Disrupting Japan

FinTech is one of the hottest startup sectors right now, but if you've been in the industry for a while, you know that FinTech is always one of the hottest startup sectors. And yet FinTech companies seem strangely local. Very few succeed outside their home markets. A complex web of regulations and local sensibilities almost always results in these firms struggling in overseas markets. PayPal wanted to make sure that did not happen to them in Japan. In this podcast, Jonathan Epstein explains how he brought PayPal into Japan. He talks in detail about how he got the Japanese regulators to sign-off on PayPal's innovative products, and also how he and his team had to throw out the US playbook and cooperate with other overseas divisions to build new retail and online markets from scratch here in Japan. Jonathan and I also talk about the exacting demands of Japanese consumers, and how those sensibilities convinced him to decide to start a project that drastically increased short-term costs, but might have saved the business in the long run. It's a fascinating discussion, and I think you'll enjoy it. [shareaholic app="share_buttons" id="7994466"] Leave a comment Partial Transcript If you read the news, you know that Fintech is one of the hottest start-up sectors right now and if you’ve got a long memory, you’ll also know that Fintech is always one of the hottest start-up sectors. Yet, Fintech companies seem to be strangely local. Very few succeed outside of their home markets. A complex web of regulations and local market sensibilities almost always ensures their failure. PayPal wanted to make sure that did not happen to them in Japan and today, Jonathan Epstein explains how he brought PayPal into Japan. He explains not only how he got the Japanese regulators to sign off on PayPal, but how he and his team had to throw out the U.S. playbook and build a new retail and online market from scratch in Japan. Jonathan also explains how the exacting demands of Japanese consumers forced him and PayPal to make a decision that dramatically increased costs in the short run, but saved the business in the long run. But Jonathan tells that story much better than I can, so let’s get right to the interview. If you’re a start-up thinking about Japan, you’ll never really understand the opportunities here until you start to take a serious look at what’s happening outside of Tokyo. Osaka in particular deserves your attention and this is especially true if you and your team are involved in smart cities’ technologies. Now Hankyu’s GVH#5 project is Osaka’s start-up central and it’s a great place for you to get started. They offer co-working space, bilingual business support, venture investment, and they’re at the center of a great international start-up and community. Now Hankyu’s GHV#5 in Osaka really deserves your attention, so pay them a visit at www.GVH-5.com/EN. You’ll be glad you did. [pro_ad_display_adzone id="1411" info_text="Sponsored by" font_color="grey" ] [Interview] Tim: So I’m sitting here with Jonathan Epstein, who led PayPal’s market entry into Japan. And you’ve done a lot since then but today we’re going to talk about PayPal and how all that came together. So thanks for sitting down with us. Jonathan: Thanks for having me. Tim: Delighted. Well, let’s get right into it. When PayPal was looking at the Japanese market, what was headquarters’ main motivation for coming into Japan? What did they see here? Jonathan: PayPal has actually been in Japan for several years and what they wanted to do was to expand their presence dramatically. Basically, the entire focus of their mission in Japan has just been on their existing internet based business. And that’s been driven by a lot of natural—people signing up for PayPal because they want to buy something at a shop that offers PayPal, they learn about it. Originally it’s been driven a lot by foreigners who came to Japan, and then it took off in Japan and reached a sort of critical mass, and has grown, has continued to grow. Actually grew quite well while I was at PayPal here, but not to the size or to the rate of some of the other— Tim: Okay. But when headquarters was deciding to put a little muscle behind this, when they were deciding to really focus on Japan, at any multisided market, the challenge is you need customers on both sides. In the U.S., eBay was originally the killer app for PayPal, but eBay never really took off here in Japan so what was the Japan strategy to get these initial users? Jonathan: eBay did not take off here, and really, the reason is because Yahoo Japan expanded so quickly as soon as it found the idea of what eBay could do. As a result, PayPal knew that it couldn’t rely on Yahoo Japan to achieve that same growth, and looked for other ways of doing it. PayPal has had a tough time in a lot of regions in developing beyond that original eBay franchise connection. It’s a great demand pull for

Spacee has staked out an interesting position in the sharing economy. Spacee enables companies and individuals to rent out unused meeting room space to people who need to hold a meeting. It's an interesting take on applying a sharing economy model to business. I’m generally very skeptical of startups who define themselves as “Uber for X” or “Airbnb for Y”, particularly in the B2B space, but Spaceee has already been in business for several years in Japan, and they are seeing strong traction and increasing revenues. They might really be onto something. Taku has some fascinating insights on why Japan, and Tokyo in particular, might be far more fertile ground for sharing economy startups than almost any other place in the world. It’s a great discussion and I think you’ll enjoy it. Show Notes for Startups Why the basic business case makes sense How large the meeting space market can grow The challenge of expanding outside of Tokyo Why Spacee turned down venture financing to bootstrap for three years Whats wrong with the current fundraising environment in Japan Which other companies are coming into the meeting room rental space Why Japan is uniquely suited for the sharing economy Links from the Founder Learn about Spacee Follow them on twitter @spaceejp Friend them on Facebook An interview with Spacee CEO on fundraising [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan Disrupting Japan, episode 59. Welcome to Disrupting Japan - straight talk from Japan's most successful entrepreneurs. I'm Tim Romero and thanks for joining me. You know, the world is full of start-ups that define themselves as “the Uber of X” or the “Airbnb for Y.” Frankly, most of those business models don’t really make sense when you dig into them. Spacee, however, might just be onto something. Spacee rents out unused space around Tokyo to salesman, co-workers, or people who just need a quiet place to conduct a little business. As Takuya Umeda explains in the interview, it’s not just meeting rooms that are being rented out. The sharing economy is relatively new in Japan and Takuya and I talk not only about some of the problems its facing here, but why, in the long-run, Japan might be better suited for sharing economy companies than anywhere else in the world. He also explains why Spacee decided to delay taking outside investment for almost three years while they built their business and how that turned into an advantage later on. But you know, he tells the story much better than I can, so let’s hear from our sponsor and then 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 Takuya Umeda, co-founder of Spacee. Thanks for sitting down with me. Taku: Thank you, Tim. Tim: Spacee is kind of like Airbnb for meeting spaces, but that’s a really overly broad description, so why don’t you tell us a bit of how it works. Taku: Spacee is really like the Airbnb of business. In Japan, wherever you have a meeting, if you have an outside meeting, the only place you go is like Starbucks or a café. Tim: Right. Everyone meets in coffee shops. Taku: If there is a professional conference room, it costs really expensive. It’s probably like 5,000 yen per room, per hour. And at that price you can’t really do much, like brainstorming and start up some business plan. Stuff like that you can’t really do. And a café is not really good at it too. So we found that there is a gap between an expensive conference room and a Starbucks, so we fit into the gap. Tim: So something a little more formal and private than a coffee shop, but not quite as formal as a hotel meeting room or a service office. So tell me about your customers. Who is it that’s renting out these spaces and why are they doing it? Taku: You know, there is a lot of salespeople around and they stay locked in some business meeting, and I thought those people need some sort of private room. But we now run this firm for a little over three years and we found out that not only the sales guys are using it, but also like the regular firm, the marketing people, they don’t have enough meeting rooms in their office. So a bunch of business people are actually using our meeting space. Tim: Interesting. So people are using it for internal meetings? Taku: Yes. Tim: Do people usually rent it out for one hour or do they rent out a space for an entire day? Taku: Unusually they use like a little less than three hours. Tim: Okay. So morning or an afternoon. And on the supply side, what kind of places are renting space? Taku: We have three different types of rooms. One is like an office room, professional working space, and co-working space. There is a professional rental space and another one is a business office. Tim: So just someone with a little extra space in their office? Taku: Yes, or they have a meeting space but they have a new time

Today is the first episode off our new expanded format. From today, we’ll be covering both disruptive Japanese startups and detailed market entry case studies of global companies that are disrupting Japan from the outside. Oracle first came into Japan more than 25 years ago, but the challenges they faced and overcame then are exactly the same ones firms are facing today in executing their Japan market entry. Allen explains why Oracle needed a unique sales and marketing strategy for Japan, and how he managed to get buy-in from headquarters — even though Oracle already had a sales and marketing program that had proven fantastically successful in other markets. We also talk about how Oracle managed to negotiate a amicable exit out from their exclusive distribution agreements not just once, but twice. That’s an amazing accomplishment considering that many foreign companies have destroyed their Japanese business the first time they attempt it. But Allen, tells the story much better than I do. I think you’ll enjoy the interview. I know I did. [shareaholic app="share_buttons" id="7994466"] Leave a comment Partial Transcript Disrupting Japan, episode 58. I’ve got some big news for you today. Disrupting Japan is going to be twice as big, twice as informative, and twice as frequent. From today on, we’ll be sending out new episodes every single week. To do this, we’re going to be expanding the format. Half of our interviews will be with start-up founders, just like before, and half of our interviews will be with people who are disrupting Japan by bringing foreign companies, technologies, and innovation into Japan. This really makes a lot of sense because as fans of Japanese history know, foreign pressure has always been a powerful agent of change in Japan. I think you’ll find these additional episodes very interesting. And to kick things off today, we’ll get a chance to sit down and talk with my good friend Allen Miner about the challenges Oracle faced, and overcame, when breaking into Japan. I’ll warn you in advance that this episode is longer than most, and believe me, I cut things to the bone. But there is just too much great information about how to overcome both the personal and professional challenges that foreign companies face here. I felt like I would be cheating you if I edited out any more. In fact, Allen explains how Oracle successfully maneuvered out of an exclusive distribution agreement, not only once, but two separate times. This is something that has sunk more than one foreign company here. But Allen tells the story much better than I can, so let’s get right to the interview. [pro_ad_display_adzone id="1411" info_text="Sponsored by" font_color="grey" ] [Interview] Tim: So I’m sitting down here with Allen Miner and Allen, you’ve been involved with the market entry of a lot of companies into Japan. But today I want to focus on the one that you led personally, which was Oracle Japan. So let’s back up. What was attractive about the Japanese market? What made Oracle decide that they needed to be in this country? Allen: Actually, that happened a few years before I joined Oracle. In, I believe it was 1982, Oracle was about a $5 million a year company worldwide, 5 years old as a company, and just released their first commercial version of the Oracle database software. There was quite a bit of press about, “How interesting is this relation to technology? It doesn’t require traditional programming to do data manipulation.” And the U.S. press got read by some technical geeks in Europe. And one in particular in Japan said, “This sounds really interesting. We ought to figure out if we can bring this cool new technology to Japan.” Tim: So it was a partner company pulling you in? Allen: Yeah, it was a company called Digital Computers Limited, that at the time was building DEC VAX clones. Because Oracle originally was released on the DEC VAX computer platform, the president of that company, a gentleman named Mr. Yamada had read an article about it. So this is when we reached out to Oracle and see if we can sell their software in Japan and that contact from an interested Japanese distributer was what got it all started back in 1982. Tim: Okay. Even today, I think that still a really common case. Allen: Yeah. I think it is. For companies that come into the market early, perhaps earlier than they are really ready, I think that’s the most common. It’s very common for a young company with really interesting technology to be found by someone in Japan, or other countries of the world. Everyone knows that Japan is potentially a big market. I don’t think there’s a question of the potential opportunity or the size of the potential market in Japan, but often it is the trigger of, “Oh, someone is interested in our software in Japan.” Tim: But it seems like that could really be a two-edged sword. Oracle was not a small company at that point. Allen: No we weren’t. It was 5 million

Material Wrld has found a way to innovate in online fashion commerce, and that’s no easy task. It’s a crowded market, with tight margins. Rie Yano and her team, however, have found success by going against common wisdom. While their competitors were focused on building platforms and reducing the amount of work required by their staff, Material Wrld went the other way. They began to take on inventory risk and doing some of the most labor intensive parts of the process in house. This is the kind of move that looks foolish on the spreadsheets, but it turned out to be instrumental in enabling Material Wrld to maintain quality, develop lasting relationships with their customers and ultimately control their own brand. It’s an amazing, and somewhat surprising story, and it’s best if you hear it directly from Rie herself. Show Notes for Startups Why people feel guilty throwing out clothes How a credit card provides a physical anchor for an online brand Why traditional recycle shops need to change The need for cross-brand data in fashion commerce How Material Wrld handles inventory risk, and why? What kinds of pieces are easiest to sell online. Why doing things that don't scale pays off when building a brand Links from the Founder Learn about Material Wrld Check our Rie's articles on Medium Follow her on twitter @rieglobe Friend her on Facebook [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan Disrupting Japan, episode 58. Welcome to Disrupting Japan - straight talk from Japan's most successful entrepreneurs. I'm Tim Romero and thanks for listening. It’s hard to innovate in online commerce today. It seems like everything has been tried before and now we’re just looking at variations on a theme. At first glance, Material Wrld seems like just another online fashion marketplace but that first glance is deceiving. There is something very interesting going on here, but before I tell you what that is, I want you to meet someone. Online marketplaces are usually designed to be low-risk, low-capital organizations that focus on marketing building a technology platform with the buyers and sellers doing as much of the work as possible. Rie Yano, the founder of Material Wrld, however, ended up taking a very different approach. By taking on inventory risk and shifting non-scalable labor requirements onto her own team, they were able to build and scale a unique fashion commerce brand, where so many before have failed. Her reasoning may surprise you a bit, but you know, she tells the story much better than I can, so let’s get right to the interview. [pro_ad_display_adzone id="1404" info_text="Sponsored by" font_color="grey" ] [Interview] Tim: So, I’m sitting here with Rie Yano of Material Wrld and thanks for sitting down with me. Rie: Thank you, Tim, for inviting me. Tim: Great to have you here. So, Material Wrld is a fashion trade-in service and, well, rather than have me explain it, why don’t you explain a bit about what material world is and how it works. Rie: Sure thing. Material Wrld is based in New York. We are a service that helps women easily refresh their closets. Often times, we find ourselves waking up, looking into a closet and feeling a sense of guilt or frustration in that what’s in your closet may not be what you want to wear or how you feel that day. We created Material Wrld so that you can constantly evolve your wardrobe. One day you might be feeling like you want to be a powerful woman. Another day, you might feel like you want to dress with some beautiful, emotional colors. Making sure that our service can enable that idea or feeling that you have by making the refresh very simple. Tim: So, usually that’s done by just buying more clothes but Material Wrld has a little bit of a different approach. What are the mechanics? How does it work? Rie: Sure. Everyone thinks about shopping for new clothing when they think about trying to become different or refreshing. Where we’re quite different is really focus on the reuse of designer fashion pieces with quality that lasts long. We know that even if one piece of fashion may not be good for you anymore, if it’s a high quality, then there is definitely going to be someone else that is going to be excited to have that in their wardrobe. So we connect second-hand clothing by using this trade-in service where a woman can easily mail in their fashion pieces that they’re no longer wearing to us and instantly get an offer to go and shop new. In the meantime, the collected fashion pieces are then re-sold to our customers so that we can then excite them with these new pieces of merchandise. Tim: So what seems to be different about Material Wrld is you don’t simply give them store credit or send them a check. You have a very interesting system with sort of a pre-paid card, and you’re connected with several of the department stores where they can use that. Do most of your customer

The aerospace industry has been particularly resistant to disrupting in Japan. In the rest of the world, launch vehicle and spacecraft technology has made incredible gains over the past decade, but here in Japan its still mostly the same government contracts going to the same major contractors. Naomi Kurahara of InfoStellar, has come up with an innovative way to leverage existing aerospace infrastructure and to collaborate globally by renting out unused satellite ground-sataion time, Airbnb style. You see when an organization launches a satellite, they also build a ground station to communicate with it. The problem is, that as the satellite obits the Earthy, it’s only in communication range of the ground station for less than an hour a day. The rest of the time the ground station just sits there. By renting out that unused time ground-station operators earn extra income, and the satellite operators are able to communicate with their satellites as often as they need. It’s a great interview and I think you’ll enjoy it. Show Notes for Startups Why the Airbnb for satellites startup model makes sense The demand-side problem Why this market is much larger than it seems today The key growth drivers in the satellite market Why the Japanese aerospace industry can't innovate How to run a startup as an expectant mother What challenges women scientists still face in Japan How Japan could better support working moms Links from the Founder Learn about InfoStellar [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan Disrupting Japan, episode 56. Welcome to Disrupting Japan - straight talk from Japan's most successful entrepreneurs. I'm Tim Romero and thanks for joining me. Aerospace in Japan is particularly resistant to disruption. Over the past decade, the rest of the world has seen incredible gains in both launch vehicles and spacecrafts. But Japan has been moving slowly. Sometimes it seems as if she’s determined to stay the course with the same government contracts going to much the same corporate heavyweights year after year. Naomi Kurahara of InfoStellar once had plans of changing the Japanese aerospace industry. But along the way she went out on her own with a plan that bypassed Japan’s major players and targeted the global market. You see, when an organization launches a satellite, they usually also build an antenna and a ground station to communicate with that satellite. The problem is that as the satellite orbits the Earth, it’s only communications range with the ground station for less than an hour a day. The rest of the time the ground station just sits there. So, Naomi decided to pool all of the unused ground station time together and rent it out to satellite operators, Airbnb style. Everybody wins by sharing resources. The ground station operators get income by renting out their facilities and the satellite operators get to communicate with their satellites far more often. But Naomi explains it better than I can, so let’s get right to the interview. [pro_ad_display_adzone id="1411" info_text="Sponsored by" font_color="grey" ] [Interview] Tim: Cheers! I’m sitting here with Naomi Kurahara, the CEO and fearless founder of InfoStellar, so thanks for sitting down with me. Naomi: Thank you for inviting me. Tim: Now, InfoStellar is basically time-sharing for satellite ground station, or Airbnb for satellites, but it’s a complex idea so why don’t you explain a little bit about what InfoStellar does. Naomi: Okay, the reason I started this business is the aerospace space has an issue for cost. Like satellite is expensive, and rocket is expensive, and ground station is expensive because, maybe, not many people are using. Tim: Well, aerospace is incredibly expensive but actually I think before we get into InfoStellar’s business model, I think it’s going to be best if you explain what ground stations are and how they work. Naomi: Okay, so there is three main components for space business. That’s the ride, or spacecraft, and the rocket, which delivers the spacecraft from ground to space, and after the delivery, the operator has to control the spacecraft somehow because most of spacecraft doesn’t have people on board. It could be a space station, maybe only space station. But most of the spacecraft do not have an operator, so the ground operator has to control this spacecraft. So we need to send some commands. For that, we use radio and radio communication. So the antenna system and some computers to process the commands. Tim: So the ground stations, they’re what’s around the big parabolic antennas that everyone’s used to seeing on the ground and they both get data from the satellite? Naomi: And to the satellite. Tim: And give instructions back to it? Okay. Now that that’s clear, tell us about InfoStellar’s business. Naomi: To go back to the issue of this business, the cost. The cost is so expensive in this business, it’s diffic

Disrupting Japan is two years old and ready to party. To celebrate, we gathered the leaders of Tokyo's venture capital community together in front of a live audience of made up of the thought leaders of Japan's startup community. We all had a few drinks and talked about fundraising in Japan, the future of venture capital here, and how startups can best get in touch with and impress VCs. Our panel included some of the top VC investors in Japan, which naturally led to an amazing discussion. Shinji Asada (@asada23) - Japan Head, Salesforce Ventures Hiro Maeda (@djtokyo) - Partner at BEENEXT James Riney (@james_riney ) - Head of 500 Startups Japan We discuss the challenges or fundraising in Japan, growing a Japanese company as a foreigner, what Japanese VCs can learn from their foreign counterparts, and what kind of of pitch mistakes will ruin your funding chances. On a personal note, it's hard to believe that two years have gone by already. Disrupting Japan has grown larger, faster, and with a more engaged and passionate community than I ever imagined it could. Today, thousands of people from all over the world listen to each episode, and we are featured regularly in English-language and Japanese-language news and podcasts from all over the world. And to keep things fresh, I have some big surprises coming up in the next few months, so stay tuned. I want to offer a sincere thank you to everyone who has pitched in to help make Disrupting Japan a success. There is no way I could have built this by myself. I'm lucky. I have great subject matter to work with. Japanese startups and Japanese startup founders are far more innovative and far more interesting than most in the West give them credit for. I look forward to continuing to bring you their stories. Thanks for listening! [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 coming out tonight. You guys are awesome. All right, to our listeners at home, or wherever you might be in podcast land, we’ve got a special show for you tonight. We are broadcasting live from Super Deluxe in Roppongi with the most creative and dynamic group of people in the world, which is Tokyo’s start-up community. All right, and we’ve got an astounding panel discussion for you, and before we get to that and our kampai, I’ve got to call out three members of the start-up community who really helped put this together. There is absolutely no way I could have done it without them. They are start-ups themselves and you should know a little bit about them. So, first is Justa.io and I think Elena is here from Justa. Where are you Elena? Everyone wave at Elena. So, Justa is Japan’s, really, best start-up job board. If you’re an engineer or a programmer looking to work at a start-up, or if you’re a start-up looking to hire engineers or programmers, you want to talk to Elena. Second, I want to introduce Creww, with two W’s. And what Creww, with two W’s, does, is they run open innovation programs for Toyota, and Panasonic, and JTV. And these big companies really want to work with start-ups, but they’re bad at it. So that’s where Creww comes in to help out. They also have a start-up kit, which is a bundle of goodies from IBM and Microsoft and a bunch of big companies, that they give away for free. And Kozue is here from Creww. Kozue, where isKozue? Way in the back over there. Now,Kozue will pretend she doesn’t speak English but her English is really good so don’t be shy. And last, and certainly not least, is Digital Hub. You will see these guys running around with cameras and microphones, documenting this event for all posterity. And you want to talk to Steve, who is over there. So, these guys also do great commercial work. You can see it on the website or you can see it right now. They’re going to be producing this, you might be watching this on YouTube right now, and they do amazing work, don’t they? All right, so without further ado—is that yours? We seem to be one bottle short. Oh, James got two of them, did he? All right. [JAPANESE] A nd now, we will go back into English. And I’m going to break with convention here and I’m going to make the introductions because I know you guys and I know if I hand you a microphone and I tell you to talk about yourselves and your portfolio, I would not get that microphone back for a good 30 minutes. So, on the far left, we have Hiro Maeda, who is currently the head of B-Next. And before that he started Beenoes incubation and acceleration program. Before that, he started one of the very first, and still one of the most successful accelerators in Japan, Digital Garage’s OnLab. And, in the center, James Riney, who is Japan head for 500 Startups. And before that, you put in some time at DeNA as well. And, rounding out our group is Shinji Asada, who is now head of Salesfo

Ten years ago, everyone know that e-commence would drive most retail stores, especially specially stores out of business, and with the Amazon juggernaut plowing ahead, there were very few dissenters. But something very interesting is going on right now. Many e-commerce companies are opening physical stores. Even Amazon, going against all economies of scale, is opening up brick and mortar bookstores in expensive locations with full-time staff. And there a good reason for this trend. There is something very reassuring about holding a product in your own hands. And it’s something that can’t really be replaced with high- resolution photos and customer reviews. Tomohiro Hagiwara of Aquabit Spirals has committed both his company and a large part of his adult life to bridging this gap between the physical and the digital world and is helping online retailers jump into the physical world. Of course, Aquabit Spirals’ technology does much more than this, and Tomo tells an interesting story of how it took his company more than six years of work before they closed their first deal and became an overnight success. It’s an fascinating discussion and I think you’ll enjoy it. Show Notes for Startups What is SmartPlate, and why is it important? Why e-commerce offline needs to come offline How to close global deals as a small startup The difference between going global and being global Why Tomo abandoned his first business to follow his dream The value of accelerators in Japan Why founders can't work at big companies Links from the Founder Learn about SmartPlate Follow Tomo on twitter @hagi_w Friend him on Facebook SmartPlate pitch-deck SmartPlate explainer video Coverage on VentureBeat [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan Disrupting Japan - Episode 54 Welcome to Disrupting Japan - straight talk from Japan's most successful entrepreneurs. I'm Tim Romero and thanks for listening. Ten years ago, it was a common knowledge that e-commerce would drive most retail shops especially small specialty shops out of business. With the Amazon juggling up, moving it full speed, there's no reason to really doubt that opinion. But something very interesting is going on right now, many e-commerce companies are opening physical stores at expensive locations with actual products and full-time staff. Even Amazon is opening up Brick and Morter bookstores across the United States The truth is, there's something reassuring about holding a product in your own hands. It's something that can't really be replaced by high-res photos and online reviews. Tomo Hiro Hagiwara of Aquabit Spirals has committed his company, in fact, committed a large part of his adult life to bridging the gap between the physical and digital worlds. But before I'll introduce you to Tomo, let me introduce you to someone else. Now, Tomo once had a thriving, profitable app development business that employed over 30 people, but he was committed enough to his vision of connecting the physical and digital that he turned down work and laid off most of his staff so he could focus on it. After working on it in obscurity for 6 years, he's now becoming an overnight success. But, Tomo tells the story much better than I can, so let's get right to the interview. [pro_ad_display_adzone id="1411" info_text="Sponsored by" font_color="grey" ] Tomo: Okay, cheers! Tim: Thank you. Tomo: Thank you. I'm very glad to see that you're here Tim: I'm sitting here with Tomo Hagiwara, CEO of Aquabit Spirals, and thanks for sitting down with me. Tomo: Yes, thank you. Nice to meet you here, and I'm very glad to meet you today. Tim: Great! Now, Aquabit Spirals makes the smart play which is a physical device that allows bookmarking physical objects with your phone, I think you can explain it much better than I can. What is SmartPlate and who uses it? Tomo: SmartPlate is a physical bookmark, we call. It directly carries visual content to your Smartphone directory, just thriving only Smartphone on our device. Then, our SmartPlate can connect to certain places with internet services or content directly. Tim: Okay. So, I'm looking at two versions here. One looks like a card and one is about the size of your thumb. Tomo: Also, we have another type -- Sticker type. Tim: What's the technology that's going on when you wave your phone ever this? How is it communicating? Tomo: Ah, Okay. We use NFC technology - Near Field Communication, and also we can sample through QR code -- bar code technology to the labeled content. Not only QR code and NFC but also, we can sample Bluetooth Technology - BLE. We know it well as IPCon or something. Tim: On the technology level, what happens when I wave my iPhone over this SmartPlay? What's happening? Tomo: iPhone? Tim: For example. Tomo: Please use android, at first. Tim: Okay. But, I wave my android

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Last week I published a article on Medium about why I was shutting down my current startup. If you haven't read it yet, you can find out Why I turned down $500K, Pissed off my investors, and Shut down my startup. The post went viral and I've received several thousand emails in the last few days. ...

Pocket Supernova has pivoted through three countries and three completely different products before they hit their stride with their current video editing platform for mobile, and they now seem ready to move a generation of video content creators out from behind their desktops and onto their mobile phones.

We are about to start seeing more cars but fewer drivers on the road. Self-driving vehicles are already moving out of the labs and onto the roads world-wide, and Yuki Saji thinks Japan has a unique competitive advantage in the space. Yuki is CEO of SB Drive, Softbank’s...

Japan could be, and perhaps should be, a BioTech startup powerhouse. The size of the market, the aging population and the depth and quality of the fundamental research being done here should make Japan a global player. But something is holding her back.

Everyone talks about the importance of international markets and how startups need to think globally from day one. Few companies, however, build that goal into their DNA as completely as Miku Hirano’s Cinnamon. Cinnamon’s core product, Tuya is a micro-video sharing platform...

Japanese banking is one of the most conservative industries in one of the most conservative countries in the world. That’s what makes it both so difficult and so profitable to disrupt. Today, Paul Chapman talks to us about the founding and growth of Moneytree, a personal finance app that is quickly growing into something much bigger and more important.

Over the last 25 years, both Zest and Yuki Ito have been through several different incarnations. Interestingly, these incarnations perfectly mirror the changes we have seen in Japan’s startup scene in that time. Today Zest makes cloud-based, field-service software, which ...

Overall trends are going pretty well for startups in Japan, but things could be a lot better. One strange thing seems to be that almost everyone asking how to improve things for startup in Japan are either government officials, academics or venture capitalists. It's fantastic that they are interested, and their interest in sincere, but there is only so much they can do. What needs to happen ...

Koki Hayashi of Letibee is walking a difficult path by combining a startup business with social activism, but he just might pull it off. Japan is very rapidly becoming more accepting of those who are openly gay, and 2015 was a year of extremely rapid progress for gay rights. Letibee has plans to capitalize on this movement...

Japan has a long cultural fascination with human-like robots. Literature, cinema and anime are filled with them, and perhaps not surprisingly, a large number of Japanese startups are focused on making anthropomorphic robots. I have to admit that this fascination never really made sense to me until Shunsuke explained it during this interview.

There are not many industries more resistant to disruption than satellite and aerospace. The dominant firms thrive largely because of the massive capital requirements and strong government connections. Yuya Nakamura of Axelspace is confident he can change that.

More than ten years before Quora and ZenDesk became famous, there was OKWave. Kaneto Kanemoto founded OKWave to address a massive problem that was unique to the Japanese internet in the mid-1990’s. Most of the country felt the situation was inevitable, even natural, but Kaneto knew it had to change.

Yuka considers Famarry to be the happiest company in the world, and looking at who her customers are, I think she just might be right. But behind this happy company is an aggressive plan to disrupt a cartel of photo studios that have dominated the market for decades.

It’s hard to imagine an organization more resistant to change and disruption than the government of Japan. But today’s guest, William Saito has made it his mission to bring innovation to the way the Japanese bureaucracy operates. And more astoundingly, he’s actually having an effect.

Startup culture has crazy and contradictory views about failure. As founders we are told to fail fast, but also to never give up. We are told to follow our vision, but be ready to pivot. Somehow this macho-bullshit culture of “I never really fail and ‘m not afraid of failure.” has become dominant amount founders. But it’s the result of denial. Trivializing failure is a way of not thinking about it’s effects. The truth is that failure sucks. Failure is painful. Failure ...

Japan was once home to some of the most innovative companies on the planet, but those companies lost their innovate edge a long time ago. Today, many are betting on startups to change the course of the Japanese economy and to some extent, that’s already starting to happen. Ijichi Sorato of Creww, however, is betting on a different approach to win out, that of Open Innovation.

500 Startups has been one of the driving forces behind the utter disruption of how seed funding is done. That shift is one of the reasons we have seen such large and diverse startup ecosystems emerging around the world. Japan, however, often changes more slowly than other nations.

Too many things that are labeled as "cultural differences" have much simpler explanations. There are perfectly rational (and even mathematical) reasons why we have not seen a lot of entrepreneurship in Japan over the last 50 years, why we are starting to see a lot more of if now, and why we are likely to see an explosion of Japanese startups in the coming decade. In this episode, we look what happens in Japan when the gatekeepers who stand between the creative people and the broader public are removed.

Corporate accounting is not usually the first thing the comes to mind when you think of disruptive technology, and for the most part, that’s a good thing. Daisuke Sasaki of Freee, however, is changing the way accounting is done in Japan from the bottom up. Bringing change to a conservative industry, however, is not easy. The fact is ...

The Internet of Things is becoming so commonplace that it is almost almost invisible. About a year ago, Moff launched an extremely clever IoT toy called the Moff-band that allows kids to add sound effects to their every-day play. They toy had been successful, but for Moff to take the next step they need to create a platform around the toy.

Disrupting Japan is one year old, and ready to party. To celebrate , we gathered some of the leaders of Tokyo's startup community together in front of a live audience, had a few drinks, and talked about the future of startups in Japan. Our panel included perspectives from software, IOT, and venture capital, which led to some interesting discussions.

Marketing automation is new in Japan, and it’s taking a lot of Japanese companies off guard. For decades, sales in Japan have been done by armies of salarymen in navy-blue suits visiting clients and marketing, well until recently, most Japanese companies didn’t make much of a distinction between marketing and advertising. This week, we get a chance to ...

Everything we thing we know about design is changing. This transformation is further advanced in America, but the seeds have already been planted in Japan and the changes are now starting to take root. Brandon Hill explains how design, rather than more traditional analytical methods, is the ideal prism from which to view potential solutions to business problems. Not just the best approach to improving products, mind you, but also the best way to improve business processes and even to better engage employees.

Almost all startup accelerators are going bankrupt and going away. Hiro Maeda, the founder of two of Japan's most successful, and most different startup incubators explains both the brief past and precarious future of startup incubators and accelerators. We talk not only about the mechanics and challenges of what it takes to make an incubator successful, but Hiro has some practical advice on when founders should consider joining an accelerator and how they can avoid the 99% of them that provide no real value.

Every 15 years, like clockwork, the Japanese gaming industry is disrupted by a new technology. The console giants were crippled by the first generation of mobile games published by companies like DeNA and Gree. Now those companies are now losing business to smaller publishers selling through the Apple Store and Google Play. Rintaro Oyaizu used to run

I love low-tech solutions. They are more likely to be solving real problems, and if we are being honest with ourselves, a true a minimum viable product (or business) usually does not involve cool new technology. Hiroki Kudo of MerryBiz has rolled out a minimal solution to address their client’s bookkeeping needs, and he is now in the process of trying to gently walk his customers from this small, sustaining innovation to something more disruptive. Something that will change things in the long term. It’s an interesting path to be walking...

Ari Horie has no interest "empowering" women and sensitivity training is not in her toolkit. Ari is showing the startup world that incorporating some of the problem-solving skills and leadership techniques favored by women improves their chance of success.

So many things that are labeled as "cultural differences" have much simpler explanations. There are perfectly rational (and even mathematical) reasons why we have not seen a lot of entrepreneurship in Japan over the last 50 years, why we are starting to see a lot more of if now, and why we are likely to see an explosion of Japanese startups in the coming decade.

Gengo understands the need for small-batch translation. Global communication takes place exponentially faster than the project management cycle, and understanding is way too important to be left to machines. And with even the smallest and most early stage startups understand the importance of going global, Gengo seems to have found their niche.

Makuake is one of Japan's largest crowdfunding platforms. It was spun out of CyberAgent in 2013 with Ryotaro Nakayama (or Naka as his foreign friends call him) as CEO. Crowdfunding has taken off more slowly in Japan than it has in the US, and it has followed a different growth path. It started out primarily as a way to raise money for charitable causes and at the moment crowdfunding seems to be having a more significant impact on corporate Japan than on smaller Japanese ventures.

Yuta Inoue and Quantum have developed a model to help large Japanese companies both work with innovative startups and to remember how to innovate internally. Many find it hard to believe today, but Japanese companies used to be some of the most innovative firms on the planet, and Yuta explains how a few of them are now starting to return to their creative roots.

Koichiro Yoshida took CrowdWorks from idea to IPO in less than three years, and today both CrowdWorks and crowd-sourcing in general are seen as essential to Japan’s future economy. Just 10 years ago, Japanese politicians pointed to freelancers and part-times as part of the cause of Japan's economic woes. Fortunately, Japan's leadership is now beginning to realizing that having a flexible and skilled workforce is actually a tremendous economic advantage.

Startup founders know that going from zero to one means not only making mistakes, but also asking for help. Unfortunately, in Japan asking for help has traditionally been seen as a sign of weakness. In both professional and personal life you are expected to be either a confident leader or an obedient follower. Such attitudes...

Investors were skeptical that combining traditional face-to-face learning with a P2P web platform would work. Over the past three years, startup founder Takashi Fujimoto of StreetAcademy has been proving them wrong. Takashi is showing Japan that the new does not have to replace the old. Sometimes the new just makes the old things even better.

One Japanese startup founder is on a mission to change not only the way we think about the news, but the way we think about each other. The "filter bubble" is a term that describes the natural, but tragic, result of search engines and news services giving us more and more of what we want. We end up seeing only information that reenforces what we already believe. Ideas that contradict our beliefs, ideas that might make us uncomfortable, and ideas we have never been exposed to get filtered out in the process of ...

Casey has been on the founding team of several Japanese startups in markets ranging from from retailing, to recruiting, to information sharing, to private social networks for pachinko parlors. Add to that the fact that he's just published a book on Japanese startup founders and their stories, and you won't be surprised to find that this turns out to be a pretty interesting discussion.

Starting and growing companies is nothing new to Hiro. He's been doing it his whole adult life. In his younger days, he always felt caught somewhere between Japanese and American culture, never really belonging to either. Hiro found inspiration in an unlikely place; Nintendo games. They were uniquely Japanese, but universally loved and intuitively understood. His journey so far has ...