Sometimes it seems like Japan is almost invisible in global e-commerce.

Despite a dynamic domestic e-commerce market and a long tradition of global exports, Japan just  doesn't seem that interested in selling to the outside world.

But things are changing, and Kazuyoshi Nakazato of Zig Zag is working to make sure they change even faster.

We talk about why Japan is unrepresented in global e-commerce, why that's changing, some things you should never try to sell online.

It's a great conversation, and I think you'll enjoy it.

Show Notes

Why even small e-commerce is global

The bowling ball export experiment

What are Japan's biggest export markets for e-commerce

How acquire overseas e-commerce customers

How to select overseas markets to target

How fast are Japanese e-commerce exports growing?

How to grow and thrive as a small e-commerce site

How to get Japanese founders to think more globally

Links from the Founder

Everything you ever wanted to know about Zig Zag

and their World Shopping international

or domestic in Japanese

Check out a good video intro to World Shopping

Shop in Japan from the rest of the world

Follow Kazuyoshi on Twitter @nakazaty

Friend him on Facebook

Connect on LinkedIn

Transcript

Welcome to Disrupting Japan.

Straight Talk from Japan's most successful entrepreneurs. I'm Tim Romero and thanks for joining me.

Japan is missing out on the global e-commerce boom. Well, there is plenty of e-commerce going on in Japan, but it's almost all domestic and Japan is really missing out on the growing global market.

However, Kazu Nakazato, founder of Zig Zag is changing that. Japan's e-commerce exports are still relatively small, but growing at 140% a year. And Kazu is looking to increase that even more.

But as you'll hear, that's not easy. Kazu and the team at Zigzag are up against strong entrenched interests, language barriers, and one particularly frustrating aspect of Japanese business culture that we'll talk about in a few minutes.

Kazu and I also discuss what COVID taught us about the resilience of global e-commerce. Some things you should never try to sell online. And Kazu also shares some really great advice about how to survive and grow as an independent e-commerce site.

But you know, Kashi tells that story much better than I can. So, let's get right to the interview.

Interview

Tim: So, we're sitting here with Kazu Nakazato of Zig Zag.

Kazu: Yeah, Zig Zag.

Tim: Who's helping Japanese e-commerce sites sell globally. So, thanks for sitting down with us. So, I explain really simply what you do, but I think you can explain Zig Zag much better than I can. So, what does Zig Zag do?

Kazu: We offer a service called global base. Our eCommerce site can quickly transform into share site. It's very simple. All it takes is a single line JavaScript tag. It's provide marketing input forms, marketing our customer support and payments support.

Tim: That's a lot for one line of JavaScript to do. So, it covers the translation, payments, logistics?

Kazu: Yes. Shipping.

Tim: Okay. Wow. And do you handle like returns?

Kazu: Returns, yes. And there are 200 countries.

Tim: So, tell me about your customers. Who's using Zig Zag? What kind of e-commerce sites?

Kazu: Fashion, cosmetics, Anime and entertainment type. For example, Japanese apparel is Beams and Tower records about 2,500 website.

Tim: So, that's quite a range. So, is it mostly the bigger sites like Tower Records and Beams or small independent sites also using it?

Kazu: Yeah, for example in Fukuoka, very, very small apparel shop. And in Chiba, bowling maker site.

Tim: Like bowling ball maker?

Kazu: Yeah, bowling ball. Very, very heavy.

Tim: I was going to say that’s really expensive to ship.

Kazu: Yeah. FedEx or DHL, air or by ship.

Tim: Exporting bowling balls. Are like Japanese bowling balls, like really high quality or something?

This is our 200th episode, so I wanted to do something special.

Everyone loves to complain about the poor quality of Japanese software, but today I’m going to explain exactly what went wrong.  You'll get the whole story, and I'll also pinpoint the specific moment Japan lost its way. By the end, I think you'll have a new perspective on Japanese software and understand why everything might be about to change.

You see, the story of Japanese software is not really the story of software. It's the story of Japanese innovation itself.

 

The Elephant in the Room

Japanese software has problems.  By international standards, it’s just embarrassingly bad.

We all know this, but what’s interesting is that there are perfectly rational, if somewhat frustrating, reasons that things turned out this way. Today I’m going to lay it all that out for you in a way that will help you understand how we got here, and show you why I am optimistic about the future.

You see, the story of Japanese software, is not really about software. It's the story of Japanese innovation itself. The ongoing struggle between disruption and control. It’s a story that involves, war, secret cartels, scrappy rebels, betrayal, rebirth, and perhaps redemption.

 

How This Mess Started

So let’s start at the beginning. The beginning is further back than you might expect.

To really understand how we got here, we need to go back, not just to the end of WWII, but to the years after the Meiji restoration, the late 1800s, back when the Japanese economy was dominated by the zaibatsu.

Now, “zaibatsu” is usually translated as “large corporate group” or “family controlled corporate group.” While that is accurate, it grossly understates the massive economic and political power these groups wielded around the turn of the 20th century.   

Japan’s zaibatsu were not corporate conglomerates as we think of them today.

You see, although the Meiji government adopted a market-based economy and implemented a lot of capitalist reforms, it was the zaibatsu, with the full support of the government, that kept the economy running.

And the zaibatsu system was almost feudal in nature.

The national government could, and did, pass legislation regarding contract law, labor reforms, and property rights, but in practice these were more like suggestions. In reality, as long as the zaibatsu kept the factories running, the rail lines expanding, and the shipyards operating at capacity, the men in Tokyo didn’t trouble themselves too much with the details.

In practice, the zaibatsu families had almost complete dominion over the resources, land, and people under their control. They were the law.

At the turn of the pervious century, there were four major zaibatsu (Sumitomo, Mitsui, Mitsubishi, and Yasuda). And each zaibatsu had its own bank, its own mining and chemical companies, its own heavy manufacturing company, etc. But it wasn’t just industry, each of these zaibatsu  groups had strong political and military alignments. For example, Mitsui had strong influence over the army, while Mitsubishi had a great deal of sway over the imperial navy.

At the start of WWII, the four zaibatsu families controlled over 50% of Japan’s economy. This fact, when combined with their political influence, quite understandably, made Japan’s military government very uncomfortable, and during the war, the military wrested away a bit of the zaibatsu’s power and nationalized some of their assets.

After Japan’s defeat, the American occupation forces considered the zaibatsu a serious economic and political risk to Japan becoming a liberal, democratic fully developed nation. They targeted 16 firms for complete dissolution and another 24 for major reorganizations.

 

Rising from Ashes

Now, that was supposed to be the end of the zaibatsu. I say “supposed to” because those of you who know Japanese history understand that it never really happened.

Of course, many things changed.

There has never been a better time to be raising money in Japan than right now.

Founders ask me about fundraising more than any other topic, so this guide is long overdue. There are links that cover the basics in the Show Notes, and I will be keeping this page updated as new information becomes available and members of the community create new resources.

Calling something "The Ultimate Guide" to anything is a pretty big claim, and I'll do my best to make sure this page lives up to it.

Please enjoy.

Show Notes

Results of the "Why Meet a Founder?" survey

Directories of Japanese VC firms

Japan Venture Capital Membership

Crunchbase's list of Japanese VCs

The Bridge: not a directory, but a good source of Japanese funding announcements

Kei Furukawa's master list of Japanese VCs

Tyson Batino's list of foreign-founder-friendly VCs in Japan.

How to pitch like a Pro

Dave McClure's original guide to pitching VCs - Very much substance over style

The same information in a more readable format

Dave's deck redesigned by people who do care about style

What you need to put in your pitch deck - an infographic

Design advice for pitch decks  - more geared towards pitch contents

Advice from Japanese VCs

James Riney talks about the VC business model and gives pitching advice

Disrupting Japan's live show on fundraising in Japan

Hiro Maeda on fundraising in Japan

Ikuo Hirasishi provides an overview of Japan's VC landscape

More from James Riney back when he was with 500 startups

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 am going to answer the question that everyone seems to be asking. Or at least the question that everyone seems to be asking me.

I am going to explain how to raise money as a new startup founder in Japan.

You know, it’s funny how things work out. I originally planned to write this episode a few months ago as a short-take on a focused topic while I fished up my episode about the history of software engineering in Japan, but the topic kind of got away from me.

My first draft and notes for the show came in at over 24,000 words, which by the time I fleshed it all out would have ended up as a four -hour podcast, and even I can’t stand to listen to me for four hours.

So I’ve had to make some cuts, some painful ones. This episode should be under an hour, but it requires that I speak in generalities and make a few over-broad statements. There are a few really important topics that I will just mention briefly before moving on.

So, if while you are listening to this episode, particularly my VC listeners, and you find yourself thinking that I would explain a particular point in more detail and with more nuance, or wishing that I would dive deeper into specific strategies and scenarios …   Yeah. Me too. But we’ll save that for another podcast or maybe a conversation over a beer.

Now, there are a few very important questions you need to ask before you even decide to seek VC money. Things like “How do you plan on using those funds?” and “Are you sure you understand the growth-driven management style you are signing up for here?”

But, from my experience, relatively few founders really want to dive into those topics. No, what founders in Japan really want to know is how to raise money. So that’s what we are going to talk about.

I’m going to give you a clear and actionable plan so that:

You can decide which VCs you should approach

You can set up meetings with partners at reputable Japanese VC firms

You will know how to pitch in the most effective way possible

You will have some strategies to help you actually close the round, and get the money in the bank.

And you’ll be able to do it all in a reasonable amount of time without going absolutely crazy.

Now, I’ll warn you.

Police departments around the world are using this startup's AI to predict future crime.

Mami Kajita, founder of Singular Perturbations, explains the success of their models, the public reaction to the technology, and how the physics models of glass transition lead to a crime prediction AI.

We debate the future impact of crime prediction technology, and we also talk about how researchers and entrepreneurs can better connect and collaborate.

It's a great conversation, and I think you'll enjoy it.

Show Notes

Telling police what future crime is likely to occur

Who else, besides the police, can use these tools

How the physics of glass transition lead to crime prediction

How to sell software to the police (and other government agencies)

Real world trials led to a 68% decrease in crime

What data go into Crime Nabi's models

The public reaction to future crime prediction

Unintended consequences and and the future of crime prediction

How founders can find mentors and advisors

How researchers and entrepreneurs can better connect and collaborate

Links from the Founder

Everything you ever wanted to know about Singular Perturbations

Check out Mami's published research

Connect with Mami on LinkedIn

Friend her on Facebook

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 predicting future crime, and not in terms of 1950s science fiction, but in terms of real software being used right now by police departments all over the world. 

We talk with Mami Kajita of Singular Perturbations about their Crime Nabi AI, and how this technology is starting to change policing. In real world use Crime Nabi has already resulted in crime reductions of over 50% in areas where it's been tested around the world. 

In our conversation, Mami and I dig into these numbers and we talk about the somewhat surprising inputs that go into training the Crime Nabi AI. 

And of course, we also talk about the very real potential dangers for misuse and what Singular Perturbations is doing to make sure this technology is a force for good. 

Along the way, we talk about how founders can find good mentors and advisors, the proper balance between research and sales, and some really good advice about how to sell to national governments as a startup. 

But, you know, Mami tells that story much better than I can, so let's get right to the interview.

Interview 

Tim: So, cheers.

Mami: Okay, cheers.

Tim: So, I'm sitting here with Mami Kajita, the founder and CEO of Singular Perturbations, the AI for Crime Prediction. So, thanks for sitting down with me.

Mami: Yeah, thank you so much. I'm very honored to be here, and thank you so much for this opportunity.

Tim: I'm glad to have you here. In the intro, I explained a little bit about what Singular Perturbations does. But I think you can explain it much better than me. So, what does Singular Perturbations do?

Mami: We predict future crimes in using AI technology and we provide operation management services for police departments and local governments. And the name of our product is Crime Nabi.

Tim: So, you are telling police departments where future crime is likely to occur?

Mami: Yes. Using this technology we can provide the area where the risk is higher than the other area.

Tim: Okay. And how do they use this information? What do they do with it?

Mami: We provide operational management services in the police department, and there is a team who patrols outside and in Japan, and many police departments doesn't use crime prediction technology before patrols. They have not so much established plan.

Tim: So, the police departments are using this predictive technology to decide where to send patrols?

Mami: Yes, yes.

Tim: Okay. What kind of predictions does it make? Does it predict the type of crime or just the level or…?

Today's episode is about trust; trust in technology and trust in each other.

Very few startups experience what LPixel went through and far fewer survive it.

Today we welcome Yuki Shimahara, founder of LPixel, back to the show. The last few years have been a roller-coster for LPixel, and despite the chaos LPixel managed to created Japan's first certified medical AI device and roll it out into hospitals around the country.

And despite his success in Japan, Yuki also explains why smart medical AI startups are all looking to Southeast Asia.

It's a great conversation, and I think you'll enjoy it.

Show Notes

How LPixel was certified as Japan's first AI medical device

The transition from diagnostic support to full medical diagnosis

Why it's not technology holding back medical AI

The nature of trust in Japanese business

Japanese health insurance is now paying for AI diagnosis

What happens when an employee steals all your funds?

The advantages (and disadvantages) of full transparency

How investors reacted and their new demands

Why more doctors are founding startups

Why research is easier at startups than at universities

Why developing countries will see more advances in medical AI than the developed world

Going global does not mean going to the US (yet)

How the Japanese government should (and should not) foster Japanese innovation

Links from the Founder

Everything you ever wanted to know about LPixel

LPixel's medical diagnostic support system Eirl

Transcript

Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.

I’m Tim Romero and thanks for joining me.

Japan is often described as a high trust society, but it's hard to explain exactly what that means and why it matters.

Well, today we sit down to talk about trust and about medical AI with Yuki Shimahara, CEO of LPixel. Now, a lot has changed since Yuki was on the show four years ago. And by all metrics, LPixel is a stronger and more successful startup today. But one unfortunate event really put that level of trust to the test.

Well, Yuki will give you the details, but the level of trust that existed between investors and clients and employees resulted in saving a startup that no one could reasonably expect to be saved.

And we also talk about why medical AI is going to be adopted so much faster in Southeast Asia, why more and more doctors are starting startups in Japan and why Yuki thinks it's more productive to do deep research at a startup than at a university. But you know, Yuki tells that story much better than I can. So, let's get right to the interview.

Interview

Tim: I'm sitting here with Yuki Shimahara, the CEO of LPixel. So, welcome back to the show. 

Yuki: Yeah, thank you for having me.

Tim: LPixel a cloud-based AI image analysis for life sciences and medical research. And well, you can probably explain it much better than I can.

Yuki: I'm very honored to be back here. LPixel is a startup company from Research Lab of Tokyo University, which is a pioneer bio image informatics. We combine life science and imagine analysis including AI, but also we do are the two main business. So, we developed the AI for medical misdiagnosis and then developing AI for accelerating the pharma research.

Tim: And wow. Last time we talked, I think you were still a PhD candidate at that point.

Yuki: Probably.

Tim: Yeah. Because I do remember we were running around into different rooms at the University of Tokyo campus at Hongo trying to find a room that didn't like echo. So, much has changed since then. You're a lot bigger and more successful than before. So, how many people do you have working at LPixel now?

Yuki: Now, 60 or 70.

Tim: Tell me about your customers. So, last time most of your customers were research institutions, people working on medical research and it seems like you've expanded a lot since then.

Yuki: I think the last time is just developing the AI but ...

The way we get our food is changing.

Many are discussing how to make modern farming more sustainable, but this startup working to end it entirely.

Ikuo Hiraishi is a serial entrepreneur and the Japan head of Infarm Japan, an urban-farming startup growing food at supermarkets. In fact, as Ikuo explains, a lot more of your food is grown indoors than you probably imagine.

The future of food will look nothing like its past.

t's a great conversation, and I think you'll enjoy it.

Show Notes

What is Urban framing, and why do it?

Why Japanese consumer's first resisted urban farming

The true value proposition for the supermarkets.

The biggest costs in indoor farming are not what you think.

Why, after 40-years. urban farming is finally taking off in Japan

The two challenges to scaling indoor agriculture

Three reasons Japan might be the perfect market for urban farming and one reason it may not be

Why it's better to grow cheep veggies with expensive tech

Is it better to be a founder or a VC?

Links from the Founder

Everything you ever wanted to know about Infarm

METI visiting the Infarm Growing Center in Berlin

Follow Ikuo on Twitter @ikuoch

Friend him on Facebook

Check out Ikuo's article about the Japan startup & VC landscape

More about Ikuo

Ikuo's consulting company Dreamvision and blog

He's also a Professor at Entrepreneurship Department, Musashino University

... and an AsiaBerlin ambassador

Transcript

Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.

I’m Tim Romero and thanks for joining me.

Food is complicated.

That's why successful food related startups are so rare and so important when we do find them. Today, we sit down with an old friend after almost eight years. Ikuo Hiraishi is running Infarm Japan, an urban farming startup that is actually growing vegetables in supermarkets.

Now, indoor farming or hydroponics has been fairly common since the 1980s, but the combination of rising global cost of food and the plummeting cost of technology and some innovative machine learning has resulted in urban farming not only becoming commercially viable today, but providing a very interesting value proposition for the supermarkets. And a pretty interesting value proposition for you and me as well. 

We talk about the future of food, why you need expensive technology to grow inexpensive vegetables, and whether it's better to be a founder or VC in today's world. But, you know, Ikuo tells that story much better than I can. So, let's get right to the interview.

Interview

Ikuo: Cheers. Very nice to see you.

Tim: I'm sitting here with Ikuo Hiraishi, a serial entrepreneur, angel investor, and new urban farmer.

Ikuo: Thank you.

Tim: So, thanks for sitting down with us.

Ikuo: It's honor to be back here, to have a chat with you.

Tim: It's been a while. It's been around eight years.

Ikuo: Yes. I was kind of like test interviewee of Disrupting Japan. That was eight years ago.

Tim: I think you were episode number four.

Ikuo: Yes. A very early episode. 

Tim: Very early. And we're closing in on episode 200 now. 

Ikuo: Oh, cool. Congrats.

Tim: But yeah, we're here to talk about urban farming. So, just so I can make sure I understand it correctly. So, the types of farming we have, like rural farming, which is just vegetables out in the field, like just farming.

Ikuo: Yes. Soiled based farming.

Tim: And then we have indoor farming, which is like plants and warehouses and things that are usually in the suburbs or in the outskirts of cities. And then we have what you and Infarm are doing, which is urban farming, where the veggies are grown like in the supermarkets themselves. So, what's the big advantage of urban farming overall, the other types of farming?

Ikuo: So, of course there are lots of advantages, but so we can minimize the food mileage meaning delivery distance. So,

We need to get the health care revolution right.

Artificial Intelligence promises to reduce bottlenecks, improve quality of care, and allow our over-stretched healthcare systems to scale to meet the needs of the aging global population.

But it's not going to be easy.

Today we talk with Kota Kubo, founder of Ubie about the opportunities and challenges involved in the coming wave of healthcare innovation. And since Ubie just raised $27 million to  fund their global expansion, you'll be hearing a lot more about them in the future.

It's a great conversation, and I think you'll enjoy it.

Show Notes

The right way to use and AI symptom checker

Is founding a 50/50 startup with an old friend a good idea?

How you can manage 150 employees without managers

Why the team designed Ubie's UI in Hibiya Park

The "karaoke interface" for medical data

Why you should ignore your customers and listen to your users about design

Why it's so hard to sell to doctors (and how to do it right)

How to better support orphaned diseases

Ubie's strategy for going global.

Links from the Founder

Everything you ever wanted to know about Ubie

Check your symptoms with Ubie's AI Symptom Checker

AN overview of Teal Management

Follow Kota on Twitter @quvo_ubie

Connect on LinkedIn

Transcript

Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.

I’m Tim Romero and thanks for joining me.

Even if AI can't give us the right answer, sometimes it can help us to ask the right questions. It turns out, that's a lot more important than you might think.

Today, we sit down with Kota Kubo, the co-founder of Ubie, an AI based symptom checker and hospital check-in tool that is being used at over a thousand hospitals and clinics across Japan. And as you'll see in this case, the questions, the AI raises are more important than those it answers. And since Ubie just raised 27 million to fund their global expansion, you'll be hearing a lot more about them soon.

 We also talk about how Ubie manages 150 staff with no managers, why it's so hard to sell to doctors and how to do it right. How to bring attention to orphan diseases and why you really need to ignore your customer’s ideas about UI and listen to your users.

But, you know, Kota tells that story much better than I can. So, let's get right to the interview.

Interview 

Tim: Cheers.

Kota: Cheers.

Tim: So, we're sitting here with Kota Kubo of Ubie, who is disrupting digital health here in Japan. So, thanks so much for sitting down with me. Health tech is so important in Japan. And so you've got two different products you offer. 

Kota: Yes. 

Tim: So, let's do just a real quick introduction to what those products are and then we'll dive deep.

Kota: Yes, we have the two side of product. First, is for the patient product. It's our AI symptom checker Ubie and the users input their symptoms like headache or stomach ache or something. So AI asked some of the sort of questions. And after that AI suggest a disease name so their users can get to know their symptom, condition and disease. And after that, we also suggested the clinics or hospitals. 

Tim: Okay. You know, one thing I'm curious about that, because I've used it. It's really interesting, but so like some sites like WebMD, for example, they have a really famous problem where someone will go on with like, I don't know, a runny nose and they'll start searching and asking questions. And 10 minutes later they're convinced they have like rabies or some brain eating parasite or some horrible disease. How do you stop that kind of unhealthy interaction at Ubie?

Kota: Yeah, it's very difficult. I think so our end the point of the suggestions guide people to the appropriate clinics and hospitals and we suggest a specialist created to their symptom. So, I think their users feel they're safe.

Tim: So, and again, you're really focusing on providing information,

World-changing trends can start anywhere in the world today.

Because the social media platforms evolved differently in Northeast Asia, e-commerce developed differently as well. And because of recent shifts in regulation and social attitudes, Western social media is going to start to look a lot more like it does in Aisa, and e-commerce trends will follow.

Today Masa Shimizu, founder of Zeals, explains the origins and structure of chat-commerce and how it might lead to a friendlier, more enjoyable, and more profitable internet.

It's a great conversation, and I think you'll enjoy it.

Show Notes

An introduction to chat commerce

How to teach a support chatbot to sell

What the death or retargeting means for chat commerce

Why some university startups get support, mentoring, and funding but and others do not

$39 M fundraise in equity and debt, and why that's becoming a popular model

Why Asian social media evolved differently

Why Facebook and Instagram are about to become more chat-like

How Japanese VC discourage startups from going global

Links from the Founder

Everything you ever wanted to know about Zeals

Zeals on LinkedIn

Coverage of Zeal's $39 M fundraise

Follow Masa on Twitter @masa_zeals

Friend him on Facebook

Connect on LinkedIn

 

Transcript

Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.

I’m Tim Romero and thanks for joining me.

Today, we are going to talk about a 290 billion eCommerce trend that is sweeping through Northeast Asia, but hasn't taken off in the US or Europe. Well, at least not yet. 

You and I are going to sit down with Masa Shimizu, founder and CEO of Zeals. And we're going to talk about Chat Commerce. Now Masa will explain this structural reasons that this has been so popular in Japan, China, and Korea, and why it's about to take off in the West. 

And it's not just Masa and me saying so, Zeals just raised 39 million to fund their US expansion. So, this is a trend you need to know about. 

We also talk a lot about the Japanese concept of Omotenashi, which is usually translated as hospitality and yeah, kind of, I mean, that's probably the closest word we have for it in English, but there's more to it than that. It's kind of obsession and a giving of yourself honestly and wholeheartedly to make your guests comfortable and satisfied. It's kind of a satisfaction and happiness that you get from making your guests happy. 

So, Masa and I talk about Omotenashi, about a structural change coming to global social network platforms. How we can get more Japanese startups to go global and why the third party cookie ban means the death of retargeting and the birth of the Chat Commerce boom. 

But Masa tells that story much better than I can. So, let's get right to the interview. 

Interview 

Tim: I'm sitting here with Masa Shimizu the founder and CEO of Zeals, who is a driving force behind Chat Commerce. So, thanks for sitting down with us.

Masa: Thank you for reaching out.

Tim: To start out with, what is Chat Commerce?

Masa: Chat Commerce is next eCommerce innovations. So, on eCommerce website many people feel concerned to purchase online, especially expensive items or complex items. We can support through communication experience and we believe this is Omotenashi experience. Omotenashi is Japanese word which means hospitality. It's very exciting and helpful experience I think.

Tim: So, when you're talking about Chat Commerce is this interaction over social media? Is this interaction over like chat at corporate websites? What's the main channel where this conversation is taking place?

Masa: Mainly is SNS. In Japan case, line platform is most important because many people use this platform. And as a country, other channel is very important. The example, WhatsApp, Facebook Messengers, WeChat and Instagram and so on.

Tim: Okay. That makes -- and its funny people coming into the Japanese market o...

You never hear the names of some of the world's best SaaS startups.

Why waste money building awareness among consumers when you can quickly and steadily grow your B2B business across Japan then across Asia?

Today Yu Taniguchi founder of TableCheck returns to the show and answers that question.

TableCheck is rapidly expanding their table-management system business by throwing out a lot of the traditional SaaS playbook, and Yu lays out a model for sustainable, scalable SaaS startups.

It's a great conversation, and I think you'll enjoy it.

Show Notes

How the TMS market has changed in the last five years

Why the first mover advantage is not really an advantage

Maintaining differentiation in an increasingly competitive market

The huge flaw in the current generation of SaaS "best practices"

Demand-side vs supply-side startups

Why you should only take the VC investment that you actually (desperately) need

Why Japanese (and otter) startups need to be thinking about global markets from day 1

Concrete (and sad) examples of what's wrong with Japan's education system

Links from the Founder

Everything you ever wanted to know about TableCheck

TableCheck Twitter @tablecheck

LinkedIn Page

TableCheck on Facebook

Follow Yu on Instagram

Friend him on Facebook

Connect on LinkedIn

Transcript

Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.

I’m Tim Romero and thanks for joining me.

Some of the most important and successful B2B startups fly under the radar. And that makes sense when you think about it. 

When success depends on dominating a specific business niche, who really cares if most consumers have never heard of you? In fact, as we'll see, that can actually put your whole startup at risk. Today, Yu Taniguchi, old friend and founder of TableCheck joins us again on Disrupting Japan. 

Now, TableCheck makes a table management solution for restaurants, and Yu and the team have taken a very different approach than most of the competition in this space. 

The last time Yu came on the show, we talked about his business model and how to expand globally with very little capital. There's a link to the episode in the show notes, and I strongly recommend you listen to it because it was really a good one and we'll be covering a hundred percent new ground today.

Today, as we catch up with Yu, we find his strategy has worked with some refinements, and TableCheck is expanding rapidly across APAC. 

This is a great real world case study of how Japanese startups can go global. Yu and I also talk about how the current generation of SaaS business models is broken, how to protect your startup from market downturns, and some really good advice about the two kinds of fundraising plans you need to have to survive. 

But you know, Yu tells that story much better than I can, so let's get right to the interview. 

Interview 

Tim: We're sitting here with Yu Taniguchi of TableCheck, who is making integrated reservations, CRM billing and more for restaurants. Yu, it is so good to have you back again. Thanks for sitting down with us.

Yu: Thank you so much for inviting me. I'm very honored and excited to be here.

Tim: It's been four and a half years since you were last on the show and so much has changed since then. You were growing fast then, you've continued to, so tell me about your customers today. Who's using TableCheck and how many are there now?

Yu: We have roughly 7,000 restaurants using our solution both in Japan and overseas. Back then when we did the interview, I think it was around 2,000 restaurants. Roughly we've more than tripled since then and taking in consideration that out of the four years, two years have been during the COVID.

Tim: Let's talk about what's changed in the market. Four and a half years ago, you were saying that your biggest competition was paper and pencil. Most of your customers were using these manual processes,

Manga is one of Japan's best known exports, but it's surprisingly hard to make money here.

Today we dig into exactly why this is. We sit down with Sho Ishiwatari, founder of Mantra, who explains how is company is trying to expand the global market by streamlining the translation and global marketing processes.

We also talk about why manga is so much harder than books for AI to understand and a few ways Japanese universities are trying to develop and inspire the next generation of Japanese founders.

It's a great conversation, and I think you'll enjoy it.

Show Notes

The surprisingly complex manga translation process

The real problem with fan-translated manga

How to think about getting a 10x( or 100x!) improvement

How the University of Tokyo supports startups and what other schools can learn from them

Why translating manga is so different from translating novels

The downside using contextual hinting wit AI/ML

How to expand the global manga market

What every Japanese university should be doing to encourage startups

Links from the Founder

Everything you ever wanted to know about Mantra

Connect with Sho on LinkedIn

Friend him on Facebook

Follow him on Twitter @mantra_ja (Japanese)

Sho's published academic research on machine translation of manga

Transcript

Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.

I’m Tim Romero and thanks for listening.

Manga and Anime have been two of Japan's most visible and influential exports. Japanese manga has earned its own section in US bookstores. And in the movie industry today, many of the world's most successful directors and cinematographers cite Japanese manga and anime artists as some of their biggest inspirations and influences. But surprisingly, despite manga's global popularity and influence, the global market is pretty small. There's not a lot of money in manga. A

And today, we're going to dig into that. We're going to sit down and talk with Sho Ishiwatari, CEO of Mantra. And we're going to find out if a startup can disrupt or even survive in the manga industry. Mantra has created an AI that can translate manga. But, as is the case with so many startup stories, the journey is far more interesting than the destination. You see, before the AI could translate manga, Sho when the team had to teach it to understand manga. Not just read the words but understand the context and the layers of implied meaning. 

Sho and I talk about the nature of human understanding, how Japanese universities can better inspire the next generation of startup founders, and AI's role in helping people understand each other. But you know, Sho tells that story much better than I can. So let's get right to the interview. 

Interview 

Tim: So we're sitting here with Sho Ishiwatari of Mantra, who's bringing Japanese manga to the world. So thanks for sitting down with us, Sho. 

Sho: Yeah, thank you for having me, Tim.

Tim: In the introduction, I give a really high-level description of what you guys do. But can you explain what Mantra is?

Sho: Yeah, sure. So what we are doing is to deliver comics, deliver manga, across language barriers. So we are building two products. The first one is a manga translation tool that is based on our machine translation technology. And another product we're making is Langagku, which is a language learning tool based on manga.

Tim: That's two really different lines of business. 

Sho: Yeah.

Tim: Let's dive into both separately later on. But the core tool, do you just translate Japanese into English or do you support other languages as well?

Sho: We currently support for language peers, Japanese to English, and English to Japanese, and Japanese to Chinese, and Chinese to Japanese. 

Tim: Well, that's interesting. So far, most of your business has been Japanese to other languages. But do you also have companies bringing in English or Chinese language manga to Japan?