[Podcast] Japanese technology to supercharge human fertility (Part 4)

Japan’s declining birth rate makes global headlines, but most of the developed world will soon be facing the same problem.

The real solution involves a lot of social and economic changes, but as you’ll see, technology has a huge role to play as well.

Today we sit down and talk with Kaz Kishida, CEO of Dioseve, about how their technology promises to transform IVF, the rapid timeline for global rollout, and safety issues and ethnical questions involved.

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.

Today we’re going to talk about making babies.

Now, this is not something that startups or startup podcasts normally weighed into, but as you’ll see in this case, it makes a lot of sense.

Today we sit down with Kaz Kishida, co-founder and CEO of Dioseve. And Dioseve has developed a technique for growing mature human eggs from IPS cells. Now, this technology represents a huge step forward for IVF and for human fertility in general.

Some parts of Dioseve’s technology could be in commercial use as soon as next year.

Now, kaz, I dive deep into Dioseve’s technology and the potential good it can do and why some future babies will have three parents. We also cover the tricky ethical and safety issues involved, and we explore exactly why that, in spite of all Japan has going for it. The biotech startup ecosystem here is still facing challenges.

But, you know, Kaz, tells that story much better than I can.

So, let’s get right to the interview.

(Continued from the previous part)

Tim: Hey, well listen, Kaz, before I let you go, I want to ask you what I call my magic wand question. And that is, if I gave you a magic wand and I told you that you could change one thing about Japan, anything at all, the education system, the way people think about risk, the way new medical technologies are approved, anything at all to make it better for startups and innovation in Japan, what would you change?

Kaz: People think we need to follow others. The culture should be changed.

Tim: Like how do you want to see it changed?

Kaz: Being different from others is the strength and their own perspectives or own dream can be pursued by anyone. Everyone can have their own dream and they have right to do that. But sometimes those people think, oh, if we do this, possibly the other person would think he’s a net or something like that. So, that made them hesitate to do a new thing. But there is their foundation that made lost 30 years in Japan.

Tim: I think so, but also when we look at Japanese innovation, I think if you look at like the most innovative time in Japanese, well modern history, so like the sixties and seventies Japanese industry just revolutionized automobiles and watches and cameras and machine parts and just everything. But the pressure to conform in like the sixties and seventies was much stronger than it is today. So, is it just the ability to be independent or is there something deeper about innovation? Is something else that either can accelerate or hold back innovation in Japan?

Kaz: That’s super interesting question. From my perspective in like 1960 and seventies, the main field is hardware. Yeah of course, in Japanese are good at making something. We have strong workforces, so we have resources to innovate something. But current time, the situation is totally different. Yes, we have expensive labor cost and not many laborers comparing to other countries, we needed to win in software in this generation, but software is not a hard hardware. So, it was difficult for Japanese people to iterate our strengths in that industry.

Tim: Well, and I think also it gets back to a point you made before about the type of innovation we need in software or in medical sciences requires a lot of failure and a lot of rapid iteration and changing, which is different from the type of innovation in hardware. So yeah, maybe that’s tied up with the ability to go do your own thing requires a tolerance and respect for failure as well.

Kaz: I think that’s right. And now the failure can be accepted by others before time it was difficult. But I feel that failure is what an experience.

Tim: Do you feel that also in Japanese society people are being encouraged to kind of follow their dreams more? Or at least being more tolerant of people who are following their dreams more than they used to?

Kaz: I think so. Especially for Gen Z. We have employee, he’s now 68 years old, and he said before time, if the boss said something, it’s mandatory. But for Gen Z, possibly they will say, why? Why I need to do this? So, very opinionated persons will do something different from others.

Tim: Well, that’s good. That’s encouraging.

Kaz: Yes. Yes.

Tim: Hey, well listen, Kaz, thanks so much for sitting there.

Kaz: Thank you very much. It was very enjoyable.

And we’re back.

Japan’s biotech startup ecosystem has the potential to be so much bigger. There’s world-class fundamental research being done here, a deep pool of highly specialized talent and VCs who recognize this and are willing to invest.

But as Kaz pointed out, there are two big things holding Japan back right now. First, most of that specialized talent is employed by big pharma, and so far few of them are leaving to start or to join startups. Second, creating world-class biotech startups requires a lot of long-term capital and large amounts of patient capital. Well, that only arrives when there is a real potential for very large exits. And we don’t really have that in Japan today.

The good news, however, is that both of these problems are very solvable.

The first of enterprise talent moving to startups. Well, that’s already happening now. Now, as Kaz mentioned, we don’t see much of it in biotech just yet, but we’re seeing more and more of it across other industries.

The trends started in services and software, but every year, more and more Japanese industries are seeing their top talent jump out of the enterprise and into startups. Now, this trend will eventually become common even in conservative industries like energy and life sciences.

The second thing holding biotech back in Japan, however, the lack of high value exits. Well, that’s not something that will be solved by the ecosystem, but by the biotech founders themselves. Multi-Billion dollar IPOs do happen in Japan, but they tend to be corporate spinouts or large successful private companies rather than startups.

Now, this might change eventually, but not soon. And startups certainly can’t wait for it to happen. But founders can already solve this problem by thinking globally. The global market is much bigger than Japan, and it’s very common for successful non-US startups to IPO in the US. Investors don’t care where the big exits happen, as long as they do in fact happen.

So yeah, Japanese founders need to go global.

And biotech more than most is a global industry. All us humans pretty much have the same parts and work the same way and have the same problems. It’s a perfect go global market.

And you know, the more I talk to the new generation of Japanese founders like Kaz, the more the Japanese startup ecosystem today reminds me of Silicon Valley in the mid 2000s.

After the dotcom crash, things got a lot harder for founders. Naturally, VCs were still investing. There were still plenty of money available, but you had to work for it. Rounds were smaller and investors pushed more aggressively for a clear path to profitability.

Starting a startup was riskier in that era. Both the public and customers were far more skeptical. Back then, startups were still the underdogs. I mean, raising enough capital to outspend enterprise competition was simply not an option.

Also most founders had a personal reason for starting a startup in that environment. I mean, of course everyone wanted to get rich, don’t let anyone tell you otherwise, but they wanted to get rich on their terms and in a way that made things better for everyone.

Sadly, that sentiment’s considered rather naive in Silicon Valley today, today’s San Francisco’s startup culture has become a lot like New York’s financial culture, but with a more casual dress code.

But in Japan, that spirit of innovation as a force for good is still strong. Both founders and VCs want to make a lot of money, of course, but most also genuinely want to make the world at least a little bit better as they do.

If you want to talk more about how to make babies in a lab or to make money doing so, Kaz and I would love to talk with you. So come by disruptingjapan.com/show240 and let’s talk about it. And if you enjoy disrupting Japan, please share a link online or just, you know, tell people about it. Disrupting Japan is free forever, and letting people know about it is the absolute best way you can support the podcast.

But most of all, thanks for listening. And thank you for letting people interested in Japanese startups and VCs know about the show.

I’m Tim Romero and thanks for listening to Disrupting Japan.

Top photo: Envato

Click here for the Japanese version of the article