Recently we have seen more than a few Japanese companies disappearing from the market. According to a 2011 white-paper on Japanese SMEs and Industry, 30% of companies will be gone in ten years, and as many as 50% of them in 20 years [1]. It might be relatively easy to launch a startup, but it’s still very hard to keep running one. So advice for experienced entrepreneurs is very useful for all of us. On day one of B Dash Camp Osaka, we had a chance to hear such advice from Drecom CEO Yuki Naito and Crooz CEO Koji Obuchi. The session was moderated by Septeni Holdings CEO Koki Sato.
Sato started the session by noting that even though M&A activities are increasing, IPOs are decreasing. Obuchi says that selling off your company is one of the necessary steps to accelerate the startup ecosystem, but he couldn’t say definitively that entrepreneurs should choose an acquisition as an easier option.
When I look at faces of my employees, I feel I wouldn’t be able to let them down. I’m probably very typically Japanese in that I wouldn’t be able to take a buy-out option.
Naito also says he really wants to keep running his business, explainging that if he sold off his company, it would be hard to find something else to do.
Looking at recent M&As in the Japanese startup scene, he pointed out that prices for startup buyouts are still low.
Mostly the prices ranging from 500 million yen to 1 billion yen, right? (from $5 million to $10 million) For startup founders, if you still hold half of your company’s shares, the amount is much more than what you can spend on your petty expenses. Your startup is what you want to do, but you will lose it after the sell-off. And you probably wouldn’t be able to spend the money so easily because it represents the fruit of your contnuous efforts. I’m not sure how one can so easily sell off a company.
Tough times
Naito reflected back on the times when he suffered the most:
Drecom CEO Yuki Naito
One year after the IPO of my company Drecom, it still showed a loss. In 2006, we took over a company for 1.3 billion yen ($13 million) but we were forced to borrow money from the bank for it because Drecom had a low evaluation due to the Livedoor Shock. When I looked at the acquired company’s fiscal report, it still had 2 billion yen ($20 million) in short-term debt. If your company shows a loss for more than two consecutive fiscal periods, your bank will take something in security for your future pay-back and attempt to collect money from you.
At the time, Naito was in his 20s but had to make his company profitable, even lending the company money from his personal account. When they got investment from Rakuten, a total acqusition by the e-commerce giant was one of their possible options. But he rejected the proposal since he would not really be motivated to keep running the business if he lost ownership.
Obuchi let his social gaming business mature after pivotting seven times. The moderator asked him if his employees were confused with those pivots, and he said they were very tolerant, and probably understood it was necessary for the company to survive.
Naito emphasized the importance of quick execution in business, explaining:
If you know your business in feature phone content (for example) will suffer, you need to take action as soon as possible. If you start working on it when you see a loss, that might be too late.
Issued by the Japanese Ministry of Trade, Economy.↩
A new ecommerce website was recently launched in Japan. It’s called STORIES online store. Operated by design and branding company Seitaro Design, the concept of the site is to make buying decisions based on the stories behind each product. All products on STORIES are hand picked, with a variety of items ranging from furniture, to art jewelry, to bags. One thing they all have in common is a colorful back story, like a story of about a designer, or about the materials used to make the products. We picked out a just few fun made-in-Japan designer products from STORIES to share with you here. Dry Carbon Crutch Dry Carbon Crutch is the world’s lightest crutch. It’s made from dry carbon (or CRRP) and weighs in at just 310 grams. The concept behind this fancy crutch was to make something that can be a part of your personal fashion. It is produced by Media Culture Plus, a company that develops original products in the health/medical sector. Each crutch is custom made and is available for 230,000 yen (roughly $2,300). Dry Carbon Crutch was a recipient in Japan’s Good Design Awards 2013. Baloon This neat looking shaker set is called Baloon, and…
A new ecommerce website was recently launched in Japan. It’s called STORIES online store. Operated by design and branding company Seitaro Design, the concept of the site is to make buying decisions based on the stories behind each product.
All products on STORIES are hand picked, with a variety of items ranging from furniture, to art jewelry, to bags. One thing they all have in common is a colorful back story, like a story of about a designer, or about the materials used to make the products. We picked out a just few fun made-in-Japan designer products from STORIES to share with you here.
Dry Carbon Crutch
Dry Carbon Crutch is the world’s lightest crutch. It’s made from dry carbon (or CRRP) and weighs in at just 310 grams. The concept behind this fancy crutch was to make something that can be a part of your personal fashion. It is produced by Media Culture Plus, a company that develops original products in the health/medical sector. Each crutch is custom made and is available for 230,000 yen (roughly $2,300). Dry Carbon Crutch was a recipient in Japan’s Good Design Awards 2013.
Baloon
This neat looking shaker set is called Baloon, and it was created by Masayuki Kurokawa. The shaker’s 0.9 mm thick glass is handblown and comes with a cork cover. A set of two can be purchased for 4,800 yen (or about $50).
SOU Wood Table
This beautiful wooden table is an original product by Seitaro Design. The layered wood uses a new type of material called paper wood, mixture of colored recycled paper and veneer. The tables are designed so that they can be easily connected to expand your dining space. The table comes in two color flavors, red & orange, and blue & green, and can be purchased for 245,000 yen.
BAXES
Made by a designer for designers, Baxes series are a great bag for carrying art papers and drawings created by Kazuko Ito. Each bag is hand-made by experienced craftmans in Nigata prefecture, and can be purchased for 26,000 yen.
Tears
Tears is a small art piece that can be worn as jewelry. It was designed by Taiwanese designer Yu-Chun Chen. Juxtaposing Barocco pearls in different forms and with different material, Tears can be purchased for 7,000 yen.
Recent news from STORIES online store can be found on its Facebook page. If you’d like to see the actual items in person, there is a gallery shop in Nishi-Azabu here in Tokyo open from 11:00 am to 6:00 pm on weekdays. But you’ll need to make a reservation in advance by calling 03-6434-0115.
This is a part of our coverage of B Dash Camp Osaka 2013. As we reported earlier today, Japanese startup Kaizen Platform walked away with the top prize at the B Dash Osaka startup pitch event. But one of the services that turned the most heads over the two-day event was Puteko’s colAR Mix app. It uses augmented reality technology to animate ordinary coloring books (see demo below), and has already attained some significant exposure when it was featured in TechCrunch back in July. Interestingly Puteko has been focused on the Japan market, and they plan to move their office here before the end of the year. They have already partnered with SourceNext in Japan, and will be working with Dentsu, DeNA, and d-right. CEO Katy Kelly explained that right now their business consists of three aspects: A library of coloring pages (sort of like Line’s stickers) Partnering with content/brand owners to make coloring pages In-app purchases, cross promotion and revenue share. In the future their business may expand to include things like game integration (use your character in a game), an SDK for third party app developers, and they may provide an authoring tool for users to create their…
As we reported earlier today, Japanese startup Kaizen Platform walked away with the top prize at the B Dash Osaka startup pitch event. But one of the services that turned the most heads over the two-day event was Puteko’s colAR Mix app. It uses augmented reality technology to animate ordinary coloring books (see demo below), and has already attained some significant exposure when it was featured in TechCrunch back in July.
colAR app view of a colored plane
Interestingly Puteko has been focused on the Japan market, and they plan to move their office here before the end of the year. They have already partnered with SourceNext in Japan, and will be working with Dentsu, DeNA, and d-right. CEO Katy Kelly explained that right now their business consists of three aspects:
Partnering with content/brand owners to make coloring pages
In-app purchases, cross promotion and revenue share.
In the future their business may expand to include things like game integration (use your character in a game), an SDK for third party app developers, and they may provide an authoring tool for users to create their own coloring books/pages.
So far the company has raised US$200,000 in seed funding back in New Zealand, their current base, and are now seeking series A funding of $1.5 million.
Kelly emphasized the fact that their app engages not only kids, but entire families. Many children these days might lose themselves in a mobile game, colAR is an activity that is more involved. And certainly, the animated end result will be something that kids will love to show off.
Their app is available for free on both iOS and Google Play. It’s one of those jaw-dropping AR services that feels like it should have been made in Japan. So I’m glad to see they’ll be coming here!
This is a part of our coverage of B Dash Camp Osaka 2013. The highlight of day two of B Dash Camp Osaka was the startup pitch event, with a number of quality entrants from Japan and around Asia. The grand prize winner of the event was Kaizen Platform, whose CEO Kenji Sudo pitched their PlanBCD service. He was awarded a Microsoft Surface 2, a Sony Xperia Tablet Z, as well as return invite to the next B Dash Camp The service is a little tricky to wrap your head around, but its primary function is to help developers improve the user interface of their web service. The front page of their site boasts “Growth Hackers are ready to optimize your site.” But of course it can be costly for companies to hire growth hackers for such improvements, but PlanBCD proposes a crowdsourced solution and useful tools for short-term A/B testing. You will need to set a budget for your site improvement, and then add some javascript to your site’s headers. After that you wait for suggested improvements from growth hackers, and you can A/B test the ones you like best. The results can then be reviewed on a handy…
The highlight of day two of B Dash Camp Osaka was the startup pitch event, with a number of quality entrants from Japan and around Asia. The grand prize winner of the event was Kaizen Platform, whose CEO Kenji Sudo pitched their PlanBCD service. He was awarded a Microsoft Surface 2, a Sony Xperia Tablet Z, as well as return invite to the next B Dash Camp
The service is a little tricky to wrap your head around, but its primary function is to help developers improve the user interface of their web service. The front page of their site boasts “Growth Hackers are ready to optimize your site.”
But of course it can be costly for companies to hire growth hackers for such improvements, but PlanBCD proposes a crowdsourced solution and useful tools for short-term A/B testing. You will need to set a budget for your site improvement, and then add some javascript to your site’s headers. After that you wait for suggested improvements from growth hackers, and you can A/B test the ones you like best. The results can then be reviewed on a handy dashboard.
Sudo says that they will be looking to expand globally, with the goal of becoming a sort of Github for growth hackers. But they still need to look at reducing their tool’s cost.
Kaizen Platform Inc. just raised seed funding worth $800,000 from GREE Ventures, GMO Venture Partners, and CyberAgent Ventures back in August, with the intention of stepping up its system development and marketing. And it wouldn’t surprise us at all to see them attract more investment very soon.
You can check out their demo video below to learn more about PlanBCD, as well as some of the slides from the pitch (in Japanese).
This is a part of our coverage of B Dash Camp Osaka 2013. In the second morning session on day two of B Dash Camp Osaka, we heard a panel on the latest developments in smartphone advertising. Included in the talk on stage was Ganesan Velayathan, CEO, Fun & Cool Ventures, and Sid Bhatt, CEO of Aarki Inc. Joining the talk via Skype was Brian Wong, the co-founder of Kiip. 22-year-old Wong was an especially interesting (and charismatic) addition to this panel, since Kiip actually refuses to be called an ad company, instead preferring the moniker of ‘rewards company’. He says they are trying to redefine brand engagement, as well as connections that brands have with consumers: Kiip came from our observation that people were already engaged in ‘moments of happiness’. When people got a high score in a game, there’s an emotion. But that moment of happiness would often be abused by an ad. We wanted to instead acknowledge and reward these moments. Kiip is currently included in about 1500 apps. They started out in games but they are now in six verticals, including fitness, music, to-do, and food. Many of the ad dollars that come their way would…
Ganesan Velayathan, CEO, Fun & Cool Ventures Inc., Sid Bhatt, CEO of Aarki Inc
In the second morning session on day two of B Dash Camp Osaka, we heard a panel on the latest developments in smartphone advertising. Included in the talk on stage was Ganesan Velayathan, CEO, Fun & Cool Ventures, and Sid Bhatt, CEO of Aarki Inc. Joining the talk via Skype was Brian Wong, the co-founder of Kiip.
22-year-old Wong was an especially interesting (and charismatic) addition to this panel, since Kiip actually refuses to be called an ad company, instead preferring the moniker of ‘rewards company’. He says they are trying to redefine brand engagement, as well as connections that brands have with consumers:
Kiip came from our observation that people were already engaged in ‘moments of happiness’. When people got a high score in a game, there’s an emotion. But that moment of happiness would often be abused by an ad. We wanted to instead acknowledge and reward these moments.
Sid Bhatt, CEO of Aarki
Kiip is currently included in about 1500 apps. They started out in games but they are now in six verticals, including fitness, music, to-do, and food. Many of the ad dollars that come their way would normally be spent on video, he explains:
They want the relationship with users to be a reciprocal one, starting such relationships “with a gift rather than yelling.”
We are now one of Hulu’s top three acquisition partners in the US. […] The bottom line is simple: As long as you have something relevant with a timely aspect to it, people will convert at a higher rate [than traditional ads]
Kiip is currently working with Yahoo Japan as one of their premier partners. They are also working with Lawsons, SMCC, Dell, with many more companies to come later. Japan is an especially fitting environment for a service like Kiip, as Wong explains:
Japan has a great mobile literacy. You can tap your phone and buy something, but that still science fiction in the US. In Japan, that science fiction is a reality. And I felt our platform would be accelerated there.
Like Kiip, Aarki Inc has been getting pretty creative in how it engages consumers on mobile devices. CEO Sid Bhatt showed off some really fun demos, including a rich media ad for Landrover. That ad let the user move their phone around to display a 360-degree view of the inside of a Landrover. Time spent in such rich media ads can be over two minutes, says Sid, and this is what advertisers are really looking for these days.
The traditional format, the banner ad, is quickly becoming obsolete. People still use it but it is definitely not the future.
And then there’s the Asia problem
Sid explained a little about their platform, which allows the creation of complex ads with drag and drop widgets, doing so in a better, faster, cheaper way.
He says that they are considering an office in Japan, but they are still trying hard to understand the market. What we build in the US may not be applicable in Asia.
Ganesan expressed this very same point as well, saying that In addition to the challenges that come with innovating new advertising technology, operating in the Asia region brings a whole new set of obstacles:
In Asia each country has its own style. Agencies still control the market in Japan.[…] Southeast Asia has many languages, many cultures, and different dominant market players. So [the challenge is] how to navigate that, and the agencies, and deliver the best results.
Ganesan, who operates an Asia-focused market place where developers and advertisers can connect, explained the value of their service by pointing out how it lets users choose the app where they advertise, rather than use an algorithm to select.
Moderator Tak Miyata from Scrum Ventures shared some figures to clarify the importance of the innovations these panelists have developed. Mobile ad spend, he says, was only 1 percent of all ad spend in 2011, but by 2017 it will represent about 17 percent – surpassing traditional media.
So while there will certainly be a payoff for companies who can figure out how to best engage consumers on mobile, those who can solve that riddle in regions across Asia have an especially big reward in store.
This is a part of our coverage of B Dash Camp Osaka 2013. On day two of B Dash Camp in Osaka, we had a chance to hear from two big international companies with their eyes on big market opportunities on mobile, particularly here in Japan. Moderator Tomohiko Kuboto (marketing officer at GCA Savvian Corporation) spoke with Spotify’s Japan director Hannes Graah, and Videology’s APAC managing director, Kenneth Pao. Spotify has launched its streaming music service in 32 markets, with 24 million active users and 6 million paying subscribers. But the company has yet to launch in Japan, and Hannes tells me that they still don’t have any specific timeline for launch here. But they do have an office here with four employees, and hopefully they can lay the groundwork for the Spotify to enter. As Hannes explained, Japan represents a big opportunity, not just for them, but for the music industry too: The average spend of a CD buyer was about $50 or $60. But for a year of Spotify, that costs about $120 a year, which is double that. I would say that it is less about losing money, but more about growing the overall pie. During the…
Spotify Japan director Hannes Graah, Videology APAC managing director Kenneth Pao
On day two of B Dash Camp in Osaka, we had a chance to hear from two big international companies with their eyes on big market opportunities on mobile, particularly here in Japan. Moderator Tomohiko Kuboto (marketing officer at GCA Savvian Corporation) spoke with Spotify’s Japan director Hannes Graah, and Videology’s APAC managing director, Kenneth Pao.
Spotify has launched its streaming music service in 32 markets, with 24 million active users and 6 million paying subscribers. But the company has yet to launch in Japan, and Hannes tells me that they still don’t have any specific timeline for launch here. But they do have an office here with four employees, and hopefully they can lay the groundwork for the Spotify to enter. As Hannes explained, Japan represents a big opportunity, not just for them, but for the music industry too:
The average spend of a CD buyer was about $50 or $60. But for a year of Spotify, that costs about $120 a year, which is double that. I would say that it is less about losing money, but more about growing the overall pie.
During the Q&A session I could help but ask him how much of an obstacle music industry incumbents are for a company like Spotify. And while Hannes diplomatically declined to rank how much of a nuisance they are on a one-to-ten scale as I asked (perhaps I should have phrased my question differently?), he did underscore the excitement that comes with a big music market like Japan:
Every market has challenges, in many different ways. Japan is less of a challenge than it is an opportunity, because it is the second largest music market after the US. The music industry here has been looking for new solutions for a while now. In the last year we have seen some streaming services emerge from the local market and abroad, so its an exciting time to be here.
He adds that piracy and non-monetized consumers represents a huge opportunity, and he looks forward to Japan moving into an era of more profitability.
Kenneth Pao, Videology
Similarly, Kenneth Pao explained that Japan represents a huge opportunity for Videology too. He began by explaining a little about their ad technology service, which he describes as the “the pipes under the house” which enables brands and advertisers to complete TV ad spending online. In short, says Ken, they put the right advertising in front of the right person.
Videology is active in 18 countries, and Ken hopes that Japan will be the 19th. They did 13.5 billion yen in revenue last year, with 40% of those revenues coming from TV budgets. They have raised 13.4 billion yen in venture funding, NEA, Catalyst Investors, Comcast, and they work with big name publishers like ABC, NBC, ESPN, ITV.
Kenneth explained that in the Japan, there is just 2 billion yen in online ad video spend, which compares to about 410 billion yen in the US. He noted the importance of using internet and mobile in addition to traditional media:
Many people see digital as a competitor of television. But that’s not necessarily the case. If we look at the London Olympics, we saw mobile and tablets actually complement TV. […]
There are an abundance of people on the internet and mobile, and advertisers are not reaching them. Other areas like print, radio, and TV are pretty much saturated.
He adds that if TV broadcasters don’t take advantage of this, there are many disrupters that will jump into that void. It will be interesting to see how Videology fares in particular as it increases its focus on Japan.
Takeshi Hirano
Yukari Mitsuhashi
Rick Martin
