The Journal The Authority on Global Business in Japan

On September 8 and 9, Tech In Asia held a signature conference, one of its largest to date for entrepreneurs, investors, media, and members of the startup community in Asia.

Over two days in the Hikarie building in Shibuya, Tokyo, the event drew A-list speakers from the startup world, including executives from Alibaba, Twitter, Airbnb, Rakuten, and DeNA.

In addition to the star-studded line-up on the main stage, side events included a kick-start stage and “bootstrap alley,” where startups with an interest in the Asian market set up booths and promoted their products and services.

A startup investor speed-dating venue was also created, allowing founders to meet investors at the conference.

GIANTS OF TECH
Two highlights marked day one of the event. Tomoko Namba, founder and chairwoman of the board at DeNA, enthralled the crowd in discussion with two young entrepreneurs who had begun and failed in their first startup venture.

The main message of their conversation was simple: being an entrepreneur means you have to try, fail, iterate, and repeat until you meet with success.

During the conversation titled “The Panel without Fear,” entrepreneur and venture capitalist William Saito exchanged candid views on Asia’s tech industry with other panelists, who are also entrepreneurs.

In reply to a question by interviewer Akio Tanaka, co-founder and managing partner at Infinity Venture Partners, about Japan’s startup scene, Saito said Japan—while having a high tech culture and education system—is lacking in startups that go global.

Further challenges facing the country, he said, do not just emanate from policy decisions, but also manifest themselves in the lack of widespread use of English, and a culture in which failure is to be feared. Such states of mind, Saito added, have to change.

SMART CAPITAL
A vigorous discussion then ensued, between Saito and fellow panelist and former principal at DeNA, James Riney. Is there, they debated, a sufficient amount of capital for startups in Japan?

While Riney said he believed that there is a lack of such funds, Saito said there is plenty of it around, in the form of government grants, although it is in direct competition with what is really needed: “smart capital,” which emanates from venture capitalists.

Gen Isayama, also a panelist, and co-founder and CEO of World Innovation Lab, said Japan’s startup ecosystem lacks diversity and is too focused on the domestic market. This, he pointed out, is in contrast to Silicon Valley, which is both diverse and has a global outlook.

What’s more, he reasoned, Japan needs to improve how the country’s competitive advantages—including its high tech industries—are communicated to the tech world, in the same way that India and China are doing with their nation branding and tech promotion initiatives.

“I worry that if we don’t do anything for the next 10 or 20 years, we will not have this conversation. If we do something now, maybe there will be some interesting part that Japan can play in the global tech space,” Isayama added.

INVESTOR SENTIMENT
The fourth panel member, CEO and founder of Wantedly Akiko Naka, began by saying the investment environment in Japan had improved markedly in the last two or so years, but she agreed with other panelists that Japanese startups need to focus more on entering international markets.

Naka added that Wantedly, a trust-based recruitment platform, is seeking expansion into the Asian market.

Other main-stage panels on day one of the conference included those discussing funding trends in Asia, “the economy of everything,” the Internet of Things in Japan, and the next generation of Japanese hardware.

A keynote speech by Japan enthusiast and economist Jesper Koll, and an in-depth conversation with Dave McClure, founder of the early stage venture firm, 500 startups, was a highlight of the day.

VALUING HONESTY
Day two of the conference began with a bang, as best-selling author and icon of tech entrepreneurship Ben Horowitz held forth.

The founder of venture capital firm Andreessen Horowitz, he spoke of his early years as an entrepreneur in cloud computing and how, when his business plan had run aground, he had to lay off staff:

“I would sleep like a baby and wake every two minutes and cry,” he said.

One lesson Horowitz learnt during that time is the value of honesty, including telling staff why it was necessary to make the tough decision to let them go. Being engaged was also a valuable lesson, he said.

“I would remember standing there in the parking lot as staff packed their belongings into their car, and thanking them,” Horowitz said.

“We may not have done a good job,” he continued, “but at least I was honest.”

Indeed, Horowitz went on to speak of the importance of being honest. As difficult a quality as it may be to develop, it is a key asset for any entrepreneur to have.

What’s more, this was in 2002, two years out from the dot-com bubble, when jobs in the industry were hard to find.

Spurred on by a desire not to fail, Horowitz was able to raise new money for the company, Loudcloud, and successfully pivoted from an infrastructure and applications hosting service to an enterprise software company called Opsware.

In 2007, Opsware was sold to Hewlett-Packard for over $1.6 billion.

NEW MARKETS
Following Horowitz’s presentation, there were panel discussions on how to enter and win in Southeast Asia, the rise of hardware in China, and the upsurge of India as a market for Japanese tech investors.

The afternoon session also witnessed 9 handpicked startups in a pitched battle for $10,000.

Speaking to The Journal, tech investor and founder of Rebright Partners, Takeshi Ebihara said emerging markets such as Southeast Asia and India are new targets for Japanese investors.

The main attraction, Ebihara said, is the region’s emerging middle class, which consumes and relies on the latest tech and Internet services.

To this end, Rebright Partners has invested in some 20 companies in the region: in Indonesia (several, including one of the largest e-commerce websites in the country), Singapore (a car-sharing service), and the Philippines (a bitcoin company).

Ben Horowitz, Andreessen Horowitz; Tomoko Namba, DeNA; Takeshi Ebihara, Rebright Partners; Zain Jaffer, Vungle

From top: Ben Horowitz, Andreessen Horowitz; Tomoko Namba, DeNA; Takeshi Ebihara, Rebright Partners; Zain Jaffer, Vungle,

A year ago, the company expanded into India, where it has invested in five portfolio companies. Most of the company’s investments have been seed to Series A round investments, he added.

For a behind-the-stalls look at the startup scene, The Journal sat down with Eric Chung, representative director and country manager-Japan of Vungle Co., Ltd.

Vungle is a mobile, video ad network that helps developers monetize their apps and advertisers—the company works with the gaming industry, for instance, to increase ad reach for users, many of whom do not consume traditional media such as TV.

In Japan, Chung said, Vungle’s targets besides gaming companies are publishers, e-commerce sites, social networking services, and entertainment companies.

Established by serial entrepreneur Zain Jaffer in 2012, the company began as a maker of trailers for gaming companies, before pivoting to become a creator of an in-app video ad platform.

Beginning in the UK and then Silicon Valley, in 2015 Vungle entered the Japanese market—where advertising spend is one of the highest in the world.

“When you look at companies that are successful, they need mature markets,” Chung said. “That’s how you become a success—by having global reach.”

One lesson Horowitz learnt during that time is the value of honesty