Disrupting Japan: Startups and Venture Capital in Japan

We live in a global financial system, but fintech innovation is surprisingly local.

Makoto Shibata, the head of FinoLab, has been leading financial innovation Japan for over 20 years, long before the term fintech existed. We talk about the evolution of Japan's fintech landscape, and which fintech sectors are facing consolidation and which are facing growth.

And we also explore Japan's rapid transition from a cash-based society to a cashless one and the startup opportunities that opens up.

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

Show Notes

The critical role of a dedication fintech community

Why corporate support is still needed to succeeded in fintech in Japan

The government's push to move society away from cash

The likely fate of today's e-payment startups

Opportunities for fintech startups in the next five years

How AI is being used in Japanese banks (you won’t like it)

Advice for how startups can successfully collaborate with large financial institutions

What is preventing Japanese fintech startups from going global? 

The kinds of foreign fintech startups with the best chance for success in Japan

How to know when you are at the peak of the fintech investing cycle?

What foreigners most misunderstand about Japan’s fintech markets

Links from our Guest

Everything you ever wanted to know about FinoLab

The FinoLab startup community

Connect with Makoto on LinkedIn

Friend him on Facebook

An interview with Makoto on Xtech

Ergomania article on the rise of fintech in Japan

Fortune innovation Forum on fintech in Japan [Video]

Japan FinTech Topics YouTube playlist [Japanese]

 

Transcript

Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs.

I'm Tim Romero and thanks for joining me.

FinTech is a broad and confusing startup sector. It's a sweeping category that encompasses everything from pragmatic and meticulous applications, like the optimization and risk management of consumer loan portfolios to the most hype driven and outrageously transparent crypto scams.

Of course, at Disrupting Japan, we focus on Japan. And so today we'll be sitting down with Makoto Shibata, the head of FinoLab and the FinoLab Fund. Now, FinoLab has been central to Japan's FinTech community for a long time, and today we're going to take a sober look at FinTech in Japan.

What's working, what's not, and what's likely to blow up in the near future.

Equally important, before running FinoLab, Makoto spent 23 years at a Japanese mega bank and was in charge of their innovation activities. So, he offers some very practical advice on how FinTech startups can partner with financial institutions in Japan. He explains why such partnerships are needed and where they can go wrong.

Makoto and I dig into how Japan is rapidly becoming a cashless society, the opportunities that trend presents for FinTech startups in Japan, and the importance and challenges of Japanese FinTech startups trying to go global and

oh, yes, we also talk about what is perhaps the worst possible business use of generative AI ever to be deployed.

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

Interview

Tim: So, we're sitting here with Makoto Shibata of FinoLab. So, thanks for sitting down with me.

Makoto: Thank you for having me.

Tim: So, FinoLab is a community. It's much more than just the fund, but to start things out, tell me about the fund and its thesis. Who are you investing in and why?

Makoto: We started from a business community, we realized that one of the top priority startup is to raise fund. And in their early stages, they may have difficulty, and we thought that it would be good to have our own fund to support these startups. So, basically we would focus on the early stage startup in FinTech related areas. These days FinTech has become quite wide. The territory of FinTech is expanding.

Disrupting Japan is 10 years old today!

This is a simple thank you rather than a full episode.

Thanks for listening!

 

 

Transcript

Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs.

I'm Tim Romero and thanks for joining me.

This is a very short and very special episode. It's not an episode really, more of a personal message.

You see, ten years ago today. I released the very first episode of Disrupting Japan.

And I just wanted to say thank you.

I really mean that. Independent podcasting is an incredibly personal medium and it depends on there being a real connection between the host, and the guests, and the listeners.  Commercial talk shows spend a fortune creating the illusion of that connection.

And being in the center of that in real life is an honor and it’s amazing.

It’s become a cliche when the host thanks their audience and reminds them that the show would not be possible without them, but it’s different at Disrupting Japan. You really do create a big part of the show’s value.  Let me explain.

It’s not about download numbers or affiliate link-clicks. I don’t sell anything and my guests aren’t selling anything on Disrupting Japan, so those metrics don’t matter much to me. However, my guests often comment on the surprisingly high quality of inbound contracts they receive  after appearing on the show. These connections have resulted in a lot of new hires, and a handful of investments have been made as well.

That community, the engagement and overall quality of the listeners is a big part of the show’s value. In fact, over the years, four Japanese startup founders have told me that listening to our guests’ tell their stories on Disrupting Japan gave them the confidence to start their own startup, and that’s pretty awesome.

So, thank you!

Ten years ago I never imagined how big Disrupting Japan would become. Honestly, it kind of freaks me out sometimes. But here we are. Ten years and well over 200 episodes later, and we have over 9,000 listers in more than 150 countries around the world — including one listener from Vatican City.

Now, I have no way of knowing for sure exactly who that listener is.  I mean, it could be anybody. But I like to think of it as a testament to the influential nature of Disrupting Japan’s listeners.

Building Disrupting Japan is an honor and a joy. I love putting the show together, and despite having a fairly demanding day job, I always make sure Disrupting Japan is released on schedule and is a quality show that woth the time you put into listening to it.

The show takes up a lot of weekends and evenings. I’ve done pre-interview research while in the hospital for a minor surgery. I’ve done post production editing in so many different airport lounges, and twice I’ve made a little pillow-fort in my hotel room so I would have decent acoustics to record the intro and outtro.

So, whether you are a new lister or have been a part of Disrupting Japan ever since episode 1 was released 10 years ago, thank you for taking this journey with me. Startup innovation is really starting to flourish in Japan, and we have exciting times ahead.

And most of all, thanks for listening and thank you for letting people interested in Japanese startups and VCs know about the show.

I'm Tim Romero and thanks for listening to Disrupting Japan.

SaaS startup valuations and growth rates have dropped sharply in most of the world, but not in Japan.

SaaS startups are growing fast in Japan, and that trend is set to accelerate even more over the next five years.

Today Shinji Asada of One Capital explains Japan's still-untapped SaaS potential, his unique SMB and product-focused investment thesis, and the big changes that are happening in Japan's startup ecosystem.

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

Show Notes

The untapped potential of SMB SaaS

Unique requirements for product collaboration software in Japan

What is will take for Japanese SaaS startups to go global

How One Capital helps its investors with digital transformation

Japanese CVCs play a different role than in the US, and that's a good thing

Why Japan SaaS valuations will continue to climb

What makes a great SaaS company

How Japanese founders have changed over the past 20 years

How they will change in the next five

How Japanese VC will (and will not) change in the next five years

What Shinji learned from doing inside sales as a VC

Links from our Guest

Everything you ever wanted to know about One Capital

The SaaS metrics tool, Projection AI

Follow Shinji on Twitter @asada23

Friend him on Facebook

 

Transcript

Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs.

I'm Tim Romero and thanks for joining me.

I have always been a fan of Enterprise SaaS. In fact, all of the startups I founded have been enterprise SaaS companies, and some of those were back when SaaS was called ASP.

But these days it seems that SaaS has lost a lot of its former shine and sparkle, at least in the US market. Multiples are way down for both public and private SaaS companies. We're seeing a lot of flat and even down rounds.

For the first time in a very long time, American VCs just aren't that excited about SaaS startups.

But things are very different in Japan.

Today we sit down with Shinji Asada, co-founder and general partner of One Capital.  Shinji explains how SaaS in Japan has had a very different history and why it's likely going to have a very different future than it will in the West. And he brings the numbers to back that up. We also talk about why SaaS valuations continue to climb in Japan, how Japanese VCs are changing, and why Shinji spends his spare time doing inside sales for SaaS products.

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

 

Interview

Tim: So, we're sitting here with Shinji Asada, the founder of One Capital. So, thanks for sitting down with us.

Shinji: Appreciate it.

Tim: So, Shinji, first of all, let me just congratulate you on your recently closed Fund two, which was just last month, right?

Shinji: Yeah. It was a great adventure too, because Fund two is different from Fund one. Fund one is totally, totally new, where you have to talk a lot, about track record and your strategy. And Fund two, you have a little bit of an easier life because you've started your Fund one and you've deployed most of the capital. So, you have a story to tell in a concrete manner.

Tim: I'm going to dig into that whole journey in a bit later. But right now, tell me a bit about One Capital. What's your thesis? Who are you investing in and why?

Shinji: We are a sector focused early stage Fund, focused on enterprise software. The reason is, I think Japan has a huge problem with the adoption of technology in the workforce. And I've been working at Itochu, which is a great company in a profitable large market cap growing. But the systems that I had to use was very, very old. It's on-prem customized software. You know, even under those IT system circumstances, I think corporate Japan is doing pretty well. And people didn't actually use digital workflows pre-covid because we had this thing called the Hanko, which is stamps.

If you have ever wondered what it really takes to start and grow a startup as a foreigner in Japan. Well, I have a treat for you today.

Earlier this year, at the Japan FinTech Festival, I had the privilege of sitting down with four fantastic foreign FinTech founders and talking about what you need to succeed in Japan.

There are some great insights here from Jeff Wentworth of Curvegrid, Paul Chapman of Moneytree, Sam Pemberton-Ahmed of SmartPay, and Samantha Ghiotti of Habitto.

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

Transcript

I think in every startup ecosystem, foreigners play an outsized role in promoting that ecosystem, whether it's in San Francisco, whether it's London. And the reasons for that might be a desire, a people who are willing to uproot themselves and move halfway across the world, maybe are just bigger risk takers. Maybe it's new perspective.

But today, we're gonna dig into what it takes to grow a startup, a Fintech startup in particular as a foreigner here in Japan. And to start out, we're gonna do really brief, really brief introductions. So I'm Tim Romero. I'm a partner at Jira Ventures. We invest in green tech energy, sustainability, next generation energy.

Before that, I founded 4 startups here in Japan. I ran Google for startups Japan for a number of years. I helped Tapco spin out their CVC, and I run a podcast called Disrupting Japan, which is interviews with Japanese founders about what it's like to be a founder in a culture that prizes conformity. Samantha? Hi, everyone.

My name is Sam, and I'm the cofounder of Habito. Habits is Japan's first connected financial experience helping people save, invest, and protect what they love the most. As my surname suggests, I'm Italian and I'm a mother of 2. And, I've been living and working across 4 different continents, London, New York, Dubai, Singapore, and now Tokyo. I spent about 20 years at the intersection of tech and finance, about 10 years as an operator, both in large financial institutions.

And I ran the Singlife franchise in Singapore prior to its exit in 2021. And I spent 10 years as an investor sitting on the other side, predominantly in venture and also private equity, with a company called Anthemis Group, which is pioneer fintech investors in Europe and North America. And, that's where I met a lot of people there today is in this room. So it's great to see you all again. Excellent.

Sam? Hi. My name's Sam. I'm from SmartPay. SmartPay is an embedded finance company.

What does that mean? We provide installment loans to consumers at the point of purchase to help merchants, to grow their revenue. And then as of today as well, we just announced insurance as well. So we've partnered with Chubb, and we're providing product insurance and travel insurance with Chubb, at the point of purchase as well. We've signed over 20 banks and 201 credit unions.

What does that mean? It means that you can pay directly from your bank account digitally. So we've connected with the 20 banks and 201 Credit Unions through APIs. So through our app, you can access your bank account. Me, personally, I've been working in Japan since 2010.

Very lucky I was with Starbucks, where we rolled out in app payment, and loyalty card and obviously grew Japan to to be the 2nd largest market at Starbucks, moved to Mastercard, worked with Japan, as well with the banks, and then I was at Facebook, and WhatsApp, and Instagram in Japan and learned a lot from Zuck about success in Japan and decided to to go on my own. Good morning, everyone. My name is Paul Chapman. I'm the, the founder and and CEO at Moneytree. We're a financial data platform, based in Tokyo.

We work with some of the largest banks such as SMBC, one of the sponsors, Mitsubishi OFJ, Japan Post Bank. We have some of the fastest growing, up and coming start ups in Japan using our data platform to get access to over 2,500 data sources. We we've been at this for a while,

Japan has far fewer unicorns than one expects - or than venture capitalists desire.

That fact, however, hides a fascinating story.

Today James Riney, founding partner of Coral Capital explains the danger of unicorn counting.

We dive deep into which startup sectors Japan is likely to lead in globally in the coming decade, how to identify unique startup value in Japan.

We also talk about how Japan has become more like Silicon Valley in the past ten years and why they are about to become very different.

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

Show Notes

Coral Capital’s portfolio strategy

How to find Japanese startups that can make a global impact

Three categories of Japanese startups with unique opportunities for growth

Sectors where Japan has a global advantage in startups

Why “niche” startups in Japan can become hugely profitable

What’s in Store for Carpal Capital Fund 4

Proof Japanese investors are long-term patent long-term investors

The importance of VC portfolio services is growing in Japan

How to get a job at a startup

Starting a VC fund as a foreigner in Japan

Japan’s “Just who does he think he is?! “ problem

The error in the government's plan to attract foreign investors

Why foreign VC struggle in Japan

This biggest misconceptions foreign VCs have about the Japanese market

Japan’s hidden unicorns

Links from our Guest

Everything you ever wanted to know about Coral Capital

Get in touch as a startup

Get in touch as normal person  (lol)

Coral Capital on YouTube

The Coral Capital podcast

Follow James on Twitter @james_riney

Connect with him on LinkedIn

Japan's Hidden Unicorns

James' Article on Japan's 41 Hidden Unicorns

My panel discussion on the same topic : Live from Stanford: Where are Japan’s Unicorns?

Coral Capital Fund IV announcement

Get a job at Coral Capital

Transcript

Welcome to Disrupting Japan, Straight Talk from Japan's most innovative startups and VCs.

I'm Tim Romero, and thanks for joining me.

Venture capital in Japan is changing, but not in the way that most people think it is.

Today, we sit down and talk with longtime friend of the show and founding partner of Coral Capital, James Riney. Now, James first came on the show about eight years ago, back when he was at 500 startups and before he even started Coral Capital.

Over those eight years, James and Coral has probably done more than anyone to bring Silicon Valley style VC investment and VC founder support to Japan. And we're going to talk about some of those successes and failures.

James also shares exactly what he and the team at Coral Capital are looking for in the startups they invest in and how they identify unique startup value in Japan. We also dive into the recent push to attract more foreign VC investment into Japan, what foreigners misunderstand about investing in Japanese startups, the challenges of establishing a VC fund here in Japan, and what Japanese and Silicon Valley VCs still need to learn from each other.

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

Interview

Tim: So, I'm sitting here with longtime friend of the show. James Rainey, who's CEO, founder of Coral Capital. So, thanks for sitting down with us again.

James: Thank you. I guess it's my third time.

Tim: Third time in almost 10 years.

James: It's crazy. Time flies.

Tim: It does. Man, so much has changed. It's just incredible. But we will go down memory lane some other time. And today let's talk  Coral. So, tell me about your fund. Who are you investing in and why?

James: Yeah, so we are basically looking for what we call Power Law companies in Japan. So, as you know, venture capital is very much driven by Power Law, which means that there's only a handful of companies in the industry or at a firm level that are really going to drive most of the returns.

Japan thinks about robotics and AI differently that the West.

In addition to their functional, productive role, a lot of thought is also given to our personal interactions, their social role, and the relationships we build with them.

Today we sit down with Shunsuke Aoki, founder of Yukai Engineering and one of the most innovative and creative thinkers on the emotional connection between humans and machines.

We talk about the future of robot companionship, how AI will change the definition of "culture", and why the future of Japanese robotics will have a lot more participation by foreigners.

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

Show Notes

The importance of emotional connection with robots

Why children will listen to robots more then parents

The importance and future of robot companionship

Japanese vs western robot attitudes in culture and fiction

How GenZ is is accepting AI boyfriends and girlfriends

What a healthy emotional connection with an AI or robot looks like

How to keep AI from influencing us into developing bad habits and

Why do we keep building human like robots

Why it’s easier to form an emotional connection to Qooboo than Abbot

How to (maybe) make money on emotional robots

Why the Japanese approach to robotics needs more foreigners in Japan now

Links from our Guest

Everything you ever wanted to know about Yukai Engineering

Follow Shunsuke on Twitter @aopico

Friend him on Facebook

Connect on LinkedIn

Yukai's Products

Bocco Emo

Qoobo

Nekkomimi

Fufury

Transcript

Welcome to Disrupting Japan, Straight Talk from Japan's most innovative startups and VCs.

I'm Tim Romero, and thanks for joining me.

Today, we're going to talk about robots because I mean, hey, who doesn't love robots?

Now, in past episodes, we've talked a lot about how Japan's relationship with robots and automation is fundamentally different from what it is in the West. It's not really about technology. I mean, technology is universal. It's more about the personal and cultural connection to machines in general.

Well, today I have a real treat for you. We sit down and talk with Shunsuke Aoki, the founder of Yukai Engineering. Now Shunsuke may not be that well known outside Japan, but he's one of the most innovative and creative thinkers on the topic of how humans and machines can connect on an emotional and a subconscious level.

Now, to be fair, an audio podcast can't really do justice to Yukai engineering's creations, but we're going to do our best. You need to see the videos or really you need to interact with Shunsuke's creations in person to fully understand the emotional impact.

Shunsuke and I talk about the future of robot and AI companionship, how AI will change the way we think about culture, and why the future of Japanese robotics will involve a lot more participation from foreigners.

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

Interview

Tim: So, we're sitting here with Shunsuke Aoki, the founder of Yukai Engineering who's creating lifestyle robots, and thanks for sitting down with us again. It's been a while.

Shunsuke: Thank you. It's been a while.

Tim: Yukai over the last decade and a half has been making so many cool, interesting things that just to name a few, your first big hit was the Nekomimi wearable cattier that respond to brainwaves. You have the Qoobo sort of companion pillow which has the cat tail on it. The Bocco family robot that seems to be getting a lot of traction and it's hard to describe these on an audio podcast. But we'll put videos and pictures on the site, but it's hard to understand this kind of emotional impact unless you can touch and interact with these robots. With so much robotics research going on, you've been very focused on this sort of emotional connection. Tell me about that. Why is that important? Why do you focus on that?

What keeps Japanese startups stuck in Japan?

It's not a lack of opportunity or ambition. It's not a lack of knowledge or talent. In fact, one of Japan's most experienced venture capitalists thinks that VCs themselves that are the problem.

Today we sit down with Ken Yasunaga, founder and Managing Partner of Global Hands On VC, a fund focused on finding and supporting the Japanese startups with the highest potential to succeed in the global market.

Before founding GHOVC, Ken was managing director at INCJ (Japan's public/private $21B venture fund) as well holding multiple leadership positions in the Japan Venture Capital Association.

We talk about the unique opportunities for investment in Japan, the trap of going public here, how some VCs are holding startups back, and why this might be a turning point for Japan's new global startups.

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

Show Notes

The two most pressing needs in Japan's startup ecosystem

What's driving the increasing quality of Japanese founders

Why we are not seeing Japanese unicorns

What's preventing Japanese startups from going global

The trap of going pubic in Japan

Why Japanese startups struggle to go global

The importance of mentors and hands-on support

The important role of foreign VCs in Japan

The right role government needs to play in supporting innovation in Japan

Are Japanese founders becoming more conformist?

Links from our Guest

Everything you ever wanted to know about GHOVC

Check out GHOVC on YouTube

Follow Ken on Twitter @ken_yasunaga

Friend him on Facebook

Connect on LinkedIn

Transcript

Welcome to Disrupting Japan. Straight Talk from Japan's most innovative startups and VCs.

I'm Tim Romero, and thanks for joining me.

Talking about how Japanese startups need to go global is like talking about needing to go to the gym to lose those 10 pounds. I mean, everyone agrees it’s a great idea, a necessary one in fact, everyone is incredibly supportive. There are classes, networking opportunities, a wide and encouraging network.

We all agree that it needs to be done, but somehow very few actually get off their ass and make it happen.

Well, today we sit down with Ken Yasunaga, who is going to explain what he and his team are doing to fix that. The going global part, I mean, getting motivated to go to the gym is a discussion we'll save for a later time.

Ken is the founder and the managing partner at Global Hands-on VC a fund. He and his partners put together to focus on finding the Japanese startups with the strongest global potential, and then providing them with the resources and guidance they need to actually do so successfully. Before starting his most recent fund, Ken managed one of the largest Japan government VC funds and has advised both METI and the Cabinet Office on startup policy.

So, we also dive deep into the role that government should play in supporting the startup ecosystem here. The IPO trap that many Japanese startups fall into, the unique opportunity for foreign VCs in Japan. And of course just what it's going to take to get Japanese startups to succeed in global markets.

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

Interview

Tim: So, we're sitting here with Ken Yasunaga, the founder and managing partner of Global Hands-on VC. So, thanks for sitting down with us.

Ken: Well, thank you for having me.

Tim: I've really been looking forward to this conversation because we've known each other for quite some time now through several iterations of our career path. So, let's talk about your thesis at Global Hands-on VC because I think you're addressing two really important needs in Japan's startup ecosystem.

Ken: Yeah. So, let me first tell you what the Global Hands-on VC. We call it the GHOVC. This is a VC fund that invest to the Japanese technology startup.

There is important news for Disrupting Japan this week.

It's a very short episode because I just want to let you know what's coming, and to thank you for all your support over the years.

Leave a comment

Transcript

Welcome to Disrupting Japan

Straight talk from Japan’s most innovative startups and VCs.

I’m Tim Romero, and thanks for listening.

Big changes are coming to Disrupting Japan.

Our 10th anniversary is coming up this September, and you know, I thought about making this change then, but no. No, there is too much going on right now now to wait for four more months.

For the past ten years Disruption Japan has brought you the stories of Japan’s most successful entrepreneurs, and I am going to continue to do that. But starting today, we are going to be hearing from Japan’s leading venture capitalists as well.

There are a few reasons for the change. Part of it is that the Japanese venture landscape is changing fast, and in some very different snd important ways than what we see in the US.  Understanding innovation and startups in Japan requires understanding how it all gets financed and understanding the changing role that venture capital is playing here.

The other reason for the change coming now is that these days as a Partner at JERA Ventures, these are the waters in which I swim. And there are some incredibly interesting trends and changes going on in the ecosystem that I will be sharing with you. Naturally, we’ll also talk about the kinds of startups VCs are investing in now and where they see the market heading in the future.

And of course, Disrupting Japan will still be talking with founders —  a lot of them! After all, that’s where the change and the innovation really comes from. The founders are the are men and women who are actually in the arena, fighting the good fight, and changing the world.

So I’ll see you right back here in just a couple of weeks.

And most of all thanks for listening, and thank you for letting people interested in Japanese startups and investors know about the show.

I’m Tim Romero, and thanks for listening to Disrupting Japan.

Some industries need to be dragged kicking and screaming to innovation.

When margins are tight and profits are small, CEOs often don't want to spend a dime on the promise of increased efficiencies or long-term savings, and so external leverage is needed.

Today we talk with Shinya Shimizu, founder and CEO of Elephantech, who explains how he found that leverage in his mission to make the global technology supply chain more environmentally friendly.

We explore how Elephantech and other startups are helping the world meet net-zero targets, strategies for scaling  manufacturing startups, and how you can make money while doing good in the world.

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

Show Notes

The surprising impact of circuit boards on global CO2 emissions

Growing from a kickstarter camping into a multi-million dollar startup

How to raise debt financing rather than equity financing

How Elephantech is selling eco-friendly solutions in a low-margin commodity industry

How they built their first factory, and Shinya never wants to build another one

How to scale a manufacturing startup

Advice on successfully selling to and collaborating with Japanese enterprise

How to take a deep tech startup global without massive amounts of capital

Advice for sustainability startups on how to survive and thrive in cost-conscious industries

When government regulation is good for startups and when it's damaging

The danger of the wrong kinds of founder role models in Japan.

Links from the Founder

Everything you ever wanted to know about Elephantech

Follow Shinya on Twitter @shinyashimizu_e

Connect with Shinya on LinkedIn

Transcript

Welcome to Disrupting Japan. Straight Talk from Japan's most successful entrepreneurs.

I'm Tim Romero and thanks for joining me.

Circuit boards are one of those things that are everywhere, but that we really don't think about very much. Personally my only direct experience with circuit boards was years ago and involved a fair amount of cursing and a lot of solder burns.

But printed circuit boards or PCBs, or a $90 billion global industry that is highly standardized, tightly controlled, and surprisingly damaging to the environment.

Well, Shinya Shimizu and the team at Elephantech are changing that, they've not only developed the technology to re-engineer PCB manufacturer to be more environmentally friendly and less expensive, but they've also built their first factory and are now selling to some of the world's largest manufacturers.

Elephantech is a great example of how startups can succeed while making a positive contribution in this world. And Shinya also gives some great practical advice about how to sell to large enterprises as a new startup. How to raise money for capital intensive growth, and how to introduce new innovation into a low margin cutthroat industry. It's really quite an amazing story of their journey from a small Kickstarter project 10 years ago to make a pen that lets you draw working electrical circuits to selling PCB technology to some of the world's largest manufacturers today, to just maybe fundamentally changing the way circuit boards get made tomorrow.

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

Interview

Tim: So, we're sitting here with Shinya Shimizu, the CEO and founder of Elephantech. The first company in the world to mass produce printed circuit boards using an inkjet printing, echo friendly, sustainable manufacturing process.

Shinya: Yeah. Sure.

Tim: That's longer to say than I thought. But thanks for sitting down with us.

Shinya: You're welcome. So, I'm really happy to be here.

Tim: Well, I try to explain what you do in that big mouthful of an introduction, but I think you can probably explain it better than me. So, what does Elephantech do?

Shinya: So, Elephantech is going to completely change the way of manufacturing electronic circ...

Japanese HR departments are in a bit of a panic right now.

The increasing job mobility that startups have unleashed is forcing them to rethink their entire mission.

Today we sit down and Takako Ogawa, co-founder and CEO of Panalyt, a startup at the center of this transformation, and we talk about the changing career paths in Japan, when startups need to change CEOs, and the dangers of going global that people don't seem to talk about.

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

Show Notes

Why it's so hard for HR to answer simple questions

Google’s approach to people analytics and why that's important in Japan

The dangers involved in the freemium model

Why a Singapore-based startup started focusing on Japan

Why it's better to build a startup today in Japan rather than Singapore

How to change a startup CEO

The importance and danger of transparency in a startup

The problem most enterprise SaaS dashboard startups never overcome

The right way for a startup to go global

HRs new mission in Japan and its struggles to fufill it

Why your next head of HR might come from marketing

How Japan punishes failure

Takako's near "career-ending" mistake in corporate HR that put her on the path to entrepreneurship

Links from the Founder

Everything you ever wanted to know Panalyt

Friend Takako on Facebook

Panalyt's column in HRPro about modern HR in Japan [Japanese]

Panalyt's book on modern people analytics [Japanese]

Transcript

Welcome to Disrupting Japan. Straight Talk from Japan's most successful entrepreneurs.

I'm Tim Romero and thanks for joining me.

Japanese HR departments are in crisis right now.

Oh, life was simple back in the good old days when the big firms all recruited straight out of university and employees stayed with the company until they retired. But things are changing in Japan. People are starting to switch jobs. Companies are hiring mid-career and startups?

Well, startups are a source of employee mobility, that is forcing enterprise HR to completely rethink its entire mission.

Today we sit down and talk with someone at the center of this transformation, Takako Ogawa, co-founder and CEO of Panalyt, a startup bringing modern people analytics to Japanese HR departments.

But that was not always the case. Takako was not always the CEO and Panalyt, was not always a Japanese startup.

So, Takako and I talk about that journey. We'll dive into how you know when a startup needs a new CEO, how to decide on your first overseas market including a few big mistakes that you should be sure to avoid. And the very important difference between having a global mindset from day one and actually being global from day one.

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

Interview

Tim: So I'm sitting here with Takako Ogawa, the co-founder and CEO of Panalyt, who's bringing modern people analytics to Japanese enterprise. So, thanks for sitting down with us.

Takako: Yeah, thank you.

Tim: It's really great to have you on the show. But just for a background, what is people analytics?

Takako: So, in a nutshell, how I see people analytics is taking a scientific or data approach to HR, kind of in the same way that when you build a new product, you do AB testing, or when you're building financial models, you test out a lot of things in numbers. And the super exciting thing is in the people space, now we can do this as well. Modern enterprises who uses a payroll system, a time and attendance system, HRIS, they have enough data to make data-driven approaches to people.

Tim: So, data-driven is good. We all like data, but what kind of decisions are these companies making? What are they improving?

Takako: I can definitely share some of the experiences at Google because back when I was there, we used data in everything. Like everything. I was astonished by how Google approached HR and that's what got me...