news

From tech startup to media company: Videogram evolves, with smart TV on the horizon

Rick Martin 2013.12.12

We’ve written about Cinemacraft’s Videogram solution a few times before here on The Bridge. It is a player that lies of top of existing web video, giving a visual paneled preview of different portions of that video. The startup received investment from 500 Startups, and this year began working with Turner Broadcasting by way of its 12-week Media Camp, and subsequently when it became an investor as well. Founder Sandeep Casi explained to me that although they started out strictly as a technology company, they have now grown to become more of a media company. And not just any media company either. Recently they were one of five TVOT nominees for the best TV and video user interface / user experience, right alongside the likes of Netflix, Dish Network, and Showtime Network. They’re building for the future too, announcing Leap Motion integration today. Much of their recent progress, says Sandeep, has come about thanks to the alliance with Turner. “Turner has been fantastic,” he explains. He says that the connection with Turner really helped them get official embed status for Twitter, their player now white-listed for viewing. What that means is that now Videogram clips can be shared in the…

videogram-leap — Videogram is now Leap Motion enabled

We’ve written about Cinemacraft’s Videogram solution a few times before here on The Bridge. It is a player that lies of top of existing web video, giving a visual paneled preview of different portions of that video. The startup received investment from 500 Startups, and this year began working with Turner Broadcasting by way of its 12-week Media Camp, and subsequently when it became an investor as well. Founder Sandeep Casi explained to me that although they started out strictly as a technology company, they have now grown to become more of a media company.

And not just any media company either. Recently they were one of five TVOT nominees for the best TV and video user interface / user experience, right alongside the likes of Netflix, Dish Network, and Showtime Network. They’re building for the future too, announcing Leap Motion integration today. Much of their recent progress, says Sandeep, has come about thanks to the alliance with Turner.

“Turner has been fantastic,” he explains. He says that the connection with Turner really helped them get official embed status for Twitter, their player now white-listed for viewing. What that means is that now Videogram clips can be shared in the Twitterstream, and function as they normally would.

Having made solid progress with presentation of video on the web, Sandeep is looking ahead to what he says was his vision all along: Television. He’d like to make electronic program guides more interactive, and Videogram can be a pathway to doing that. By integrating their service into smart TVs, not only do you bring the paneled functionality of Videogram, but you also bring the capability to socially share portions of television shows in a more granular manner via the sharing function on those panels. You can check out some Videogram Smart TV interfaces here if you’d like to learn more.

As for the business side of things, Videogram panels also enable banner ad placement within videos for advertisers. Sandeep showed me an example using an NBA clip (see below), where panels visually previewed highlights of a Knicks game, with one panel showing a banner ad for a basketball shoe. That banner, when clicked, gave an option to buy via the Nike website [1]. Obviously this sort of hyper-relevant product placement holds a lot of potential in the video advertising space, especially for TV. Sandeep explains:

We’re trying to make the industry think about engagement, not views. For advertisers this is important, because they now know their video is being eyeballed.

When I talked with Sandeep, he showed me a number of Videogram mockups and samples for a wide range of notable entertainment properties. To be honest, it was hard to keep up with which companies were already clients, and which ones were just mockups. But it’s hard not to admire Videogram having the confidence to overhaul a given company’s online video presence on spec, and take it to their offices to sell them on its potential. Sandeep adds:

This is our business development scheme. This is what we do. And I really can’t believe that more startups don’t do it. Clients get it immediately. We give them a link, and they can convince internally with that link.

Videogram’s iOS app has come a long was as well, recently getting an upgrade that lets users capture multiple clips, combining them as a composite video. This is a function we see in many video apps these days, but the technique lends itself especially well to Videogram since different clips could be represented by different panel previews.

Cinemacraft has already deployed Videogram across a number of properties, including CBS, ABC, FOX , Sony, and even in India’s Bollywood. I expect NTT group will also be assisting the company to reel in some big fish here in Japan as well. I’m told that their service has grown in popularity in Korea as well, so I look forward to hearing news from that front too.

There’s also a play button, so buy link appears to be not too intrusive. ↩

news

How can big companies collaborate with startups?

Masaru Ikeda 2013.10.16

See the original story in Japanese. This is a part of our coverage of B Dash Camp Osaka 2013. Here in Japan we’ve recently seen several efforts to connect startups and established companies, like Morning Pitch and Creww’s Ignition Night. In Japan, most incubation programs run by corporate venture capital initiatives aim to let their employees understand the startup culture and get a sense of the creative atmosphere. So in this way, established companies and startups can complement each other, and such efforts will likely be more frequent across the local startup scene. On a day two of B Dash Camp in Osaka last week, we heard more on this topic from Microsoft Japan evengelist Shinichiro Isago, NTT Docomo Ventures managing director Daisuke Miyoshi, and Dentsu [1] senior director Fumijiko Nakajima. This session was moderated by Shuji Honjo, visiting professor at Tama Graduate School of Business, Tokyo. According to Nakajima, Dentsu focuses on three factors when partnering with startups: ideas, entrepreneurship, and technology. Under a well-known project dubbed Neurowear, the company has developed several products like as Nekomimi and Miko, which were also exhibited at SXSW back in March. His team is currently exploring business models for these products. He…

See the original story in Japanese.

This is a part of our coverage of B Dash Camp Osaka 2013.

Here in Japan we’ve recently seen several efforts to connect startups and established companies, like Morning Pitch and Creww’s Ignition Night. In Japan, most incubation programs run by corporate venture capital initiatives aim to let their employees understand the startup culture and get a sense of the creative atmosphere.

So in this way, established companies and startups can complement each other, and such efforts will likely be more frequent across the local startup scene. On a day two of B Dash Camp in Osaka last week, we heard more on this topic from Microsoft Japan evengelist Shinichiro Isago, NTT Docomo Ventures managing director Daisuke Miyoshi, and Dentsu ^[1] senior director Fumijiko Nakajima. This session was moderated by Shuji Honjo, visiting professor at Tama Graduate School of Business, Tokyo.

dentsu-nakajima — Dentsu’s Fumihiko Nakajima

According to Nakajima, Dentsu focuses on three factors when partnering with startups: ideas, entrepreneurship, and technology. Under a well-known project dubbed Neurowear, the company has developed several products like as Nekomimi and Miko, which were also exhibited at SXSW back in March. His team is currently exploring business models for these products.

He also shared some of the projects that the company is working on in collaboration with other companies:

Draffic: Developed in association with Japanese GIS company Zenrin Datacom, this system visualizes how many people were located in a specific time at a specific location. It is expected to be used by local governments to consider a disaster evacuation plan.
Asoberu-T: Developed in association with Japanese fashion retailer Beams, this solution lets users experience augmented reality on T-shirts. We featured this product back in July.
Social Marathon: Using RFID technology, this service collects time lapses of runners at a marathon and automatically publish their updates via social networks to more motivate them to keep running.
Dentsu Science Jam: This is a joint venture with Japanese web conglomerate Digital Garage, aiming to create commercial services based on cutting-edge research in science.

According to Miyoshi, NTT Docomo Ventures aims for capital gain, but for startups, they expect to be seen as a gateway to all NTT group companies.

At a huge conglomerate like NTT Group, you may have no idea how to connect with a certain department. We will find the right person in the right department, corresponding to what you’re looking for, and link you up with them. We will work with you to explore how a department can make the most of your technology.

Since our company is a mobile carrier, we tend to be more constrained, so we will need more time to launch a new business than a typical startup does. By collaborating with startups which typically have lots of knowledge about new businesses, we would like to accelerate our internal entrepreneurial efforts as well.

One of the trends popular with our executives currently is the health care business. If you can bring us a health care solution, we can probably explore a potential business partnership.

For startups from outside Japan, they welcome any types of your approach. But they highly recommend you to visit them with a Japanese interpreter.

microsoft-isago — Microsoft’s Shinichiro Isago

Microsoft launched Microsoft Ventures from its US headquarters back in July. And Microsoft Japan is preparing to launch its Japanese counterpart, providing startups with support such as BizSpark, an acceleration program, and seed funding opportunities ranging from 5 million yen to 30 million yen (from $50,000 to $300,000).

In a response to a question about what kind of startups they can support, Microsoft’s Isago shared an interesting story:

In Saga prefecture, the local government decided to distribute our tablets to all high school students in the prefecture. … Our challenge is we have little variety of apps for Windows Tablets. So we really want to support startups which can provide a variety of apps for devices.

For startups, if you want to apply for Microsoft’s incubation program, you will be requested to submit a form in English, as they are a global company. Microsoft Japan can give you translation assistance, but they recommend you to personally write about what has motivated you to launch a startup, regardless of whether your English is good or not.

Moderator Honjo praised the the panelists for helping their respective companies connect with startups. In response, Microsoft’s Isago explained why.

It’s because big companies became weaker. In the past at many companies, smarter people tend to be assigned to high profit business. But for communicating with startups, you will need to be agile and responsive. Supporting startups will not help profits so much, but taking these actions with our future in mind is a good policy.

Disclosure: The author has a business relationship with Dentsu.↩

news

Ietty fundraises $500,000, aiming to disrupt Japanese home rental industry

Junya Mori 2013.10.16

Based on our original story in Japanese. Ietty is a Japanese startup that provides an alternative to conventional househunting. The startup announced yesterday it has raised 50 million yen (approximately $500,000) from I Mercury Capital, the investment arm of Japanese social network Mixi [1]. Since its launch back in February of 2012, the company has been developing its service in stealth mode. But it seems that, coinciding with these new funds raised, they are turning up at many showcasing opportunities like Graph Hack Award 2013. Ietty, the platform that the startup provides under its company name, aims to solve problems for both homeseekers and property agents. When you use conventional home finder sites, you need to enter lots of criteria to find something to fit your preference. But Ietty uses your Facebook user profile, and agents propose some available options via the platform based on criteria you have entered in advance. Property agents will pay a commission to the platform on a performance basis, so they have no risk in signing up. The platform was launched back in June in beta, and has partnered with eight different agents to date. The startup’s CEO Taihei Ogawa explained what makes the platform…

Based on our original story in Japanese.

Ietty is a Japanese startup that provides an alternative to conventional househunting. The startup announced yesterday it has raised 50 million yen (approximately $500,000) from I Mercury Capital, the investment arm of Japanese social network Mixi ^[1]. Since its launch back in February of 2012, the company has been developing its service in stealth mode. But it seems that, coinciding with these new funds raised, they are turning up at many showcasing opportunities like Graph Hack Award 2013.

Ietty, the platform that the startup provides under its company name, aims to solve problems for both homeseekers and property agents. When you use conventional home finder sites, you need to enter lots of criteria to find something to fit your preference. But Ietty uses your Facebook user profile, and agents propose some available options via the platform based on criteria you have entered in advance.

Property agents will pay a commission to the platform on a performance basis, so they have no risk in signing up. The platform was launched back in June in beta, and has partnered with eight different agents to date. The startup’s CEO Taihei Ogawa explained what makes the platform different from conventional services.

The property agent business connects homeseekers and landlords through a property. For users, even if you can find no property that fits your preference, we can help you connect to appropriate agents likely to introduce a good one for your search.

From an agent’s perspective, the more users the platform has, the more likely an agent is to close deals. For the users who receive no manual contact from agents, the platform has a recommendation engine that automatically proposes a set of available apartments based on your preference.

ietty-ogawa — Ietty founder/CEO Taihei Ogawa

Prior to launching the platform, the startup’s CEO Ogawa previously worked at Sumitomo Realty & Development, a well-established Japanese property agents. When he determined to launch a startup, he started studying about business models in the IT industry and participated in Incubate Camp, the program run by Japanese startup incubator Incubate Fund. Ogawa explains:

I’ve never seen any other industry where customer satisfaction so extremely low. That’s why this market is worth disrupting. … By boosting our business, I believe the market can become more competitive and more transparent in how it presents information to consumers.

It will be interesting to see how this startup will might evolve such an old-fashioned industry, where consumers have been paying high incidental expenses for house relocation.

The company’s name comes from the Japanese word for home ‘ie’, which they are apparenty turning into an adjective somehow.↩

news

Two young Japanese entrepreneurs discuss their recent buyouts

Takeshi Hirano 2013.10.15

See the original story in Japanese. This is a part of our coverage of B Dash Camp Osaka 2013. Two Japanese startups that have experienced an strong growth in the last several months are Coach United, the startup behind private lesson portal Cyta.jp, and Bracket, which operates instant e-commerce platform STORES.jp. On day two of B Dash Camp Osaka last week, we had a chance to hear from Coach United CEO Nobuhiro Ariyasu and Bracket CEO Yusuke Mitsumoto. Also on the panel were Rakuten executive officer Takeshi Homma, and KDDI general manager Shigeki Matsuno. This year Ariyasu sold his startup to Japanese recipe site Cookpad, and Mitsumoto sold his startup to leading Japanese fashion commerce company Start Today. Moderator Hiroyuki Watanabe started the sessions with asking about their recent exits. When did you start preparing for buyouts? Ariyasu explained: When we launched our company back in 2007, I had no idea about funding or M&As. We couldn’t help but enjoy developing our product at that time. Two or three years later, we finally could make our business profitable, and had a chance to receive offers from some people [1]. The company kept using bank loans but were exploring funding opportunities…

bracket-fril — Bracket CEO Yusuke Mitsumoto and Coach United CEO Nobuhiro Ariyasu

See the original story in Japanese.

This is a part of our coverage of B Dash Camp Osaka 2013.

Two Japanese startups that have experienced an strong growth in the last several months are Coach United, the startup behind private lesson portal Cyta.jp, and Bracket, which operates instant e-commerce platform STORES.jp. On day two of B Dash Camp Osaka last week, we had a chance to hear from Coach United CEO Nobuhiro Ariyasu and Bracket CEO Yusuke Mitsumoto. Also on the panel were Rakuten executive officer Takeshi Homma, and KDDI general manager Shigeki Matsuno.

This year Ariyasu sold his startup to Japanese recipe site Cookpad, and Mitsumoto sold his startup to leading Japanese fashion commerce company Start Today. Moderator Hiroyuki Watanabe started the sessions with asking about their recent exits.

When did you start preparing for buyouts?

Ariyasu explained:

When we launched our company back in 2007, I had no idea about funding or M&As. We couldn’t help but enjoy developing our product at that time. Two or three years later, we finally could make our business profitable, and had a chance to receive offers from some people ^[1].

The company kept using bank loans but were exploring funding opportunities for the next stretch.

Bracket is not an old company but has been running a number of businesses for about five years. In contrast to his past businesses, Mitsumoto was aggressively exploring funding opportunities to boost their e-commerce platform. He attributes this to the many competitors in that space ^[2].

What’s the most impressed in the entire session was the following interaction between the pair.

Ariyasu asked Mitsumoto,

If Base (Bracket’s main competitor) wasn’t around, would you still sell your startup to Startup Today?

Mitsumoto answered, saying:

Without them, we probably might have not achieved the revenue we have.

Why not aim for an IPO?

Since these two startups were rapidly growing but self-funded, their founders could probably consider IPOs as possible options. But they emphasized a good match with the companies that acquired them.

Ariyasu explains:

I’m not really a person who drives after an IPO. It’s all up to you to determine whether an IPO and an M&A is a better choice for you. … I actually got an offer from Murakami (Livesense CEO) but I think it was not so aggressive. I’m close with him, and we have been fishing together. The reason why we partnered with Cookpad was I thought the both companies have something common in their corporate culture.

In a explanation about how Bracket’s Mitsumoto decided to sell his startup, he unveiled it was finally decided over the phone with Start Today’s CEO Yusaku Maezawa, which surprised the audience.

bdash-camp-buyout-mitsumoto — Bracket CEO Yusuke Mitsumoto

The decision was surprisingly smooth. I’ve been in touch with Maezawa for almost three years since he sent us an inquiry via our website. … I’ve handled four different businesses in the past, and I finally managed to find success in my fifth. The recent announcement that Yahoo Japan made of making its e-commerce platform free this year will be a big turning point in the Japanese e-commerce industry, where more players will make more bold decisions to defeat competitors.

Buyer’s perspective, seller’s perspective

KDDI’s Matsuno was involved in Mediba’s ^[3] acquisitions of startups such as Nobot and Scaleout. In a response to moderator Watanabe’s question about criteria around M&As, he says:

You probably need the perspectives of both a buyer and a seller. When your company is acquired by 100%, you will totally lose your ownership. In an extreme case, you might lose your position as the CEO. When you think of a company that you could sell your business to, you will need to build a good relationship of mutual trust (not to be asked to step down).

Rakuten’s Homma concluded the session with saying that:

Both for a seller and a buyer, the more experience you have, the better you can understand how you should proceed.

We previously featured Ariyasu and Cyta in this article.↩
Our readers may recall that we visited the Bracket office just last month, and had a chance to speak more with Mitsumoto about Stores.jp.)↩
Mediba is a mobile advertising-focused subsidiary of KDDI.↩

news

CyberAgent subsidiary Sirok rolls out mobile debugging solution

Takeshi Hirano 2013.10.11

See the original story in Japanese. At B Dash Camp earlier this week, Kaizen Platform, the Tokyo-based startup behind A/B testing tool PlanBCD, won the top prize. But interestingly, there are a number of other development tools that are popping up here in Japan. Testing tool Fello, for example, has exceeded 100 corporate users in its first month. And yesterday, another Japanese startup gave us something new as well. Tokyo-based Sirok, the CyberAgent subsidiary behind camera app My365, introduced a comprehensive service package that helps developers debug their mobile apps. It is called Growth Debug. The new service is a complementary product positioned along side Growth Push, a testing tool focused on gaining user retention which they introduced back in August. Fierce competition Sirok CEO Yuto Mukaiyama explains: I thought the market was sort of ‘Blue Ocean’, but seems like it’s turning red [1]. But a surge in this market is something worth appreciating though. When the testing tool was launched back in August, he wanted to see it used by 1,000 apps, delivering 10 million testing notifications in three months. So how are they doing now? Mukaiyama responded: For the target about the number of apps using our service,…

See the original story in Japanese.

At B Dash Camp earlier this week, Kaizen Platform, the Tokyo-based startup behind A/B testing tool PlanBCD, won the top prize. But interestingly, there are a number of other development tools that are popping up here in Japan. Testing tool Fello, for example, has exceeded 100 corporate users in its first month.

And yesterday, another Japanese startup gave us something new as well. Tokyo-based Sirok, the CyberAgent subsidiary behind camera app My365, introduced a comprehensive service package that helps developers debug their mobile apps. It is called Growth Debug.

The new service is a complementary product positioned along side Growth Push, a testing tool focused on gaining user retention which they introduced back in August.

Fierce competition

Sirok CEO Yuto Mukaiyama explains:

I thought the market was sort of ‘Blue Ocean’, but seems like it’s turning red [1]. But a surge in this market is something worth appreciating though.

When the testing tool was launched back in August, he wanted to see it used by 1,000 apps, delivering 10 million testing notifications in three months. So how are they doing now? Mukaiyama responded:

For the target about the number of apps using our service, we’re still struggling. But we’ll probably be able to surpass 10 million notifications pretty soon. We don’t yet provide our service to foreign developers though. In terms of demographics, many of our users are social gaming developers, and casual gaming and community apps follow.

The company also expects to make see the platform used by all 200 Ameba mobile apps (iOS / Android) from CyberAgent, which they expect to account for 20% of their three-month target.

He also explained a little how how their platform can contribute to a better user retention rate:

We are using the platform to improve user retention on our own My365 app, and it is gaining 1.2 to 1.5 times in the number of daily active users on average.

The problem of debugging mobile apps

Growth Debug, their new service, provides developers with improvements in quality and efficiency by taking a different approach.

The company not only gives you the tools, but also provides personnel who can understand how to eliminate bugs.

Unlike conventional tools like Excel, when you find a bug in your app you can record and manage it via an online tool. This lets you submit an issue to management tools such as JIRA and Redmine, including a screen capture, a handset terminal ID, and a log. Mukaiyama explains how it differes from conventional debugging solutions:

We used to create a script to automate text inputs in testing a sign-up process in an app. But this doesn’t work at all on mobile apps where an enormous number of minor adjustments are usually implemented. As a result, these developers are forced to input texts manually when testing.

Finding bugs and extracting testing cases is very important, but the quality of this process depends on who is involved. An engineer many need to ask a debugger to find clarify some meaning in a list of bugs or testing cases. For social gaming developers, a bug related to in-app purchases may have a great impact on how much money you can make. That’s why we developed a tool that allows you to easily submit a defect as soon as you find it by connecting a desktop and a smartphone device.

Mukaiyama explains their another advantage they have is their strong network of debuggers:

Our parent company CyberAgent has developed a number of apps, and their experience will help our users debug more efficiently. We aim to help developers improve their apps with a combination of a tool and professionals.

In contrast with PlanBCD, their aforementioned competitor which uses crowdsourced workers to help users improve user experience, Sirok has partnered with about ten temporary employment agencies and ask them to send the company staffers when needed.

When they used their debugging package to improving some Ameba mobile apps, debugging time was shortened by about 30%.

We recently wrote about Query Eye as our readers may recall.↩

news

Japan’s UI Scope planning to expand its usability testing service

Rick Martin 2013.10.10

This is a part of our coverage of B Dash Camp Osaka 2013. One of the four Japanese startups that pitched at B Dash Camp in Osaka was InnoBeta, the creator of UIscope, a service for testing usability of smartphone-based media. The company’s CEO Daisuke Hiraishi explained a little more about their service on Tuesday, and revealed more about their plans moving forward. He highlighted the need for qualitative market research to be brought online, noting that the market size is about $3.3 billion globally [1]. UI Scope matches developers and testers, providing the latter with web cameras to explain and comment on a user interface as they test it out. The result that developers will see is a video and a questionnaire. They have 5000 testers, with each tester costing 3000 yen (about $30), with UI Scope taking 2500 yen and 500 yen going to testers. So far the startup has accumulated over registered 500 clients over 10 months, including the likes of Yahoo, Capcom, GungHo, and many startups [2]. Readers may recall that previously featured InnoBeta back in April when they partnered with Mixi’s Deploygate to create ‘DeployGate Scope’ to help developers crowdsource usability testing, not only for…

This is a part of our coverage of B Dash Camp Osaka 2013.

One of the four Japanese startups that pitched at B Dash Camp in Osaka was InnoBeta, the creator of UIscope, a service for testing usability of smartphone-based media.

The company’s CEO Daisuke Hiraishi explained a little more about their service on Tuesday, and revealed more about their plans moving forward. He highlighted the need for qualitative market research to be brought online, noting that the market size is about $3.3 billion globally [1].

UI Scope matches developers and testers, providing the latter with web cameras to explain and comment on a user interface as they test it out. The result that developers will see is a video and a questionnaire. They have 5000 testers, with each tester costing 3000 yen (about $30), with UI Scope taking 2500 yen and 500 yen going to testers. So far the startup has accumulated over registered 500 clients over 10 months, including the likes of Yahoo, Capcom, GungHo, and many startups [2].

Readers may recall that previously featured InnoBeta back in April when they partnered with Mixi’s Deploygate to create ‘DeployGate Scope’ to help developers crowdsource usability testing, not only for live apps, but also for prototypes still in development.

So what does the future look like for UI Scope? Hiraishi pointed to three strategies in particular:

Global expansion, starting with Korea where they will provide testing for 30 different apps. They are also planning China expansion as well. Local partners will help them bring in new testers.
Expand testing methods: Interview and group discussion can be done online as well.
Currently they focus mobile but they can also test things like hardware or even consumer products such as shampoo.

Hiraishi closed his pitch by predicting that his company will be the number one online qualitative research company in the world. That’s certainly a lofty goal, but their first few steps have been promising.

In online quantitative research, they point out Macromill and Survey Monkey as existing market solutions. ↩
I wonder if a corporate testing plan, or some sort of premium offerings, might be a way to increase their revenue. ↩

news

Capitalizing on culture: Can new $60M fund help make Kyoto an innovation center?

Rick Martin 2013.10.09

As we return from our trip down to Osaka for B Dash Camp, there’s more news emerging from Western Japan, this time from Kyoto. A new venture fund of $60 million was officially announced today, initiated by Kyoto University with the goal of supporting entrepreneurial activity from that university and the Kyoto area. The sectors of focus for the fund will be information/communication technology, life science and biotech, agricultural food, and environment and energy. Kyoto University has designated the newly formed Miyako Capital to manage the fund. I recently had a chance to speak with Hiroaki Okahashi (managing partner) and Kenshin Fujiwara (partner) to learn more about this initiative. Their team will also include director Norihiko Ishihara, and the president of the company will be Satoshi Yamaguchi, who brings much cross-border experience from his years at JAFCO. Unlike many VCs with primarily a finance background, many on the Miyako Capital team have experience starting and managing companies, which they see as a big differentiation with other VCs. A Cultural Edge Kyoto is typically known as a prime sight-seeing spot, rich in history, with a unique aesthetic, and a zen atmosphere. Okahashi explains that he’s very interested in Western Japan, in…

Miyako Capital's Kenshin Fujiwara, Hiroaki Okahashi — Miyako Capital’s Kenshin Fujiwara, Hiroaki Okahashi

As we return from our trip down to Osaka for B Dash Camp, there’s more news emerging from Western Japan, this time from Kyoto. A new venture fund of $60 million was officially announced today, initiated by Kyoto University with the goal of supporting entrepreneurial activity from that university and the Kyoto area. The sectors of focus for the fund will be information/communication technology, life science and biotech, agricultural food, and environment and energy.

Kyoto University has designated the newly formed Miyako Capital to manage the fund. I recently had a chance to speak with Hiroaki Okahashi (managing partner) and Kenshin Fujiwara (partner) to learn more about this initiative.

Their team will also include director Norihiko Ishihara, and the president of the company will be Satoshi Yamaguchi, who brings much cross-border experience from his years at JAFCO. Unlike many VCs with primarily a finance background, many on the Miyako Capital team have experience starting and managing companies, which they see as a big differentiation with other VCs.

A Cultural Edge

Kyoto is typically known as a prime sight-seeing spot, rich in history, with a unique aesthetic, and a zen atmosphere. Okahashi explains that he’s very interested in Western Japan, in particularly Kyoto, where famous technology innovators like Steve Jobs and Larry Ellison have sought and found inspiration. He adds that the city’s cultural edge helps “give it the potential to be a center of innovation,” a place where cultural authenticity and new business ideas can merge.

Kyoto's Kinkakuji, or Golden Pavillion, one of many cultural attractions — Kyoto’s Kinkakuji, or Golden Pavillion

Of course, the image of an industrial East (Tokyo) contrasted with a creative-minded West sort of brings to mind the dichotomy that exists in the US.

Kyoto, of course, has a long way to go, but Kyoto University is renowned for its advanced research, even beyond Japan’s borders. Okahashi says that while Miyako Capital’s first few investments will likely be from Kyoto University (or some Kyoto entrepreneurs), they will not limit their investment criteria domestically:

If there are any companies that might represent synergies by adding the Kyoto brand or Kyoto University technology, we are willing to invest in technologies outside Japan.

He adds that there are many potential investors to this fund, like manufacturers looking for new technologies and businesses, lacking the experience to invest or source such businesses. Miyako Capital will aspire to fill that gap for them, given that they have access to IP derived and accumulated at Kyoto University.

In the technology world these days, Kyoto is perhaps best known as the home of giant companies like Nintendo and Kyocera. But it is also the home of internet company Hatena, which has a new office in Tokyo leading to its expected IPO coming soon [1]. Fujiwara says that that’s the kind of movement that they’d definitely like to see more Kyoto companies follow. When I inquired about promising Kyoto startups these days, both he and Okahashi pointed to Nota, whose Gyazo screenshot service is currently seeing heavy use by many here in Japan.

Both Okahashi and Fujiwara say they would like to see more entrepreneurs coming to Kyoto as well, and I really don’t think that’s a very difficult sell. Kyoto is a pretty incredible place, and I think given the chance, entrepreneurs the world over would love a chance to spend some time there. Hopefully this new fund can be a catalyst for more interest in the city — via Kyoto University — from both here in Japan as well as abroad.

Coincidentally, we had a chance to hear Nintendo president Satoru Iwata speak earlier this week in Osaka. You can read all about that here. My personal favorite Kyoto company right now is game developer Ponos. Their Battle Cats game is incredible. We’re also big fans of QOOQ and its Yesterscape app. ↩

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Japanese founders discuss the difficulties of sustaining a startup

Takeshi Hirano 2013.10.09

See the original story in Japanese. This is a part of our coverage of B Dash Camp Osaka 2013. 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…

See the original story in Japanese.

This is a part of our coverage of B Dash Camp Osaka 2013.

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.↩

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Puteko poised to push its AR coloring books in Japan

Rick Martin 2013.10.08

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…

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 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!

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Kaizen Platform’s A/B test service wins BDash Camp Osaka pitch event

Rick Martin 2013.10.08

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…

Kaizen Platform CEO Kenji Sudo

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 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).

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