HoloAsh is a company active in the San Francisco area, which is developing AI therapy programs for ADHD (attention deficit hyperactivity disorder) in order to help people suffering from the condition. Their CEO, Yoshiaki Kishi, attended X-HUB’s “US West Coast Expansion Course” between June and September 2018. The program invited local accelerators and venture capitalists to Tokyo so that they could provide feedback about business expansion plans to the US West Coast while also helping startups kickstart their overseas expansion by matching them with local businesses.
But why did a company that’s already up and running in the US enter the “West Coast Expansion Course”? By asking this question, we’ve learned a lot about the rules that all Japanese startups should know while expanding overseas, as well as things they should be careful of while conducting business in Silicon Valley. So how should entrepreneurs go about starting their own company in Silicon Valley?
- HoloAsh is already active in the Silicon Valley area so why did you attend the X-HUB program?
When I started operations in Silicon Valley, the most important thing to me was establishing a “human network.” For meeting investors, there aren’t many things more important than who introduces you. Of course, many times people communicate directly through e-mail or LinkedIn and then just meet and talk. You can do that. However, being introduced by this or that famous person can be very powerful advertising. It’s important to make connections with successful businesspeople in the area.
So the main reason I attended the X-HUB program was to help me network. Thanks to it, I’ve successfully made connections with many prominent mentors and advisors affiliated with the course. I’m also enrolled in a few other acceleration programs but, to be frank, only X-HUB made me think “This is amazing!”.
- It’s important to have your own human network. What do you have to do to create something like that in Silicon Valley?
This is true everywhere and might seem obvious but you must have an “idea” for your business. For example, if you ask someone to introduce you to this or that person, often they’ll ask back: “Why?” If you then don’t give them a good enough reason based on a solid idea, then they’ll refuse you.
However, unlike in Japan, oftentimes they will introduce you to someone else who better fits the idea for your company. Only in Silicon Valley will people do such generous things as introduce you to people from their own personal network.
Things get a little harder when you’re looking for funds, though. You must introduce yourself like “I’ve been through this or that accelerator program, and I know this or that person.” If you don’t have some kind of connection to a successful famous person or organization then you’ll have trouble securing funding. That’s the reality of Silicon Valley.
There are a few characteristics shared by all people who have an easy time securing funding in Silicon Valley, like “under 28 years old,” “white,” “engineer,” or “Stanford (a famous university) graduate.” They say that the fewer of those metrics you meet, the harder and harder it gets for you to secure funding. That’s why, for a Japanese person such as myself, it’s important to keep actively building my network in the area.
- Is there some trick to talking to investors?
First, you have to be clear and brief. Next, you have to present your business like a story. Storytelling skills are very important.
Always start with the “Why” of your business. If, during a meeting, someone told you “One day, while I was reading a book,” you’d be sucked into the story, right? It’s the same when talking to investors. If you want them to be interested in your story, you must capture their attention from the start.
This is especially true in our field. Many people think that ADHD is a very specialized problem so you must communicate to them that “It’s actually not a small market. Everyone experiences problems with concentration or not being able to relax. It’s when these little things come out in force that you get ADHD.” We often bring up stories that the other person can relate to and talk about how this is a big problem.
“How many times a day do people look at their smartphones? Probably more than 100. Do you ever feel your thinking getting scattered from all the information you get from so many different applications? I think that many people find themselves wanting to read a book but ending up on LINE or replying on Slack etc. I myself have ADHD, and the truth is that all those things are close to the disorder. To have ADHD is to be distracted and have trouble concentrating. It’s similar to the problems faced by people caught up in all the things put out there by Tech Giants.”
That’s where I’d take the conversation.
Sometimes I also want help from researchers with my business so I talk to them as well but it’s different than talking to investors. We focus on data, saying things like “According to our studies, we will most likely encounter this or that sort of problems.” We also keep it specific with things like “Our previous studies have shown that we have problems in this area, and this is how we want to approach it.” You have to tailor the way you talk to the other person.
Even if you get introduced to the right person you still must capture their attention, otherwise nothing will come out of it. I’ve been very careful not to waste any chance that I’ve been given.
- I assume that the human network and all the rules that you have to be mindful of in Silicon Valley are things you researched beforehand. But were there things that really surprised you about conducting business in Silicon Valley or things that turned out completely different from what you’ve learned beforehand?
People there really aren’t dreamers, hahaha. Rather than being visionaries most investors are very strict and only worry about realistic returns. They look at things like whether the Product Market Fit is there or whether the potential market is big enough. They’re even harsher about these things than Japanese investors.
There’s also this phrase: “Spray and Pray.” During the bubble era, the Silicon Valley investors’ approach was all “just spray the money wildly around and then pray and wait.” Their shotgun approach was based on the idea that it’d be all worth it if some of the money found its way to one successful company. However, nowadays ideas like lean startups and design thinking have become more popular, and it’s considered bad form to stray from them.
- What else do entrepreneurs should know about working in Silicon Valley?
- Whatever you do, try not to overthink things. In Japan, there’s this idea that you shouldn’t launch a product without first making it perfect but American engineers think more along the lines of “Even if it’s full of bugs, we should still put it out there.”
- Can Japanese people compete in such a culture?
I think there are many cases of people not being able to adjust to the cultural differences. Japanese engineers are all incredibly talented people and, by all rights, they produce quality goods able to compete on the global stage. Still, many of them are unable to adjust to the culture of Silicon Valley and end up getting stuck.
There are also many cases of Japanese businesses specializing in Japan-specific problems. If you start out with a product made specifically for Japan, you’ll be forced to remake it for foreign use if you expand overseas. You’ll have to identify the “problems/pains of the local market” for your redesign, and that will take a lot of time, and you might be forced to go back to the drawing board many times.
- Have you ever encountered any language barriers?
Not really. I can’t really speak English but that’s not important here. There are many Indian people in Silicon Valley who confidently speak the kind of English that even Americans don’t understand. That kind of attitude is what’s important so, when you think about it, your words and what you’re saying don’t really matter.
Of course, when you have to get some information across, you should be able to do it but even in those cases I feel like Japanese people have too little confidence. You can just pretend you speak English in the beginning, and then sharpen your language skills after you’ve dove into this world.