THE BRIDGE

Takeshi Hirano

Takeshi Hirano

Takeshi is a Japanese tech blogger and a co-founder of The Bridge, and is also the CEO for bootupAsia, Inc. He started his career as a web designer.

Articles

FrogApps CEO Nakamura steps down, has another startup in the works

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See the original story in Japanese. FrogApps is the Tokyo-based startup behind the notable Japanese food photo sharing app, Miil. The company’s CEO Hitoshi Nakamura recently announced he would step down from his current position, and board member Hawk Takahashi will be appointed as the new head. Mr. Nakamura will stay on the board of directors and support the startup as it grows further. FrogApps was founded in September of 2010 and went on to introduce Miil in 2011 [1]. Subsequently the startup fundraised 20 million yen from CyberAgent Ventures in 2011, and 240 million yen from Lead Capital Management and Dentsu Digital Holdings in 2012. According to Mr. Nakamura’s blog post, the food photo app has surpassed 300,000 downloads and 50,000 daily postings and comments. So why the change at the top? What’s this we’re hearing about a new company co-founded by FrogApps and Mr. Nakamura? We spoke with both the ex-CEO Hitoshi Nakamura, as well as his successor, Mr. Takahashi. Why step down now? Nakamura: I’m better at creating something from scratch. I really like to create something in a form of a service or a product, and then find its value proposition for consumers or markets. I’m…

See the original story in Japanese.

miil_screenshotFrogApps is the Tokyo-based startup behind the notable Japanese food photo sharing app, Miil. The company’s CEO Hitoshi Nakamura recently announced he would step down from his current position, and board member Hawk Takahashi will be appointed as the new head. Mr. Nakamura will stay on the board of directors and support the startup as it grows further.

FrogApps was founded in September of 2010 and went on to introduce Miil in 2011 [1]. Subsequently the startup fundraised 20 million yen from CyberAgent Ventures in 2011, and 240 million yen from Lead Capital Management and Dentsu Digital Holdings in 2012. According to Mr. Nakamura’s blog post, the food photo app has surpassed 300,000 downloads and 50,000 daily postings and comments.

So why the change at the top? What’s this we’re hearing about a new company co-founded by FrogApps and Mr. Nakamura? We spoke with both the ex-CEO Hitoshi Nakamura, as well as his successor, Mr. Takahashi.

Why step down now?

Nakamura: I’m better at creating something from scratch. I really like to create something in a form of a service or a product, and then find its value proposition for consumers or markets. I’m feeling that I’ve already done for the app. However, we needed to form a more sound team to keep the service growing. […] From now on, our key focus is finding how we can further boost our business.

Looking back to when you first launched, how much has your business achieved to date?

Nakamura: I can’t say we have taken the path that I expected. We had a minimum milestone to achieve, and I believe we have passed it. For our users, we have acquired many influencers who can spread the word about food and gourmet. We assumed food-savvy people like dining around town, but the facts were different. Our users like dining at home. I’ve been involved in restaurant business for a long time, and that’s why I thought we wanted to start building a user base among restaurant addicts.

From left: founder Hitoshi Nakamura and FrogApps's new CEO Hawk Takahashi
From left: ex-CEO Hitoshi Nakamura and new CEO Hawk Takahashi

Did you find the right sort of business model to accelerate your business?

Takahashi: We ran a promotion campaign using food photos, and that was well received by our users. In terms of reaching our target for our possible sponsors, our service is too small to compete against conventional big mass media. However, our user base is specifically filtered around foodies and gourmets. We’ve discovered unexpected insights from our users’ feedbacks.

Nakamura: For example, we got sponsorship from Morinaga Milk (TYO:2264) and promoted their chocolate condensed milk products using the app. The chocolate product is an old product, as old as a plain-type condensed milk, but has not been featured so much publicly. When we asked our users to post recipes using the chocolate milk product, we received a bunch of great recipe ideas that the milk maker had never expected. These recipes were subsequently featured on the Morinaga website.

Why did a milk company like the Miil app? Was it something like market research for them?

Takahashi: Our clients (potential sponsors) may not be satisfied with only spreading the words about their products. They want to create value through interaction with our users. We turned to see how to improve our service and explore more potential business models including using the app for our client to fill their market research needs. In the next year, we’ll be much working on projects in partnership with restaurant businesses.

Nakamura: We need switch ourselves from the investment phase to a monetization phase someday. In order to make the business more sound and more sustainable, I handed over my role to Mr. Takahashi.

I heard you will be launching a new business called Froggy. What’s that about?

Nakamura: I’ve been in restaurant business for a long time, and I’ve learned there’s no innovation in this space. The restaurant business is labor-intensive, and for workers the conditions are not always the best, possibly with long hours or little to no paid vacation. That’s something technology can solve, and it can make a great impact on the industry as well. I can’t disclose much about what I’ll be working on, but I believe there’s more room for services which can work both for restaurant owners and their customers. The new project might be integrated with the Miil app as well, and I hope both can help each other, like the two wheels of the same cart, for example.


My interview with them was unfortunately quite short, and they couldn’t disclose too much about future plans. I thought they were expecting to develop a service for driving customers to real restaurants, but I could be wrong. The new project seems to have a different business model from that of the Miil app, and that may be a clue as to what they’ll do next.

Disclosure: The author’s wife has a business relationship with FrogApps.


  1. Available in both English and Japanese for both Android and iOS.  ↩

Base: The Japanese freemium e-commerce platform that’s following Shopify’s lead

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See original story in Japanese. Base is a Tokyo startup that provides an easy-to-implement e-commerce platform. It was born from Project Liverty, a tech savvy team led by serial entrepreneur Kazuma Ieiri. On Friday, the service added a new feature called BASE apps, allowing users to set up a shop under their own domain name. it also includes SEO (search engine optimization), and packaging material that merchants can use when shipping. With the exception of credit card surcharges, the service is provided completely free, and that includes these new features. The company’s CEO Yuta Tsuruoka explains that they will gradually add new features week by week, such as logo design, the ability to offer limited time discounts to customers, and even photo shoots for merchandise. Following Shopify’s successful ‘plug-in strategy’ Base was inspired by Shopify, the third-ranked e-commerce platform behind Amazon and eBay in terms of transaction volume (about $1 billion) in the US. In contrast to competitors, Shopify generates its revenue partially from plug-in usage. Essentially this means that when you add features or services to your e-shop, you will be requested to pay extra. Yuta adds: In the US, many merchants who have their e-shops on multi-tenant e-commerce…

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See original story in Japanese.

Base is a Tokyo startup that provides an easy-to-implement e-commerce platform. It was born from Project Liverty, a tech savvy team led by serial entrepreneur Kazuma Ieiri. On Friday, the service added a new feature called BASE apps, allowing users to set up a shop under their own domain name. it also includes SEO (search engine optimization), and packaging material that merchants can use when shipping.

With the exception of credit card surcharges, the service is provided completely free, and that includes these new features. The company’s CEO Yuta Tsuruoka explains that they will gradually add new features week by week, such as logo design, the ability to offer limited time discounts to customers, and even photo shoots for merchandise.

Following Shopify’s successful ‘plug-in strategy’

Base was inspired by Shopify, the third-ranked e-commerce platform behind Amazon and eBay in terms of transaction volume (about $1 billion) in the US. In contrast to competitors, Shopify generates its revenue partially from plug-in usage. Essentially this means that when you add features or services to your e-shop, you will be requested to pay extra. Yuta adds:

In the US, many merchants who have their e-shops on multi-tenant e-commerce platforms have [not been doing well], and they are now moving to marketplace platforms. I really want this shift to come to Japan.

01457154ec60f6301cf4ceecd664147b

The startup’s plug-ins motivate small merchants and even individuals to open shops online. They also provide outsourced logistics service for merchants, and plan to provide vendor-managed inventory services. You can order logo design or a website template from partnering crowdsourced services via the Base platform.

Among the available plug-ins, some allow goods producers to even offer to develop merchandise for you. See apps.thebase.in to learn more about what features they provide.

Monetizing the payment process

Does the Base platform fully drive its business only with these plug-ins? Yuta says the answer is no:

During the testing period, we’ve seen merchants were using our platform in many different ways. Some merchants were selling web services, digital content, or other non-tangible services on the platform. It shows us there’s e-commerce potential far beyond just merchandise distribution. That’s the key for making our business successful, I believe.

He aspires to make this into another Paypal, as opposed to the next Rakuten or Amazon. The Base platform aspires to handle not only merchandise logistics but also monetary transactions between merchants and shoppers which may generate a huge volume of commission.

The e-commerce platform has acquired more than 23,000 merchants in the four months since its launch, where a variety of items ranging from luxury furniture to show tickets are being sold. The average price per customer reaches around 3,500 yen (around $35).

In January, the startup fundraised 23 million yen ($230,000) from Partyfactory, East Ventures, and several angel investors. We’ll keep you updated about how their business further grows from here.

Can crowdsourcing startups change Japan’s employment landscape?

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This article is based on an interview published on our Japanese-language site (see part one and two). It has been partially modified for our global audience. Lancers, CrowdWorks Employment in Japan has traditionally been a cradle-to-grave sort of system, but given modern day economic challenges, many people are facing difficulties. Many workers are faced with finding alternatives when the notion of a full-time job doesn’t work out. Recent government statistics show that 94% of 4.5 million Japanese companies only have a single office. Larger companies with more than 10 offices across multiple locations only account for 0.4% of all Japanese business. But in which category of business do most employees fall under? 31% of the entire national workforce belongs to the 0.4% of big companies. Out of the entire Japanese workforce of 62.3 million people, 55 million of those are employed by someone else, and 7 million people are self-employed or working with their family businesses [1]. These figures show that many workers are concentrated among a very small number of big companies here in Japan. Given that this distribution will likely not change soon, how can Japanese workers prepare for what will happen to the national economy in the future? Being a so-called ‘crowdsourced’ worker…

This article is based on an interview published on our Japanese-language site (see part one and two). It has been partially modified for our global audience.

Lancers, CrowdWorks
Lancers, CrowdWorks

Employment in Japan has traditionally been a cradle-to-grave sort of system, but given modern day economic challenges, many people are facing difficulties. Many workers are faced with finding alternatives when the notion of a full-time job doesn’t work out.

Recent government statistics show that 94% of 4.5 million Japanese companies only have a single office. Larger companies with more than 10 offices across multiple locations only account for 0.4% of all Japanese business.

But in which category of business do most employees fall under? 31% of the entire national workforce belongs to the 0.4% of big companies. Out of the entire Japanese workforce of 62.3 million people, 55 million of those are employed by someone else, and 7 million people are self-employed or working with their family businesses [1].

These figures show that many workers are concentrated among a very small number of big companies here in Japan. Given that this distribution will likely not change soon, how can Japanese workers prepare for what will happen to the national economy in the future?

Being a so-called ‘crowdsourced’ worker is an alternative solution when it comes to finding employment. Crowdsourcing (in the context of this discussion) is a concept that matches task requests with individuals who can do the work. The most notable examples of this process are US-based services oDesk and Elance. These days some people can even make a living from such jobs.

Recently we spoke with two key people in Japan’s crowdsourcing space: Yosuke Akiyoshi, the co-founder and CEO of Lancers Inc., and Koichiro Yoshida, the co-founder and CEO of CrowdWorks Inc.

Lancers: Helping users crowdsource a career

Yosuke Akiyoshi, Co-founder/CEO of Lancers
Yosuke Akiyoshi, Co-founder/CEO of Lancers

Mr. Akiyoshi says that with his Lancers service, some workers can earn as much as 7 or 8 million yen ($70,000 to $80,000).

The traditional concept of crowdsourcing has been that someone in a remote location helps you finish minor tasks at an affordable rate. But recently platforms like Lancers are being used for more, serving as a primary income stream for some. Mr. Akiyoshi shared a few key indicators from his platform:

  1. The platform is home to 120,000 freelancers from all around Japan.
  2. 1,000 of those users are earning about 50,000 yen (approximately $500) a month
  3. 70% of users reside in suburban areas or countryside.
  4. Some people make more than 3 million yen (about $30,000) using the platform. Needless to say, that’s enough to make a living.
  5. There are now about 10,000 tasks listed on the platform, three times the amount of tasks listed last year.

Akiyoshi adds:

We saw the rapid growth since 2011. Our operations have expanded from two people in 2008, to 11 people in 2011, to the 30-person team we have now.

Helping people work regardless of geographical location is the startup’s concept. And true to that notion, Lancer itself is based in the quiet Tokyo suburb of Kamakura, where they can concentrate more on the service development.

Recently they are seeing a decent number of task proposals including jobs like copywriting, proposal writing, web design, or sales outsourcing.

With the platform, Akiyoshi hopes to contribute to creating a world where people can find good work and better living.

lancers_screenshot

CrowdWorks: An opportunity to work and live better

CrowdWorks'  CEO Koichiro Yoshida
CrowdWorks’ CEO Koichiro Yoshida

CrowdWorks is another key player in this field, and its website features many voices from people who use the platform. When I asked CrowdWorks’ CEO Koichiro Yoshida if crowdsourced work has become a mainstream working style, he answered me by relating the following story from a housewife who lives in Tokushima Prefecture and uses their app.

I’m glad to see a world I’ve never seen before, getting in touch with the interests of the younger generation. I’m also amazed that the platform provides us with equal accessibility to tasks regardless of where we live. I retired and moved to the countryside but the platform gives me the great opportunity to keep working at home.

For most people, their daily work is more than just earning money. It’s also a means of giving your life a sense of purpose. Crowdsourcing can help them find such a purpose in their lives as well.

Every worker has a preferred style for working. And CEO Yoshida says that freelancers can pursue a sort of career optimization in finding the projects that best suit their needs and style.

Take for example, PC operating systems. These days we have many choices ranging from licensed systems (like Windows or Mac) to open source (Linux) systems. Likewise, people employed at governmental offices or big companies can be seen as a ‘licensed’ way of working. What we’re proposing is to develop an open source way of working. Some people use the platform to finding a side job, and others use it to making a living. It’s meaningless to try to figure out which is the better route, but what’s important is give people more options, more ways to work.

The service was launched in March of 2012, and has acquired more than 5,000 corporate clients who are posting jobs on the platform. So far projects worth more than $12 million have been matched in the year since the launch. Back in last October, Crowdworks raised a total amount of $3.75 million (300 million yen) from Itochu Technology Ventures, Digital Garage, and Suneight Investment, with aiming to expand their business in the South East Asian region.

Working styles changed after the 2011 earthquake

We’ve asked the both startups about why the Japanese crowdsourcing market has been on an upswing during the last few years. Both Akiyoshi and Yoshida say that it appears to have stemmed from the tragic 2011 earthquake. That disaster also encouraged several Japanese crowdfunding sites to launch as well.

Akiyoshi pointed out that the disaster might have triggered the recent boom in the crowdsourcing market. It has brought us newly-coined phrases like ‘nomad working,’ and it has prompted many companies to permit their employees to work from home.

These crowdsourcing startups are presenting a fascinating alternative to conventional working styles in Japan, and in the process they are creating an employment ecosystem that’s helping many individual workers face the challenges of our current economy.

Crowdworks
Crowdworks

Live-streaming app TwitCasting surpasses 2 million users, but founder is a little distressed

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See the original story in Japanese. TwitCasting is an app that allows you to stream videos from iPhone or Android handsets. The service was launched early in 2010, and there have been good numbers in terms of user acquisition: reaching 250,000 users in 2010, 750,000 in 2011, and 1.75 million in 2012. On Thursday, we had a chance to speak with Yoski Akamatsu, the CEO of Moi Corp., the company behind the app. He explained more about the services sudden growth: I feel it rapidly shifted gears last November. Since the beginning of this year, we are acquiring almost 200,000 users a month. We may surpass 4 million users by the end of this year. […] The livecast channel has 200,000 to 300,000 visitors a day, and they usually stay for about 4 to 5 minutes on average. While I invented the service, I can’t really explain what has caused the recent rapid user growth. More than a half of our entire user base is people who are younger than 25 years old. He showed us a list of livecast programs, where thumbnail portrait of users livecasting can be seen for each one. As the CEO mentioned, they are pretty…

twitcasting

See the original story in Japanese.

TwitCasting is an app that allows you to stream videos from iPhone or Android handsets. The service was launched early in 2010, and there have been good numbers in terms of user acquisition: reaching 250,000 users in 2010, 750,000 in 2011, and 1.75 million in 2012. On Thursday, we had a chance to speak with Yoski Akamatsu, the CEO of Moi Corp., the company behind the app. He explained more about the services sudden growth:

I feel it rapidly shifted gears last November. Since the beginning of this year, we are acquiring almost 200,000 users a month. We may surpass 4 million users by the end of this year. […] The livecast channel has 200,000 to 300,000 visitors a day, and they usually stay for about 4 to 5 minutes on average. While I invented the service, I can’t really explain what has caused the recent rapid user growth. More than a half of our entire user base is people who are younger than 25 years old.

twitcasting_screenshot

He showed us a list of livecast programs, where thumbnail portrait of users livecasting can be seen for each one. As the CEO mentioned, they are pretty young – probably high school students, junior high school students, and teenagers. When we opened one program, it was explaining about how to put on make-up. Viewers then would leave comments on the video via Twitter.

[The sudden influx of] younger users might be caused by Atsushi Tamura, a comedian known for using the Twitcasting app on his TV show. Users visit our service with the expectation of making new friends online. They’re using it as a chat app.

The service is getting so popular so that has been featured in some magazines for teenagers, but it seems the CEO can’t keep up with this unforeseen popularity.

Compared to other similar services like Ustream or the live channels of Nico Nico Douga, the service pursues quality user communication. Instead of video quality, they are focusing on gaining real time capabilities like live radio programming, aligning the direction for the user community by adopting a real name-based membership system. But now that the younger generation shares a big portion of the user base, he has to intensify monitoring of video posts to ensure there’s no illegal activity involving minors.

TwitCasting was launched as a part of Yoski’s other startup, Sidefeed. It was spun-off in February of 2012 and incorporated as a new startup called Moi Corp.

They intend to monetize with advertising and paid-subscriptions, and currently revenue is roughly split between these two streams. The paid subscription from the Android app is showing good growth too.

The startup is now in talks with big companies exploring possible business partnerships.

Japanese corporate communication platform Talknote has more than 5,000 clients

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See the original story in Japanese. Talknote, a Tokyo-based startup providing an in-company social network platform for sharing among colleagues, announced that it has acquired more than 5,000 corporate users. The startup was launched in February of 2010, pivoted to a communication tool for business in 2011, and raised funds from CyberAgent Ventures in March of 2012 [1]. They’ve been seeing good numbers lately with 1,400 corporate users coming on board in the last two months, and company’s CEO Haruo Koike says the service will be reaching a growth rate of 1,000 users a month very soon. It was more than three years ago when I met with Haruo for the first time to discuss the original version of Talknote. At that time it was intended for chatting in closed groups, but the shift to target enterprise users has yielded good results. The CEO’s eccentric background has really helped the rapid growth of the company. He has been running several restaurants since he was young, and I still remember how he emphasized the importance of feature phone-optimization for web services, making them easier to use at working sites like restaurants where adoption of digital services can be very slow. And…

talknote_logo

See the original story in Japanese.

Talknote, a Tokyo-based startup providing an in-company social network platform for sharing among colleagues, announced that it has acquired more than 5,000 corporate users. The startup was launched in February of 2010, pivoted to a communication tool for business in 2011, and raised funds from CyberAgent Ventures in March of 2012 [1].

They’ve been seeing good numbers lately with 1,400 corporate users coming on board in the last two months, and company’s CEO Haruo Koike says the service will be reaching a growth rate of 1,000 users a month very soon.

It was more than three years ago when I met with Haruo for the first time to discuss the original version of Talknote. At that time it was intended for chatting in closed groups, but the shift to target enterprise users has yielded good results.

The CEO’s eccentric background has really helped the rapid growth of the company. He has been running several restaurants since he was young, and I still remember how he emphasized the importance of feature phone-optimization for web services, making them easier to use at working sites like restaurants where adoption of digital services can be very slow. And he has apparently done a good job of bringing such businesses onto his platform. Haruo tells me that internet companies and IT business account for only the 20% of the entire user base. The rest are restaurants which were accustomed to fax or feature phone-based e-mails for their internal communication.

talknote_usergrowth
The Growth of Talknote subscribers (corporate accounts)

Most users have learned about our service by word of mouth from restaurant owners whom I know, and they’ve decided to use the service not because of better usability than other tools but because those owners find the value that Talknote may help them get away from conventional analog communication tools.

When I saw it for the first time, I thought it was just a Yammer clone and would be a new group chat tool for high school girls. But what Haruo is proposing is not developing an innovative system but evolving ways of communication in places slow to adapt to digital. It will be long journey to make this happen.

Compared to the other businesses, people working in the restaurant industry can be very digitally challenged, they don’t want to use anything even if it’s a bit complicated. I’ve been working here for 10 years, and that experience helps a lot in developing the service.

We often follow cutting edge technologies or business models in the tech space. But this conversation reminds me that this is just the tip of the iceberg when building new services or new businesses. Talknote is expecting to acquire 10,000 users by the end of this year. We hope they’ll have a big impact on digitally challenged businesses with their product.


  1. The amount of funds raised was not disclosed.  ↩

NTT Docomo launches startup incubation program, partners with 500Startups and B Dash Ventures

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See original story in Japanese Japan’s largest mobile telco NTT Docomo (NYSE:DCM) today announced its new incubation program called ‘Docomo Innovation Village’ (first alluded to back in October) has launched. Its goal will be to intensifying business partnerships with startup companies. In connection with the start of this program, the company is planning to launch a new 10 billion yen fund (approximately $107 million) (called Docomo Innovation Ventures) by receiving all shares of NTT Investment Partners, a fund managament company belonging to NTT group’s stock holding company. The fund will be established in late February. Docomo is a relative late-comer in the Japanese incubation industry, but many entrepreneurs are certainly happy about this announcement because the telecom’s brand will lend an element of trust to any invested company. The program starts receiving applications today, and each of five to six qualified startups will be able to receive a grant of 2 million yen, as well as office space for system development and mentoring. The startups will be asked to finish their development in five months, and then present their results at a release event scheduled for late September. NTT Docomo executive Toshiki Nakayama explained that standout candidates will receive an offering…

20130207-105926

See original story in Japanese

Japan’s largest mobile telco NTT Docomo (NYSE:DCM) today announced its new incubation program called ‘Docomo Innovation Village’ (first alluded to back in October) has launched. Its goal will be to intensifying business partnerships with startup companies.

In connection with the start of this program, the company is planning to launch a new 10 billion yen fund (approximately $107 million) (called Docomo Innovation Ventures) by receiving all shares of NTT Investment Partners, a fund managament company belonging to NTT group’s stock holding company. The fund will be established in late February.

Docomo is a relative late-comer in the Japanese incubation industry, but many entrepreneurs are certainly happy about this announcement because the telecom’s brand will lend an element of trust to any invested company.

The program starts receiving applications today, and each of five to six qualified startups will be able to receive a grant of 2 million yen, as well as office space for system development and mentoring.

The startups will be asked to finish their development in five months, and then present their results at a release event scheduled for late September. NTT Docomo executive Toshiki Nakayama explained that standout candidates will receive an offering to collaborate, as well as promotional and marketing assistance plus additional investments from the fund.

For further details about the program, visit this page [1].

Where does Docomo fit in the startup ecosystem?

So what should entrepreneurs think of this new program? We can help but compare it with KDDI Mugen Labo and KDDI Open Innovation Fund, both operated by Japan’s second largest telco, KDDI, Docomo’s closest competitor.

The Docomo program aspires to differentiates itself others by aggressively partnering with other accelerators. It has partnered with 500 Startups, a Silicon Valley-based seed accelerator which has invested in more than 450 startups in the last two years. Japanese startups in its portfolio include online translation service Gengo, online ticketing and event promotion startup PeaTix, and social lending service AQUSH. The Docomo program allows qualified startups to receive mentoring by 500 Startups partners, and also offers multi-faceted support for startups interested in doing business in North America. It was also announced that the program will also include a partnership with B Dash Ventures, a Japanese investment fund focused on startups.

But the bottom line is that startups will have to be qualified to receive all these privileges. The program intends to help participating startups go global, but if all are doing domestic-centric business, the partnership with 500starups will not work at all. So it will be interesting to see what kind of programs get accepted for the program, and we look forward to hearing what they roll out post-development in September.


  1. Not yet online at the time of writing.  ↩

Lang-8: The language learning startup that’s playing the long game

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Lang–8, launched in 2007, is a language-learning platform in which users from different language backgrounds can socially correct each other’s writings. The CEO YangYang Xi started the service when he was 23 years old while studying at Kyoto University. Xi, born in China and raised in Japan, got the idea of the language-learning platform from keeping a diary, in which he asked friends to correct his own writings (in Chinese) when he was studying in Shanghai. Six years, half a million users later ¶ Skip to the present day in 2013, and Lang–8’s user base is about to reach 510,000, with the current active user rate at about 10%. The service is used by people in 190 countries, 70% of them from outside Japan. The primary users are business professionals. While the 500,000 user milestone is an impressive one, the company took more than a little while to get there. When asked about this six-year journey, Xi says he didn’t experience real growth until about a year ago, and that it took a lot of preparation to reach this point. Having started his career as a student entrepreneur, the first order of business was research and development. The service needed…

lang-8-logo

Lang–8, launched in 2007, is a language-learning platform in which users from different language backgrounds can socially correct each other’s writings.

The CEO YangYang Xi started the service when he was 23 years old while studying at Kyoto University. Xi, born in China and raised in Japan, got the idea of the language-learning platform from keeping a diary, in which he asked friends to correct his own writings (in Chinese) when he was studying in Shanghai.

Six years, half a million users later

lang8-yangyang

Skip to the present day in 2013, and Lang–8’s user base is about to reach 510,000, with the current active user rate at about 10%. The service is used by people in 190 countries, 70% of them from outside Japan. The primary users are business professionals.

While the 500,000 user milestone is an impressive one, the company took more than a little while to get there. When asked about this six-year journey, Xi says he didn’t experience real growth until about a year ago, and that it took a lot of preparation to reach this point.

Having started his career as a student entrepreneur, the first order of business was research and development. The service needed to expand enough to be profitable. Initially Lang–8’s staff spent the majority of their time on site development and other technical elements. But two years after launch, Xi had a bit of a falling out with his engineer. Abandoned and left alone to nervously face 15 servers on his own, he decided that he couldn’t entrust his work to other people. That moment prompted him to make an effort to learn programming, and in the following two years, he learned development skills by interning at a friend’s company.

Interestingly, this period of personal growth for Xi coincided with strong user growth on the site as well – likely not a coincidence.

In 2009, Lang–8 received an angel investment of about 10 million yen from four private investors, including Nishikawa Kiyoshi of NetAge. In order to raise more funds, he will have to prove that Lang–8 has real growth potential. And that means addressing one key problem: smartphone support. Lang–8′s competitor busuuu experienced sudden growth as an iPhone application, reaching 1,9000,000 users. And while Lang–8′s userbase is not as large, its position as a social network is unique. If solid smartphone support is added, Xi believes it could become a serious competitor.

The other crucial point is monetization. Xi explained several of his ideas for controlling the corrections which play a central role in the service. For example, whether an entry receives corrections can be an issue. About 60% of English entries get corrected, as compared to 80% of entries in other languages. But a paid service could ensure that all entries are corrected. The jump from free to paid is never easy, but if that’s what users are looking for, it may possible.

Belief in an idea

Xi’s six-year journey from a struggling student startup to a community of 500,000 has certainly not been a glamorous one – although his persistence is certainly admirable. But compared to the explosive growth of social gaming and chat services in recent years, Lang–8′s growth rate might not grab the attention of investors.

Even with the recent improvement in user growth, there must have moments when Xi considered throwing in the towel. But he asserts, “I feel it has potential, and that’s why I can continue.” There are several entrepreneuers who are currently supporting him as mentors, and hopefully this can help with his plans to grow and expand his staff in the future.

That kind of unshakable belief in an idea is what has carried him this far. And with any luck, it’ll continue to drive him as he takes Lang8 to the next level.

Japanese fashion coordination site iQON raises $3.2M, will boost marketing efforts

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See original story in Japanese Vasily, a Tokyo-based startup which runs online fashion coordination service iQON, announced today that it has fundraised a total of 300 million yen (approximately $3.2 million) from Globis Capital Partners, Itochu Technologuy Ventures, and GMO Venture Partners. This is the second round of funds following the previous series A funding of 140 million yen ($1.5 million) in May of 2011. The iQON service allows you to combine clothing and accessories online and share fashion coordination ideas with other users. Each item has a direct link to fashion e-commerce sites where you can purchase it, and the startup will generate revenue from partner sites using an affiliate model. More than 300,000 coordinated outfits have been registered since the service launched in April of 2010, and users are bookmarking their favorites more than a million times a month. The startup introduced its iOS app last February (and an Android app is now also available) which really took off. It even helped some of their partnering e-commerce sites make more than 20 million yen monthly sales through the affiliate traffic. The company focused on service development in the series A phase, but will be intensifying branding and marketing…

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See original story in Japanese

Vasily, a Tokyo-based startup which runs online fashion coordination service iQON, announced today that it has fundraised a total of 300 million yen (approximately $3.2 million) from Globis Capital Partners, Itochu Technologuy Ventures, and GMO Venture Partners. This is the second round of funds following the previous series A funding of 140 million yen ($1.5 million) in May of 2011.

The iQON service allows you to combine clothing and accessories online and share fashion coordination ideas with other users. Each item has a direct link to fashion e-commerce sites where you can purchase it, and the startup will generate revenue from partner sites using an affiliate model. More than 300,000 coordinated outfits have been registered since the service launched in April of 2010, and users are bookmarking their favorites more than a million times a month.

The startup introduced its iOS app last February (and an Android app is now also available) which really took off. It even helped some of their partnering e-commerce sites make more than 20 million yen monthly sales through the affiliate traffic. The company focused on service development in the series A phase, but will be intensifying branding and marketing efforts from now on.

When discussing fashion e-commerce sites in Japan, we can’t help but mention Zozotown (listed on the Tokyo Mothers exchange since 2007). The site is a partner for Vasily rather than a competitor because the two companies have different business models and won’t compete and/or conflict. Vasily’s CEO, Yuki Kanayama, says they will keep working closely with their good partner Zozotown in the future.

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Vasily Inc.’s CEO: Yuki Kanayama