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Forecasts for 2017 from Five Insightful Investors

Rude VC Predictions

The Bridge 2016.12.26

This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. With the first full year of Brexit implementation, French elections, the inauguration of President-elect Trump, and a start to the baseball season with the Cubs as the reigning world champs, the world could not feel more unpredictable. In 2017, entropy feels more palpable than ever before. ‘Tis therefore the season to invite some of my colleagues in VC to offer some predictions for the upcoming year. These talented individuals are much smarter than I am, so it’s an honor to solicit their wisdom during this period of chaos. Claire Houry, Ventech, Paris For 2017, I see e-tailers going offline, reinventing the offline world and merging the physical and digital world to create an immersive environment. We shall see augmented and virtual reality booming in marketing applications, data-driven indicators and online analytics entering the offline world…

This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.

With the first full year of Brexit implementation, French elections, the inauguration of President-elect Trump, and a start to the baseball season with the Cubs as the reigning world champs, the world could not feel more unpredictable. In 2017, entropy feels more palpable than ever before.

‘Tis therefore the season to invite some of my colleagues in VC to offer some predictions for the upcoming year. These talented individuals are much smarter than I am, so it’s an honor to solicit their wisdom during this period of chaos.

Claire Houry, Ventech, Paris

For 2017, I see e-tailers going offline, reinventing the offline world and merging the physical and digital world to create an immersive environment. We shall see augmented and virtual reality booming in marketing applications, data-driven indicators and online analytics entering the offline world and intelligent apps (virtual customer assistant) performing some of the functions of a human assistant. Be ready to see internet of things invading all types of products.
Geopolitical views: With the world’s biggest start-up campus to open in Paris in April 2017, I also see France getting high attention in the tech world. Ventech supports the project and will launch its ParisPOC program for its foreign portfolio companies, willing to expand into the French and the European market.

Anna Boffetta, Balderton Capital, London

The list of winners in machine learning will shift from including only those who can gather the biggest dataset for training to also include those who develop training methods that rely on fewer and fewer data points. In the past years we have made huge progress in Artificial Narrow Intelligence (automation, optimisation, prediction etc.) but, thanks to the increase in computational power, the next years will begin to build towards Artificial General Intelligence, where computers get closer to human-like intelligence.
2017 will see the rise of new interfaces. While today’s dominant human-computer interaction is done through the display and visualisation, mostly on mobile, new interfaces like voice, audio, messaging etc. will start seeping into everyday life. More data will be collected, structured and analysed by machines which will deliver the results to humans through conversational interfaces.

Allison Baum, Fresco Capital, Tokyo

Increase in cross-border M&A – The US startup ecosystem is ripe for consolidation and most corporates in Asia are currently cash rich but innovation poor. We are already starting to see the beginning of this trend with our own portfolio companies, where we are receiving inbound interest from international companies looking for new business lines, tech IP, or an entry point into the US.
Edtech goes mainstream – Education technology has incorrectly been identified and relegated to a niche market. However, the combination of the economic and political turmoil we’re seeing in all corners of the world, and a rapidly accelerating rate of technological progress (self driving cars are very real now), jobs are going to be in focus. Tech related and tech enabled training will no longer be a nice to have, but instead a critical need for the health of individuals, corporations, governments, and society as a whole.

Adizah Tejani, Former Level 39 Fintech Accelerator, now at Token.io, London

Over the last few years, finance has undergone change as technology shifts the landscape on what is possible.

With the up and coming PSD2 changes across Europe, I think the move to platform banking driven by an API economy will start to become clearer in 2017. Banks and technology companies will continue to adjust through collaboration to navigate this change.

Anja König, Novartis Venture Fund, Basel

I like to quote Yogi Berra, “It’s tough to make predictions, especially about the future.”

With this caveat in mind, one doesn’t have to be a wizard to predict that it will be easier for European companies and academic institutions to recruit top talent from the US.

All the best for 2017.

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Choosing a name for your startup: Do’s and Don’ts

The Bridge 2016.11.23

This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. A year ago I wrote about French startup naming blunders and promised a follow up piece with constructive advice. I applaud non-English speaking entrepreneurs for bravely choosing international names when branding their companies and products. After all, English (or more specifically: broken English) is the most common business language globally. I do not mock language mistakes and have certainly committed my share of stumbles when operating outside of my native tongue. However, for entrepreneurs whose first language is not English, it’s foolish not to test your proposed startup brand first with a native English speaker. You can read some entertaining names of real-life startups in France that failed to heed this basic advice in my earlier post. In this one, I will explore some effective methods for choosing a company brand name which I have…

This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.

A year ago I wrote about French startup naming blunders and promised a follow up piece with constructive advice. I applaud non-English speaking entrepreneurs for bravely choosing international names when branding their companies and products. After all, English (or more specifically: broken English) is the most common business language globally.

I do not mock language mistakes and have certainly committed my share of stumbles when operating outside of my native tongue. However, for entrepreneurs whose first language is not English, it’s foolish not to test your proposed startup brand first with a native English speaker.

You can read some entertaining names of real-life startups in France that failed to heed this basic advice in my earlier post. In this one, I will explore some effective methods for choosing a company brand name which I have witnessed in various portfolio companies over the years.

Marketing fundamentals

Before starting, nail down the marketing basics of your business: segmentation / targeting / positioning. Understand how you’ve defined your target market and positioning within it. Resist the temptation to premise your entire business on a cool name you thought of (Note: I did this myself in the mid-90s with the name Virtual Realty, a startup which would bring 360-degree virtual tours to real estate. The name was awesome, but my overlooking the marketing fundamentals ultimately resulted in a failed business).

Branding distinction

Decide if your company name is going to represent your public-facing brand, or rather simply your flagship product. Both methods work, however, I’ve witnessed startups that fumble this in failing to clarify it early on.

Descriptive vs. symbolic

Do you want to choose a name that describes (or implies something about) your business activity? Or do you prefer a symbolic name? Examples of the former include AirBnb, Facebook, and Microsoft; whereas Amazon, Apple, and Google are examples of the latter. I tend to be partial to symbolic names, because technology churns so quickly. Trends blossom and wither, and accordingly tech company must often evolve their business activities. However, a symbolic name generally requires a higher initial investment in marketing to build brand recognition.

Outside feedback

Don’t choose a name in your corner. Solicit the advice of your company stakeholders both upwards (board), downwards (employees), and laterally (customers, suppliers, partners). Then ask a diverse collection of people you trust outside your business network. Even consider asking a stranger or two. Incidentally, if you’re generally not in the habit of soliciting feedback from others, chances are your marketing instincts are off.

Me-too

Resist overused word components to better stand out from the crowd. For example, last I counted 12 fintech startups in France alone use the word ‘pay’ in their name. In Japan, founders have an affinity for the word ‘market’, or for “adverbing” words by appending ‘ly’ to the end.

Language check

And last but not least, consult a native speaker for each market in which you may aspire to conduct business (obviously!). That way you’ll avoid naming your company after a venereal disease.

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Instant speculation abounds with Facebook Messenger’s Instant Games

The Bridge 2016.11.11

This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. Subscription media service The Information broke a story on Friday about Facebook Messenger allegedly planning to integrate HTML5 games into their platform, enabling users to play “Instant Games” directly in their chat feed. Assuming the reports are accurate, I find this development quite interesting for a number of reasons. First, this represents further confirmation that the rumors of HTML5’s demise in gaming have been greatly exaggerated (I’ve long argued as such for the reasons I cite here and here). Secondly, this feature will undoubtedly boost engagement, thus extending the share of time consumers spend on the FB Messenger platform. Combined with Instagram, Oculus, and Facebook itself, imagine how many hours per week Facebook will capture from consumers on one of its properties. Additionally, the monetization opportunities should be plentiful. Facebook could enrich its targeted advertising…

This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.

Subscription media service The Information broke a story on Friday about Facebook Messenger allegedly planning to integrate HTML5 games into their platform, enabling users to play “Instant Games” directly in their chat feed. Assuming the reports are accurate, I find this development quite interesting for a number of reasons.

First, this represents further confirmation that the rumors of HTML5’s demise in gaming have been greatly exaggerated (I’ve long argued as such for the reasons I cite here and here).

Secondly, this feature will undoubtedly boost engagement, thus extending the share of time consumers spend on the FB Messenger platform. Combined with Instagram, Oculus, and Facebook itself, imagine how many hours per week Facebook will capture from consumers on one of its properties.

Additionally, the monetization opportunities should be plentiful. Facebook could enrich its targeted advertising profiles with deeper knowledge on users habits. FB could also grab a slice of revenue from in-game purchases or even playable HTML5 ads like those in Neko Atsume. Could Instant Games serve as a backdoor to an FB equivalent of an App Store?

Finally, I could imagine how Instant Games could enable Messenger to strengthen its position in the few markets where it is not the leading messaging app. Although I suspect FB Messenger will not dethrone WeChat in China, countries like South Korea (Kakao), Japan, Taiwan, Thailand (all three, Line) may all come back in play.

I’ll be curious to watch how Facebook’s Messenger team selects its games for this service, and in particular whether they tailor their game selection based on market vs. pursuing a U.S.-centric content strategy for instance.

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Pepper Salé: Lessons from the bitter Aldebaran / SoftBank project

The Bridge 2016.11.02

This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. Bloomberg published an article last week on the failed Pepper program, the emotionally intelligent robot originally developed by French company Aldebaran Robotics which was largely acquired in 2012 by Japan’s SoftBank for approximately $100 million. The demise of Pepper has long been rumored (in fact The Rude Baguette originally broke the story nearly two years ago), though only recently is it becoming acknowledged more openly in Japan. On a recent visit to a business meeting in Tokyo, I was warmly welcomed at the interphone (despite my poorly accented Japanese), directed into a elevator, escorted to a conference room and offered coffee, all by a charmingly hospitable Pepper receptionist. Although the Rude Baguette post‘s comments go deeper in speculation and entertaining mud-slinging, one part of the Bloomberg piece in particular resonated with me: Aldebaran and SoftBank’s…

This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.

Bloomberg published an article last week on the failed Pepper program, the emotionally intelligent robot originally developed by French company Aldebaran Robotics which was largely acquired in 2012 by Japan’s SoftBank for approximately $100 million.

The demise of Pepper has long been rumored (in fact The Rude Baguette originally broke the story nearly two years ago), though only recently is it becoming acknowledged more openly in Japan. On a recent visit to a business meeting in Tokyo, I was warmly welcomed at the interphone (despite my poorly accented Japanese), directed into a elevator, escorted to a conference room and offered coffee, all by a charmingly hospitable Pepper receptionist.

Although the Rude Baguette post‘s comments go deeper in speculation and entertaining mud-slinging, one part of the Bloomberg piece in particular resonated with me:
Aldebaran and SoftBank’s cultures didn’t mesh well. Engineers in Japan fumed when their French counterparts disappeared for weeks on vacation.

Aldebaran employees, accustomed to a flat structure, suddenly found many of their decisions second-guessed by an army of managers in Tokyo.

The Japanese parent created SoftBank Robotics Corp. to oversee the business and sell Pepper. It named Fumihide Tomizawa, a business manager who doesn’t speak English or French, to oversee development. Son put Takashi Tsutsui, a close ally and a veteran network engineer, in charge of technology.

So here are a few lessons from the unfortunate and probably avoidable demise of Pepper.

Acquisitions don’t magically solve organizational dysfunction. I understand from some of the firm’s early investors that Aldebaran faced internal lack of cohesion in the period prior to the SoftBank’s rescue, with allegedly some investors reaching the limits of their patience with Aldebaran management. Cleaning up personnel challenges in French companies is already difficult enough for shareholders locally, let alone a foreign acquirer.

Cross-cultural training is critical in transcontinental acquisitions like this one. The company cultures of SoftBank and Aldebaran fell in stark contrast: a hierarchical organization vs. a flat one; structured vs. chaotic; a work environment where office face time is valued vs. one in which the minimum 5 weeks vacation plus RTT days are prized.

Employees with an affinity to bridge the cultural divide — be it thanks to their languages skills, international experience, etc. — should be empowered to play a prominent role in such partnerships. Even among those who are not viewed as sufficiently senior in the hierarchy or as sufficiently expert in the domain, any individuals who can help facilitate the interpersonal connections are valuable during the initial critical phase of a merger.

Finally, perhaps the Aldebaran / SoftBank experiment shines light on a need that efforts like #LaFrenchTech might address: with its access to a pool of resources who are versed in political relations and diplomacy, a government initiative like #LaFrenchTech could provide guidance to startups in finding their way in unfamiliar territory.

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I’m bullish on Fintech investment in Japan. So are a bunch of CVCs.

The Bridge 2016.07.08

This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. Several weeks ago I summarized my first impressions of Japan’s burgeoning Fintech sector. Now that I’ve had an opportunity to meet more of the key actors, I’m relatively bullish on this market for both innovation and venture investment. Perhaps reinforcing my appetite, this recent piece in TechCrunch offers a worthwhile primer on the Fintech world beyond Silicon Valley and Europe but ostensibly neglects to mention Japan. The Japanese government’s support of innovation in Fintech, such as by way of its modernizing of financial regulations and offering business incentives to firms that encourage the creation of startup incubators — is one contributing factor. Another is the average Japanese consumer’s substantial investable asset base, especially after the mid-life step function I explained earlier. Although I would not quite characterize the Japanese consumer of holding the same degree…

This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.

tokyo-stock-exchange — CC BY 2.0 via Flickr by Guilhem Vellut

Several weeks ago I summarized my first impressions of Japan’s burgeoning Fintech sector. Now that I’ve had an opportunity to meet more of the key actors, I’m relatively bullish on this market for both innovation and venture investment.

Perhaps reinforcing my appetite, this recent piece in TechCrunch offers a worthwhile primer on the Fintech world beyond Silicon Valley and Europe but ostensibly neglects to mention Japan.

The Japanese government’s support of innovation in Fintech, such as by way of its modernizing of financial regulations and offering business incentives to firms that encourage the creation of startup incubators — is one contributing factor. Another is the average Japanese consumer’s substantial investable asset base, especially after the mid-life step function I explained earlier. Although I would not quite characterize the Japanese consumer of holding the same degree of mistrust for banks the way we do in the West, investing experience of the average household is relatively more limited in Japan than say in the U.S. In fact, I observe a more kindred mindset of conservatism (or prudence) with European households.

That is not to suggest that Japanese consumers are close-minded to creative financial products. On the contrary, some very promising young firms are tapping into a consumer appetite for solutions ranging from robo-advisory (Money Design) to peer-to-peer small business lending (Crowdcredit). The recent Microsoft Innovation Day featured some other compelling entrepreneurs with global ambitions.

See also:

Japan’s P2P lending platform Crowdcredit raises $1.7 million from trading giant Itochu

Financial institutions in Japan are determined to not just remain bystanders. To their credit, many acknowledge that innovation can take place outside their corporate walls… and sometimes even outside the country’s borders.

Increasingly, these established corporations are taking small stakes in Fintech startups. A new draft measure in Japan’s parliament will ease the restrictions on banks’ ability to invest in operating companies.

Many are also setting up dedicated venture capital units. Although historically corporate venture capital funds underperform independent VC firms on a purely financial return basis, a corporation’s objectives also encompass strategic considerations, so making direct investments in startups can make sense.

By last tally, I’ve counted over 20 corporate venture capital funds in Japan who make Fintech investments. This list is by no means exhaustive, but includes (listed alphabetically):

Adways Ventures
Credit Saison Ventures
DBJ Capital
Dentsu
GCI Capital
GMO Venture Partners
Gree Ventures
Intel Capital
Itochu Corporation
Mitsubishi UFJ Capital
Mitsui Fudosan
Mizuho Venture Capital
Monex Ventures
Opt Ventures
Rakuten Ventures
Recruit Strategic Partners
Salesforce
SBI Holdings
Shinsei
SMBC Venture Capital
YJ Capital

Although I haven’t met all of them yet, the relatively few of this group with whom I’ve coinvested have behaved much like a purely financial VC would expect of them. By this I mean that these funds have issued relatively market-standard term sheets, have not demanded any special privileges, and have at least in my experience properly balanced the financial objectives of the investment with their own strategic agenda. Far from viewing them as competitors, I welcome the opportunity to coinvest with CVCs because of their complementarity with independent, financially-driven VCs.

In addition to open innovation initiatives or establishing in house CVC units, I submit that another option exists which merits serious consideration for Japanese corporations and financial institutions. More on that soon…

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The Valley of Heart’s Delight

Silicon Valley for aspiring innovation ecosystems

The Bridge 2016.06.04

This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here. This is Part 1 of a 3-part series on Silicon Valley for aspiring innovation ecosystems. Spot quiz: What region is formerly known as the Valley of Heart’s Delight ? Here’s a hint: it’s not Blackstone Valley in Massachusetts, nor is it Berlin, East London, and especially not Saclay, France. A swathe of apple orchards and orange groves spanning Santa Clara County in Northern California is what gave Silicon Valley this original nickname. In 1953, transistor inventor William Shockley left Bell Labs, moved to Mountain View, California and founded Shockley Semiconductor Laboratory with the belief that silicon would be a better material than the conventional germanium for making transistors. Shockley was a brilliant engineer but proved a terrible manager, so in 1957 eight of his best engineers (including a character by the name of Gordon Moore)…

This guest post is authored by Mark Bivens. Mark is a Silicon Valley native and former entrepreneur, having started three companies before “turning to the dark side of VC.” He is a venture capitalist that travels between Paris and Tokyo (aka the RudeVC). You can read more on his blog at http://rude.vc or follow him @markbivens. The Japanese translation of this article is available here.

This is Part 1 of a 3-part series on Silicon Valley for aspiring innovation ecosystems.

Spot quiz: What region is formerly known as the Valley of Heart’s Delight ?

Here’s a hint: it’s not Blackstone Valley in Massachusetts, nor is it Berlin, East London, and especially not Saclay, France.

A swathe of apple orchards and orange groves spanning Santa Clara County in Northern California is what gave Silicon Valley this original nickname. In 1953, transistor inventor William Shockley left Bell Labs, moved to Mountain View, California and founded Shockley Semiconductor Laboratory with the belief that silicon would be a better material than the conventional germanium for making transistors. Shockley was a brilliant engineer but proved a terrible manager, so in 1957 eight of his best engineers (including a character by the name of Gordon Moore) quit and went on to found Fairchild Semiconductor.

This is of course only one little excerpt of a fascinating story, but it seems timely to review the history of the creation of Silicon Valley as various governments from Europe to Asia periodically attempt to replicate Silicon Valley in their local geographies.

I’m a Silicon Valley native. My first residence when I entered the world almost four decades ago was in Tiburon, an island just north of the Golden Gate Bridge. Besides a brief stint in Tokyo, I spent much of my childhood growing up in Los Altos, a sleepy residential town smack in the middle of Silicon Valley. I attended the same high school as Steve Jobs and Steve Wozniak in Cupertino, albeit almost two decades later.

We knew our region as Silicon Valley (not “The Valley”, as people that never lived there sometimes call it). However, as kids, we didn’t necessarily realize that we were a part of something so unique. The high-tech boom of the 80’s was in full swing, though it was about designing microprocessors rather than designing mobile apps.

HP, VisiCorp, and Varian were like the Google, Facebook, and Box of the era. Entrepreneurship was a natural reflex, not something to be forcibly learned. I recall my first entrepreneurial experience at the age of 15 which began with a paper route and, encouraged by a more industrious neighborhood kid, evolved into locking up town-wide distribution for the local newspapers and subsequently hiring junior high kids for pennies to perform the actual delivery. The San Jose Mercury News was the big brand, but the lower-quality Peninsula Times Tribune proved a nice complement with its fatter margins.

Maybe it was due to the omnipresent earthquake risk (I recall the menacing San Andreas fault line ran right down our street), but the prevalent vibe was the cycle of creating, enterprising, destroying, and rebuilding. Of course there were the folkloric stories of tinkerers in garages launching tech companies. Less often reported were the far more numerous incidents of lifestyle entrepreneurs creating small businesses: dry cleaners, pizzerias, and ice cream parlours. And just as Fairchild Semiconductor later gave way to Intel, the ice cream parlours were disrupted by frozen yogurt shops. It’s no coincidence that of the three aforementioned Silicon Valley corporate titans of the 80’s, only one name is recognizable today – HP – and it’s not exactly a poster-child for the visionary companies list nowadays.

So amidst the variety of well-intentioned innovation initiatives (most recently Japan’s plan for Tokyo as the Fintech capital of Asia), I submit that it’s worthwhile to study how Silicon Valley came to be what it is today. Some lessons may be relevant for Japan, others less so. In the spirit of constructive brainstorming, in part two of this series I’ll expound on the confluence of factors which transformed the Valley of Heart’s Delight.

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Smaller Japanese ventures seeking to project themselves overseas

RISCON

The Bridge 2015.11.05

This is a guest post authored by “Tex” Pomeroy. He is a Tokyo-based writer specializing in ICT and high technology. With the arrival of October, many small-sized Japanese SMEs – especially venture businesses honing in on safety as well as security needs – have been actively showcasing their new products at exhibitions and symposiums in Japan. From October 12th many small firms supported by the Tokyo Metropolitan Government gathered at Asia’s largest security and safety exposition RISCON – targeting everything from automotive hazards to natural disasters – held alongside the restricted-access [luggage examination and ID/passport required] SEECAT (Special Equipment Exhibition & Conference for Anti-Terrorism) geared towards the more specialized businesses. The RISCON Tokyo SME Support Center corner and clusters nearby had several eye-catching ventures, running the gamut from Challenge, an earthquake early warning systems producer established by a former Japanese telecoms monopoly engineer, and Port Denshi, an electronics maker now availing handy “checkers” for structural integrity of buildings, to Starlite, a car parts maker unveiling a “floating garage” and Sea Enterprise, a firm offering a Tsunami shelter, among many purveyors of apps/devices to inform of other such hazards. Challenge Challenge is a venture business started up by Mr. Kazuo Sasaki,…

This is a guest post authored by “Tex” Pomeroy. He is a Tokyo-based writer specializing in ICT and high technology.

riscon-stage — Challenge’s Sasaki presents on the RISCON stage.

With the arrival of October, many small-sized Japanese SMEs – especially venture businesses honing in on safety as well as security needs – have been actively showcasing their new products at exhibitions and symposiums in Japan.

From October 12th many small firms supported by the Tokyo Metropolitan Government gathered at Asia’s largest security and safety exposition RISCON – targeting everything from automotive hazards to natural disasters – held alongside the restricted-access [luggage examination and ID/passport required] SEECAT (Special Equipment Exhibition & Conference for Anti-Terrorism) geared towards the more specialized businesses.

The RISCON Tokyo SME Support Center corner and clusters nearby had several eye-catching ventures, running the gamut from Challenge, an earthquake early warning systems producer established by a former Japanese telecoms monopoly engineer, and Port Denshi, an electronics maker now availing handy “checkers” for structural integrity of buildings, to Starlite, a car parts maker unveiling a “floating garage” and Sea Enterprise, a firm offering a Tsunami shelter, among many purveyors of apps/devices to inform of other such hazards.

Challenge

Challenge is a venture business started up by Mr. Kazuo Sasaki, a former NTT engineer who quit the ICT giant – a rare breed indeed in this “employment-risk-averse” nation still dominated by “public servants.” Mr. Sasaki first started out by producing a “terrorist attack warning system” based on an on-campus communication network but found that more lives could be saved through early earthquake warnings, as he explained at the RISCON stage event.

His company, with assistance from the public corporation backing up the SME Support Center, is already slated to deploy its EQ-Guard II network in Indonesia. According to their tech chief Yamaimaiti Nizhamudong the company already has nearly a dozen languages available for systems announcements and are targeting quake-prone countries in Eurasia as future markets.

Port Denshi

Port Denshi is headed by Mr. Katsuhiko Hibino, whose company until recently was mainly focused on producing electronic components until he realized that he could use his products to “sound out” structural flaws in buildings. The electronic “one-stop” tapping system developed by Port Denshi, a typical “Denshi” meaning “electronics” in Japanese, uses a “metal xylophone stick” which enables pinpointing of problems with concrete deterioration upon hitting the surface, and unlike the Schmidt hammer is able to fathom deeper inside the building structure.

In recent years Japan – whose postwar reconstruction results are showing wear and tear – has witnessed a spate of problems related to urban infrastructure. There has also been a marked lowering in workmanship among constructors, perhaps due to a lack of human resources brought on by the sudden building rush of recent years. As an aside the event this year at Big Sight took place alongside Tokyo Aerospace Symposium and a reference to airport buildings in need of periodic checks – like the older Tokyo area ones as well as the sinking one offshore of Osaka – cannot but be stressed.

Starlite

As it turned out, adjacent to the Tokyo SME area was located Starlite of Osaka, which availed a new type of sturdy garage. The car parts provider, in view of recent flash downpours that have caused floods and swept away communities, decided to attach drum cans underneath a garage clad all around with protective sheathings. It is said to float long enough until water subsides.

As a disaster still fresh in the minds of many Tokyoites there are also the tidal waves that struck the shores north of the metropolis. Several companies were focused on providing schemes to deal with such hazards as well. One of these, Sea Enterprise, looked to disseminate its Tsunami shelter system which provides for longer “riding out” of waterborne disasters.

As for automotive hazards countermeasures we will look in depth on these in the Tokyo Motor Show story to follow soon. In any event it is hoped there will be less cases of major disaster situations, although we need to be prepared well at all times.

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Leading Japanese news app Gunosy launches in the US. But is it ready?

Rick Martin 2014.05.16

A couple of weeks ago Japanese mobile news startup Gunosy launched an English version of their app for the UK. Now today the company has announced that it has released its iOS app in the US as well, with an Android version to follow at the end of the month. The company says that it is targeting 80 million installs outside of Japan, and 100 million worldwide. And while I’m usually encouraged to see Japanese companies venturing abroad, there are three reasons I can think of why this app – in its current form – will fail spectacularly. No ‘readability’ view – I’ve written about why I think so before. Gunosy does not provide news articles in a stripped-down, Readability-style view. Most Western news apps, in contrast, do. Check out the view of the same article below, first on Gunosy, then on Pocket. Which would you prefer to read on mobile? Late mover advantage squandered – As a startup, if you enter a market late as Gunosy is now doing, you benefit from seeing what competitors have done, and you have a chance to do it better. Gunosy, for some reason, seems to think it has a chance against the…

A couple of weeks ago Japanese mobile news startup Gunosy launched an English version of their app for the UK. Now today the company has announced that it has released its iOS app in the US as well, with an Android version to follow at the end of the month.

The company says that it is targeting 80 million installs outside of Japan, and 100 million worldwide. And while I’m usually encouraged to see Japanese companies venturing abroad, there are three reasons I can think of why this app – in its current form – will fail spectacularly.

No ‘readability’ view – I’ve written about why I think so before. Gunosy does not provide news articles in a stripped-down, Readability-style view. Most Western news apps, in contrast, do. Check out the view of the same article below, first on Gunosy, then on Pocket. Which would you prefer to read on mobile?
Late mover advantage squandered – As a startup, if you enter a market late as Gunosy is now doing, you benefit from seeing what competitors have done, and you have a chance to do it better. Gunosy, for some reason, seems to think it has a chance against the competition without bothering to do anything. In my view, their app does not in any way compare with even the 2012 version of Flipboard (for example), let alone the current one.
Doesn’t serve the user first – Just for kicks, I tried to send an article from Gunosy to Pocket. It worked, but the link that Gunosy lets users share not actually the article link, but a Gunosy link of this format: https://gunosy.today/r/gEqFt. At first I thought it might be just a link shortener, but it’s not, as you can see below. It’s pure Gunosy promotion with a download link and the top, and below too if you scroll down. Warning, this mess may induce flashbacks to the Hootsuite toolbar.

So where is Gunosy’s proposed value add? I confess, I have no idea. Perhaps KDDI knows? I can think of 12 million reasons why they should know!

Gunosy’s push notifications/reminders at different times during the day might be touted as a differentiator, but it’s not really a big selling point.

I think if the company hopes to do well beyond Japan, they’ll need to make some serious user-focused iterations on this app first.

news

Why Japan’s mobile news startups are scared to disrupt

Rick Martin 2014.04.18

This is a complex issue, but I think it boils down to this: Most of Japan’s news app creators do not put the interests of their users above the interests of content publishers. So while users around the world can read news in apps with beautiful typography of an appropriate size (see Pocket, Instapaper, or Reeder), most Japanese readers – or those who use domestically produced apps anyway – are given the original webpage in an in-app browser, often showing typeface that’s too small to read, or a page that has not been optimized for mobile. While the app developers I’ve spoken to are reluctant to acknowledge it, most industry observers I ask point to publishers who cry foul over copyright law, complaining about stripped-out ads, and a lack of metrics from readers who come on site. These debates occurred on a global scale years ago, and while they were not resolved in a neat and tidy fashion, the internet appears to have generally settled that such use (whether it is via a republished RSS feed for via scraping) is ok [1]. But Japanese companies who have ventured to create news apps have almost universally opted to err on the…

This is a complex issue, but I think it boils down to this:

Most of Japan’s news app creators do not put the interests of their users above the interests of content publishers. So while users around the world can read news in apps with beautiful typography of an appropriate size (see Pocket, Instapaper, or Reeder), most Japanese readers – or those who use domestically produced apps anyway – are given the original webpage in an in-app browser, often showing typeface that’s too small to read, or a page that has not been optimized for mobile.

While the app developers I’ve spoken to are reluctant to acknowledge it, most industry observers I ask point to publishers who cry foul over copyright law, complaining about stripped-out ads, and a lack of metrics from readers who come on site. These debates occurred on a global scale years ago, and while they were not resolved in a neat and tidy fashion, the internet appears to have generally settled that such use (whether it is via a republished RSS feed for via scraping) is ok [1].

But Japanese companies who have ventured to create news apps have almost universally opted to err on the side of caution by showing the original webpage content in their app, as is, without any effort to ensure that it’s readable on mobile [2]. They have purposefully chosen to not disrupt or challenge current content models.

Let’s look at a few examples from some of Japan’s leading news apps. Here’s Gunosy:

Gunosy does what most Japanese news apps do. They serve up the original web page when the title is clicked, whether its very readable or not. Other Japanese apps that do this are Presso, Romly, Vingow, Mynd, and Kamelio [3]. These news apps are primarily aggregators or curation tools. I wouldn’t go so far as to call any of them ‘news readers’, because technically, you’re just being directed to a traditional reading experience on the source site.

SmartNews’s approach is an interesting one, maybe the only one that is even a little daring. They are one of the few companies to present a readability mode, boasting offline caching as a feature for Japanese users who might be beyond internet signal on the subway. When you tap to read an article on SmartNews, you are flashed an option to read in ‘SmartMode’. This is SmartNews’s more readable view, but it’s presented as something the user must choose to view deliberately. What’s more, when you press back, the app sneakily presents the original source page (see this below). This is a clever way of giving both the publisher and the user what they want, and I’m sure it took them a while to figure out this compromise.

Line News is also mildly daring, showing longer excerpts relating to one story, collected from various sources. Tapping on any of those sources brings you to the original source, however (see lower left), including ads and undesirable cruft (lower right).

Overall I think it is pretty clear that the relationship that exists between content publishers and news apps that tiptoe around their requirements/expectations is not good for innovation in the content space. Publishers cling to old monetization models instead of searching for new ones, and Japanese readers are denied the kind of beautified reading experience that the rest of the world enjoys [4].

And that’s a shame.

[Photo]

For more on this, see ‘Is Flipboard Legal?’ (2010), and ‘Could loading a feed into an RSS reader be grounds for legal action?’ (2010). Of course now even Apple has a ‘Reader’ function for Safari and Mobile Safari that strips away ads and gives you a simplified, readable version. ↩
Mobile-friendly news sites are far more common in Japan than in other countries, so if there’s a silver lining here, it’s that. the original page view on mobile is typically not so bad. ↩
Kamelio does some interesting things with timelines which I think are admirable, but they still opt to show the original source in this way. ↩
Unless they use something like Pocket, of course, which many do. ↩

news

Japan’s bookmark-driven news app ‘Presso’ launches, but fails to impress

Rick Martin 2014.03.28

Last week I mentioned that Japanese internet company Hatena would be launching a mobile news app based around its Hatena Bookmarks service. Yesterday that app, dubbed Presso, was made available on the App Store, so I decided to take it for a spin. For those not familiar with Hatena Bookmarks, or ‘Hatebu’, the service began way back in 2005, offering the same sort of social bookmarking as Delicious (2003) but for the Japanese market. As I mentioned last week, the company has built a useful ‘hot entry’ portal based on most frequently bookmarked media from users, and this new mobile app brings that same valuable content on to mobile. What’s useful about Presso is that the available news categories are rather robust and customizable. So for example, if I’m interested in news about ‘mobile apps’, ‘business’, and ‘cameras and photography’, I can simply select those to create a very personalized news service for myself. There are more diverse topics included as well, such as ‘Government/Economics’, ‘Manga/Anima’ [1], ‘Lifehacks’, ‘Travel’, and ‘Blogs/Journals’ (see below). You can even add your own tags on your own, which is perhaps the most useful function. As I expected, Hatena’s new app puts more focus on…

Last week I mentioned that Japanese internet company Hatena would be launching a mobile news app based around its Hatena Bookmarks service. Yesterday that app, dubbed Presso, was made available on the App Store, so I decided to take it for a spin.

For those not familiar with Hatena Bookmarks, or ‘Hatebu’, the service began way back in 2005, offering the same sort of social bookmarking as Delicious (2003) but for the Japanese market. As I mentioned last week, the company has built a useful ‘hot entry’ portal based on most frequently bookmarked media from users, and this new mobile app brings that same valuable content on to mobile.

What’s useful about Presso is that the available news categories are rather robust and customizable. So for example, if I’m interested in news about ‘mobile apps’, ‘business’, and ‘cameras and photography’, I can simply select those to create a very personalized news service for myself. There are more diverse topics included as well, such as ‘Government/Economics’, ‘Manga/Anima’ [1], ‘Lifehacks’, ‘Travel’, and ‘Blogs/Journals’ (see below). You can even add your own tags on your own, which is perhaps the most useful function.

As I expected, Hatena’s new app puts more focus on photos as most modern news applications do. And I while I really like the way you can swipe right or left to go to the next news category, Presso occasionally feels slow when loading those categories. I had hoped that Presso would apply its the same minimalist reformatting on article pages that we find in apps like Instapaper and Pocket, but it doesn’t – which I think is a mistake. Similarly, I think they’ve wasted an opportunity in the video category by not pulling in videos for consumption within Presso.

One interesting feature is the optional four push notification times (8am, 12pm, 6pm, and 11pm, as you can see above), which are ostensibly intended to coincide with the times that Japanese users read news most. But overall I think Presso doesn’t bring anything to the news app space that we haven’t seen before. However, because you can bookmark articles to Hatena Bookmarks as you read them, that will feed much needed activity back into its bookmarks service, perhaps winning back many Hatena users that the company may have lost as smartphone popularity has grown.

So in this sense, I think Hatena has built this app more with its own interests in mind instead of those of its users. This might have been an exciting app two or three years ago, but in the age of startup news challengers like Gunosy and SmartNews here in Japan, I think local consumers expect a little more.

Despite the downslide of the leading social bookmarking service Delicious, online bookmarking has enjoyed something of a resurgence recently through the very geeky Pinboard. That is essentially a clone of what Delicious was when it was good, now serving a rather niche market by charging an initial one-time sign-up fee of $10, and optional caching service for $25 per year.

It would be interesting to see Hatena explore that kind of business model, but I have a feeling they never will. Nevertheless, for hardcore Hatebu fans out there, Presso is a welcome present.

Perhaps a good resource for Japanese learners interested in manga. ↩

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