The Tokyo Metropolitan Government’s X-HUB TOKYO project, which supports global expansion of startups in Tokyo, held the third seminar on November 6th. Following the speech titled “Introduction of the U.S. Ecosystem”, this event featured a lecture on “How to leverage the U.S. Startup Ecosystem” and “Overseas market strategies that Startups from Japan need to keep in mind”.
We shared the latest information that would be useful not only for startups but also for organizations such as VCs and corporations offering various supports to startups.
Introduction of the U.S. Ecosystem
Silicon Valley Japan Platform President, Mr. Jon Shalowitz
- We would like to start this event with the introduction of Silicon Valley Japan Platform, which has been engaging in industrial development in the U.S. and Japan, by Mr. Jon Shalowitz.
- Silicon Valley Japan Platform (SVJP) provides a platform where business leaders, academics and policymakers representing both Japan and Silicon Valley can interact with each other. SVJP places great importance on “connecting people” through interactions and has formed various partnerships. I have spent most of my career in Silicon Valley. During my nearly 25 years of working in the startup community as a serial entrepreneur, I’ve come to see four key points that startups need to know to success. The first point is not to be overconfident in your services or products. You need to analyze your company’s performance critically sometimes. The second point is you have to think about how investors can support you willingly. Try to understand each opinion better through thorough discussions rather than just avoiding conflicts. The third point is don’t take the easy way out. Please choose the hard way instead. The last point is to develop your abilities for imagination and empathy. Think daily about how users and stakeholders who get your products or services will be affected by them.
- What is the advantage of Japanese startups entering the U.S. and what is the characteristics of the U.S. ecosystem?
- I think there are three main benefits for Japanese startups entering the U.S.. The first is access to the world’s largest technology market. The second is access to top talent. People you work with are the most important factor for startups. The third is easy access to capital. There are a lot of VCs in the U.S. and so you can talk to them face to face. The characteristics of the U.S. ecosystem vary slightly by region. New York, for example, has a financial market, which makes it a good fit for startups with FinTech related businesses. Seattle, where there are so many companies spun out of Microsoft and Amazon, has a strong community of entrepreneurs and investors. On the other hand, Austin has been gaining attention in recent years as the “next generation of Silicon Valley”. It has a reputation for its low cost of living, rich nature and business environment where people can work relaxingly. When you prepare to expand your business into the U.S., be sure to consider whether your business fits with the characteristics of the region.
How to leverage the U.S. Startup Ecosystem
WiL, Co-Founder & CEO, Mr. Gen Isayama
- Next, we will ask Mr. Gen Isayama from WiL, Co-Founder and CEO, the latest information of U.S. Startups.
- In 2020, the U.S. has been strongly affected by COVID-19. As of November, there were still more than 100,000 new infections per day. The social environment has changed dramatically, leaving both children and adults under much stress. On the other hand, the environment for startups is not so bad. Startup investment in the U.S. in 2020 is on track and will surpass that of 2018. We can say the “venture spirit” in the U.S., especially in Silicon Valley is on the rise. COVID-19 has changed the way we work and increased awareness of health and hygiene, which has gathered much attention on digital transformation and health tech. We remember a similar example, the 2008 financial crisis. Driven by people’s distrust of existing financial institutions, FinTech related investments grew by about 5600% over the next decade. Crises, in this time COVID-19, would also be an innovation catalyst.
- What is the most important thing for Japanese companies and startups to keep in mind when they want to expand their business into U.S.?
- If you want to expand your business into U.S., I think there are four important points to keep in mind. Firstly, don’t limit your shareholders only in Japan. Try to expand your funding options to VCs in the U.S. or raise funds from Japanese investors who have connections with people in the U.S.. Secondly, plan your business and design your product, with a consideration for future expansions into U.S.. Thirdly, be conscious about business speed. Japanese companies are often regarded as slow to grow and so be aware of that. Finally, hire foreign talents for a founding team and core members. They play a very important role in the progress of your business. Let’s take a look at Japanese startups such as Mercari, and Solacom which is a member of KDDI group. They successfully entered the U.S. market. They had a strong will to expand overseas from the beginning and changed the user interface into a design that U.S. like. Try to run your business with a wide perspective for global expansion and expand into the U.S..
Overseas market strategies that Startups from Japan need to keep in mind
Terra Motors Corporation, Terra Drone Corporation, Founder and CEO Mr. Toru Tokushige
- Lastly, we will ask Mr, Toru Tokusige from Terra Motors Corporation and Terra Drone Corporation, overseas market strategies that Japanese startups need to keep in mind.
- We are involved in electric vehicle (EV) business, such as electric motorcycles and development of software for drones. From the beginning, we had a passion for the global market. After overcoming various difficulties mainly in Asia, we got stronger mentally. When entering foreign market, please remember that there will be many unpredictable problems. Hedging risk has more importance than conducting business aggressively. Particularly when expanding into emerging markets, you need to be cautious even if you work with the government or major corporations.
- What is important for Japanese startups to be aware when aiming for global expansions?
- I think basic points of business creation remain the same even if you are going to expand your business overseas. However, the most important thing is to determine if your service or product fits the needs of the market. Start small and try to develop a sense of local markets through many trials and errors. In terms of human resources, it is essential to develop local key personnel and Japanese management personnel. We actively encourage our young staff members to gain experience abroad as a company that develops people’s talent through our business. Even if young staff members make one or two big mistakes, we don’t dismiss them. We believe that setbacks will lead to future growth and hard situations will make people grow. New business in its nature has unpredictability. I realize Japanese have high potential as we are expanding into global markets. Please hedge risk as much as possible and take on the challenge for global expansion to your heart’s content.
- The event delivered how to take advantage of U.S. startup ecosystem and overseas market strategies that Japanese startups need to keep in mind. Through various upcoming events, X-HUB TOKYO will continue to provide useful information for startups looking to expand globally as well as the latest trends in open innovation.