 Oh, yeah. All right. How are you guys doing? All right. So we thought we'd do something a little bit fun since it's the last panel for the day. I'm going to let Josh lead us in this exercise. All right, everybody. Stand up. It's the last session of the day. We're going to broadcast you live to America, all of us. We're going to live stream just for a little bit. So we want you to say hello to America. Thank you. Can everyone just wave their arms and do a little jump? Don't hurt yourself. Little jump. Little jump so we can see you. All right. Awesome. In Japan. Go slosh. Thank you. Is someone going to keep their phone on for the entire panel? No. Okay. I think Aaron should do it. He seems like the positivity cheerleader. I'm good. All right. So we're here as the last panel to share some of the Silicon Valley secrets. So please stay awake. So what I thought I'd do is I'll let each of our participants here give a brief introduction on what they do and also maybe one particular sector or type of technology that's interesting to them that they're looking at today. When we start at the end. Sure. I am a former entrepreneur converted to an investor. I started two companies, one of which was bought by a Japanese company called Spinner. And when the Japanese company was Sony. And about five years ago I started an early stage venture capital fund with another guy that I've worked with for 20 years. And so we make early stage tech investments across pretty much every sector in technology. And let's see. What was the last part of the question? So what's an interesting sector? We like late adopting verticals. So we like funding companies that are helping doctors become smarter and lawyers become smarter. And retailers become smarter. So that's an area of interest for us. Otherwise we invest in everything. All right. Aaron Battalion. Co-founded and was CTO of a company called Living Social. Which was in the group commerce space. Grew it from Ford. Almost 5,000 employees. Took a couple of years off. And now I'm a general partner at Lightspeed Venture Partners. We are investors in companies like SnapChat on its company. Affirm. But really a lot of enterprise and infrastructure businesses. Sectors that I'm interested in. I'm on the consumer team at Lightspeed. And I'm fascinated by businesses that have core network effects. Whether that's e-commerce, marketplace, or even some industries that Josh is talking about. There has to be a growth vector that we believe will improve over time and actually get better. And that's a really industry or market not specific to anything, but a characteristic of a business. Steve. I'm also a serial entrepreneur like these guys here. Did most of my work across three companies in social software. Consumer products and media streaming music. Three, four years ago I converted into sort of an angel investor and advisor. I didn't really have a specific theme area that I was focusing in on. But over time I've come to realize through intention and through hindsight that I really like consumer products in general. But I particularly like marketplaces. I like consumer hardware when there's a long term viable subscription services model. I get really enamored with the physical enclosure and the physical experience of that. I try to invest a little bit to learn and also make return, but also to learn in deep technology areas like material sciences as they affect some of the consumer markets that I'm excited about. Great. So my name is Eric Wu. I'm with Top Tier Capital. We're a venture fund of funds. So I work on the LP side. My colleagues here are on the GP side. So I invest money in them for them to make money for me. So it all works out well. We've been investing in venture capital funds since 1999. And, you know, happy and excited by the current innovation wave that we're in today. So my kind of area of interest right now that I'm looking at is pre-seed. And in Silicon Valley there's this interesting phenomenon now where you had a lot of upstart seed funds. And now there's this phenomenon around pre-seed, which is before seed funds. So that's some areas that I'm doing some investigation around. So maybe first question for our panelists. Each of you have been successful founders or operators and you have turned into investors. So how has your experience as a founder-operator influenced your investment philosophy? We'll start with Steve. I think to your point about pre-seed and seed, let's call that zero to one. That's where I feel most excited, most experienced, and most skilled. So I tend to focus in on that area. I have obviously a lot of companies that have grown beyond that in my portfolio. And I try to help out and stay involved. But really like the building products and hiring teams and raising money, those three things are things that you really don't understand in its detail until you've done it. And I think that that's the best benefit that I can offer to my investments. Because I don't want to be just a stock picker in a seed stage. I don't want to just be a picker. I want to actually have an influence on the outcome by being a great mentor and a coach on those three areas. And those are the three areas I can bucket every single email or conference call or a board meeting that I get invited to in one of those three categories. Having seen my own company scale from sort of 40 to 400 to 4,000, I think at each point in that journey there were important lessons learned about prioritization and sort of radical prioritization. What I like to see in companies is very clear, thoughtful approach. And where I try to help is to help them dissect of the million things you could work on today. There's probably only one that matters. And how do you build a structure and a culture and an organization where you're focusing on the right things? And you sort of tackle the hard problem at every stage of a business and it shifts and changes over time. So at Freestyle, we are all serial founders. And that means we've walked on your shoes. And so I think we bring this empathy, an understanding of what you're going through in a way that is, you know, we're fortunate. Most investors have not worked as operators before. Most are maybe lifelong venture capitalists. And so we all bring this understanding of what it means, how hard it is to be to do what you guys are doing. And the difference between being an entrepreneur and being an investor for me is I go home at six and you guys have to keep working all night. And so I've been there, I know what that's like. And so I support it. It's, there's no easy, something's never changed. Today there is no easy path for being an entrepreneur. You have to work as hard as you did 10 years ago. And we really try and support you along the way. Is there more competition today than when you were starting your companies? Yeah, so our first company was Spinner and we were the first internet music company and it was a rocket ship all the way. We never had competition. The second company was more recent. We had 30 competitors that were all fighting for the same pie and it was a very much more stressful rat race situation. The nice thing today though is that there is more capital available. You could do so much more with less capital. So that's the positive to having a very vibrant ecosystem. Fair enough, fair enough. So now that you have sat on both sides of the table, the investor side and the entrepreneurial side, as an investor, and I'll pick on Aaron first here, what's the hardest thing about your job? The hardest thing about this job is that I only get to invest in a couple companies a year. So the way that the structure works is we have a big pool of cash that we raise from our limited partners or our investors. We have X number of people in the room and each person can allocate a certain number of dollars per year to a certain number of companies. And I meet 1500 companies a year and write two checks. And there are some incredible people that I meet that I can invest in. I think as a former founder, feeling the pain and the tears and the blood and the sweat and the calls to my wife that I'm coming home late or I'm going to work all night at the office, I know what that feels like and every time I say no, it sucks just a little bit. Same. How about you, Steve? So obviously you're investing out of your own money, so you aren't accountable to LPs or other investors. So for you, what's hard? I think, you know, for me, I also sort of get hands-on and help start companies with founders that I've known for a while and that I've been able to build products with before. So I tend to split my time between really drilling down as well as like doing the sort of classic investing where you're meeting with companies that are pitching and you're making a decision. So I find the, and I think there are a lot of, I've met a lot of entrepreneurs and executives who are also angel investors here in Japan. I think it's a zero sum, right? Your time is a zero sum. And so I find that the better and the more I'm doing, which is a great thing on a particular company, it's time away from seeing perhaps a few great companies and teams that are getting started in that time period. So I think the angel investor has the benefit of flexibility and choice, but also has the sort of the unprofessionalized platform so they can't scale beyond the way, you know, a larger venture capital fund with many partners, they can coordinate to sort of address all of those opportunities. So I find myself having FOMO quite a bit, but that's an okay thing so far. Yeah, it's a huge difference. I was an angel investor for a handful of years and now I've joined an institutional fund. And on the angel side, when you're working with a founder, it's and, meaning I can invest and soak in my friend John and Bob and Mike. But on the institutional side, it's or. So it's me or John or Bob or Mike. And it builds a very different structure with the founder and how you relate to them and you just don't get to spend as much time or make the same decisions. Well, what's great is I can invest with both of them and they can't invest with each other. So that's good. Actually, we can because we're different stage. So the three of us can do a deal together. This is Steve's plan to like pit us against each other. Good luck. So he can take the spoils. Good luck. I'm more like junior high school and you guys are like high school and college in the life line. Yeah, grad school, college, high school. So on that point, and then like middle school, pre-seed. I don't know what you're doing over there. So anyway, so on that point, right? So if you think about, we're all from Silicon Valley and Silicon Valley is a special place. It's a unique ecosystem. With respect to your personal experience, what do you think it makes that special and unique? What's the start, Josh? You want to start? I mean, we have like two minutes to. It's a tough thing to. I would say that, you know, the talent pool, while it is, it is recruiting is every entrepreneur's biggest challenge. But the talent pool in the Bay Area is amazing. I mean, it really is across every position. So while it's in demand, I think it's without that talent pool. I think we'd be hard pressed to be any kind of ecosystem. And I turn over, you're going to talk about the funding. I have been fascinated with Japan most of my adult life. I have a degree in Japanese. I speak Japanese. I've visited here dozens of times. Aaron, say something in Japanese so everybody believes you. No one believes you. I don't know what should I say. No one believes you. Come on. I want to invest in Japan as a country. I want funds like ours from the valley to look at early stage deal flow here in Japan. I think there's a lot of great operators that have become angels. I think there are starting to be some seed funds. I think 500 startups was up here earlier. That's one among many who are starting to write really small checks. I think folks like us can come in and write series A-ish checks where I struggle with is what happens next. Where is the follow on capital in Japan? Where are the corporate venture arms coming in and supporting some of these deals through the IPO? Where are the larger, more mature funds who are able to help these companies as they scale not only inside of Japan but around the world? And that's part of my personal hesitation. Would your advice just be more activity, more capital? What would you say if you think about a policy level and then obviously here in Japan the corporates are very active as it relates to trying to build and foster innovation? What advice would you give? I don't think we have enough time on this panel to talk about all the complexities of the startup issues in Japan. I think success begets success. The best thing that can really happen to Japan is some great startups win in big ways. So I think for all of the folks that are listening or in the room that have companies the best way to help the country is to win. And from that the entire ecosystem starts to build off of that. You know one thing just to add to that and I was talking to an entrepreneur here and they told me that if you work for a large company in Japan and you want to leave that company to go start to create a startup that you actually will lose all of your benefits that you've accrued over the years of that company. And it shows the social website it. I mean the bigger company should say okay go do your startup and if you come back to us after you have this experience and you've been steeped in innovation and entrepreneurship will give you your benefits back as if you hadn't left at all. I think without that it's so risky that it's hard for employees at bigger companies to actually jump into the startup space. I've been spending probably about two three years now visiting Japan quite a bit being helpful to some friends here who have started incubators and startup studios. And one thing I've noticed culturally and this is true of a lot of Asia still there's an inability to take the entrepreneurial risk and it's not because there's a desire to do it it's that there's a fear of failure which just over the last three years I've seen that kind of move and progress. So that's been an interesting thing to see the other less cultural but more sort of structural thing that Aaron was just referring to is super important. So now there's startup studios, incubators, 500 startups Japan, Mistletoe, a bunch of great organizations like that that I keep meeting actually. So I'll meet entrepreneurs that have the mojo. They're ready to go. They're ready to take the risk. They've learned a lot of the best practices that we've learned. So they've sort of leapfrogged and sort of gotten bootstrapped on that. But then if I were to make an investment the number one thing I'm worried about is not the product and not the hiring because I think they can get that done. But I think I worry about the last part which is fundraising for the A and it's a life cycle. It's not just you know companies don't just raise one round of funding they don't just hire one group of employees. They don't build one product as it is. And so that sort of process kind of has a gap. Imagine if you're walking down a path and there's just a deep ravine right there. And so you kind of want that bridge to happen. So I'm hopeful that it's corporate venture capital is sort of the majority of venture investing in Japan. It seems like it would be like markets like Korea are the same way. There's sort of a series A series B gap. And I'd love to see that filled with some great venture funds or corporate venture capital that is willing to take the risk as well. So I'm going to give you guys homework because we've said okay what advice would you give to people in this ecosystem to help promote and foster a more robust venture activity. So what's one thing that you'll do when you when we all go back what's one thing you'll do to keep this idea alive. This idea of trying to build that bridge between Silicon Valley here in Japan. Well I'd say it a little differently. I would instead of focusing on what you can do here I would say that if I were an entrepreneur starting a company in Japan I would try and get temporarily out of Japan. I would take six months and apply to you know Y Combinator, TechCrunch, Hacks. There are a bunch of great incubators in America and they will be happy to have you from Japan go spend that time, get steeped in the ecosystem in New York, San Francisco, even LA and get some experience like really take me a sponge and learn from those people around you and then take that home take that back to Japan and I guarantee you'll be a much smarter more effective entrepreneur if you do take that risk. This is an important point that I don't think you realize when I started a company which was not what the first ten people are capable of. It's if you're lucky enough to build something that people want and you start to scale there's a point where you need help and you need to recruit and it helps if you recruit senior leadership who has done something like that before. I don't mean the co-founders. I don't mean the first five engineers. I mean that SVP of engineering. That senior level marketing hire maybe a CMO. There are not that many people in the world that have scaled consumer software companies before. What in the entire world the predominance of those humans are in Silicon Valley. So if you do have the opportunity to go and spend time and work at a company in the west that is at scale or about to scale those lessons that you can then bring back here are invaluable not just for your company but for the whole ecosystem. So I'll take the opposite tack of Josh because I think Josh's point is right but I think that's cost prohibitive to a lot of startups here. So I'll take the tack of stay here, invite people like us, invite other entrepreneurs from the US that are interested in entering the Japanese market and use your strengths. Japan still is one of the largest economies in the world. It's flush with cash. It has an aging population. They need a lot of services and products as well. There's a ton of opportunity here. A lot of US companies like Coinbase was speaking earlier and they've gotten some strategic investors from Japan and they'll be entering the Japanese market very soon which will be exciting to see. Blue Bottle Coffee which was sort of one of my early investments not meant to be sort of a tech or innovation investment but just a high growth retail, consumer retail business. They're doing super well in Japan. They have on a per store basis performing as well if not better than the average globally. So I think that inviting entrepreneurs, inviting investors, inviting large companies who probably already have a big office here, inviting them to check out what you're doing and building the base here, I think that's something that you can do today. And I think stuff like Slush is great but I think the ongoing action of making those connections and those bridges is important. So just quickly, maybe a raise of hands. How many founders or entrepreneurs in the crowd here today? Just a raise of hands. So maybe about half or so. So there's a lot of aspiring entrepreneurs. What would be your one sentence or one phrase of advice that you would give to people here in the audience? I was going to ask how many people are planning on raising capital in 2017 for their startup? Five. Raising capital sucks. It's a horrible experience. It really is horrible. But all it takes is one investor to believe in you and it can make everything come together. So my advice, it's soft advice. Don't give up, find that one investor and work with that investor and try and build momentum around that. Don't give up. I would say pick something you really love because if you are lucky enough for it to work you're going to spend every waking moment thinking about it and doing it potentially for the next 10 years. So make sure the idea you're working on is something that you're proud of, excited about and something that you'll give your whole self to because this is not something you can do as a part-time thing or as a nine to five. Building a company and scaling a team is a 24-7 job. So in a nascent market like this I would say that you don't have the full ecosystem of angels and seed investors. So one of the things that I love to see whenever I meet someone new that's talking about their business maybe they haven't built a working prototype yet but they have a presentation, there's some detail to it there's data, they understand their unit economics they understand the technology architecture they've done their homework and they present that crisply with articulation. Just that, you'd be surprised how many people no matter where you're talking about in the world don't actually put the effort and the precision into doing that. And I would say that that just is a great leading indicator of this person may has a higher probability of creating a great start-up hiring a great team because they can articulate their vision and they've done the upfront research and a lot of people just kind of like say I want to start a start-up which is usually not a good idea in starting a start-up you should have something you're passionate about but like do the homework, do the research that doesn't cost money, it costs time. Do that, get a co-founder that is a compliment to what you are not an identical partner and then present that in an articulate way whether it's on paper or it's verbally but paper is always good and then what I mean by paper is some digital document but that alone will get people excited and leaning into what you're going to talk about and a lot of people just forget that and they just kind of come with like verbal pitches and kind of don't have answers to questions so get those answers and that's the first step and then from there I think you can develop the team and the pitch so I always say focus on the upfront research and articulate it well This is a really important point that I think matters especially to this market I started a company a decade ago I think you started a company 30, 40 years ago like a while ago I think what the magic if you speak English you can essentially It's all about real age We'll talk about that later If you can read English because a lot of this content is in English on the internet you can learn everything you need to know how to measure a business how to grow a business how to think about cohort analytics how to scale, how to market There's so much There's arguably too much content online but there's no excuse not to learn how to do it well because someone has written about it on the internet Furthermore, the tooling now is so good I would argue it's harder to build a business because you could essentially duct tape together 20 services whether it's AWS whether it's SendGrid whether it's all these products and services do marketing analytics the list goes on It forces you to just do the magical thing in the world that you do better than anyone else and just focus on that piece and so much else that you can leverage from software and information makes it easier now to build a company than ever before My argument from anywhere in the world Cool Alright, we'll end on that note Please give a round of applause to our distinguished guests Good job, guys