Tokyo-based digital media outlet Wired.jp reported on Wednesday that eight successful entrepreneurs from Japan have joined forces and launched a new startup-focused investment fund called Tokyo Founders Fund. The founding members represent an impressive lineup of the Japanese startup community: Yusuke Asakura (former CEO of Mixi, visiting scholar at Stanford University) Nobuhiro Ariyasu (Coach United CEO) Kiyo Kobayashi (Chanoma CEO) Yusuke Sato (Freakout COO) Yo Shibata (former Spotlight CEO) Kensuke Furukawa (Nanapi CEO) Ayataro Nakagawa (Peroli CEO) Taichi Murakami (Livesense CEO) Inspired by San Francisco-based Founders Fund started in 2005 by the Paypal founders, Kobayashi decided that Japan also needed a similar startup investment founders fund while building a network with local investors and entrepreneurs in the San Francisco Bay Area where he is based. According to Kobayshi’s recent post on Facebook, the fund will offer a small amount of investment to pre-seed and seed stage startups around the world. Details of the fund’s activities have not been decided, but the eight-person team will discuss this in a closed Facebook group while looking to give their invested entrepreneurs functions as a knowledge sharing platform around launching businesses and a hub for connecting them with each others. Edited by Kurt Hanson
Tokyo-based digital media outlet Wired.jp reported on Wednesday that eight successful entrepreneurs from Japan have joined forces and launched a new startup-focused investment fund called Tokyo Founders Fund.
The founding members represent an impressive lineup of the Japanese startup community:
Yusuke Asakura (former CEO of Mixi, visiting scholar at Stanford University)
Inspired by San Francisco-based Founders Fund started in 2005 by the Paypal founders, Kobayashi decided that Japan also needed a similar startup investment founders fund while building a network with local investors and entrepreneurs in the San Francisco Bay Area where he is based. According to Kobayshi’s recent post on Facebook, the fund will offer a small amount of investment to pre-seed and seed stage startups around the world.
Details of the fund’s activities have not been decided, but the eight-person team will discuss this in a closed Facebook group while looking to give their invested entrepreneurs functions as a knowledge sharing platform around launching businesses and a hub for connecting them with each others.
See the original story in Japanese. This is a part of our coverage of B Dash Camp Osaka 2013. Two Japanese startups that have experienced an strong growth in the last several months are Coach United, the startup behind private lesson portal Cyta.jp, and Bracket, which operates instant e-commerce platform STORES.jp. On day two of B Dash Camp Osaka last week, we had a chance to hear from Coach United CEO Nobuhiro Ariyasu and Bracket CEO Yusuke Mitsumoto. Also on the panel were Rakuten executive officer Takeshi Homma, and KDDI general manager Shigeki Matsuno. This year Ariyasu sold his startup to Japanese recipe site Cookpad, and Mitsumoto sold his startup to leading Japanese fashion commerce company Start Today. Moderator Hiroyuki Watanabe started the sessions with asking about their recent exits. When did you start preparing for buyouts? Ariyasu explained: When we launched our company back in 2007, I had no idea about funding or M&As. We couldn’t help but enjoy developing our product at that time. Two or three years later, we finally could make our business profitable, and had a chance to receive offers from some people [1]. The company kept using bank loans but were exploring funding opportunities…
Bracket CEO Yusuke Mitsumoto and Coach United CEO Nobuhiro Ariyasu
Two Japanese startups that have experienced an strong growth in the last several months are Coach United, the startup behind private lesson portal Cyta.jp, and Bracket, which operates instant e-commerce platform STORES.jp. On day two of B Dash Camp Osaka last week, we had a chance to hear from Coach United CEO Nobuhiro Ariyasu and Bracket CEO Yusuke Mitsumoto. Also on the panel were Rakuten executive officer Takeshi Homma, and KDDI general manager Shigeki Matsuno.
This year Ariyasu sold his startup to Japanese recipe site Cookpad, and Mitsumoto sold his startup to leading Japanese fashion commerce company Start Today. Moderator Hiroyuki Watanabe started the sessions with asking about their recent exits.
When did you start preparing for buyouts?
Ariyasu explained:
When we launched our company back in 2007, I had no idea about funding or M&As. We couldn’t help but enjoy developing our product at that time. Two or three years later, we finally could make our business profitable, and had a chance to receive offers from some people [1].
The company kept using bank loans but were exploring funding opportunities for the next stretch.
Bracket is not an old company but has been running a number of businesses for about five years. In contrast to his past businesses, Mitsumoto was aggressively exploring funding opportunities to boost their e-commerce platform. He attributes this to the many competitors in that space [2].
What’s the most impressed in the entire session was the following interaction between the pair.
Ariyasu asked Mitsumoto,
If Base (Bracket’s main competitor) wasn’t around, would you still sell your startup to Startup Today?
Mitsumoto answered, saying:
Without them, we probably might have not achieved the revenue we have.
Why not aim for an IPO?
Since these two startups were rapidly growing but self-funded, their founders could probably consider IPOs as possible options. But they emphasized a good match with the companies that acquired them.
Ariyasu explains:
I’m not really a person who drives after an IPO. It’s all up to you to determine whether an IPO and an M&A is a better choice for you. … I actually got an offer from Murakami (Livesense CEO) but I think it was not so aggressive. I’m close with him, and we have been fishing together. The reason why we partnered with Cookpad was I thought the both companies have something common in their corporate culture.
In a explanation about how Bracket’s Mitsumoto decided to sell his startup, he unveiled it was finally decided over the phone with Start Today’s CEO Yusaku Maezawa, which surprised the audience.
Bracket CEO Yusuke Mitsumoto
The decision was surprisingly smooth. I’ve been in touch with Maezawa for almost three years since he sent us an inquiry via our website. … I’ve handled four different businesses in the past, and I finally managed to find success in my fifth. The recent announcement that Yahoo Japan made of making its e-commerce platform free this year will be a big turning point in the Japanese e-commerce industry, where more players will make more bold decisions to defeat competitors.
Buyer’s perspective, seller’s perspective
KDDI’s Matsuno was involved in Mediba’s [3] acquisitions of startups such as Nobot and Scaleout. In a response to moderator Watanabe’s question about criteria around M&As, he says:
You probably need the perspectives of both a buyer and a seller. When your company is acquired by 100%, you will totally lose your ownership. In an extreme case, you might lose your position as the CEO. When you think of a company that you could sell your business to, you will need to build a good relationship of mutual trust (not to be asked to step down).
Rakuten’s Homma concluded the session with saying that:
Both for a seller and a buyer, the more experience you have, the better you can understand how you should proceed.
We previously featured Ariyasu and Cyta in this article.↩
Our readers may recall that we visited the Bracket office just last month, and had a chance to speak more with Mitsumoto about Stores.jp.)↩
Mediba is a mobile advertising-focused subsidiary of KDDI.↩
See the original story in Japanese. Thanks to the progress that companies like Rakuten and Amazon have made in the e-commerce market, we can now easily purchase quality items for better prices online. But in Japan, the online retail market still accounts for less than 10% of the nation’s overall retail market, which means there’s still lots of potential for further growth. One player out there is hoping to disrupt the Japanese market from a unique angle. Coach United is the Tokyo-based startup behind Cyta.jp, one of Japan’s leading marketplaces focused on private lessons. According to CEO Nobuhiro Ariyasu, their newly launched smartphone-optimized interface will be a turning point for the company, capitalizing on Japan’s increasing affinity for all things mobile. They plan to create a new kind of business where instead of selling just products online, they focus on ‘service e-commerce’. Cyta.jp provides users with information about 140 different private lessons (such as language learning, music study, or qualification acquisition) which are available at 3,000 locations around the country. Unlike other marketplace services which typically connect potential students to lesson teachers, the startup assures the quality of the lessons they introduce on the website by checking into who will…
Thanks to the progress that companies like Rakuten and Amazon have made in the e-commerce market, we can now easily purchase quality items for better prices online. But in Japan, the online retail market still accounts for less than 10% of the nation’s overall retail market, which means there’s still lots of potential for further growth.
One player out there is hoping to disrupt the Japanese market from a unique angle. Coach United is the Tokyo-based startup behind Cyta.jp, one of Japan’s leading marketplaces focused on private lessons. According to CEO Nobuhiro Ariyasu, their newly launched smartphone-optimized interface will be a turning point for the company, capitalizing on Japan’s increasing affinity for all things mobile. They plan to create a new kind of business where instead of selling just products online, they focus on ‘service e-commerce’.
Cyta.jp provides users with information about 140 different private lessons (such as language learning, music study, or qualification acquisition) which are available at 3,000 locations around the country. Unlike other marketplace services which typically connect potential students to lesson teachers, the startup assures the quality of the lessons they introduce on the website by checking into who will teach or where it will take place. Since launching back in June of 2011, have served a total of about 20,000 users.
Shifting to Smartphones
Ariyasu explained the recent shift in their users’ preferences.
Smartphone access is rapidly increasing. It used to account for just 10% of all access, but it reached 45% back in June and has now surpassed desktop access.
Cyta.jp access statistics by browsing device (June 2011 – June 2013)
As we reported several times before, smartphone access is increasing across many Japanese web services. Mr. Ariyasu believes in this trend, and is going to adjust his service accordingly.
We learned that people use smartphones during commutes and at home. Over the last two months, we’ve been focusing on developing a smartphone-optimized interface in order to provide [all] available features to smartphone users.
The startup isn’t selling physical products on side, but rather lessons in the form of a service. It requires a business strategy different from that of conventional online retailers. The company expects to standardize its strategy and expand business to other local community-based services. He adds:
We plan to allow users to book a local service using our website and consume it offline. These services include things like baby sitting, waterworks repair, and even decorative nail painting. Major e-commerce sites such as Rakuten or Amazon will not be able to sell these services online. But we believe consumers will want to buy them online.
This concept is somewhat similar to the group-buying service trends initiated by Groupon. It’s relatively easy to build a system that allows users to discover and find a service they may be interested in. However, in order to encouraging consumers to buy the service and give them a positive user experience, it probably requires a little more know-how. In fact, with group-buying services there have been difficulties in terms of how participating retailers delivered their services, often resulting in poor service quality.
Cyta.jp has been trying to ensure quality by interviewing lesson teachers prior to hiring, or carrying out surprise inspections of lessons via ‘mystery shoppers’ (so to speak). It is through this extra effort that the company plans to be a leader in the service e-commerce industry.
Personally I was a little unsure if this quality assurance policy could co-exist with business scalability. But Ariyasu explained:
I don’t think a costly business is unscalable, it’s a bit of a misconception. In fact, group-buying businesses were using a bunch of people for sales, but their business were successfully scaled. Whether or not your business is scalable depends on the whether you can be persistently profitable, so you can receive funds and invest in the business to scale up when needed.
It will be interesting to see what kind of an impact Cyta can make. And it will be perhaps even more interesting to see if many other young startups follow in this sort of service e-commerce in the future.
See this story in Japanese. Below are selected excerpts from the original. This is part of our coverage of the Infinity Ventures Summit 2013 in Sapporo, Japan. You can read more of our reports from this event here. In this panel, CyberAgent CEO Susumu Fujita spoke with five young Japanese entrepreneurs to find out more about how they got to where they are today. Participants in the discussion included: Riki Kojima, CEO of Willgate (an SEO solution provider) Nobuhiro Ariyasu, CEO of Coach United (a private lesson provider) Shintaro Otake, the CEO of Tri-fort (social app and smartphone app developer) Kensuke Furukawa, the CEO of Nanapi (an archive of how-to and daily tips) Natsuko Shiraki, the CEO of Hasuna (jeweler) Startup strategies in the face of hardships Otake: I intended to take a radical approach in order to make it successful. I set a target that we surpass Facebook, and I learned that we need radical and rapid growth to reach that goal. Kojima: At the age of 20, my company was still two years old but employed too many people, even though I didn’t have much business experience at that time. With our 100 million yen funding ($1 million), I…
This is part of our coverage of the Infinity Ventures Summit 2013 in Sapporo, Japan. You can read more of our reports from this event here.
In this panel, CyberAgent CEO Susumu Fujita spoke with five young Japanese entrepreneurs to find out more about how they got to where they are today. Participants in the discussion included:
Riki Kojima, CEO of Willgate (an SEO solution provider)
Nobuhiro Ariyasu, CEO of Coach United (a private lesson provider)
Shintaro Otake, the CEO of Tri-fort (social app and smartphone app developer)
Kensuke Furukawa, the CEO of Nanapi (an archive of how-to and daily tips)
Natsuko Shiraki, the CEO of Hasuna (jeweler)
Startup strategies in the face of hardships
Otake: I intended to take a radical approach in order to make it successful. I set a target that we surpass Facebook, and I learned that we need radical and rapid growth to reach that goal.
Willgate’s CEO Riki Kojima
Kojima: At the age of 20, my company was still two years old but employed too many people, even though I didn’t have much business experience at that time. With our 100 million yen funding ($1 million), I hired 30 people but the company unexpectedly collapsed too soon. Subsequently I found a colleague’s chat post that mentioned ‘I shouldn’t work with this company.”
Fujita: What are the advantages and disadvantages of launching your business when attending school?
Kojima: I had no business experience, so that I couldn’t figure out what was the best approach. I was forced to take a roundabout route and fail repeatedly. I’m still young, so people tend to see me as an immature business person, but in fact this makes me better at feeling people’s pains.
Monetization and business strategies
Fujita to Furukawa: I frequently visit your blog, and I know you’re quite good at writing stories. You, the company’s president, often show up on the web. What is there to gain from that?
Nanapi CEO Kensuke Furukawa
Furukawa: If you’re running an internet service, you should be familiar with the space. But on the other hand, it was once pointed out at an important business appointment that I might have too much time to spare. Many employee applicants come to us through my blog. Compared to applicants we find through talent search services, they are highly motivated and bring much benefit to our business.
Fujita: For today’s business owners, your blogging strategy makes sense. Not only to help your hiring efforts, but it may also help you bring your vision and message to employees as well. But what’s your overall strategy behind Nanapi? Are you just focused on growing it without considering monetization? Do you plan to sell it off to other companies?
Furukawa: In order to monetize the service, we need to make it grow. We have 20 million monthly unique users, not yet sufficient for the monetization. In Japan, if you monetize an internet service, it should be among the top 50 sites in the country in terms of internet traffic. Some web media companies have succeeded to monetize, but my interest is in making big stuff.
Coach United CEO Nobuhiro Ariyasu
Fujita: In my view, Cyta.jp (Coach United’s private lessons portal) is not very ‘Internettish’. How do you feel about it?
Ariyasu: No, our operations are not ‘Internettish’, as you say. For many online service providers, you typically send inquires to consumers to find out if they are satisfied with the customer experience. We actually use mystery shoppers to conduct surveys. In case that we can’t acquire users by e-mail marketing, sometimes even use telephone marketing.
Entrepreneurial culture in Japan
Fujita to Furukawa: Gradually we’re getting a culture where people admire exits. Do you plan to run your business independently without funding? Or are you interested in selling off?
Furukawa: We actually fundraised from Globis Venture Partners. In terms of our business model, our focus is on enlarging our media business. Selling off is a good option. But for now, we’d like to look at buying someone else’s service in order to enlarge our business.
I developed the Nanapi service because I couldn’t find any similar one. In our four-year experience since the launch, I eventually learned that it’s not so promising. Everyone wanted to have it but nobody actually did it, since it’s a bother.
Fujita: In Japan, entrepreneurs are generally not admired much. What do you think about this?
Furukawa: In my understanding, Japan is a country where we can easily launch a startup. We can also receive orders from big companies regardless of the size or maturity of the business. Compared to foreign countries, startup founders in Japan are relatively older, probably because we (generally) prefer to launch a business after getting work experience at a big company. For me, I’ve worked at Recruit for three years, which I think helps me do business more easily. If you are a student, people typically look down on you.
Kojima: When I failed in my business, I was bothered by the issues surrounding capitalization strategy and employment. I wanted more details about this information. I failed once but I bounced back even though I was immature. I hope our society can be tolerant of people who fail.
Ariyasu: Japan is heaven for entrepreneurs. Considering the huge amount of cash flow available in the market, the population of entrepreneurs going after that cash is extremely low. We need more success stories than we need government efforts to help entrepreneurship. If we get more billionaires, more people will get excited about entrepreneurship.
Fujita: Absolutely. If we have more success stories, that will certainly have an impact on people’s mindsets.
Tri-fort CEO Shintaro Otake
Otake finishes by asking Fujita a question: When are you planning to retire? What kind of people would you want to hand the company over to?
Fujita: To be honest, I’ve been always thinking [about] stepping down — when our business became profitable, when we completed the launch of Ameba (CyberAgent’s blog service). But the fact is, every time that we make an achievement, another new goal comes up.
For our media business especially, I was heavily involved in building it up. I did too much, and now I can’t really hand it over to someone else. (big laugh from the audience.)
Nobuhiro Ariyasu 
Masaru Ikeda
Takeshi Hirano
