SNA (Tokyo) — Host Michael Penn interviews Yu Asabe about the eco-system for young entrepreneurs and technology start-ups in Japan.

Full Transcript

Penn: Hello. Welcome once again to What’s the Rumpus. We are here as usual at The Pink Cow Restaurant in Roppongi, and we have a guest today. His name is Mr. Yu Asabe. As you can see, he’s a young man, and because the theme of what we’re going to talk about is “Young Entrepreneurs,” he is one of those. So first of all, Yu, why don’t you tell our audience a little bit about yourself.

Asabe: My name is Yu Asabe, and I just graduated from high school here in Tokyo, and I’ll be going to Tokyo University from this April. I lived abroad in San Diego, California, for basically my whole elementary school years. Upon returning to Japan, I attended a private school here. I started learning programming from a really young age, and I made websites and small games, and that’s how I got introduced to the art of computers. That’s what really got me going. Since then, I’ve been making a lot of applications, including iPhone applications, iOS, and Android applications. By doing so, I got a mindset of creating new things, and not just becoming a user, but also becoming a creator of the software we use in our daily lives, and that’s how I started my own company when I was a freshman in high school.

Penn: How old were you then?

Asabe: I was sixteen.

Penn: So you were sixteen and you started your own company.

Asabe: Yeah.

Penn: Alright.

Asabe: With the support of some companies that were teaching programming to young students here in Tokyo, they kind of supported me in creating my own company. Since then, I’ve been running online media for high school students here, and kind of creating a few more apps and stuff like that.

Penn: I think I heard that one of your apps won a major award.

Asabe: Yeah. Before I created my company in 2013, I won the national application contest in Japan.

Penn: I don’t know what that is. Can you please explain what that is?

Asabe: Yeah. It’s a competition where we compete for first place in a lot of software applications. We had iOS applications, Android applications, web applications. Students from all over Japan come to compete in presentations, how clean the code is, and how functional it is, and how much potential it has when it becomes a business. So I was able to win that in 2013.

Penn: Were you the number one prize?

Asabe: Yes.

Penn: For all of Japan.

Asabe: All of Japan, yes.

Penn: Wow. So what kind of app was it.

Asabe: The app I made was called SoundGuess, and it was a quiz game in which you basically listen to many sounds we hear in our daily lives, and we try to guess what sound it is. It was a very simple quiz game, but I was focused on the sound that we hear in our normal daily lives that we don’t really care about when we live, but it’s actually a really big part of our daily lives. In the application, you hear a sound, and you get to guess the name. You enter the name of the sound. You get points, and you compete with other players, and things like that.

Penn: Okay, I see. That was now a couple of years ago.

Asabe: Yes.

Penn: And after that, you made your company. What is the focus in your own mind for your company.

Asabe: Until now, when I was in high school, I did have to do both the academics in my school and also my company as an extracurricular activity, so I was pretty busy. I focused on online media and I started an online media for returnees here in Japan, who can speak English and can write English, but don’t really have the right environment to be able to use that English skill, and talk to other returnees. I created an online media in which people can post the articles and essays they wrote in their school on, and create a community in which these people can interact. People in my school in ShibuMaku in Chiba supported me a lot in gathering those articles and starting the first stages.

Penn: Japan in the 1980s was known as a high technology country leading the world, but people’s image of that is Sony and all of those big corporations. In terms of small entrepreneurs and small businesses, at least the image that we have of Japan is that it is a harsh environment. As a young entrepreneur coming up, how do you feel the environment is?

Asabe: You are totally correct about Japan’s environment until now. Until now, the best career option was to go to a good university, go to a good company, and lead from thereon. I think that system is starting to change, and people are being forced to not only rely on their companies, but also rely on their own skills, and really think about what they want to do. In that case, the entrepreneurship eco-system in Japan is just starting to grow, and a lot of people around the world are coming together in places like Tokyo in events like Slush Asia or in other events, and people coming together in that venture eco-system, trying to start new things.

Penn: Can you tell us briefly, what is Slush Asia?

Asabe: Slush Asia is a start-up pitch event in Tokyo where people from all over the world get together. People not only in the start-up field, but also from the arts field and the science field. People from all around the world come together and try to create new ideas and meet new people. I think these kinds of events were not very frequent in Tokyo until very recently, but these events are really becoming popular now, and I think that’s one sign that the entrepreneurs here are getting more support than ever before.

Penn: And what kind of support do entrepreneurs really need to really prosper in this country?

Asabe: I think one is that, people who start new ventures, they have to know that even if they fail, they can try again. Especially in Silicon Valley in California, that notion is really clear, and people always fail, and people always start over again. And the people who fail the most succeed in the end. In Japan, that kind of eco-system has not been created yet, and people are starting to realize that we have to accept these failures, and people in big companies as well have to support these small new entrepreneurs, both financially, and with connections around the world. I think that’s one thing. Being able to start over again from failure. I think another thing is having a really open international community where entrepreneurs in Tokyo can interact with people from all over the world, and gather new ideas.

Penn: Is language any problem there? You speak very excellent English, but that’s not necessarily true for all young entrepreneurs in Japan.

Asabe: I think that’s totally true, and one big barrier for Japanese people is English, and we do have mandatory English lessons in school, but that’s not really enough to actually be able to speak in a really fluent way, so English is one barrier that people have here. Upon meeting a lot of people who are Japanese, but are really succeeding in these ventures, I noticed that even if they don’t speak really good English, they really try hard to express themselves, and try to get their word across, and especially in the world of start-ups, that’s all that matters. It’s not about speaking good English or bad English, it’s mostly about your way of expressing yourself. So I think English is definitely a barrier here, but if you really try to express yourself as much as you can, I think that’s really not much of a problem.

Penn: And what about investment? Are there lots of people and groups willing to invest in start-ups right now, or is it still a little thin on the ground?

Asabe: Investment is starting to grow these years, and right now, I think there are a lot of places where you can get investment and the opportunities are definitely growing, but compared to pitches and start-up environments abroad, I think it’s still fairly small.

Penn: Is it mostly corporations that are investing, or individual investors? In Japan, who’s dominating the investment field?

Asabe: I think it’s both, but I think the big companies are taking the lead here right now.

Penn: You’re a much younger man than I am, probably a couple of generations younger, and I actually am a historian, so I tend to look backwards more than forwards, although I think by looking backwards, you often can see some things that are forward. But from your perspective, where do you see the future of start-ups in Japan? Is Japan really going to be a heavyweight start-up country, or is it just going to be one contributor among many?

Asabe: I definitely think Japan has the potential to become a big startup eco-system. One reason is that, I think the startups in the future will be centered around artificial intelligence, or AI. It’s one field that I’m really interested in right now. It’s a field that I really want to study in university. Some new ventures in Japan, for example, from Tokyo University, there’s a venture called Preferred Infrastructures, and they basically focus on artificial intelligence, and they try to use it in many fields. I think in Japan, especially in artificial intelligence research, they still have the potential to become, not only a member of the leading players in the world, but also a big start-up eco-system here.

Penn: Basically, you feel that AI is going to be one of the areas where Japan is going to be a global leader again, or do you feel that it’s just one area that you are interested in.

Asabe: Of course I am interested in AI right now. Although I think Japan is kind of slowing down in vehicles and hardware, I think if we can manage to pursue new fields in the field of AI, you can connect that back to hardware, and create new products that utilizes both AI and the hardware that we have developed over the decades. I think that’s something that Japan really can have a strong influence on.

Penn: When you look at some of the emerging start-ups right now, are there any specific companies or groups that are really exciting you?

Asabe: As I mentioned Preferred Networks, based in Tokyo University. It’s a venture that really focuses on AI research and development. They try to connect that with the needs of the people now, so they’re really the leading company in Japan that tries to utilize the high-end AI technology to our daily needs, and they’re really coming up with a lot of new ideas and products. That’s one company that I want to check out in the future.

Penn: Any others?

Asabe: Here in Japan, there are a lot of small companies that are using AI algorithms to make new products.

Penn: But none of them have really caught your eye.

Asabe: Yeah.

Penn: In terms of information and people who want to follow the scene of start-ups in Japan, where are the sources of information that you’re drawing upon, or you recommend other people draw upon?

Asabe: Most of the time, I look at online sources and online news media. For example, TechCrunch, The Bridge, and Wired, both in English and Japanese. But I also try to meet as many new people as possible. I go to small events and try to meet new people, and these small connections really change my perspectives in the end. I think trying to gather these new connections is an important thing as well, especially if you’re in Japan with a rather small community, once you get to know some of the leading people, you get to know the whole field.

Penn: Just to finish up, I think this is a very basic question, but a fundamental one as well. Why should people be paying attention to start-ups? Don’t these companies that have much larger resources and can use the older business models of hiring permanent salary employees, don’t they still have a future? Are they not entrepreneurial enough, or falling behind? What’s happening here?

Asabe: I think it’s not that the big companies are very slow, or they can’t make a difference. I think with regard to the increasingly rapid changes in the world, start-ups are able to utilize that speed, get that opportunity, and try to do new things. For example, in order to be entrepreneurial, you have to be creative, you have to be innovative, and you have to be able to find solutions to problems in a really fast manner. Especially for really big companies that have strict conservative ideas, they need to pass through many layers of people to create a product or find a solution to a problem. I think in start-ups, there’s the more flexible way of finding solutions to all of the problems. Usually, there’s a lot of different kinds of people in one situation. There’s designers, programmers, and artists, and maybe a person who is really in the field, maybe medicine or something like that. That flexibility is what gives birth to these products that people haven’t really imagined of. I think in that way, start-ups are potentially the game-changers in the future. I think it’s really a good field to look at.

Penn: Alright. Thank you very much.

Asabe: Yeah.

Penn: Let’s hope that this show is also a game-changer.

Asabe: Indeed.

Penn: So you said that you spent some time in San Diego. This restaurant here is actually a Cal-Mex restaurant.

Asabe: I noticed.

Penn: So our next point of agenda, after we finish the show, is to have dinner. The burritos here are quite famous. Are you ready for that?

Asabe: I love burritos.

Penn: So that’s what we’re going to do. We’re going to have burritos now. And for all of you, thank you for joining us at What’s the Rumpus. We hope to be back next week to keep the momentum going, and if not, we’ll be back sometime. See you later. Thank you for coming.