Hello Tomorrow「Trends of Deep Tech Startups Expanding Business Abroad」 | 【東京都主催】海外進出支援プラットフォーム「X-HUB TOKYO」

Hello Tomorrow「Trends of Deep Tech Startups Expanding Business Abroad」

vol.21

2019.12.17

Speeches were given by Hello Tomorrow, an international NPO that is committed to the creation of an ecosystem that is focused on technology. Also, Japanese startups that participated in Hello Tomorrow’s Global Challenge gave lectures on the situation about global technology startups and the key to success in overseas expansion.


The platform Hello Tomorrow provides

〈Speaker〉 Mr. Jean-Dominique Francois
Hello Tomorrow has been doing research on the Deep Tech ecosystem for five years and we publish new research reports every year. We have established partnerships with well-known colleges and incubators in Europe and America. To date, approximately 25,000 people have participated in our events, Global Challenges, and summits. Among those that have participated are investors and major startup companies.

 

Every year, Hello Tomorrow hosts a Global Challenge that attracts about 4,500 companies. 85% of the participant companies are startups while the remaining 15% are not yet established startups. The hallmark of Hello Tomorrow is that people get together and create a community where everyone wants to create new products that utilize new technology. That is why the best and brightest from all over the world join in.

 

Every year, after the Global Challenge in September ends, various summits are held around the world from October to December. We will hold a global summit in France next March.
Every year we choose one grand prize winner from thousands of projects.

 

So far, most projects have been created by American companies, followed by Chinese and European companies. It has been two years since we started this activity in Japan. Last year, 50 companies applied, but only a few were deep-tech startups. I think that there are two reasons for this. First of all, they have the technology but lack an appropriate target. Secondly, the Japanese startup ecosystem is not so international. However, we, Hello Tomorrow, would like to support them, and we hold different events, some big and some small. Next year, we will hold events from September to December in Japan. If you are interested, please come and join us.


Why we expand our business overseas – Challenges and tasks unique to deep-tech startups

〈Speaker〉Kenjiro YAMAMOTO
Our task is implementing anti-earthquake reinforcement by applying a specialized coating to the walls of masonry houses, which are made from bricks and concrete blocks.
Masonry houses are built all over the world, especially in areas that are prone to earthquakes. The problem, however, is that masonry houses are not earthquake resistant at all. Even now, in the 21st century, severe damage continues to occur, not only in developing countries but in developed nations like Italy as well, where cities are destroyed whenever an earthquake hits. Out of the number of deaths caused by earthquakes over the past 100 years, an overwhelming majority of those deaths are caused by collapsing masonry houses. Our mission is to reduce the number of deaths caused by collapsing masonry houses to zero and our anti-earthquake concept began with the idea of applying a coating to these buildings.

 

The coating is a special reinforced resin-based fiber material, and by having this applied to their walls, buildings can get anti-earthquake reinforcement. Its advantages are its ease of use, it doesn’t require special skills to apply, and the reduction of time and labor. Coating a building with a high strength resin has a high cost, but our product can reduce this cost to one tenth or even one twentieth. Experimental results show that a building coated with our material can withstand a class 7 earthquake.

 

Since no one has yet to solve this issue, even if we were to narrow down the target countries to just 12, the market size would still be quite big. Among them, India and Indonesia are the largest markets due to their large populations, many masonry houses, and general earthquake activity. We have received inquiries from Nepal and the Philippines and are thinking about entering into these countries’ markets and working with local partners there.

 

Now, I would like to tell you why we are expanding overseas and about the challenges and issues facing deep-tech startups. First of all, the reason we are expanding our business overseas stems from our determination to solve this global-scale issue of lives being lost due to the collapsing of masonry houses from earthquakes. Moreover, the market size is overwhelmingly larger overseas and market development is simpler than in Japan. Through discussions with our business partners in Nepal, we learned that earthquake-resistant houses sell for a higher price than those that are not earthquake-resistant. If you view the world from this point of view, there are many untapped markets.

 

Next are the issues and challenges facing deep-tech startups. They can be roughly divided into two parts. First, we must avoid being too technology-oriented. We need to focus on what the local people really need. The second is contending with rivals that may enter the market; dealing with information leakage, shoddy goods, and knock-offs.

 

Regarding being too technology-oriented, in my laboratory, we believe that a product will not be widely adopted unless local availability, applicability, and acceptability are taken into consideration. These are aspects that absolutely cannot be overlooked.
Local availability depends on materials. We want the local people to be able to do material production, construction management, and quality control. Otherwise, the product will not be widely adopted there. Applicability will not spread if specialized knowledge or techniques are required. For acceptability, even if the technology is good, the product must match the locals’ lifestyles and cultures, or it will not spread. These are our three basic rules.

 

Our strategies for competing against competitors in the future are keeping our most vital tech information confidential and having partnerships with only trustworthy companies. Obtaining patents is good for protecting our rights, but the technology will be open to the public at the same time. Disclosing our most important technologies to the public involves risk, so the most important tech information must be kept confidential. And how we figure out if a company is trustworthy enough depends on how they can sell the products. We do not give the product to them first. The product must be given in exchange for money. Even if we can trust them, we must be mindful of any possible technology leaks.


Sharing our experience from Hello Tomorrow

 

Hello Tomorrow is the world’s largest startup competition, so companies and venture capitals from all over the world participate. 4,500 teams from more than 120 countries apply. If selected as one of the top 500, the team will be invited to a one-on-one venture capitalists.
Fortunately, we were able to make our pitch at the global summit as a result of being recognized as number one in the Japan Challenge. We received many inquiries from the people there and felt that the scale of investment and sales were completely different from those in Japan.

 

In comparison to other startup competitions, the judging criteria for Hello Tomorrow’s pitch contests focus more on companies that have a positive social impact. The judging method is unique in that it is not a scoring system, but instead focuses on a discussion with the judges. Thanks to this method, I think we were able to win the Hello Tomorrow Japan competition. Judging standards and criteria for final pitches are stated clearly. Impact is first and the team is second. In 2017, a team that made sanitary items from banana peels won the competition. In 2018, a team that made a scanner that can identify fake drugs won. It is easy to see that companies which have a positive social impact are successful.

 

In summation, businesses which do not target Japan for investment but make an impact on society are especially appealing to Hello Tomorrow. I feel that the perspectives regarding the scale of investments, types of investors, and the market will broaden dramatically.
Thank you.