana has a highly engaged global user-base that numbers in the millions, but it almost did not work out that way. Three months after the initial release, Nana was running out of money and was watching new installs trend towards zero. How Aki and his team managed to turn things around is an amazing story, and one I think you’ll really enjoy. Show Notes for Startups Why "casual music" is important How to develop an overseas user-base by word of mouth Why teenage girls form the heart of Nana How a YouTube video inspired an iPhone app Why it's hard to monetize a music app Why startups in Japan (outside of Tokyo) struggle The difference between Tokyo and Kansai startup founders Links from the Founder Everything you ever wanted to know about Nana Friend Aki on Facebook Check out Nana on Facebook [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan   Disrupting Japan, episode 80. Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I'm Tim Romero and thanks for joining me. I’ve always had a soft spot in my heart for music apps. The competition in this space is intense, and almost every niche seems to be filled. So trying to differentiate a music gap calls for a lot of creativity. But it’s usually their quixotic quest for business models that is the most interesting. The problem is that people just don’t want to spend money on making music. The amateurs and the dabblers don’t spend enough time on the hobby to invest much. And the professionals, well speaking as a former professional musician myself, I can tell you that professional musicians never have money in the first place. Well today, we sit down with Akinori Fumihara of Nana, and they might have just cracked the code. Nana is a collaborative music creation app where different users upload and submit different tracks to a song. Which can be edited and remixed by others to create an unlimited number of arrangements. Now Nana has become a huge hit with its millions of users. And just like Google, the name Nana itself has become a fully conjugatable verb in Japanese. “Nananu Nanateru, Nanata.” “I use Nana. I’m using Nana. I used Nana.” Now I’ll warn that Aki’s English is not as good as some of our other guests. But the man is really excited about reaching out to foreign listeners and so he decided to make it work and come on the show. Nana is a very cool app, and Aki’s a pretty cool guy. He’s got an amazing life story, and he started a fascinating company. But you know, Aki tells that story much better than I can, so let’s hear from our sponsors and get right to the interview. [pro_ad_display_adzone id="1411"  info_text="Sponsored by"  font_color="grey"  ] [Interview]  Tim: Cheers. Akinori: Cheers. Tim: So I’m sitting here with Akinori Fumihara, the CEO and founder of Nana. Thanks for sitting down with me today. Akinori: Nice to meet you. Tim: That’s great. Now Nana is a social music platform, but can you explain what is social music? How does Nana work? Akinori: Nana is music collaboration. I’ve found and enjoyed that biggest feature is collaboration and over dubbing. For example, like the base line, boom, boom, boom, boom, boom, boom. Next, with the base add drums, boom, boom, boom, boom, boom, boom, boom, boom. So with the beat it adds piano. Tim: So each user adds a new part to the piece— Akinori: Yes, yes. Tim: And they collaborate to build the song. To build the orchestration. Do they record directly into their iPhones? Or do they upload tracks? Akinori: Yes, yes, yes. You can just use smartphone. Tim: Okay, so are there editing features within Nana, or is everything sort of recorded live to layer on top of other tracks? Akinori: User can upload and overdub. Tim: Okay, so this really is a casual music app? Akinori: Exactly. Tim: So the focus is not creating a finished work, it’s really just having fun? Akinori: Yes, exactly right. So in music is communication. Tim: Well, tell me a bit about your customers. Who uses Nana? Akinori: Okay, we have 3 million users and mostly teenagers. Tim: Mostly teenage boys, teenage girls, a mix? Akinori: Teenage girls. Tim: Mostly teenage girls? Akinori: Girls, yes. Tim: Alright. Nana’s also available in English, right? Akinori: Yes. In fact, we have 13 languages available. Tim: How many of your users are in Japan, and how many are global? Akinori: 2 million users in Japan, and 1 million is overseas. Tim: Wow, so one third of your users are overseas. What are the main countries besides Japan that people are using this? Akinori: 5 countries; Taiwan, America, Vietnam, India, and France. Tim: Okay, that seems like a strange collection of countries. So why those countries in particular? Akinori: I don’t know yet. Tim: Okay. Akinori: Because grows naturally. Yes. Tim: So just word of mouth growth? Akinori: Yes, yes. Tim: Excellent. Okay, if we say teenage girls are the biggest user base, what are they using Nana for? Are these people who want to become professional musicians? Are they people who are just having fun with their friends? Why are they using Nana? Akinori: I think everybody just want just to sing, and they’re both tweeting to their friends. And they want everyone to just listen to their songs. And they’re not wanting to be professional. Tim: Okay, so it’s more of a hobby? Akinori: Yes, hobby. Yes. Tim: But I understand a lot of your users are very engaged. They have their Nana ID on Twitter profiles and social media quite frequently. Akinori: Yes. Users who has energy engage to our app 10 hours a day. Tim: 10 hours a day? Akinori: A day. Tim: Okay, that’s some pretty heavy use. Akinori: Yes. Tim: That’s not a hobby anymore. That’s— Let’s talk a little bit about you. Akinori: Me? Okay. [pro_ad_display_adzone id="1652"  info_text="Sponsored by"  font_color="grey”  ] Tim: So you have a background in music, right? You used to be a professional singer. Akinori: Yes, yes, yes. I wanted to be a professional singer. And I loved Stevie Wonder, and Bree Joab— Tim: Excellent. Akinori: —and Ray Charles— Tim: That’s nice. Akinori: —and Janis Joplin. I love jazz and rhythm & blues. Tim: Was that your main motivation for starting Nana? Akinori: Yes. But also I can post the video on YouTube. This was sung by 57 amateur singers all over the world. As a Haiti earthquake relief  and I was greatly moved. It’s awesome. People are united through the song and harmony. It was so amazing. But I don’t see any Japanese here. Yes. Then I realized that that concept: music uniting the world, is rather spoken yet it isn’t realized. I’d like to create that world without loneliness by connecting people all over the world with music. Tim: Okay. Yeah, I remember that video. So it was this collaboration of people from all over the world who were creating this song— Akinori: Yes. Tim: —together. Akinori: Yes. “We are the world” for Haiti, YouTube edition. Tim: And so that was your inspiration for Nana? Akinori: Yes, yes, yes. Tim: Okay. Before starting Nana— What were you doing before Nana. Akinori: I was a mature racing driver. Tim: You were a race car driver? Akinori: Yes. Tim: Okay. Tell me about race car driving. How long were you doing that? Akinori: 5 years. 5 years. And to 2004 to 2009. Tim: Okay. From being a race car driver to starting a music start-up is a pretty big change. Why did you quit racing cars? Akinori: At that time, my dream was become a Formula 1 Driver, but it costs so much so I had to quit. Tim: You couldn’t get the sponsors? Akinori: No, I had no sponsor. Tim: Okay. So changing from race car driving to music. These are targeting things where there’s very little money. But okay, so once you got the idea and the inspiration for Nana— Akinori: Yeah. Tim: —you were a part of Movida’s early acceleration program? Akinori: Yes. It brought me a lot of benefits. It works, and they have invested me when I haven’t established a business model so it was very, very helpful for me. But they wasn’t able to bring a financial side. Tim: Oh, okay. So the amount of money they invested was very small, but I guess you were there learning how to run a company, and how to hire, and how to build the product. So you guys went live in November of 2012. How much traction did you get initially? Akinori: At first, we achieved 4 thousand downloads in the initial launch, but that then decreased to 2,000, 700, 200, 100 [laugh]. Tim: Okay, so after the big announcement and the big release, you got a lot of attention, and then it just trailed off. Akinori: Yes, yes. Tim: Okay. Well, how did you turn it around? How did you start attracting users? Akinori: It was by tuning UI/UX opposite app. And also after app store optimization grew our users’ pack. Tim: What did you change about the UI? Akinori: All. Tim: So it completely changed it. Akinori: Yes, immediate change. Tim: So it’s very unusual for simply changing the UI to cause an app to suddenly become successful. So you guys also did a lot a social media outreach, and you even had some live events, right? Akinori: The biggest reach was users sharing on SMS,

Soracom is one of those rare Japanese startups that has the potential to become a major global player and to change the way Internet of Things devices work. The real deployment bottleneck in the Internet of Things is not the hardware or the software, but the connectivity. There are still relatively few inexpensive, flexible and scalable ways that IoT devices can transmit and receive data. Cellular connectivity is expensive, and WiFi is largely limited to stationary devices in homes and offices. Today we sit down with Ken Tamagawa, CEO of Soracom, who explains his solution to this problem, and it's a good one. Soracom operates a mobile virtual network and provides widespread connectivity for IoT devices for pennies a day, and since their infrastructure runs completely on AWS their costs are significantly lower than the competition's. Soarcom is extremely well-funded, and they are quickly expanding globally. You are going to be hearing a lot about them in the future, so let’s get to know them today. I think you’ll really enjoy the interview. Show Notes for Startups What are  MVNOs and why are they important  for the Internet of Things Why replacing hardware with software drives innovation How Japan Taxi is taking advantage of the Internet of Things The most surprising thing about going global from Japan The future of the IoT in Japan Why play and serendipity remain important even as a company scales Links from the Founder Everything you ever wanted to know about Soracom Follow Ken on twitter @KenTamagawa Friend him on Facebook Check out the Soracom blog Get started with the Soracom Developer Site Safecast P2P Radiation Monitoring [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan   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 problems of the internet of things is not the internet or even the things. The problem lies in connecting those things to the internet. In fact, much of the promise of the internet of things is based on the idea of thousands of connected devices working together. It turns out that building the hardware and writing the software has proven to be much simpler than developing an affordable, scalable, and secured network that enables these devices to communicate with home base and with each other. Some applications use WiFi and that's a great solution for stationary devices that operating homes or offices, or anywhere else where you can be certain to have a connection. But, many devices are mobile or need to operate whether there may not be a WiFi connection. Some applications paired with cellphones and that works well for personal devices and wearable’s and things will carry around with us. But for things like sensors and inexpensive autonomous devices, well, having a cellphone plan for each of them is simply cost prohibitive. So, right now, connectivity is the real problem for a lot of internet of things applications. Well, Soracom has a solution and a damn good one in my opinion. Today, we sit down with Ken Tamagawa, CEO of Soracom to talk about their solution which involves slicing up mobile bandwidth and using Amazon web services as their backbone and this enables a pay as you go remote communication package for pennies a day. We also discuss Soracom's global ambitions. Soracom is one of the few Japanese start-ups to raise a round of more than 20 million dollars and a lot of that is targeted on their global expansion. Soracom has something that is truly unique and you'll be hearing more about Soracom in the years to come. But Ken tells us story much better than I can. So, let's hear from our sponsor and get straight to the interview. [pro_ad_display_adzone id="1404"  info_text="Sponsored by"  font_color="grey" ] [Interview] Tim:                     I'm sitting here with Ken Tamagawa of Soracom. Soracom is a communications platform for internet of things devices but you can explain it much better than I can. So, what is Soracom? Ken:                     Okay. Soracom offers IOT connectivity platform. So, basically, many IOT solutions or devices need the connectivity sending data to the cloud. I noticed, like I was working for Amazon web services before I founded Soracom, and many, many customers wanted to send data to the database cloud but there is no ideal connectivity yet. So, we built connectivity platform on top of the AWS and that is Soracom. Tim:                     Okay. You're operating which is called a mobile virtual network, right? For example, many developers will use the use of mobile phone as a connectivity device. What you guys are doing is something very different. So, on a technical level, what's happening? Ken:                     So, there's many people wondering how we provide that kind of cloud-base connectivity at the MVNO- Mobile Virtual Network Operator. So, let me talk about the mobile view of this industry fast. Telecomm operator such as the NTT Docomo and other big giant players, they usually have many, many base stations or cell towers and it's going to be, I think, maybe 100 cell towers in Japan. They need to invest a lot of money to the cell towers and also they need to have big data center to host telecomm call network system. It's usually very expensive. Tim:                     Oh sure! It's a massive capital investment. That's why almost any country are only going to have 2 or 3 cell operators. Ken:                     Obviously, we cannot do that as a start-ups, but we found a way to provide several connectivity as MVNO. There's a way called the "Layer 2 connection" to the telecomm operator. So, we contracted with the NTT Docomo and we got Layer 2 Connection. So, in that set-up, basically, we are borrowing cell towers and we are hosting our telecomm call network system by connecting those cell towers with the physical network plan to the database code. Tim:                     When you're operating virtual network, are you paying a fixed fee monthly or yearly to operate this network on top of Docomo or you're paying on like a SaaS basis or in a per packet or something like that? Ken:                     This is kind of a secret though, but actually --- Tim:                You can tell me. Ken:                It's actually opened in the website. let me talk about the secret. We are paying the bandwidth fee to the NTT Docomo based on the bandwidth per month used from us, in that way we borrow the cell tower part of the NTT Docomo. Tim:                Okay. So, that's perfectly aligned with your business models. So, your cost only go up as your users and their use go up. Ken:                Right. There are several MVNO's using that layer 2 connection. The uniqueness of us, usually MVMO player, they use a layer 2 connection and they borrow the data center and they buy the hardware appliance of a telecomm call network. They need to invest, I think, 20 million USD for that part - hardware appliance and data center. But in our way, we use AWS cloud and then we build telecomm call network in software in a AWS cloud. That's our core competency. Tim:                So, in that way, since your costs were based in usage, you can price this work on products that way to your users? Ken:                Right. Tim:                So, what does it cost for internet of things developer to get started in Soracom? Ken:                So, we try to be very open and programmable and pay as you go model, like AWS. So, we sell SIM-card in Amazon.com and also our direct web channel. Once our customer get the SIM-Card, we charge 10 Yen per day. So, basic usage fee is very cheap. So, even they continue to use for months, it's going to cost 300 Yen, it's almost $3 and also, we charge data amount. So, it's a kind of pay as you go model and every month we calculate how much data they send. Tim:                There's so much great stuff happening in IOT these days and it can be hard to really understand how a platform is used. So, let's dive in into a couple of used cases that are now taking advantage of what Soracom has to offer now. So, you're working with Japan Taxi on an ad-delivery system. Ken:                Yeah. Yeah. So, before, talking about the Japan Taxi and if you looked at our customer base within one year after our launch, we already have 5,000 customers, which include an enterprise to small and medium business and also start-ups across the industries too. So, Japan Taxi is very interesting customer. They put tablet in the backseat of the taxi and they distribute as an advertisement movie for customers. So, it was interesting. Every customer average taxi ride 18 minutes I had from the Japan Taxi. So, it's a good way to  provide the advertisement movies. Usually, those advertisement movies are updated, weekly or in two weeks, so, as I need to have a way to distribute latest advertisement movie, then they use Soracom and especially they use like a night time to distribute advertisement movie. We have like a cheaper price. Tim:                Oh, so the rates are different at different times or date. Ken:                Exactly. So, they take advantage of that time. Tim:                Okay. So, instead of having a data plan and a connectivity plan for each individual android tablet, they just connect to Soracom at less than 10th of the price and update the ads from a central location. Ken:                Right. Tim:                Excellent. And let's see, what else? Safecast is a very interesting project because they didn't start out with Soracom but they converted over last year. Ken:                Yeah.