University ignites startups, inspires corporate Japan

For the average Japanese person, the U.S. state of Texas conjures up images of old Marlboro ads: burly men in ten-gallon hats and cowboys on horseback. But for those who’ve attended the annual South by Southwest (SXSW) technology, music, and film festival in Austin, the state’s capital, that image couldn’t be further from reality.

When Japanese entrepreneur Toshinari Shimokawa visited, he anticipated finding cacti and tumbleweeds, but instead found a gateway for Japanese startups to break into the lucrative US technology market.

Shimokawa’s co-founded initiative, Todai to Texas, which is sponsored by the top-ranked University of Tokyo (commonly known as Todai), brings promising Japanese ventures to SXSW each year.

Shimokawa’s first visit to the event was in 2012, after agreeing to help a friend and fellow entrepreneur showcase his music discovery startup, Beatrobo Inc. Despite the lack of cattle ranchers, the event provided memorable encounters that would shape the then-budding entrepreneur’s future path.

“We ended up meeting early Facebook engineer Chris Putnam one day, then a YouTube executive was giving us advice the next,” Shimokawa says. “SXSW allows those kinds of interactions to occur — interactions that would never happen otherwise for Japanese startups.”

Along with fellow Todai graduate Masaaki Sugimoto, Shimokawa co-founded his own venture — OpenPool — later in 2012. OpenPool utilized Microsoft Kinect’s tracking technology and projection mapping to overlay 3D animations on ordinary pool tables, thereby enhancing a player’s experience of the game via computer-aided effects.

Shimokawa and his team debuted the “super-billiard” experience at SXSW 2013, to great fanfare. “Imagine it: we had this high-tech pool table in the middle of a packed convention center. Everyone came by to play with it and talk to us. If you live in Japan, it’s really hard to get connected to U.S. media, but it’s definitely possible at SXSW,” Shimokawa says. By the end of the event, OpenPool had been featured in two of the most famous U.S. technology blogs — Engadget and Gizmodo.

The business dojo

Shimokawa was forever changed by the experience of building a product in Japan and showing it off at one of the biggest US technology events. He and Sugimoto returned to their office, a stone’s throw from the Todai campus, as heroes of the local startup scene. It dawned on them that sharing the OpenPool experience with others would do more to raise the profile of Japan’s burgeoning startup scene than they could possibly achieve otherwise.

Along with Taketo Sugawara, an assistant professor at the University of Tokyo and the head of both its Entrepreneur Dojo program and in-house startup incubator, the trio founded Todai to Texas in the summer of 2013. That December, they hosted a demo day to select six winning teams to represent the university — and Japan — at SXSW 2014.

“SXSW attracts a lot of technology heavyweights, but the thing that makes it great? Startups,” Shimokawa explains. “Twitter, Pinterest, Groupon, Leap Motion, Foursquare, and now Meerkat all found success there. They prove that it’s a huge opportunity for startups.”

The first batch of Todai to Texas entrepreneurs produced three of the program’s superstars: Skeletonics Inc, Moff Inc, and AgIC Inc Skeletonics’ fully-mechanical exoskeleton — a product of Sugawara’s Entrepreneur Dojo — made an appearance on popular US late-night talk show "Jimmy Kimmel Live." With the international exposure on TV and tech blogs that followed, Skeletonics went on to sell its product to theme parks around the world. “Skeletonics is a typical case,” Sugawara says. “Before SXSW, no one knew them. Afterwards, everyone knew them.”

The Moff Band, a wearable device that turns ordinary objects into toys, raised over $75,000 via U.S.-based crowd-funding platform Kickstarter after having been showcased at SXSW. It’s now available on Amazon.com Inc and is expected to land at other major U.S. retailers soon. AgIC, co-founded by Sugimoto, has been a major hit with the DIY crowd since its first appearance at SXSW. The startup, which focuses on printable circuit boards, was also funded via Kickstarter shortly after having been exhibited. AgIC, which raised $830,000 in venture capital in January, is also engaged in collaborations with Sony Corporation and Microsoft Corporation.

Road to success

With Japan’s crowd-funding sites only offered in Japanese and generally much less popular than the likes of Kickstarter, Shimokawa realized the power of launching bilingual, U.S.-based campaigns in tandem with demonstrating real-life prototypes at SXSW. Two of this year’s 10 teams — Bocco, a robot-shaped communication gadget that helps family members keep in touch when separated by work or travel; and Plen2, a 3D-printed, open-source humanoid robot that stands roughly 20.3 centimeters tall — have already raised funds on Kickstarter.

Another 2015 team, Exiii, created one of the most popular gadgets at this year’s trade show — an affordable 3D-printed robotic arm for amputees and those born with missing or partial limbs. They met Not Impossible Labs, a California-based nonprofit organization and global front-runner in 3D-printed prosthetics and other innovative technology for people with health, communications and mobility challenges, and are currently discussing potential collaborations.

If you’re wondering why the Todai to Texas startups are almost entirely hardware-based, Shimokawa chalks it up to ease of communication and Japan itself. “Hardware tells you what it is by its nature—you just see it and you can figure it out. For Japanese people who don’t speak fluent English, hardware is better, and people outside of Japan think Japan is a hardware country anyway,” he explains.

“Software is a red ocean [competitive existing market],” Sugawara adds. “To compete at SXSW we must explain advantages over similar services. It’s easier for hardware to be unique.”

Japan upstarts

The increased prominence of Japanese startups on the global stage has major implications for Japan’s entrenched corporate technology sector. Embracing the entrepreneurial mentality may become the ticket to a turnaround for struggling industry giants of yesteryear. Mesh Project — an internal startup at Sony — partnered with AgIC at this year’s SXSW to show how its drag-and-drop Internet of Things platform could benefit from AgIC’s printed circuit boards. “If Sony becomes a successful example, other companies will follow; that’s what Japanese corporations do,” Shimokawa says.

For Sugawara, collaborations between Japan’s technology titans and upstart ventures are just one piece of the puzzle. Even more important, he says, are acquisitions. “They have to collaborate with startups,” he says. “But they also have to acquire startups. In the U.S., a major exit is acquisition by a big tech firm or a larger, more successful startup. Few big companies in Japan are actively acquiring Japanese startups, so they have limited exit options.”

In just two years, Todai to Texas has become a cornerstone of SXSW. With the number of teams having increased year on year in 2015, should attendees at SXSW 2016 expect an even bigger Japanese startup presence? Not necessarily.

“We have two choices: go larger scale or upgrade the quality,” Shimokawa says. “I’m inclined to go with the latter.” Because of its affiliation with the University of Tokyo, each Todai to Texas team must have at least one member who is currently a student, researcher, or alumnus. The organizers hope that other universities and startup communities copy their model.

© Japan Today