[Podcast] Foreign founders are changing how Japanese start startups (Part 5)

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.

(Continued from the previous part)

Tim: So, Antler, you guys are running similar programs all over the world. How much variation is there from market to market? Because what we’re talking about here today is great for Japan. It’s a really good fit. But looking at the UK or the US where University Spinouts are much more common and understood.

Sandeep: There’s a lot of variation, lots of variation. Each market has to be customized to fit the needs of that particular market. So, let’s take a look at Antler India, for example. Surprisingly, I thought an India wouldn’t be more SaaS based. India has predominantly a software economy, at least for the last decade and a half. But India is Deep Tech now. The amount of Deep tech companies coming out of India?

Tim: Well, maybe it’s not that surprising if you guys are tapping into sort of an unfilled need.

Sandeep: That’s right.

Tim: So, it might just be that there was plenty of funding available for SaaS companies.

Sandeep: Saas companies, and the competency domain expertise from the VC’s perspective. So, to come back to your question, yes, each and every country is different. For Japan, we have reached a conclusion that the most interesting sectors to go after in Japan is Deep Tech, which is an umbrella for everything from Space Tech to oceanic science to life sciences, to MedTech and then gaming.

Tim: Gaming?

Sandeep: Yes.

Tim: Okay. That’s quite a different sort of…

Sandeep: And I tell you why gaming?

Tim: Yeah. Why gaming?

Sandeep: For every asset that you see that has made billions of dollars for Japan, whether it’s Pokemon or whether it’s Gundam, there are thousands others that are sitting up on the shelf doing nothing, but they’re valuable. So example, Speed Racer.

Tim: I was a huge speed Racer fan when I was a little kid.

Sandeep: It’s a same similar problem even though it looks different, deep tech and gaming, but it’s an IP issue at the end of the day. So, you have like these patents coming out of Deep Tech, but you have rights IPs coming out of these gaming and manga companies. It’s the same issue. How do you take those IPs out to market?

Tim: I don’t know. I mean, yeah, that part is similar, but on the other hand, I mean, bringing a deep tech solution to market, there is a calculus to it. You’re usually solving a defined problem and you can back out like, okay, how much is it worth to solve this problem? Or how much people paying now? There’s a calculus to it. Game marketing is like voodoo.

Sandeep: But it’s even not game marketing, we’re actually figuring out what can we do with those assets. So, coming back to the Antler universe, we have 30 cities, 30 residencies running twice a year. Some 40,000 founders trying to figure out new ideas. If we take this IP bank from Japan, the Rights Bank, and provide the bank to our founders, who knows what they’re going to come up with?

Tim: I mean, it’s ambitious. But I mean, our generation, you and I know who Speed Racer is. Like the millennials and the Zoomers, do they know who Speed Racer is?

Sandeep: They don’t need to know who they are. The fact of the matter is that there is opportunities for this guy. I’m very specific to Speed Racer, but so one of the opportunities for Speed Racer that we found out was that apps like NASCAR and F1 needs a concierge. Who is appropriate concierge for that is Speed Racer. And then we have advancements in AI right now that I can animate the model. So, if you are a Speed Racer fan, and also you’re an F1 fan, why wouldn’t you want to have the character on your app that you can actually animate based on different actionable items within your race?

Tim: Okay. So, the focus is more on licensing the IP to organizations that have the marketing power to bring it to market creating brand new startups around this? Okay. That makes sense.

Sandeep: There are all of these assets that absolutely it has opportunities for monetization, but that has been shelved. It’s the same thing that happens at a university. There are all these patents sitting up on shelves. If we can actually unlock that and provide that opportunity to our entrepreneurs, who knows what we can unlock?

Tim: Interesting. Two very different domains there. 

In Part 6, we’ll discuss institutional challenges in Japan’s startup ecosystem and the policy improvements needed to support founders.

Top photo: Envato

Click here for the Japanese version of the article