Disrupting Japan

This is a rather personal episode. We have no guests this time. It’s just you and me. New listeners might not know that for about one year, Disrupting Japan was sponsored and was my primary source of income. So today, rather than diving deep into a specific aspect of startups in Japan, I thought I would share the history of Disrupting Japan itself, about my decision to go pro (and then go amateur), my visions of a podcast empire, and how it came crashing down. I'd like to tell you the story behind the stories. Leave a comment Transcript Welcome to Disrupting Japan. Straight talk from Japan's most successful entrepreneurs. I’ve got a special show for you today. There will be no guests, no beer, no playful banter about making, marketing or monetization.  For the next 20 minutes, it’s just you and me. It’s been a while since I’ve done a solo show, and these solo shows tend to be some of the most popular. So today, I thought it would be a good idea to share with you some of my thoughts about podcasting and to tell you the story of Disrupting Japan itself.  Why I started it, how I grew the audience, how I turned the show into over $8,000 a month in income, and how I started to put together Japan’s first podcast advertising network. And, most importantly perhaps, why I walked away from all of that and returned Disrupting Japan to the non-commercial, sponsor free format we’ve all grown to know and love. Our talk today will explain why a number of more unusual things about Disrupting Japan are the way they are. And you know, Disrupting Japan has been growing even faster since we went commercial-free. Today we have over 10,000 listeners in 160 countries. Including one listener in Vatican City. Now, I have no way of knowing for sure who exactly that one listener is. I mean, sure, it could be anybody, but I like to think … I choose to believe that Disrupting Japan has listeners in very high places. But it wasn’t always this way. In fact, Japan is a very hard place to launch a podcast. [pro_ad_display_adzone id="1404"  info_text="Sponsored by"  font_color="grey" ] Podcast Nation Japan is not a podcasting nation. Most popular podcasts are recycled radio produced by major media companies. Good independent shows exist, but you need to look for them. I’ve built a few startups in Japan, and the podcast was supposed to be me just talking with my founder friends about startups and innovation in Japan; about what it’s like to be an innovator in a culture that prizes conformity. I christened the show Disrupting Japan, and launched to decidedly little fanfare in September 2014. The podcast totaled 42 downloads that month. I thought that was great. How Not to Grow a Podcast My audience rose steadily each month, and after six months I had about 400 listeners. At this point, I decided to invest in growing my show, but most of the common sense marketing and production approaches I tried either had no effect or actually backfired. I rented a studio to improve production quality, but it made my guests uncomfortable. Most simply could not relax in the unfamiliar environment and spent the whole interview looking at their mic rather than at me. I tried this with three different guests and didn’t get a single usable conversation. It’s obvious in retrospect, but few things make people more nervous than shoving a microphone in their face. So I gave up on the studio. I started going to their offices and using a pair of small lapel mics. The sound quality was lower, but after a few seconds, my guests forgot they were wearing these little microphones and we could talk like two human beings. Showing up with a couple of beers also helped my guests relax and made the recording less if an interview and more of a conversation. It turned out that sacrificing a bit of production quality and so-called “professionalism” for more personal, honest conversations was one of the best decisions I made. Marketing my show proved counter-intuitive as well. None of the “foolproof techniques” everyone uses worked for me. I’ve had good results using social media advertising for some of my startups, but it was worthless for podcasting. I poured money into multiple campaign strategies on Facebook and Twitter, but I saw no real increase in listeners. These platforms reported lots of so-called engagement with my ads, but whatever form that engagement took, there was no significant difference in site visits or downloads between the episodes I advertised and those I did not. Appearing on other podcasts is also supposed to be a great way to grow an audience, but it didn’t work for me. I really enjoy the conversations I’ve had with other podcast hosts, but my appearances never resulted in a noticeable bump in listeners. The other problem I ran into here, was that most of these podcast appearances are expected to be reciprocal. I’ll go on their show and tell my story, they’ll come on mine and give theirs. Well, the obvious problem here is that Disrupting Japan is a show about startups and innovation in Japan, and if you don’t have meaningful experience in that area, it doesn’t really make sense to bring you on the show. [pro_ad_display_adzone id="1653"  info_text="Sponsored by"  font_color="grey”  ] Most of the podcast hosts said they understood and polity withdrew their request to have me on their show. Two were clearly irritated and since their listenership was so much larger than mine, I should be grateful there were even giving me this opportunity.  And of course, a few said they didn’t care and just wanted me to share my thoughts with their audience. I appeared on all of those shows. I enjoyed it. I had some good conversations, but these appearances didn’t really impact my download numbers. Now, these techniques do work for a lot of podcasters, and if you are starting a podcast, they may work for you and are certainly worth trying. But they clearly were not working for me, and I finally realized why.  Disrupting Japan was addressing a very small niche — innovation and startups in Japan — and there were simply not enough existing podcast listeners interested. I would have to build an audience from scratch. So what really worked? At least for me. The most effective way I found to grow my audience with was via interaction. Online, this meant finding the handful of Facebook and LinkedIn groups interested in Japanese startups and then joining the discussions. Most groups welcomed my contribution. However, it was my offline efforts that made the biggest impact. I sought out any event or seminar where I could speak about Japanese startups and innovation. Every time I spoke, I saw a small uptick in listeners and email subscriptions. That email list turned out to be more important than I expected for two reasons. First, casual surveys indicated that about 25% of Disrupting Japan fans were not subscribing to the podcast, but going to the site and listening from the browser or simply reading the transcript. Second, people seem far more willing to engage over email. Even today, when an episode is released, one or two people may comment on the site, but around 20 will reply to the email announcement. Disrupting Japan fans were, and still are, extremely engaged. Most guests tell me that they receive a lot of positive feedback about their appearance. September of 2015 was the show’s first anniversary, and 120 Disrupting Japan fans paid a $20 cover charge to watch a live podcast and to meet and hang out with each other. Things were going well for the show, and I had never really considered making it anything more than a hobby or a side project. But in May 2016, the startup I was building blew up, and at that point Disrupting Japan had about 3,500 listeners. Three friends urged me to try podcasting for a living.  I had no better options, so I gave it a try and wound up becoming Japan’s first professional podcaster. [pro_ad_display_adzone id="1408"  info_text="Sponsored by"  font_color="grey" ] God Help Me. I’m a Media Company! My first problem was that there were no ad agencies serving podcasters and no sponsors who understood the medium. There was a lot of work to do. The Disrupting Japan audience consists of startup founders, aspiring founders, and others interested in innovation in Japan. That’s an important and influential group of people. So I sat down and brainstormed what kinds of companies really wanted to connect to this audience. What specific companies really needed to reach Disrupting Japan listeners, and who I would feel good about recommending.  After a week, I had a list of 50 likely sponsors. Of course, almost none of these companies had ever heard of me or of podcasts, but that could be fixed. I began sending emails, making phone calls, knocking on doors and pitching in Powerpoint. It was tedious, but the feedback from potential sponsors was invaluable in crafting my final sponsorship package. It turned out that my sponsors didn’t really want what I thought I was selling. Direct response advertising, where every click and impression is measured, dominates podcasting in America, but it’s a losing game for most podcasters. The industry focuses on CPM rates (the rate advertisers pay per thousand listens) because that metric is easy to standardize and measure, but with standardization comes commodification. If you ever buy into the idea that you are simply selling impressions or downloads, you resign yourself to competing with a nearly infinite number of other podcasts. This is a terrible situation to be in. Because there are a limited number of advertising dollars but an almost infinite supply of podcasts. The secret to making real money with a small podcast is helping companies build their brand. With this in mind, I crafted sponsorship packages that combined podcast ads, banner ads,

The promise of renewable energy has always been alluring. Now that the technology has caught up to the promise, record amounts of wind and solar are coming onto the grid both in Japan and throughout the world.  But so far startups, especially Japanese startups, have been playing a very limited role in this transformation. But that's starting to change. Today we sit down with Ken Isono, founder and CEO of Shizen Energy, and we talk about what it takes to succeed as an energy startup in Japan, and since Shizen Energy is rapidly expanding globally, what it takes to succeed as a startup in the global energy markets. We talk about which renewables are working in Japan and which are not, what the real bottlenecks are, and more important, how we can fix them. It's a great conversation, and I think you'll enjoy it. Show Notes Why startups struggle in the energy market How solar plants get built in Japan How to find wind projects worth building The importance of going local in a global market Why the Japanese value land rights so highly A deep dive into solar, wind, hydro, and geothermal energy in Japan How Japanese communities are funding local renewable energy Why so many of Japan's startups come from Fukuoka How Japan can transform into a free-energy economy Links from the Founder Everything you wanted to know about Shizen Energy Shizen Energy on Facebook Shizen Energy retail green energy Friend Ken on Facebook Leave a comment Transcript Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for joining me. It’s surprising at first, for all of the potential disruption in the energy industry, for all of the potential profits that can be made by doing things better and more efficiently in the energy industry, we don’t see that many energy startups, and as it turns out, there are good reasons for this. Generating and storing electricity at scale require skills that can’t be supplanted by new technology and innovation. Furthermore, most energy projects are long-term, low-risk medium return projects that are just not attractive to venture capital. These projects require a different kind of financing. One notable exception, however, is Japan’s Shizen Energy who is bringing a lot of renewable energy onto the grid in Japan and around the world as well, and they’re doing it as a startup. In just a minute, we’ll sit down with Ken Isono, Shizen Energy’s founder and CEO. He’ll explain how his little startup has worked with local governments and fought the incumbents to bring enough renewable energy onto the grid that Shizen Energy is not so little anymore. We’ll talk about that growth, of course, and we also take a deep dive into the current state and the future prospects of the most important renewable energy technologies in Japan. But you know, Ken tells that story much better than I can, so let’s get right to the interview. [pro_ad_display_adzone id="1411"  info_text="Sponsored by"  font_color="grey"  ] Interview  Tim: So, I’m sitting here with Ken Isono of Shizen Energy, and thanks for sitting down with me. Ken: Thanks for the chance to speak. Tim: Now, Shizen Energy, you guys are a vertically integrated renewable energy company. You guys do generation, your financing, and the retail side as well. Ken: Yeah. Tim: That’s a lot for a startup to do. Ken: We started with solar but the three co-founders used to work in wind power generation company together for five years. Tim: What made you guys decide to leave that company and start your own project? Ken: So, actually, Shizen Energy, we found this company 2011, June, so three months after Fukushima accident. Before that, there was no demand from the market, from policy in renewables, but we knew that it’s going to change. Tim: At first you were focused on large scale solar projects? Was it just the financing, the construction? Ken: Yeah. So, we knew that this is very capital-intensive business and it’s really difficult for the startups to sustain the business. You have to keep on financing all the time, so our strategy was to be in the renewable business but start with the service. Started with the development of project. We also created EPC. It’s Engineering Procurement Construction. It’s basically the construction of the large-scale solar PV. Tim: Okay, well, let’s walk through what an early project was like. So, were you using investors’ capital to build these plants or did you fundraise for each individual project? Ken: So, we found the investor for the asset, but basically, we do everything for them. Tim: So, an asset would be a single solar farm? Ken: Yeah. Actually, feed-in tariff in Japan started 2012. So, when we found this company, there was no feed-in tariff yet and we didn’t know how much it’s going to be, so basically, there was no business model when we started. We just believed that there will be opportunity and there will be necessity of renewables. That’s it. So, after one year, we were looking for how we can build sustainable renewable business, and then the feed-in tariff came up. Tim: So, did the projects make sense without the feed-in tariff? For our listeners at home, the feed-in tariff is the amount that the utility guarantees they will buy your electricity from you. Did these projects make sense economically even without the feed-in tariff? Ken: Actually, it didn’t make sense at that time. The system cost was much higher compared to now. Tim: You would raise funding for a specific project, you had the expertise in managing the purchasing of the materials and the construction, and then do you also manage the operations of the plant? Ken: Yes, so we did basically everything, and we didn’t know that this business model exists around the world. After we started, we found out this is not like very new business model. Tim: Actually, it’s very common in every country that has feed-in tariffs. Ken: Yeah. Tim: But now, as you mentioned, the costs have come down so much that in a lot of places, it makes sense without any kind of subsidy. Ken: Yes. That’s true. Tim: Actually, we’ll get into that a bit later, but tell me about your customers, so who finances this? Are these outside investors? Are these individual companies? Are these communities that want renewable energy for the community? Are they power companies? Ken: It has changed over time. In the beginning, it was a very small project. So, basically, it was like local companies who wanted a new business or who sympathized with creating clean energy. Also, we worked, we co-invest with municipal government also, so we have a joint venture with the municipal government in Kumamoto, and as our team gets bigger and with more experience, we could work on larger projects, and then investors – financial partners have changed. We did with the trading houses like Mitsui Corporation. We created a fund with one of the largest real estate fund company in Japan. Now, we are working a lot with Tokyo Gas, yeah. If we create the right project in the world, there are more money than projects. Tim: So, how do you find the projects? Do your partners bring you the projects or do you actively go out and try to locate sites that would be appropriate? Ken: Yes, we do that. 20th century, it was like, globalization but in 21st century and 22nd century, we need how we can localize, like we commit to the local community. This is one of, I think, the reason we could grow with small capital is that we have the trust from the community that we are committing to long-term, so that’s why we get the land. Tim: What does that mean, to commit to the local community? Ken: Basically, the energy business is a very domestic business. Nobody wants people from outside. It’s about the land. Especially the Japanese, land is very tied to your family or your history. People feel that just selling the land for money, I think you have a bad reputation in that community. Tim: So, how do you commit to the community? Ken: So, one is we have a foundation called 1% for Community, and we basically invest 1% of revenue to that community. One project is that we made investments in local entrepreneurs who started business and education in that community. Tim: Well, I think that is interesting because the energy business in particular tends to be very extractive. It’s large global companies that are often taking resources out of a community. Ken: Yeah. Tim: Well, let’s talk a bit about renewables in Japan. There are three basic types of renewables that you’re involved with and that I think are important for the future of Japan, which is solar, wind, and small-scale hydro. So, let’s talk about each of these. A lot of people outside Japan don’t realize how big solar energy is in Japan. In fact, until last year, Japan had the second most solar capacity in the world, and US just barely passed last year. What’s been driving this huge rollout for solar energy in Japan? Ken: Biggest impact was feed-in tariff. I think from now on, it’s more like small scale, the price of the generation is going lower than the energy price from the grid. I think that will be the next driver for the - Tim: For the mega solar projects, the big solar projects. The feed-in tariff, when we started out, was ¥42 per kWh, and now for residential, it’s down to about ¥26, and for large scale projects, it’s an auction, basically, right? Ken: Yeah. Tim: So, how much has that caused solar deployment and solar development to slow in Japan? Ken: Yes, I think large-scale, I think it will slow down for a moment until solving the issue of the grid. Tim: Looking forward, now that the end of the feed-in tariff – back in the good old days, it was ¥42 per kWh. It was actually kind of hard to lose money building solar plants in Japan,

It's a great time to be a programmer in Japan. Everyone is hiring and there simply is not enough talent available. But why is that? The truth is that until about 10 years ago, programming was considered kind of a blue-collar, low-skill job. It was OK to start your career as a programmer, but if you had not moved into management by the time you were 30, clearly you weren't that bright. The startup boom has changed that, and developer salaries (and respect) has improved significantly. But the education system has not caught up, and far too few people know how to code. Today we sit down with Masa Kato, founder of Progate, and discuss how Japan got herself into this situation, and what Progate is doing to fix it. The problems run deeper than expected. It's a great conversation, and I think you'll enjoy it. Show Notes Why Japanese elementary students are learning Javascript The problem with computer science in Japan Why Japanese universities resist change - even when they know they need it The flaw in most online programming courses Can online education ever really be global? Why B2B edTech companies have trouble in B2B markets How English skills are holding back Japanese startups Links from the Founder Everything you wanted to know about Progate Friend Masa on Facebook Follow him on Twitter @cmasad43 Leave a comment Transcript Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for joining me. You know, I spend a lot of time talking with startup founders in Japan. I also spend a fair amount of time talking with policymakers and academics, and even executives of large companies who want to support startups in Japan. Two of the most concerns I hear revolve around the lack of qualified developers in Japan and how the Japanese education system doesn’t really prepare students for a world that demands that they innovate. Well, today, we’ll be tackling both of these issues head-on. In a few minutes, I’d like you to meet Masa Kato, the CEO of Progate. Progate is an online platform that is teaching young people to code, and yeah, yeah, there are a lot of startups doing that, but these guys are onto something. As Masa will explain, he actually started Progate when he was majoring in computer science at the University of Tokyo, and he didn’t start Progate as a side project, he started it because even though he was majoring in computer science, he wasn’t learning how to program in his computer science classes. Now, all of this will make much more sense when Masa explains it to you, but this foundation might be why Progate has seen so much success so quickly. Progate is now being used in high schools and elementary schools all over Japan, and they have expanded into overseas markets as well, but things didn’t work out exactly as they plan and they had to change their business model to survive. But you know, Masa tells that story much better than I can. So, let’s get right to the interview. [pro_ad_display_adzone id="1404"  info_text="Sponsored by"  font_color="grey" ] Interview Tim: So, I’m sitting here with Masa Kato who wants to teach the world to code. So, thanks for sitting down with me. Masa: Thanks for having me. Tim: Masa, you are the founder and CEO of Progate. I explained it a bit in the introduction, but why don’t you tell us a bit about what Progate is? Masa: So, basically, we are a company that teaches programming and we teach it online. The content we teach is mainly web-related, so it’s about teaching people how to make websites, make web services. Tim: So, HTML, CSS, this kind of – Masa: JavaScript and Ruby, Ruby on Rails, and all that, yeah, and we started this company five years ago. Tim: Okay, so is Progate, is it an app, is it a video? Masa: So, we do have an app as well, but we started off as a web service, and instead of using videos, we used slides to teach the students, and we also have an online coding environment, so the users can actually test out their knowledge on the browser without any like, pre-setup. Tim: And, is it just sort of like, basic courses or is it basic to advanced? Masa: So, it’s basic to intermediate, I’d say. So, we teach the fundamentals of these programming languages and eventually, lead them onto programming frameworks, and then yeah, we lead them to develop their own services. Tim: So, is the primary interface the app or is it the browser? Masa: The browser. Tim: Yeah? Masa: Yeah. Tim: Yeah, I can understand that. I mean, trying to code on a smartphone would be kind of challenging. Masa: That’s true, that’s true, but we do have a special keyboard to make that easy. Tim: Yeah? People do that? I mean, really? Masa: Yeah, yeah, yeah. Tim: Wow, I can’t imagine that! Maybe it is a generational thing, but for them even like, laptop screens seem kind of small. I can’t imagine doing it on a smartphone. Masa: Yeah, that’s true. We do provide Progate to high school students and junior high school students, and actually find it easier to learn on the mobile app. Tim: Really? Masa: Yeah, because some of them don’t even know how to type emails to register on Progate because they are so used to clicking on their smartphones. They can’t type. Even if they can, they struggle with finding how, with Japanese and English, they have to convert. Tim: Right, right. Masa: Yeah, so the accidentally type in Japanese and they’re like, “Ah, it’s not working.” Tim: Oh, okay, so in that case, like having a really controlled environment, even with a tiny screen? Masa: Yeah. Tim: Alright, that makes sense. Masa: And even for adults because a lot of Japanese people travel on trains and stuff. They can use that time to review the content they learned on the web version and try it on the app version. Tim: Alright, cool. So, the last time I checked, you had something like 600,000 users now, right? So, tell me about your customers – who are they? You mentioned like, some are high school students, is it mostly younger programmers, older Masa: Okay, so our main target is people in their 20s, I’d say – 20s to 30s, so people who already have a job not in IT and who want to look for other jobs in IT or something IT-related, but recently, over the past two years or so, many teenagers are starting to learn on our platform as well, so that’s starting to change a little bit, yeah. Tim: Okay, so it’s really people who are looking to move into IT jobs. They are not like, hobbyists. Masa: Both, actually, like university students, especially in Japan. It’s becoming a trend to learn programming just as a skill, not to get jobs, but people are starting to think that it’s really important to be like, programming-literate. Tim: I think that makes a lot of sense, really. I mean, programming today is like, I don’t know, knowing how to use the email. It opens so many doors in business. Masa: Exactly, yeah, so technology is all around you and it’s becoming very important, especially since programming will be a compulsory thing to learn in high schools and junior high schools, and even primary schools in Japan in two years. Tim: Really? I didn’t know that. Masa: Yeah. Tim: So, the Ministry of Education has said all students are learning programming? Masa: Yes, that will be included in the actual curriculum. Even parents are starting to get more interested in learning to code. Tim: What language are they going to be teaching in schools? Masa: So, I guess JavaScript. Tim: Yeah, I kind of had the feeling. Masa: Yeah, yeah, but Python is starting to get more attention, and yeah. Tim: That’s really encouraging. Actually, you mentioned university students and you started Progate back when you were studying at Tokyo University, right? Masa: Yes, yes, exactly, yeah. Tim: So, was it a hobby project that just got out of hand or did you start it knowing you wanted to make a company out of this? Masa: So, I guess it was a little bit of both. When it first started learning programming, it was at Uni in my third year of Uni, so that’s when people started to choose their major is at Tokyo University, so I chose computer science and that’s my first experience of programming, and I wanted to learn how to make web services and iPhone apps because like, five years ago, everyone started getting iPhones and I thought it was really cool. I thought programming was really cool, so I wanted to learn that, and I majored in computer science with high hopes, but what I actually learned there was not quite what I expected. It was more academic. Tim: Yeah, let’s dig into this because this is something I thought has been a little odd about computer science in Japan. So, what were they teaching you? [pro_ad_display_adzone id="1653"  info_text="Sponsored by"  font_color="grey”  ] Masa: So, they were teaching me like, the history of programming, like how it was first made. Tim: Like the Babbage engine and things like this? Okay. Masa: Yes, yeah, yeah. Tim: I mean, that’s interesting. Masa: That is interesting, yeah. I mean, I’d love to learn it now, now that I’m an actual programmer, I’d like to learn deeper into it, but back then, I wanted to know more like practical stuff, but all the professors of there didn’t really teach me that, and that is understandable because they aren’t really doing the latest web stuff. Tim: I mean, honestly, I don’t think I’ve ever met a computer science professor in Japan who has ever had to deliver a project to a customer. Masa: Yeah, that’s true. Yeah, exactly, yeah. So, I didn’t know that before, but after majoring in computer science, it just didn’t feel right, you know? Tim: Yeah, so is that a common feeling among your classmates, that you just wanted to build something? Masa: Not really.

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 sales are made in Japan from the bottom up.

A few years ago, shiny new startups were using their marketing dollars to tell the world that chatbots were going to change everything. Those marketing dollars have now been spent and most of those startups are no more. But for the past few years, one company has been quietly making chatbots useful, and they are now starting to make some noise. Today we sit down with Akemi Tsunagawa, founder of Bespoke and creator of the Bebot chatbot. In several important ways, Bespoke is one of the most successful chatbot companies in the world, and you'll be hearing a lot about them in the years to come. Today, however, Akemi explains how she and the team managed to succeed where so many better-funded companies failed, and she gives some great advice about how to get consumers to try out new technologies. We also talk about why you should absolutely never build your business around Facebook or WeChat. It's a great conversation, and I think you'll enjoy it. Show Notes Why most travel websites are doomed to failure Founding a technical startup without technical co-founders How to get people to tell chatbot what they really think Where chatbots excel and where they should not try Things you should never use a chatbot for Why you should not build a chatbot on Facebook or WeChat Why Japanese don't want to use chatbots Bespoke's plans to go global How to speed up decision making inside Japanese companies Links from the Founder Everything you wanted to know about Bespoke Friend Akemi on Facebook Connect with her on LinkedIn Leave a comment Transcript Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for joining me. I think the peak of the chat bot hype cycle came in 2017. If we cast our minds back into the midst of that distant age, perhaps we can recall that chatbots were going to change the way we work, the way we shop, the way we bank, the way we talk to our customers, and even the way we find love and raise our children. Yeah, that didn’t happen, and startup founders, start of investors, and start of media all moved on to focus on some newer, shinier object – blockchain, probably. But, you know something, sometimes, all that media type and investor attention can actually make it really hard to build something worthwhile. A lot of times, the best ideas and the best use of technology come from trying to solve a simple problem without investors telling you you need to be a unicorn or a journalist demanding to know exactly how you plan on changing the world by the end of the year, and so it is with chat bots. Today, we’re going to sit down with Akemi Tsunagawa, the founder and CEO of Bespoke, the creator of the Bebot chatbot. Now, Akemi will tell you exactly how Bebot works in just a second, but to really appreciate what that important story Bespoke is, you need to understand that outside of marketing and some trivial customer support apps, you’ve got to realize, there is almost no chatbot success stories. Bebot is one of the very few chatbots in the entire world that provides enough genuine utility that people not only willingly interact with it but start to rely on it. Bespoke’s business model does not rely on novelty or cost-cutting, no. Bespoke is solving an actual problem. This is a great example of how the needs of one industry can push technology forward for other sectors, and Akemi and I also talk about why she didn’t even realize they were running a chatbot company at first. She gives some great advice on how to get consumers to try out, not just chatbots but any new technology, and we chat about why you should never – and I mean never -- build your business around Facebook or WeChat. But you know, Akemi tells that story much better than I can, so let’s get right into the interview. [pro_ad_display_adzone id="1411"  info_text="Sponsored by"  font_color="grey"  ] Interview Tim: So, I’m sitting here with Akemi Tsunagawa, the founder of Bespoke, and we’re going to be chatting about chatbots today, so thanks for sitting down with me. Akemi: Well, thanks for inviting me here. Tim: You know, there are so many chatbot startups out there right now, but this is really an interesting application for it, so you can you just briefly explain about the service, about what Bebot is? Akemi: Sure. We make chatbots for enterprise client in the hospitality space like hotels, airports, train stations to help them automate interaction with their visitors and guests, to provide better experiences. Tim: Oh, so you are focused on tourism and travel, and I’ve noticed you managed to get some major deals – Bebot is being used not only at the airport, in the New Otani Hotel, Tokyo Station. Before we dive into Bebot and the business in general, I want to back up a little bit and talk about you. Akemi: Sure. Tim: So, you started this in 2015, so why chatbots? Akemi: Okay, so to be honest, we never started this company as a chatbot company. We were doing something completely different three and half years ago. What I always wanted to do was to provide authentic experiences to people. The type of experiences you get through a local friend is very different; it’s very unique. You get to eat something special, something unique to the country, or you get to visit places that you can’t visit elsewhere. That’s the kind of experience that I was looking for, but I could not find any sort of services out there. Tim: Oh, I can understand it because pretty much 100% of the travel-oriented startups has that same pitch, right? That it is like having a local friend, but it is something that is really hard to do at scale. I’m curious, you mentioned at first you are not doing chatbots. What were you doing at first? Akemi: So, it was a website to connect to other people, like you’ve seen that many ways at many places, but in addition to just connecting locals to travelers, you are also providing like, a little bit similar to like a trip advisor, but like a local version, like little local bars that you would not find in guidebooks types of places, so we launched the service first. We did lots of user interviews, and as we met more users, like tourists, they kept telling us like, the same kind of problem which is like in Japan, it’s always about the language, it’s always about communications, like I call the restaurant, they don’t take my reservations because I’m not Japanese or they don’t understand me, or the website is all in Japanese and I can’t understand. So, we decided to add a concert featured on top of the existing website, then as we did more user interviews, people kept telling us, concierge is great, but I don’t need your help like, next week, I need your help like, right now because I’m lost at a train station or I’m having a problem at the restaurant, so it needed to be instant. So, we decided to turn our concert service into chat. Tim: You know, that’s interesting because I think that the vast majority of tourism startups, and even tourism technology companies approach it as a problem of lack of information that these travelers just don’t know about the local spots where the interesting things to do, but it sounds like you discovered it was really more a lack of communication ability. Akemi: I think so, especially in Japan. I mean, there is not enough information out there. I actually agree 100%, right? But even if you can find information, there is not enough support afterwards. Especially now, the number of tourists coming to Japan literally tripled over the last five years and not enough bilingual staff to support those foreign tourists, so we decided to turn our service into chat, but the next thing we realized was there’s too many messages coming through that we can’t really reply back on time, and I don’t speak Chinese – I can’t chat in Chinese, right? So, we decided to automate it and that is how we became a chatbot company, so it was never like, we started a chatbot company. Tim: I mean, sometimes, you have the pivot based on the information you are getting. So, right now, you support English, Chinese, and Japanese? Akemi: So, we don’t do Japanese. Tim: You don’t do Japanese? Akemi: We don’t do Japanese. Tim: Oh, okay, why is that? Akemi: Because we built this product so that we can use it when we travel. When we travel, those places are not like Japanese-speaking countries, right? Tim: Okay. Right, right. Akemi: Yeah, and then also, I think in Japan, not many hotels are having problems dealing with the Japanese guests. Tim: Right, right. Okay, you don’t have a technical background, right? Akemi: No, I don’t. Tim: So, did you have a technical co-founder? How do you build the original team to kind of pursue that vision? Akemi: I don’t have any cofounders. It’s just me. When I first started, we were doing a website, so we didn’t need anyone for this, like PhD in computer science. We just needed like a very simple solid engineer-software engineer. The first person I found was a referral through a friend, so basically, what I did was I messaged literally everyone on my Facebook asking, do you have any developers? Like, do you know anyone who might be looking for a project? It doesn’t even need to be a full-time person, just a project, then I found a few and I picked the best one, so he was the first person to join, then I found a few more designers for the exact same thing, then I recruited a couple students entirely through craigslist. Tim: Oh, really? Okay. Akemi: Yes, so that’s how we started, so I didn’t have any cofounder, but then is our business kind of evolved, requirements also changed, right? In the beginning, we only needed like, a very simple developer, but halfway through, we decided to switch our business to make a chatbot, artificial intelligence. Tim: Right,

Everything about employment in Japan is changing. Lifetime employment is gone.  Skilled workers are discovering that they have job mobility and large Japanese companies are increasingly confused by the fact that many new graduates don't want to work for them. Wantedly has been one of the companies that has changed the way corporate recruiting works in Japan, and today we sit down and talk with the founder and CEO Akiko Naka. We first talked with Akiko a few years ago when Wantedly was starting to gain traction, but since then Wantedly has grown, IPOed and become of the most highly valued public companies in Japan. We talk about her journey, of course, but we also dive into how the nature of work is changing in Japan, the best way to promote yourself and your company in Japan, and the one terrible piece of advice that women founders need to stop listening to. It's a great conversation, and I think you'll enjoy it. Show Notes Why Japanese companies can’t hire creative employees How to deal with startup copycats The advantages and dangers of diversification The secret to making change happen in Japan  How to brag about yourself in Japan The best advice for companies wanting to expand outside Japan Unconventional advice for women entrepreneurs Why Japanese millennials really are different Links from the Founder Everything you wanted to know about Wantedly Checkout Akiko's blog Friend her on Facebook Follow Akiko on Twitter @acanocic Leave a comment Transcript Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for joining me. Today, we’re going to sit down with an old friend. Well, I mean, actually, she still a very young friend, but we’ve known her for years, so she’s – anyway, she’s Akiko: Today, we will be sitting down and catching up with Akiko Naka, CEO and founder of Wantedly. Of course, we will talk about Wantedly’s amazing growth and the IPO that has happened since the last time Akiko came on the show, but there is a much more important story here, and before we get to that, I should let you know at other than a brief overview of Wantedly’s business model, this show is all new content and conversations. If you want to understand the crazy ideas and questionable positions that led to Akiko creating Wantedly, and believe me, that’s a story you want to hear, I urge you to listen to the original episode at disruptingJapan.com/show008. I’ll have a link up at the site as well. But today, ah, today, we will be talking about the best way to sell genuinely new product to large Japanese companies, some practical advice for anyone trying to take their company into overseas markets, including into Japan, and why the most common advice given to aspiring female founders is actually terrible, terrible advice, but you know, Akiko tells that story much better than I, so let’s get right to the interview. Interview Tim: So, I’m sitting here with Akiko Naka, the fearless founder of Wantedly, so thanks for sitting down with me again. Akiko Naka: Thank you so much for coming. Tim: You know, it’s really great to have you back on again. So much has changed since we sat down over three years ago. Akiko: Yeah, I can’t believe it has been three years already. Tim: Well, listen, we have a lot to catch up on, but for my listeners who did not follow my advice during the intro and go back and listen to our old interview, why don’t you explain what Wantedly does. Akiko: Wantedly is a platform where we match users and companies based on vision and values, not only salary and benefits. When we compare our platform with traditional media, traditional job matching platform, traditional ones values more salary and benefits, but our platform focus on why the company do what they do, so more value and culture of each company. So, that way, we believe users and company can meet people casually, and that way, they can get to know each other better, and then eventually, those people can have a long-lasting relationship. Tim: That’s a really radical concept in Japanese HR. Akiko: Yeah, thank you for saying that. Tim: The whole industry, the whole process is built around very rigid job descriptions and salary scales, and even the resume format is pre-decided. Akiko: Yeah, yeah, I know. I’m really glad you said that we are very drastic because every time I explain our platform to foreign writers or reporters, their reaction is like, that’s only applicable to Japanese markets because Japan is very unique, but actually, the Japanese market is very conservative, like you said now. So, yeah. Tim: Well, does there continue to be like, pushback from HR people or from the big companies or saying like, we don’t want to do it this way, or…? Akiko: In early days, I would say nine out of 10 pitches we did to HR people was turned down, and most of pushback we had was HR people would say, “Akiko, you don’t understand anything about our job. We are so busy. We have to go through so many resumes a day and we have to do so many interviews. We don’t have time to sit down and have a chat with people just checking in and dropping by the office.” Tim: It doesn’t surprise me that 90% of the prospective customers said no, but the 10% who said yes, we want to try this, why did they say yes? Akiko: Well, I think the only reason is they trusted me, so yeah. So, early users, CEO or people in charge of HR, those people were my friends, and I was like, I was begging them to use Wantedly. So, yeah, they probably would try out anything even if it wasn’t Wantedly. Tim: Okay. Well, you guys have scaled tremendously since event, so last I read, you had over 2.5 million active users a month, and how many employers? Akiko: Right now, we have around 30,000 clients. Tim: So, pitching to your friends is a great first step, but what has driven the rest of the enterprise, is it just from successful case studies where they have seen other companies succeed, what has driven it? Akiko: Right, so it’s mostly word-of-mouth. I mean, even these days, we don’t do any outbound. So, it’s mostly inbound. Tim: Well, have you had to change the image? So, when you first started out and during your growth face, It was always this kind of quirky outsider startup company, that was the whole image, but as you grow and you scale, can you still keep that as a post-IPO company? Akiko: I mean, I guess a lot of people don’t really know that we are probably because we are still small. Yeah, I believe that we still have this image of very innovative and providing really cutting-edge technology over into products, but yeah, having changes were made as an organization wise, so in early age, we didn’t have any salesperson to chase up clients. We only had people to close the deal, but now, so in the past year, we doubled the headcount of salespeople. So, I think that’s a big change. We have more organized way of selling or closing the deals. Tim: So, branding and image-wise, it’s still the same. You have just become much more efficient and organized, and scalable inside? Akiko: Yeah, yeah. So, early age, I didn’t really believe in having a proper sales team because I really thought building really cool product will bring all the customers, but reality was, there is a chasm and to come over the chasm and going to the main market, we have to have a really strong human touch. Tim: Enterprise sales in Japan, it’s time-consuming. Akiko: That’s very true, yeah. Yeah, these days, there are a few other SaaS products like MoneyForward or SmartHR, so there are lots of foreign products like Slack, Evernote, and Dropbox. So, enterprises are getting used to interesting things without consuming so much time, but yeah, still. Tim: Yeah, but HR is one of the most conservative parts of Japanese organizations. As you got bigger and more established, did you find other companies trying to copy the Wantedly formula? Akiko: Right, right, so I think we saw more copycats in the early days. So, we started back in 2012 and I think around – by 2015, we had more than like, 20 or 30 copycats, not only in Japan but over Asia, but none of them succeeded, yeah. Tim: Were the copycats other startup or are they large recruiting companies trying side projects? Akiko: They’re both. Tim: Yeah? Akiko: Yeah, so there are many startups and also large enterprises, but none of those succeeded. I think the reason is for startups, I think people just saw the facts until it’s very successful, and they just wanted to copy the superficial essence and they just thought they could copy Wantedly, but they did not really truly understand what the true essence of Wantedly, so. Tim: So, I want to dig down into this, so the true essence, so were they just copying the business model? What did they miss, was it a community that they missed? What was missing from most of these copycats? Akiko: So, I never have really done an in-depth study of those copycats. I didn’t really pay much attention, but I guess, so we really value how users of visited offices, like casual visits, and I think a lot of startups weren’t that persistent in terms of keeping the user experience. So, most of the HR people will say, we’d rather want to have regular job interview. We don’t have to stick to Wantedly’s way, if you don’t have strong philosophy, you’re going to just let those HR play by their rules. Tim: Yeah. Well, you know that’s interesting because I always find that is the critical balance in all startups. So, you have to believe in your vision strong enough to tell your potential customers no, but you also have to listen to your customers to make sure you are building something they actually want. Akiko: Yeah, yeah, that’s true, that’s true. So,

Uber and Airbnb represent a new very kind of startup, one that could not have existed twenty years ago, and the very thing that make these companies so transformative in the United States ensures they will never succeed in Japan. You see...

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

For decades, Japan has been struggling with the economic need to attract more foreign residents to the country and the general social reluctance to do so. Over the years there have been some well-publicized failures and a few quiet successes, and Japan retains her image as a generally closed nation. But reality changes much faster than perception in Japan. Things are already changing and that change is about to accelerate. Today I'd like you to meet Nao Sugihara founder of MTIC, who is going to explain these trends in detail. Nao runs a recruiting platform called GaijinBank that deals exclusively with blue-collar, foreign labor, and he'll show you not only that Japan's has opened up far more than most people acknowledge, but that this trend will likely accelerate over the next 20 years. It's a great conversation, and I think you'll enjoy it. Show Notes Which companies hire foreigners for blue-collar work n Japan The biggest misunderstandings between Japanese companies and foreign staff The overtime gap with foreign workers The real reasons foreign workers object to overtime Japan's new guest visa program How to integrate more foreigners into Japanese society Lessons learned from the Latin American guest-worker program Why the foreign nurses programs never seem to work out well Links from the Founder Everything you wanted to know about MTIC Friend Nao on Facebook About GaijinBank Home Page Youtube Channel  Facebook All Jobs in Japan Leave a comment Transcript I love working with startups. I love talking with startup founders and I know that you do too. That is why you listen to the podcast and I thank you for that. When the traditional media focuses on startups, they tend to look at the crazy founders making outrageous claims or the newly minted billionaires, CEOs, and investors. That is all good fun, of course, but when we look a little deeper, startups tell us something else. Looking at what startups get started and what startups get funded, and what startups get traction, that tells us a lot about the kinds of problems that we, as a country, thin  are worth solving. What problems are important enough to attract time and money, and customers changes a lot from country to country, and it reveals a lot about the social priorities of the cultures that these startups operated, and it’s not always a pleasant revelation. Japan has always had a complex relationship with her foreign residents. Even today, there is a widespread intellectual acknowledgment that Japan needs to increase and encourage immigration but transforming that goal into actual policy enter real social acceptance, well, that is harder. Today, we sit down with Nao Sugihara of MTIC and were going to dive deep into this. Nao runs a recruiting platform called GaijinBank and while there are lots of job sites catering to foreign engineers and creative’s, socket deals exclusively with the blue-collar labor. Foreigners are working blue-collar jobs in Japan is actually an incredible aspect of the Japanese economy and one that is largely ignored, not only by the Japanese press, but even by the foreigners living in Japan, and you know, I have to admit, the things are different and, in some ways, much more encouraging than I expected. But you know, Nao tells that story much better than I can. So, let’s get right to the interview. [pro_ad_display_adzone id="1404"  info_text="Sponsored by"  font_color="grey" ] Interview Tim: So, I’m sitting here with Nao Sugihara of MTIC which is Make Tokyo an International City. Nao: Yes! Tim: So, thanks for sitting down with me. Nao: Thank you. Thank you for the opportunity like this. I’m happy to talk today. Tim: Wow, I’m glad to have you on, and I usually don’t interview founders of companies for like, recruiting companies, but what you are doing is really different. Nao: Thank you. Tim: You know, there is – I don’t know how many hundreds of different job sites for engineers and designers in Japan, but you’ve got a unique focus. Nao: Yeah. Our service name is GaijinBank and we are especially for blue-collar type of work. We focus on the foreigner in Japan. Tim: The job market for foreigners in blue-collar jobs is something that a lot of people don’t know outside Japan. So, tell me a little bit about your customers on the employer side. What kind of blue-collar jobs are being filled by foreigners in Japan? Nao: For example, hotel, front desk, and craning, or manufacturing and construction, and logistics, and caregiver. Tim: That seems quite a range of responsibilities, so something like factory work would not require a great deal of Japanese skills but someone working at the front desk of a hotel or being a caregiver, I imagine that would require some pretty high level of Japanese ability. Nao: Yes. Tim: So, where are these jobs? Are they in Tokyo or are they in the countryside? Are they all over Japan? Nao: Of course, like many demand came from around Tokyo, and we do like Tokyo, Chiba, Kanagawa mainly, but actually, the countryside has more demand. So, we do sometimes in Fukushima in Tohoku and Ehime in Shikoku and can be like also Nagoya. Tim: And are these permanent jobs? Are these temporary jobs? Nao: We do both. Our temporary dispatching position and also sometimes, we introduce directly to employers permanently. Tim: Now, in a minute, I want to dive deep into kind of this social impact that all this is happening, but looking at it from the employee side, who are taking these jobs? Nao: We have many candidates, more than, I think nationality-wise, 100 countries, but mainly Asian countries people. Half of our candidates is a resident visa holder such as permanent, spouse visa, long-term visa. 30% students intend to 20% is like working visa, like international, humanity visa. Tim: Okay, so my understanding was that for example, it’s almost impossible to get a permanent residency visa working at a factory. So, do they have permanent residency because of family members or for some other reason? Nao: Yes, some of them like, get married with Japanese people or got married with permanent residence visa holder, then they become like a spouse, and then stay here maybe 5 to 10 years, they become a permanent resident. Tim: So, when the employers contacted you, are they looking for foreign staff specifically or are they just looking for anyone to fill these positions and they can’t find Japanese or foreigners who are okay too? Nao: Yes, they don’t care about the nationality. The most cases they cannot find Japanese workers, and then they kind of adjust. Tim: What I imagined it for Japanese, particularly in these the blue-collar and very traditional industries, that’s a big adjustment. Do you guys help kind of bridge that communication gap? Nao: In many cases, there was a miscommunication. For example, a contract or like some direction in the workplace. It’s kind of very difficult to communicate in Japanese or English, especially in Korea, cannot speak English in most cases. So, they call us, and then we communicate in English or their mother tongue. Tim: Okay, so there are times you are actually providing an interpretation service so that they can give instructions to the employees? Nao: Yes. We send it like a very bilingual staff in the work location, and then they directly bridge Japanese and English, or mother tongue. Tim: So, I imagine a lot of cases, this is the employers first experience really working with a foreign staff. What are some of the differences between the expectation and reality? Just because the work culture in Japan is so different that it is in other places, so what kind of surprises or expectations are different? Nao: The foreigner has, of course, like have a different culture. For example, some staff, after two weeks start working, like they ask us like, “Can I have a break, like one month? I have to go back to my country,” and wow, and then these don’t happen for Japanese employees, I think. So, we try to make sure, if you have a break plan, please let me know first. Tim: That’s interesting. Nao: And also like, work time, as you can imagine, Japanese people are accepting of overwork, but some foreign staff don’t like. Tim: Oh, okay. Yeah, I can imagine that’s quite a surprise to a lot of foreign workers. [pro_ad_display_adzone id="1653"  info_text="Sponsored by"  font_color="grey”  ] Nao: We have to educate both sides. Employees, sometimes, you have to accept overwork, and do we educate also employers. If you have, they ask now in advance, and we inform. Tim: When the foreign workers are objecting to the over time, are the usually objecting because of pain mandatory because of time and they had other plans? Nao: Both. Sometimes, they have planned, so they just want to go home. Regarding payment, actually in blue-collar, the money is very well. Normally, employer pay all of overwork. Tim: Okay. So, it’s really more just a matter of scheduling and having control of your own time. That makes sense. Looking at Japan as a whole and how society is changing this way, your business of placing blue-collar – or let’s just say non-technical foreign staff, it seems like a really growth industry in Japan. Just a few weeks ago, maybe a month ago, the government announced the new guest worker visa program for 2019, and they are targeting 40,000 foreign workers in Japan for next year, and they announced they are hoping for 250,000 by the fifth year. Do you think those numbers are reasonable? Do you think we’re going to see that many foreign workers coming into Japan? Nao: Yes, that’s why I started this business. As you know, Japanese population shrink. In 2060, the population is going to be like, half. So, we need workers. Yeah, actually, some companies expect foreigner worker population,

The aerospace industry has been particularly resistant to disrupting in Japan. In the rest of the world, launch vehicle and spacecraft technology has made incredible gains over the past decade, but here in Japan its still mostly the same government contracts going to the same major contractors. Naomi Kurahara of InfoStellar, has come up with an innovative way to leverage existing aerospace infrastructure and to collaborate globally by renting out unused satellite ground-sataion time, Airbnb style. You see when an organization launches a satellite, they also build a ground station to communicate with it. The problem is, that as the satellite obits the Earthy, it’s only in communication range of the ground station for less than an hour a day. The rest of the time the ground station just sits there. By renting out that unused time ground-station operators earn extra income, and the satellite operators are able to communicate with their satellites as often as they need. It’s a great interview and I think you’ll enjoy it. Show Notes for Startups Why the Airbnb for satellites startup model makes sense The demand-side problem Why this market is much larger than it seems today The key growth drivers in the satellite market Why the Japanese aerospace industry can't innovate How to run a startup as an expectant mother What challenges women scientists still face in Japan How Japan could better support working moms Links from the Founder Learn about InfoStellar [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan Disrupting Japan, episode 56. Welcome to Disrupting Japan - straight talk from Japan's most successful entrepreneurs. I'm Tim Romero and thanks for joining me. Aerospace in Japan is particularly resistant to disruption. Over the past decade, the rest of the world has seen incredible gains in both launch vehicles and spacecrafts. But Japan has been moving slowly. Sometimes it seems as if she’s determined to stay the course with the same government contracts going to much the same corporate heavyweights year after year. Naomi Kurahara of InfoStellar once had plans of changing the Japanese aerospace industry. But along the way she went out on her own with a plan that bypassed Japan’s major players and targeted the global market. You see, when an organization launches a satellite, they usually also build an antenna and a ground station to communicate with that satellite. The problem is that as the satellite orbits the Earth, it’s only communications range with the ground station for less than an hour a day. The rest of the time the ground station just sits there. So, Naomi decided to pool all of the unused ground station time together and rent it out to satellite operators, Airbnb style. Everybody wins by sharing resources. The ground station operators get income by renting out their facilities and the satellite operators get to communicate with their satellites far more often. But Naomi explains it better than I can, so let’s get right to the interview. [pro_ad_display_adzone id="1411" info_text="Sponsored by" font_color="grey" ] [Interview] Tim: Cheers! I’m sitting here with Naomi Kurahara, the CEO and fearless founder of InfoStellar, so thanks for sitting down with me. Naomi: Thank you for inviting me. Tim: Now, InfoStellar is basically time-sharing for satellite ground station, or Airbnb for satellites, but it’s a complex idea so why don’t you explain a little bit about what InfoStellar does. Naomi: Okay, the reason I started this business is the aerospace space has an issue for cost. Like satellite is expensive, and rocket is expensive, and ground station is expensive because, maybe, not many people are using. Tim: Well, aerospace is incredibly expensive but actually I think before we get into InfoStellar’s business model, I think it’s going to be best if you explain what ground stations are and how they work. Naomi: Okay, so there is three main components for space business. That’s the ride, or spacecraft, and the rocket, which delivers the spacecraft from ground to space, and after the delivery, the operator has to control the spacecraft somehow because most of spacecraft doesn’t have people on board. It could be a space station, maybe only space station. But most of the spacecraft do not have an operator, so the ground operator has to control this spacecraft. So we need to send some commands. For that, we use radio and radio communication. So the antenna system and some computers to process the commands. Tim: So the ground stations, they’re what’s around the big parabolic antennas that everyone’s used to seeing on the ground and they both get data from the satellite? Naomi: And to the satellite. Tim: And give instructions back to it? Okay. Now that that’s clear, tell us about InfoStellar’s business. Naomi: To go back to the issue of this business, the cost. The cost is so expensive in this business, it’s difficult to launch or start. And for the ground site, one ground station, including one dish antenna, maybe it costs $300,000. So to reduce the starter’s price, there is only one way to reduce the cost, which is to increase the usage. Tim: So increase the usage of the ground stations? Naomi: Yes. If only one person uses, maybe 1% or 2% of the whole time is used. Tim: So InfoStellar allows the sharing of these ground stations, right? So, traditionally, if I’m putting up a satellite—I build my satellite, I pay someone to launch it into orbit for me, do I usually build a dedicated ground station to track that satellite? Naomi: I say yes because most of the satellites, the government requires you to stop anytime. Make sense? So the many operators have to have one ground station at least. Tim: Now, how much downtime does a ground station have? If I’ve launched my satellite and I’ve got my ground station, in one day, how many minutes, or how many hours are that ground station and that satellite communicating? Naomi: It depends no location. For Japan, I can get only 30 minutes per day of communication time. Tim: 30 minutes per day? So 23 hours and 30 minutes, it’s just not being used? And that’s the time that InfoStellar wants to rent out and to share. Naomi: To reduce the cost, I want to make the usage higher. Tim: Right. That makes sense, renting out that unused capacity. Now, I don’t imagine that all ground stations are the same. They must have different frequencies and different ways of communicating with the satellites. How does InfoStellar work with that. Naomi: Well, all satellites have different but I can still categorize some satellites because the frequency, there is an allocation amount for satellites. For example, there is a band called X-band, it’s about 8GhZ so for satellites, can use about 8 to 8.4GhZ, and the other X-band satellites cannot use. Tim: Okay. So it is fairly standardized. All right. The protocol used to communicate between a ground station and a satellite must be completely different for every satellite so how does it work? Naomi: Just a program. The many satellites have a protocol or an option. So I have to make sure that every station can process the many, many satellites. Tim: Okay, but I would imagine the stations themselves, they don’t have to understand the data they’re getting, right? They just have to collect it and send it into the cloud and get it to where it has to go. Naomi: Correct. I have to think about the analog side and the digital side; for an analog signal or digital signal. For the antenna, they take care of the analog and for analog it’s more easier. Many satellites can be categorized or they have some subbed out frequencies. Tim: It sounds like there’s enough standardization so you can at least attack the problem. So, for any multi-sided marketplace, you’ve got the supply side and the demand side. And the biggest challenge is always getting both sides on board together. So let’s first talk about the supply side. Have you been able to get a good collection of ground stations signed up for this service? Naomi: Okay, they need the dish antenna but also I need to have another type of antenna called Yagi antenna. The antenna looks like a fishbone on the buildings or the houses—that’s called a Yagi antenna. So other types of antennas can receive or can transmit the UHF or VHF frequencies. It’s not VHF or UHF, it’s a type of frequency category. Tim: So who owns the ground stations that are signing up? Naomi: So, for Yagi antennas, the individual person. For the dish antenna, maybe a private company or sometimes a university has. Tim: All right. You’ve gotten ground stations throughout Southeast Asia on board? And how did you make those sales? How did you convince people to join this? Naomi: Well people who have antennas, the people usually have their own satellite because the two operating their satellites, they have their antennas or their ground station. So they have the same issue, they have the antenna on one station but the usage is 30 minutes to 1 hour per day. Tim: I see. So I guess on the supply side it’s an easier case because they’re not using it for 23 hours a day. Okay. So it’s very appealing to them. [pro_ad_display_adzone id="1652" info_text="Sponsored by" font_color="grey” ] Naomi: Yes, they have a maintenance cost issue. Sometimes the Yagi antenna requires maintenance to change frequencies or get some new functions, so they still need maintenance and maybe $5,000 to $10,000 per year. Tim: So $5,000 to $10,000 per year for maintenance costs? Naomi: Yes. So it’s not big but it still costs. Tim: Sure, it makes sense. If they can get a little bit of income to pay for the maintenance, it’s a great idea for them. That makes sense on the supply side. So let’s talk about the demand side. I’m curious, how big is this market?