Disrupting Japan

Coming up with ideas is easy. Spotting the bad one early is a rare skill. Today we talk with Yo Shibata serial entrepreneur an investor about how you know if you really have a great startup idea. We chat about what it was like being acquired by Rakuten, and what can be done to improve M&A in Japan. Yo also talks publicly for the first time about is new startup and why the current B2B SaaS trend in Japan might have peaked and might be about to completely reverse itself. It's a great conversation, and I think you'll enjoy it. Show Notes The advantage of launching early on a new platform The reason for Japanese consumers' love for points systems What it's like to be acquired by Rakuten The birth of the Tokyo Founders Fund The weakness almost all Japanese VC Funds have How to know when you ave a good startup idea Te importance of "Founder-Market Fit" Is this new "anti-SaaS" platform the way forward Why most Japanese enterprises are bad at M&A The most important difference between Japanese and US startup culture Why the ecosystem is more important than the startups themselves Links from the Founder Check out Tailor Yo's big bet against the SaaS trend. ... and they are hiring Follow Yo on Twitter @yoyoshibata Be sure to give a listen to Yo's podcast START/FM Transcript Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for joining me. So, how do you know if your startup idea is any good? After all, coming up with ideas is easy, knowing how to evaluate them before spending a lot of time and money, well, that's that' a real skill, and we're going to get to that. Today we sit down with Yo Shibata, serial entrepreneur, investor, and well-known figure in Japan startup ecosystem. We talk about where Japanese startups are heading and the big bet Yo is making on his next startup. A big bet based on the idea that the current B2B SaaS boom in Japan has got it all wrong.  Now, Yo's theory flies in the face of all common knowledge about the Japanese market, but as long-time fans of disrupting Japan know, I am a hopeless contrarian. Anyone who can make a compelling case about why conventional wisdom is wrong always has my full attention.  I just love those stories and ideas, and I love bringing them to you. So Yo and I dive deep into why Japan's current SaaS trend might be about to reverse itself, and what might take its place. We talk about what it's like to be acquired by Rakuten, how corporate Japan is getting better at M&A, and of course, how to know if you actually have a good startup idea.  But you know, Yo tells that story much better than I can so let's get right to the interview. Interview  Tim: So we're sitting here with Yo Shibata, serial entrepreneur and investor. So thanks for sitting down with us, I really appreciate it.  Yo: Thank you for having me. Pretty excited.  Tim: I'm excited to have you here. And I mean, Yo, you've done so much here. You've started a number of companies, you've started your own fund, you even have your own podcast. It's a great opportunity to really dig in.  Yo: Yeah, yeah, pretty much.  Tim: Just for background, let's talk about your startups. There's been a lot of them.  Yo: Right.  Tim: Your first one you started in college, right?  Yo: Yes, that was when I was 19 or 20 years old. I started a small company with my friend. It was SEO consulting firm. That was back in 2005 or something like that.  Tim: Was that something you planned on like scaling into a big company or was that just beer money for you and your friend?  Yo: Back in 2005, in Japan, there was no venture capital, especially like seed stage, very rarely saw angel investors. They usually took majority stakes with like, $50,000 or something like that.  Tim: Yeah. And back then, angel investors, they were all doctors or lawyers, they weren't startup people at all.

Once the disruptors become the incumbents they are ripe for disruption. Uber, Grab and rest of the ride-sharing startups have clearly disrupted the global taxi industry, but that doesn't mean they got it right. That doesn't mean their market position, or even their business model, is secure. Today we sit down with Sota Kimura, founder of SmartRyde, a Japanese startup focused on getting airport ground transfers right. We talk about building a business based on quality and brand in a traditionally price-sensitive, low-margin market, what Japanese universities are doing to support startups, and how getting ripped off at the airport inspired Sota to start a startup. It's a great conversation, and I think you'll enjoy it. Show Notes Why airport transfers are ripe for disruption & what Uber is missing Pivoting from B2C to B2B during the pandemic How getting ripped off at the airport inspired a startup Japan's University startup support outside the majors Entrepreneurship share-houses How to compete on quality in a low-margin business Can ridesharing work in Japan Why Hiroshima was an ideal launch market How to create more university startups in Japan Links from the Founder Everything you ever wanted to know about SmartRyde The SmartRyde video  Coverage of recent fundraising Follow Sota on Twitter @kimura5008 Friend him on Facebook Connect on LinkedIn The Entrepreneurial Sharehouse Fespa Kyoto 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 talk about how to disrupt a fragmented market. I mean, that's a startup founder's dream, right? You find a market with low quality, confusing products, and no global coverage, and then disrupt it with an innovative business model and establish a trusted global brand.  That's the dream. But as you'll see today, sometimes markets are fragmented for a reason.  Today we sit down with Sota Kimura, founder of SmartRyde, who's trying to solve the problem of airport transfers and of foreign travelers being ripped off at local airports, and Sota's up against some strong competition, not only from business challengers but from human nature itself.  Let's face it, ripping off travelers has been a popular custom for a long time. Herodotus was complaining about it 2,500 years ago.  We talk about why Uber is not a threat, the new entrepreneurship share houses popping up in Japan, and how Japanese universities can better support founders. But most of all, we look into the question of whether quality can win if quality can act as a differentiator in a market traditionally focused on price competition.  But you know, Sota tells that story much better than I can so let's get right to the interview.  Interview Tim: So I'm sitting here with Sota Kimura, who is the founder of SmartRyde, who is changing the nature of airport transfer and ground transport service. So thanks for sitting down with us. I really appreciate it. Sota: Yeah, I appreciate too. Tim: So that's a really brief explanation of your company. But can you tell us a bit more about what SmartRyde does? Sota: We are operating airport transfer service around the world, mainly business-to-business sectors. For example, we integrated with online travel agency OTA, such as booking.com, and Expedia. And also, we are connected directly local transportation company like taxi and limousine and buses. Tim: So fundamentally, this is the airport transfer when you get off a plane and you need to get into a cab. Sota: Yes. So we focus on the airport transfer. So from airport to hotel, or hotel to airport. Tim: I agree, like, airport transfers, the ground transport, it's a messy process right now. But is your main competition rideshare companies like Uber and Grab? Sota: Similar business model. Transfers are a very fragment of business. And also,

NFTs are easy to understand if you examine their core utility.  Unfortunately, there are thousands of NFT promoters spending millions of dollars to make sure you never look at that. This episode is a departure from our standard format, but it's an important topic. I want to explain what NFTs actually are and how you can best make money with them -- if you really want to. Our Japanese founders will be back next episode. So let’s get right to it. Transcript This is it, gentlemen. This Queen of Hearts is the winning card. Watch it closely. Follow her with your eye as she moves. Here she is, and now here, now here, and now—where? The Queen of Hearts. My hand is quicker than your eye. If you find the lady, you win, and I pay; if not, I win and take your money. Who will go me twenty dollars? Yes, this is in fact, Disrupting Japan. Straight talk from Japan’s most successful entrepreneurs, but today we are going to be talking about Three-Card Monte, or more specifically what Three-Card Monte teaches us about NFTs, or non-fungible tokens.  You all know three-card-monte. Even if you don’t know it by that name. The dealer places three cards on the table, flips over one to reveal the queen. He flips the queen back over and begins shuffling the three cards around the table. He does this quickly, but not too quickly. You can just follow his movements. You confidently point to your card, and the dealer flips over a seven.   You lose your money!  Of course, you never really had a chance. The dealer slipped the queen up his sleeve when he started the shuffle. All that patter and shuffling is just there to distract you. The three cards you see on the table are all decoys. The important card had already been taken off the table. And you see, just like in three-card-monte, the key to understanding NFTs is looking at what’s missing. In this podcast we are going to grab the dealer by the wrist, dispose of the distracting patter and decoy cards, and take a hard look at exactly what’s been taken off the table.  And to be clear, I have absolutely no opinion as to whether you should invest in NFTs or if you personally will make money from them. Today we’ll just be talking about what they are; their reason for existence. In startup terms, we’ll be defining NFT’s true value proposition.  However, by the end of this episode it will make perfect sense to you why a jpg of a robot with a green mustache is worth $2 million, while the same robot with a red mustache is only worth $50. In fact, you’ll understand why NFTs could not possibly work any other way.   And before we dive in, I want to let you know that although I spent a lot of time checking my facts and making sure what I am about to explain to you is accurate. I am most emphatically not a lawyer or a financial advisor. I am a founder, podcaster, author, hacker, picker, grinner, lover, sinner, and if you are even thinking of taking legal or financial advice from me, you are being an idiot. Stop it!  OK, with that out of the way, let’s flip over these decoy cards.    Misdirection & the NFT Decoy Cards  Card #1: NFTs Prove Ownership NFTs are usually described as something like “digital certificate of ownership” or “a digital receipt” or  “virtual goods with the blockchain providing proof of provenance and authenticity.” NFT promoters love to claim that they are a “permanent, distributed, publicly-auditable, tamper-proof record” of ownership.   But no. They are not any of that. That’s misdirection, that’s one of the decoy cards.  NFTs absolutely provide a “permanent, distributed, publicly-auditable, tamper-proof record” that you gave your money to a crypto promoter, but purchasing an NFT gives you absolutely no copyrights, usage rights, or ownership rights to the artwork. It’s not a receipt because you haven't actually bought anything but the receipt itself. The terms of service a some NFT marketplaces hint at such rights,

We have been dreaming about flying cars (and startups have been promising them!) for over 70 years, and it looks like we might almost be there. Orders have been placed, and delivery schedules set. Today we sit down with Tom Fukuzawa of SkyDrive, and we talk about the development of their flying car and their recent contract with the city of Osaka for air-taxi services. However, we also talk about the real difficulties of turning a group of passionate volunteers into a passionate startup. I don't want to spoil anything for you, but it did not turn out like it was supposed to. It's a great conversation, and I think you'll enjoy it. Show Notes Why the word is experiencing a boom in flying car research and prototypes The cool concept vehicles of the Carivator project How to bing young innovators in an industry together Why driven, committed people rarely "volunteer" Why just asking for money can be easier than getting investment. Why aircraft innovation is slow and why aircraft startups are rare The size of the future flying car market How we will integrate flying cars and traditional infrastructure Why the enterprise to startup revolving door is so important Links from the Founder Everything you ever wanted to know about SkyDrive Friend them on Facebook Follow them on Twitter @Skydrive_Global Check out SkyDrive's LandCare Robot SkyDrive's Vision Video Transcript Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for joining me. You know, we seem to be in a bit of a flying car startup boom right now. Of course, the flying car has been a symbol of the future for over 70 years now. And for that whole time, we've always been just 10 years away from saying goodbye to traffic and taking to the skies.  Well, today we sit down with Tomo Fukuzawa, founder of SkyDrive. And he explains how he plans to have his flying cars on the road or rather in the skies in three years.  And while there are many startups making such claims today, SkyDrive recently signed contracts with the City of Osaka to deliver an air taxi service. And last month SkyDrive began the final stage of government certification for their vehicle. So yeah, there's something here that deserves a closer look.  Oh, and by the way, Tomo was at their testing facility so there's some background noise in this interview. The drones and flying cars themselves weren't flying around so just some cars passing by. It's not too bad. But at one point, it sounds like a tractor trailer drives between us and knocks over our table. You'll know it when you hear it, trust me.  Anyway, Tomo shares some really important lessons about running a moonshot startup, how partners and collaborators and people you've known for years begin to treat you differently. Many of these lessons apply to anyone following their dreams, but the startup experience makes everything so much more intense.  But you know, Tomo tells that story much better than I can. So let's get right to the interview.   Interview  Tim: So we're sitting here with Tomo Fukuzawa of SkyDrive, who is making flying cars and cargo drones. And thanks for meeting with us today. Tomo: Thank you very much for inviting me. Tim: It's my pleasure. I love the whole aerospace and aviation sector. I love what startups are doing in here. I want flying cars to be real so badly. Tomo: Thank you. Tim: So tell us a bit about your current prototype. It's currently a one-seater model, right? Tomo: We started SkyDrive three years ago. And last summer, we studied manned test flight of a flying car or eVTOL. And this was the first time in Japan to show manned flying car, and we have one-seater and eight propellers. And now we are flying 5 to 10 minutes by one charge. Tim: I want to get into the details of the technology in the future in just a minute. But it seems like in the last, let's say,

Cloud visionaries promised us unlimited scalability, but they greatly underestimated the amount of data we would start producing. Today we sit down with Michael Tso, the co-founder of Cloudian, and he explains why some systems are just too big for the cloud, and how the industry is adapting.  Mike also shares his advice for selling via channel partners, and we talk about the competitive advantages and disadvantages of being a Japanese startup on the global stage. It's a great conversation, and I think you'll enjoy it. Show Notes The real reason we are "drowning in data" The missing link in connecting cloud and local storage What kind of apps really need 100's of petabytes of storage How to pivot successfully in Japan, and why it's so hard to do so Using Japanese culture as a competitive advantage The most important difference between Japan and US startup culture Why US companies hesitate to buy from Japanese software companies How to expand globally using channel partners and systems integrators What everyone gets wrong about failure Links from the Founder Everything you ever wanted to know about Cloudian Friend Mike on Facebook Follow him on Twitter @MichaelTso   Transcript Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for joining me. As a society, as a species, we have way too much data on our hands. A decade ago, our data got too big for our local systems and so we moved it into the cloud. And now, well, our data has gotten too big for the cloud and we're moving it back on premises.  Now, I promise this will make a lot more sense in a few minutes, when we sit down with Michael Tso, co-founder of Cloudian. Cloudian makes massive scale storage systems, massive as an hundreds of petabytes of storage that can run on site and seamlessly integrate with Cloud Storage. Cloudian is also interesting, because they're one of only a handful of Japanese startups that have really succeeded in the US and European markets. And Mike and I talk a lot about how they made that happen.  We talk about the challenges and the necessity of pivoting in a Japanese startup, how Cloudian's Japanese identity and culture both helped them and hurt them in their global expansion. And Mike gives some really great advice about how to sell software through channel partners and what you should really expect from those relationships.  But you know, Mike tells that story much better than I can. So let's get right to the interview.    Interview  Tim: I'm sitting here with Michael Tso, the co-founder of Cloudian, which provides object storage for the enterprise. And Mike, thanks for sitting down with us. Mike Tso: Yes, happy to be here, Tim.  Tim: Now, object storage for the enterprise is something that gets talked about a lot. But what does that mean exactly? Mike: Yeah. So I think I need to just rewind a little bit and just kind of talk about why are we drowning in data? Why is there so much data? Well, because actually, if you think about the process of innovation and the process of invention, it's data-based, right? You need to have data to know where you're at, and you can draw inspiration from analyzing your data. And then you go try some invention, and then you have to measure the outcome. And then you go back and kind of either fix it or improve it. So it's a continuous process. Tim: But, I mean, if you look at kind of like human history, we humans will fill up as much data, well, we've always had data, it's a question of how much we can store. And the easier it is to store, the more of this information we will. So it used to have to be engraving on cuneiform, clay tablets and creating vellum now it's just, oh, we'll automatically just save everything.  Mike: Well, I think about this a lot, right? It starts with how easy it is to create the data. So if you have to chisel away on a rock,

Japanese university and government venture funds play a much larger role in Japan than in the West. I've always considered this difference to be, on balance, neutral, today's guest makes a convincing case that these funds are actually hurting the startup ecosystem here. Today we sit down and talk with Hiroaki Suga, co-founder of PeptiDream.  PeptiDream is now a $7 billion biotech company, but it started out as a couple of university faculty members funding operations out of their own pockets. PeptiDream succeeded by using a very different model than that used by either the current generation of university spin-outs or biotech startups in the West. It's an interesting blueprint that other biotech firms might want to copy, but only if they are really sure that their technology will actually work. It's a great conversation, and I think you will really enjoy it. Show Notes Japanese Univstities' problems with applied research The challenge in moving from academia to startup operations How to hire a CEO What most professors don't know they don't know about business How to land large sales contracts as a small startup How to sell new technology to Japanese pharmaceutical companies Why biotech investment is so hard in Japan Why you want to step away while you are on top Japan's next biotech unicorn Why most Japanese government startup money is misused Links from the Founder Dr. Suga's Lab Everything you ever wanted to know about PeptiDream Hiroaki's new project MiraBiologics  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, I'd like to share some amazing insights about the startups being spun out of Japan's universities, because what's going on here is very different than what's happening in e US or the EU.  This is a special selects show, and I first spoke with Hiroaki Suga co-founder of PeptiDream a few years ago. The points he made in that conversation, however, have only  become more important since then,  and I'll be back with an update after we talk. So here we go! --- We’ve talked a lot before about how there are not many life sciences startups in Japan and what can be done to change that. But there are, of course, some and some incredibly successful ones. PeptiDream is one of those startups. Founded by a small team at a university lab, PeptiDream has grown from nothing to a $6 billion company. Today, we sit down with the founder of PeptiDream and fellow guitarist, Hiroaki Suga, and he’ll explain how they’re working with pharmaceutical companies all over the world to discover new drugs and new treatments. We also talk about the rather unusual business strategy that allow them to scale up with relatively little financing and to land deals with global drug companies a lot sooner than most biotech startups can. And I’ve got to say, my conversation with Dr. Suga really changed my mind about the role the Japanese universities and the government should play in fostering startups and innovation here. It’s a fascinating and unique perspective from inside the system, and I guarantee you, it’s not what you think it is. But you know, Hiroaki tells that story much better than I can, so let’s get right to the interview. Interview Tim: I’m sitting here with Hiroaki Suga, the cofounder of PeptiDream. So, thanks for sitting down with me today. Hiroaki Suga: Sure. Very welcome. Tim: PeptiDream is a peptide discovery platform but what is that exactly? Hiroaki: So, the technology started from over 25 years ago. I had idea. Is that okay? I want to develop RNA catalyst. The so-called ribozymes. I did a post doc with Professor Jack Szostak in Harvard Medical School. I run the techniques for the in vitro selections but I didn’t really get major success, but I was fortunate enough that I get an academic position in State Univer...

It's hard to get paid to do what you love. Perhaps no one understands this better than dancers, but Taku Kodaira and his team at Mikro Entertainment are on a mission to fix that. But this conversation, and Mikro Entertainment itself, is about much more than dance. Mikro's marketplace for dance moves is just the first application of Mikro's new motion-capture technology, and things are just getting started. Today, Taku and I talk about the surprising economics of dance moves, the adoption curve of disruptive technology, dance-move lawsuits. and one very important law that looks like it is about to change. It's a great conversation, and I think you'll enjoy it. Show Notes How you sell a dance move Making a market - who is buying dance moves Why growing up international made it easier to start a startup How copyright law needs to expand One danger in allowing dance moves to be copyrighted Lawsuits against Epic Games over Fortnight dances How big is the motion capture industry The adoption curve for  disruptive technology Why it is impossible for any startup ecosystem to have enough engineers Links from the Founder Everything you ever wanted to know Mikro and GesRec Friend Taku on Facebook Mikro coverage in Wired (in Japanese) How to use GesRec models in Unity   Transcript Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.  I’m Tim Romero and thanks for joining me. Truly disruptive technology is usually hard to spot when it first shows up. Sure, after the IPOs and the mass market success, everyone claims that they knew it all along. But in the early days, disruptive technology is usually shrugged off as being too simplistic or unprofitable or most often, just a solution looking for a problem.  When Kodak invented the digital camera, they dismissed it as a toy with no real commercial applications. LED light bulbs were first written off as impractical. And in 1911, the military brass dismissed the airplane as, quote, "a scientific toy with no military value." All of these seemed like, well, solutions looking for problems.  We'll pick up that thread later. But I want you to keep it in mind as we sit down today and we talk with Taku Kodaira, the founder of Mikro Entertainment, who's developed technology that can create full 3D motion capture models for mobile phone videos.  Now, Taku's initial and current application of this technology is the world's first global marketplace in dance moves, and he has some of the world's most famous dancers signed up on the platform.  But this is a conversation that will take us on a journey of how digital dancing is already being monetized in gaming and social media, about copyrights in dance and plagiarism and choreography. And we'll also explore the new uses and new markets that this technology will open up in the future.  But you know, Taku tells that story much better than I can, so let's get right to the interview. Interview Tim: So I'm sitting here with Taku Kodaira, the founder of Mikro Entertainment and GesRec motion capture marketplace. And thanks for sitting down with us. Taku: Thank you very much, Tim. Tim: Now, what you guys are doing, it's really amazing tech, but you know, you can probably explain it a lot better than I can. So what does it do and what are you selling? Taku: Right. So just starting about the name GesRec, we tried to combine two words gesture and recognition and tried to create like a one word. My wife is a dancer, and I've been talking to her and she told me all the difficulty dancers are facing, and we just realized, okay, these people are doing so much stuff out there. Is there any way we can try to support them? Right now we are utilizing our technology to capture 3D motion and turn it into the data from the 2D video. And we are creating a marketplace that we sell and trade those 3D motions that's actually coming from a lot of people,

Disrupting Japan turns seven years old this week! Unfortunately, because of current conditions in Japan, we won't be able to sit down over a beer and talk about startups live as we usually do. Today, I'd like to share a story in three acts. We'll talk about the podcasting industry, what Disrupting Japan really is, and the likely future of Japanese startup founders. Please enjoy. 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. This week is Disrupting Japan’s seventh anniversary. Normally we mark each anniversary with the Disrupting Japan live show.  We invite a few guests on stage. We gather a few hundred of our biggest fans and our closest friends. And we spend the evening talking about Japanese startups and innovation over a few beers. Well, because of the pandemic, like so many other things, that’s not happening this year. I was hoping to do something creative, and I talked with some friends about maybe doing some kind of online gathering, but it just would not have been the same.  So next year. Next year for sure.  It’s hard to believe how much things have changed in the past seven years. This podcast, Japanese startups, the podcasting industry, and, well, even me as a person, have all gone through some pretty radical changes in recent years. And a strong case can be made that these have all been changes for the better.  Every episode of Disrupting Japan is focused on a new aspect of Japanese startups and innovation, but today we are going to talk about Disrupting Japan itself and how it fits into the future of podcasting and Japan. Because, well, it’s our birthday, and we get to do that on our birthday.  And I promise, that by the end, you’ll see how this all gives you a unique insight into the future of Japanese founders themselves.  1. The Future of Podcasting  So first, let’s talk about podcasting.  Podcasting has changed a lot in the past few years. And from the perspective of a startup founder, it’s been amazing to be a part of it and the future looks incredibly bright. Podcasting is growing up. Podcasting is becoming a real media business with large buyers and big rewards for the creators of the most popular shows. Of course, this rocket-like growth is enabled by the fact that the podcast industry is streamlining. It’s consolidating. And that brings other changes as well.  Long-time listeners know that Disrupting Japan has had several monetization strategies over the years. At one point we were in negotiations to become an official Nikki podcast. We didn’t quite come to terms, but we’re still good friends with the Nikki’s podcast team. For about a year, Disrupting Japan was independent, ad-supported and my primary source of income, and about four years ago I was putting together a podcast advertising network startup, which I then decided to spin down in order to join TEPCO and then Google.  So as you see, as a startup founder, I’m a big fan of monetizing podcasts.  Now, it was right after I shut down my podcast advertising project and returned Disrupting Japan to being ad-free that the podcasting industry really began its explosive growth phase.  Because of this, a number of my startup and podcasting friends have told me “Tim, you got out too early! You missed your big chance!”  Well, no. I mean, I understand why it might look that way, but I knew what I was doing.  Let me explain.  It was clear back then that podcasting was becoming a serious media business, but I knew enough about the media business to know that’s not what I wanted to do — at least not as talent — at least not for this show. Disrupting Japan is something special.  I don’t particularly want to attend meetings to see if the show is hitting this quarter’s growth objectives. I never want to be put in a situation where I’m being told “Interest in robotics is down now. You need to do more gaming content.

We speculate a lot about our future "robot servants" or "robot masters", but that whole metaphor is wrong. It's not going to happen that way. This is a very personal and rather speculative episode. No guests this time. It's just the two of us. In past episodes, you have already met some of the founders at the center of an amazing cluster of startups that have the potential to redefine the way humanity interacts with machines. Evocative Machines is a uniquely Japanese approach that has universal appeal, and I guarantee you that it's not what you expect. So let’s get right to it. Links from the Founder Everything you ever wanted to know Evocative Machines Some evocative machines mentioned in this episode The GrooveX Lovot and Kaname's interview Yukai's Bocco and Shunsuke's interview Gatebox's Hikari (We'll have to get these guys on the show!) Transcript Welcome to Disrupting Japan, straight talk from Japan's most successful entrepreneurs. I’m Tim Romero and thanks for joining me. Once again, I’ve got a special show for you today. There will be no guests no playful banter with someone speaking English as a second language. Today, it’s just you and me. Today we’ll be diving deep into a specific and unique area of Japanese innovation. There is something interesting happening in Japan, a cluster of startups working on something new. You’ve heard parts of it on past episodes, but today we are going into new and unknown territory, and I for one *love* being in new and unknown territory.  It’s a trend I first talked about on Disrupting Japan a few years ago as Evocative Machines. Evocative Machines is a unique Japanese technology emerging from the nexus of artificial intelligence, robotics, and healthcare, and it is something that could utterly transform our world.  It’s a technology that could birth a dozen Japanese unicorns, but we are at such an early stage and this is such a moonshot, it might not result in any at all.     But a lot has changed since I first talked with you about Evocative Machines, so today I’ll explain the technology and its importance, bring you fully up to date, and then we’ll pull out our crystal balls and predict how evocative machines might actually change the world.  Now, at the end of this podcast, I predict that 50% of our listeners will find what I am about to explain as interesting, but not important, another 40% will consider it important, but unlikely and impractical.  And maybe 10% of you will understand that this is going to change the world and will want to be a part of it.  And for those10% of you, I’ll provide a way for you to get in touch. There are amazing things about to happen. Building an Evocative Machine  So what exactly is an “evocative machine”?  Machines are unquestionably becoming smarter, and recently there is a lot of good work being done on creating empathetic machines.  But an “evocative machine” is quite different from an empathetic machine.   The distinction is that empathetic machines are those that can understand our emotions and empathize with us. Evocative machines, on the other hand, are those which evoke emotions in us. Evocative machines are machines that cause us to empathize with them.  So why is this useful, let alone disruptive or transformative? The whole point of automation is to get things done more simply. I don’t want to feel sorry for my refrigerator when it breaks down. I don’t want to sympathize with my microwave about how hard it’s working when it heats my dinner. Life is stressful enough. Why waste our emotional energy on inanimate objects?  Well, when you focus on a single task, that line of thinking is absolutely correct.  But you know something? The Western approach to automation, AI, and robotics is hurting society. It’s grinding us down without us even realizing it, and Japan’s newly emerging evocative machines are the solution to this problem that we haven’t completely realized we have...

Japan has a very different approach to robotics. Japan leads the world in industrial robots, but there is also a growing movement that is reinventing the way we share our world with machines. Kaname Hayashi was one of the creators of Softbank's Pepper robot. His latest startup, GrooveX, has raised over $100 million to develop the Lovot; a companion robot, or perhaps more accurately, a robot pet unlike any other. We talk about the Lovot itself, of course, but we also cover GrooveX's unique business model and talk about the very different ways that people of different sexes, ages, and nationalities interact with the Lovot. It's a great conversation, and I think you'll enjoy it. Show Notes Why the Lovot is as much a pet as a dog or cat Data that proves how our interaction with robots is changing Why the Lovot's form factor is so important Why GrooveX invested so much in getting the Lovot's eyes right How the Lovot makes friends The Lovot's business model. Will this scale? The biggest surprise from the Lovot Cafe Why Western men don't love the Lovot Japan's anxiety trap and how to fix it Links from the Founder Everything you ever wanted to know about the GrooveX Follow Kaname on Twitter @HayashiKaname Friend him on Facebook See the Lovot in action The Lovot on Instagram - this is way too cute The Evocative Machines Project Transcript Welcome to Disrupting Japan, straight talk from Japan's most successful entrepreneurs. I’m Tim Romero and thanks for joining me. I've never really fully embraced the Japanese concept of cute or kawaii. I mean, it's fine and all, all the mascots and characters are nice but it gets a bit odd sometimes.  For example, my bankbook is covered with pictures of Mickey Mouse and Goofy which are images Western financial institutions would probably not want to be associated with their product but hey, it works in Japan but there's actually something deeply fascinating and important underlying the idea of kawaii.  Today, we sit down with Kaname Hayashi who was formerly part of SoftBank’s Pepper Project and then went out on his own to start Groove X and create the Lovot. Now, the Lovot is a companion robot or a pet robot and we talk about the robot itself, of course and please check out the links on the site for pictures and videos. It's very cute and you really have to see the Lovot in action to appreciate it but more important than the robot itself is how people are interacting with it.  Now, we've talked about social robots on disrupting Japan before but people are interacting with the Lovot differently and far more socially than anything that's come before it. It's the first robot I've seen that not only could be fully accepted as a pet but is being fully accepted as a pet. Kaname and I also dive into the business model. Groove X has raised a lot of investment and as you'll hear during the interview, this is a startup that could go either way, it could fizzle out into nothing or it could change global society. In fact, in post-production, when I was editing down the interview, I kept thinking of more and deeper questions I wanted to ask Kaname, so we'll have to get him back on the show in the future but for now, you're about to hear a story about the difference in the way children and adults and Westerners interact with robots, the intersection of toxic masculinity and robotics and why science fiction usually gets human-robot interaction all wrong but Kaname tells that story much better than I can. So, let's get right to the interview.  Interview Tim: So, I'm sitting here with Kaname Hayashi of Groove X, the maker of Lovot, so thanks for sitting down with me today.  Kaname: Thank you very much.  Tim: So, Lovot is a cute and I mean really, really cute companion robot but you can probably describe it much better than I can. So, what is Lovot? Kaname: Yeah, good question. Lovot takes a role as a pet.