How startups suddenly became “cool” in Japan (feat. Shin Takamiya of Globis Capital)

SUMMARY

Jason Calacanis hosts Shin Takamiya, a Globis Capital Partners VC, discussing Japan's shift from corporate loyalty to startup culture, investment strategies, AI's impact, and entrepreneurial evolution.

STATEMENTS

Japan's startup ecosystem has grown rapidly, with venture investment rising from $300 million annually a decade ago to $10 billion today.
Young Japanese graduates now view founding or joining startups as high-status, surpassing traditional blue-chip companies.
Lifetime employment at large corporations remains an option but ranks lower among young people's career choices.
McKinsey was once the top prestige job, but startups have overtaken it in desirability for ambitious youth.
Globis Capital Partners, founded in 1996, is one of Japan's oldest VC firms and grew alongside the nascent tech IPO market in the early 2000s.
Shin Takamiya joined Globis post-MBA from Harvard in 2008, during the financial crisis, entering VC at a market low.
Globis invests from pre-seed to late-stage, prioritizing teams with initial product-market fit glimpses before following on to pre-IPO rounds.
Founders should play the long game in networking, building trust over years rather than pitching cold during fundraising.
The founder's motivation and passion are the most critical investment factors, more than immediate traction or financials.
Investors' biggest fear is founders giving up prematurely, not running out of money or pivoting.
Failure in Japan carried shame historically but attitudes shifted in the last 10 years amid ecosystem growth.
Mercari, a secondhand marketplace like Poshmark, became Japan's first unicorn to IPO in 2018 after seven years.
Post-Mercari IPO, Japan saw 77 startups reach $1 billion valuations within seven years, including those briefly touching the mark post-IPO.
Venture capitalists view other VCs as collaborators, not competitors, especially in syndicating tough rounds.
Japan's oldest company, a shrine carpentry firm, has operated for 1,500 years, highlighting enduring non-scalable businesses.
VC-investable companies require exponential growth, high margins, and scalability, unlike great but stable legacy businesses.
Founders need a hypothesis for future unit economics showing yum-yum (high profitability) potential, even if not realized early.
Picking a growing total addressable market (TAM) is crucial; even matching TAM growth ensures company expansion.
AI accelerates company building, but timing societal readiness for advanced applications like agentic tools remains unpredictable.
Founders must embed short-term viable models with long-term AI visions, using human-in-the-loop for conservative clients.
Stand-up sushi bars in Japan offer high-quality, affordable fast food, echoing sushi's historical roots as quick bar fare.

IDEAS

Japan's otaku culture, once stigmatized as geeky, has globalized into a powerful IP export via anime and manga.
Convergence of consumer electronics, music, and movies at Sony in the 1990s foreshadowed today's multimedia ecosystems.
Digital media kits on floppy disks in the 1990s prefigured modern content bundles on streaming and internet services.
Entering VC during downturns like 2008 allows buying low and benefiting from market recoveries.
Founders are the scarcest resource in startups, so maximizing their utility means encouraging responsible pivots or shutdowns.
A logical hypothesis failing due to market unreadiness is preferable to irresponsible execution, as it signals learning potential.
Japan's startup boom has destigmatized failure, fostering a culture where entrepreneurship rivals corporate paths in prestige.
Pitching investors requires sparking interest with one value proposition, not exhaustive details, to secure follow-ups.
Rejection in fundraising is objective, like investor-product fit; founders must find believers in their vision.
Training young, analytical talent as VCs yields candid insights, but requires tempering with empathy to avoid rudeness.
Candor in feedback is valuable, but must be constructive—explaining dysfunctions helps founders improve without judgment.
VCs collaborate because high-risk startups benefit from syndication, building long-term trust over competitive silos.
The world's oldest company thrives on tradition without scalability, challenging VC's growth obsession.
Exponential topline growth paired with decreasing unit costs creates "yum-yum" economics in mature marketplaces.
Multi-unit businesses like Uber or Robinhood unlock cross-selling to existing users, amplifying margins without new acquisition costs.
Founders should model future scalability on simple assumptions, like easier market entry in familiar regions.
Misjudging market fundamentals, like fax vs. document sharing, dooms transitional tech startups.
AI's direction is clear—agentic automation—but timing depends on societal, legal, and client readiness.
Paddling out early for AI waves means starting now, even if full autonomy takes years, to capture eventual surges.
Conservative markets like Japan's enterprises demand human oversight in AI tools, delaying full agentic deployment.
Embedding dual business models—short-term human-augmented, long-term autonomous—allows survival until tech adoption catches up.
Stand-up sushi embodies efficient, community-focused dining, prioritizing loyal customers over Michelin hype.
Long-term horizons in VC (10-15 years per fund) demand relationship-building over quick wins.
High-status shifts to startups reflect broader cultural embrace of innovation over stability.
VR and AR prototypes in Akihabara 20 years ago showed Japan's early tech foresight, now mainstream globally.

INSIGHTS

Cultural stigma around "otaku" hobbies has inverted into a global economic powerhouse, proving niche passions can drive widespread innovation.
Entering volatile markets like VC during crises positions investors for outsized returns by capitalizing on undervalued opportunities.
Prioritizing founder resilience over flawless execution ensures startup survival, as persistence amid setbacks often precedes breakthroughs.
Japan's rapid VC growth from niche to mainstream mirrors a societal pivot from conformity to creative risk-taking.
Effective pitching focuses on ignition rather than completion, leveraging curiosity to build deeper investor engagement.
Rejection in funding is a fit mismatch, not personal failure—seeking aligned believers accelerates progress.
Candor without empathy erodes trust; constructive feedback transforms critique into collaborative growth.
VC collaboration fosters ecosystem health, as shared risk in high-stakes ventures builds enduring networks.
Longevity trumps hyper-growth: stable, purpose-driven businesses outlast fads, redefining "success."
Marketplace economics reward user retention through add-ons, turning single products into compounding revenue engines.
Market selection is foundational; even proportional growth in expanding TAMs yields substantial scale.
AI's transformative power lies in inevitability over immediacy—strategic patience unlocks asymmetric advantages.
Dual-model strategies bridge current limitations to future potentials, ensuring viability during adoption lags.
Fundamental needs endure beyond delivery mechanisms; true innovation redefines value at the core.
Startup prestige evolves with societal values, signaling broader acceptance of entrepreneurship as fulfillment.

QUOTES

"The founder is the most precious resource in the startup community."
"You don't have to tell an investor your whole story… just get them interested."
"Why Jason likes to train young folks to be VCs, rather than hiring for experience."
"The world’s OLDEST company is 1500 years old… and it’s from Japan…"
"When you know the direction of change but can’t predict the timing."
"AI is helping Japanese and American founders build their companies more quickly."
"Play the long game when it comes to networking."
"High status has shifted for young people to being a founder or even joining startups."
"It's okay if your hypothesis is wrong... it's a nice try."
"VCs see other VC firms as collaborators."
"Yum yum is a technical term it means lots of money."

HABITS

Build relationships with potential investors over two years before formally pitching to establish trust.
Focus pitches on one core value proposition to spark interest and encourage follow-up discussions.
Judge investors as much as they judge you, assessing chemistry for long-term partnerships.
Maintain candor in feedback while explaining specifics to avoid rudeness and enable improvement.
Model future business scalability using simple assumptions like multi-city expansion costs.
Embed AI incrementally, starting with human-in-the-loop for conservative clients to build toward autonomy.
Seek growing markets first, then optimize for exponential topline and cost reductions.
Apologize promptly and own mistakes in professional communications to preserve relationships.
Prioritize founders' deep motivations, assessing passion and karma for sustained commitment.
Visit Akihabara regularly to explore emerging tech prototypes and cultural innovations.

FACTS

Japan’s venture investment grew from $300 million per year a decade ago to $10 billion today.
Mercari became Japan’s first unicorn to IPO in 2018, just seven years after founding.
Within seven years post-Mercari IPO, Japan produced 77 startups valued over $1 billion.
The world’s oldest company, a Japanese shrine carpentry firm, has operated for 1,500 years.
Globis Capital Partners started in 1996, predating Japan’s tech IPO markets in the early 2000s.
Shin Takamiya earned his MBA from Harvard in 2008 and joined VC amid the global financial crisis.
Stand-up sushi bars in Japan offer premium ingredients at half the price of sit-down restaurants.
Otaku culture, rooted in anime and manga, evolved from a 30-40-year-old geeky hobby to global pop phenomenon.
Japan’s NASDAQ equivalent and Mothers Market launched in the early 2000s, enabling tech listings.
Uber and Robinhood each developed 11 revenue units, starting from one, to boost margins without new acquisitions.

REFERENCES

Founder University: 12-week course covering cap tables, product-market fit, go-to-market, co-founder search, UX design.
Mercari: Japanese secondhand marketplace app, akin to Poshmark or eBay, dominant in multi-categories.
Circle.so: Platform for building branded communities, events, courses; used for Founder University.
Deel: Global payroll and HR tool for hiring, compliance, visas across countries.
Uber AI Solutions: Data labeling, evaluation, scaling for AI; powers real-world applications.
Sony: Pioneer in convergence of electronics, music (Columbia Records), movies (Paramount).
Digital media kits: 1990s Sony floppy disk bundles with text, images, video clips.
Akihabara: Tokyo electronics district showcasing early VR, AR, robots across multi-story buildings.
Harvard Business School: Shin Takamiya's MBA alma mater, class of 2008.
JETRO: Japanese government organization that invited Founder University to Japan.
Poshmark: U.S. equivalent to Mercari for designer clothes and secondhand goods.
Robinhood: Multi-unit fintech with options, margin loans, retirement accounts.
Uber Eats and Uber One: Expansions leveraging existing drivers and users for cross-selling.
DocuSign and HelloSign: Solutions replacing fax-based document sharing.
Whimo: Advanced autonomous driving implementation as an AI use case.
Apple Vision Pro: Emerging AR/VR headset advancing long-gestating tech.
Snap Spectacles: Iterative AR glasses improving on early prototypes.
Kioicho Mitani: Famous Tokyo omakase sushi restaurant without Michelin stars.
Stand-up sushi bars: Affordable, fast versions in department stores and Haneda Airport.
Big Blue: IBM's supercomputer that beat chess champions 20 years ago.

HOW TO APPLY

Assess your startup's stage: If pre-product-market fit, join programs like Founder University for basics like cap tables and ICP before seeking VC.
Network proactively: Meet potential investors casually over years, sharing updates to build familiarity without pressure.
Pitch strategically: In initial meetings, highlight one compelling value proposition and the founder's passion to ignite interest for deeper talks.
Evaluate investors: During meetings, gauge chemistry and alignment, as you'll partner for 7-10 years—treat it as mutual selection.
Handle rejection resiliently: View "no" as fit mismatch; refine your hypothesis and persist until finding one excited believer.
Provide constructive feedback: When critiquing, explain specific issues like design flaws or model volatility, offering resources for improvement.
Syndicate investments: As a lead VC, collaborate with peers to share risks in down rounds, fostering trust through transparent deal sharing.
Model economics forward: Sketch simple scenarios showing exponential growth and margin improvements, even if not current reality.
Integrate AI dual-mode: Start with human-augmented tools for immediate revenue, while developing full agentic versions for future dominance.

ONE-SENTENCE TAKEAWAY

Japan's startup renaissance empowers passionate founders with collaborative VC and AI to redefine innovation beyond traditions.

RECOMMENDATIONS

Embrace long-term networking to build investor trust before fundraising desperation sets in.
Focus pitches on sparking curiosity with core motivations, avoiding overwhelming details early.
Train young VC talent for fresh perspectives, but instill empathy to balance candor with courtesy.
Champion responsible failure as a precursor to success, destigmatizing pivots in conservative cultures.
Collaborate with peer VCs to syndicate high-risk deals, strengthening ecosystem resilience.
Prioritize growing TAMs for inherent scalability, then layer on exponential topline strategies.
Hypothesize "yum-yum" unit economics five years out, using marketplaces for cross-sell leverage.
Paddle early into AI waves by embedding hybrid models, surviving until full autonomy arrives.
Reassess markets at fundamental needs, not surface tech, to avoid transitional traps.
Seek high-status in entrepreneurship by associating with vibrant startup communities.
Use stand-up formats for efficient, community-driven experiences in dining or business.
Model dual short- and long-term strategies to navigate unpredictable tech adoption timelines.
Own mistakes honorably, turning mishaps into trust-building learning moments.
Diversify revenue units post-core product to amplify margins without acquisition costs.
View founders' persistence as the ultimate success signal, investing in their unyielding drive.

MEMO

Japan's Startup Awakening: From Salarymen to Innovators

In the shadow of Tokyo's gleaming skyscrapers, a cultural shift is underway. Once defined by lifetime loyalty to giants like Sony and Mitsubishi, Japan's young professionals are ditching suits for startup dreams. Venture capitalist Shin Takamiya, managing partner at Globis Capital Partners, one of the nation's oldest VC firms since 1996, attributes this to a decade-long explosion in investment—from $300 million annually to $10 billion today. Hosting the podcast from Founder University in Japan, Jason Calacanis, an early Uber investor, probes how this archipelago of tradition is catching Silicon Valley's entrepreneurial fever.

Takamiya recalls meeting Calacanis two decades ago amid Akihabara's gadget wonderland, where early VR prototypes hinted at Japan's tech prescience. Yet, while Japan pioneered innovations like otaku-driven anime IP and Sony's 1990s media convergence, it lagged in company formation. Cultural emphasis on harmony stifled risk, but failures once shrouded in shame are now badges of resilience. Mercari, Globis's bet on a Poshmark-like marketplace, shattered barriers as Japan's first unicorn IPO in 2018, spawning 77 billion-dollar startups soon after. For youth, founding or joining ventures now outranks McKinsey prestige, flipping salaryman stereotypes.

Calacanis's Founder University, a 12-week bootcamp, arrived via government invitation, mentoring 30 competitive applicants on essentials like product-market fit and co-founder hunting. Takamiya stresses playing the long game: Investors crave founders' "karma"—deep passion trumping money chases. Pitches should ignite with one value proposition, not exhaustive tales, fostering follow-ups. Rejection? It's investor-fit, not indictment; seek one aligned champion amid 99 nos. As Calacanis shares, even "ugly baby syndrome" feedback, if candid yet kind, accelerates growth—minus the accidental email blunder his team once endured.

Globis invests from pre-seed glimpses of traction to pre-IPO, viewing peers as collaborators in syndicating tough rounds. Long VC cycles—10 to 15 years—demand trust over rivalry, avoiding "broken cars" that erode reputations. Takamiya demystifies investable models: Beyond great but unscalable legacies like Japan's 1,500-year-old shrine carpenter, VC favors exponential topline growth with curving cost declines. Marketplaces shine, as Uber's Eats expansion cross-sold to drivers and riders, yielding "yum-yum" margins without fresh acquisitions. Founders must hypothesize such scalability early, even modeling simple multi-city ramps.

Yet, timing bedevils predictions. Tools for fading sectors like fax doomed startups, ignoring deeper needs like DocuSign's e-signatures. Enter AI, the accelerant reshaping builds. Takamiya sees its direction clear—autonomous agents—but societal readiness lags, especially in conservative Japan. Founders integrate hybrids: Human-monitored AI for enterprises wary of full autonomy, paving to agentic futures. Like adaptive cruise control preceding self-driving, incremental wins fund the vision, controlling burn until waves crest.

This evolution extends culturally. High-status now clings to innovation, with startups as cool as global IP exports. Calacanis and Takamiya bond over Tokyo's stand-up sushi—historic fast food reborn affordably in department stores, sans Michelin fuss. Loyal patrons, hot matcha self-serve: Efficiency mirrors startup ethos, prioritizing community over spectacle. As Japan levels the field, blending heritage with hustle, it beckons global founders to paddle out early.

For investors, train youth for analytical edge, tempered by bedside manner. Calacanis's anecdote of a trainee's "ugly baby" gaffe turned lesson underscores: Honor mends missteps. Recommendations abound—embed dual AI models, chase growing TAMs, own hypotheses boldly. Japan's renaissance isn't mimicry; it's fusion, where persistence meets prescience, proving even ancient soils sprout disruptors.