[Podcast] Foreign founders are changing how Japanese start startups (Part 1)

For the last 150 years Japan has made a science of borrowing the best ideas from the West and transforming them into her own.

The startup world is no exception. Japanese startup culture is heavily shaped by western ideas, but not in the traditional top down way where leadership chooses which ideas are introduced.  Japan’s startup ecosystem is being shaped by bottom-up experimentation by both Japanese and foreign founders on the ground here in Japan.

Today we talk with Sandeep Casi, an entrepreneur and Partner at Antler. We talk about the challenges foreign founders still face in Japan and how they are changing Japanese entrepreneurship for the better.

It’s a great conversation, and I think you’ll enjoy it.

Welcome to Disrupting Japan, Straight Talk from Japan’s most innovative founders and VCs.

I’m Tim Romero and thanks for joining me.

There is a truism in venture capital that states no one invests in an idea.

This references the fact that ideas are easy to come up with and they have very little value on their own. But it seems that this truism is not completely true.

Today we sit down with Sandeep Casi, the general partner at Antler Japan, and he explains how Antler does in fact invest in ideas. I mean, in one sense, the truism is still true. Antler only invests in companies. But if you come to them with an idea, they’ll invest a lot of resources to help get you from idea to startup.

We also talk about some of the challenges foreign entrepreneurs still face in Japan, the myth of Japanese founders not being able to speak English. And we dive deep into how foreign entrepreneurs are changing how Japanese founders start startups.

But, you know, Sandeep tells that story much better than I can. So, let’s get right to the interview.

Tim: So, I’m sitting here with Sandeep Casi, a partner at Antler Japan. So thanks for sitting down with me.

Sandeep: Thanks Tim. And it’s a pleasure to be talking to you today and looking forward to it.

Tim: Yeah, well, I should say welcome back to the show because I first had you on maybe eight years ago?

Sandeep: I think, so. It was a while. Yeah, it was about eight years ago.

Tim: When you were running videogram.

Sandeep: That’s right.

Tim: But a lot has changed right in the last eight, nine years. So, Antler has a bit of a different model than most of the VCs and accelerators in Japan. So tell me a bit about it.

Sandeep: Just a bit about Antler’s background. We started in 2018 in Singapore. So, Antler is an ecosystem builder. We are not just a VC. So, what do we mean by ecosystem builder? We basically are the first check in most cases, and we take extreme risks as in zero day checks. So, we basically get people to come into our program who actually have an idea, maybe to start a company, but they have absolutely no idea how to go about doing that. They lack co-founders. They probably lack a lot of opportunities that are afforded to other startups that have pre-existing teams. So, when they come into a program, we actually sit with them for 10 weeks. We look at what their mission is, what their domain expertise lies in, and then we gel together a team in the next 10 weeks by iteratively going through different ditches and pivots.

Tim: So, the founders who are joining, are they all just at idea stage or do you get founders that have an existing company and some revenues? Or do you really target those super early?

Sandeep: All of them. There are founders that come in, they have no idea, never have started a company. There are founders that come to our program that have two, three exits before, and they also existing teams that come into a program because they haven’t found attraction. So, basically it’s day zero of their lives of starting a company. We basically work with them and get them to a point where they can actually pitch to an investment committee after 10 weeks. And we invest even when the company is not being incorporated, in most cases, they take our money to incorporate the company.

Tim: So, what does the funnel look like? How many people will apply to a program? How many will get in, how many make it to pitch day, how many receive investment?

Sandeep: So globally, we receive about 160,000 applicants a year. And usually we select about 3% of that applicants into our program. And out of that 3%, anywhere between one to 1.5% end up getting investments.

Tim: And that’s 1.5% of the 3%?

Sandeep: Of the 3%. So, the way this works is that let’s say that 3% that enter our program, not all of them are founders. Not everybody can be a chef. You need a sous chef, you need somebody to actually be in the front desk, somebody to take care of the supply chain. So, there are all kinds of founders that come in, not necessarily a founder that wants to be a CEO.

Tim: Okay. So some of those, sometimes you’ll have three different people who will coalesce into a startup?

Sandeep: Coalesce into a startup. And sometimes they come with preexisting ideas and sometimes the ideas are born in the 10 week program that they participate in.

In Part 2, we’ll discuss the status of Antler’s program in Japan.

Top photo: Photo courtesy of Disrupting Japan

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