SPECIAL STARTUP REPORT: Tokyo Team Visits Silicon Valley
Contributor Eli Lyons holds a master’s in Embedded Electrical and Computer Systems and is currently pursuing his PhD in Medical Genome Science at University of Tokyo. His academic research focuses on retinal development and brain cancer. He is also the Chief Data Officer and co-founder of Molcure, a biotech startup based in Tokyo.
After returning from his recent trip to Silicon Valley, we asked him to reflect upon, compare, and contrast the experience with the Tokyo startup scene.
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A Week of Networking and Pitching in Silicon Valley
Recently, Ryu Ogawa (Molcure CEO and co-founder) and I went on an all-expenses paid trip to Silicon Valley as part of the TOMODACHI award we won at a university business pitch competition. The TOMODACHI Initiative was established shortly after the March, 2011 Tohoku Disaster by the former US ambassador to Japan, John V. Roos.
The staff at TOMODACHI work hard to coordinate exchange, educational, and leadership programs for the next generation of American and Japanese leaders. In addition to the reward, the organization has kept in touch and is keeping an eye out for further networking opportunities and ways to help our start-up.
Our team was accompanied by two additional startups with student co-founders, two business mentors from Tokyo, and two program organizers. The trip was only five days, with meetings in both San Francisco and Silicon Valley everyday. Fortunately we had a shuttle bus to drive us around because it would have been impossible to make it to all our appointments by public transportation.
Activities included meeting with venture capitalists (VCs), startup incubator and accelerator programs, and a few Japanese and American startup founders. Although most of the people we met with were not in the biotech field, the meetings were still helpful; in addition to providing feedback on our pitch, they also offered to make introductions for us in the future.
For Startups - Some Takeaways from the Trip:
1. Prepare both a 5 minute and a 3 minute pitch
We prepared a 5 min pitch, but discovered that 3 min was preferred at many of our meetings. We quickly assembled a 3 min version focusing on our business plan and company/team profile, with little explanation of our technology. Of course there is a general pitch outline that you should follow, and what you emphasize should change depending on your audience, but this can be difficult when you don’t have much advance knowledge of your audience or have an audience with mixed backgrounds. For example, if I’m presenting to a bunch of PhDs from pharmaceutical companies, they’ll want a lot of technical information. If I’m pitching to VCs with limited biotech background, they’ll want to hear more about our business plan and the market. If I’m pitching to my grandma, I’ll probably just tell her I’m trying to help make new cancer drugs. Therefore, it’s a good idea to have multiple presentations ready and a very complete set of slides in an appendix. The more you know about your business, your technology, and the market, the more effectively you’ll be able to adjust your presentation as necessary - even on the fly. Another challenge with pitching in general is how to handle advice from VCs, investors, Phds, or other people you pitch to. I’ve noticed that you’ll occasionally get important advice pointing out a change that needs to be made for all future presentations, but sometimes suggestions will be very personal and particular to an individual, even though they consider it an extremely important point. By doing lots of pitching and paying close attention to your feedback, you will be able to separate the common advice from someone’s personal preferences. I try to improve my pitch every time based on feedback, and those who saw me pitch both in the fall of 2013 and in recent months have noted significant improvements.
2. ‘Ask for advice, not money.’
We plan to secure initial financing in Japan, so it wasn’t an issue for us in this case, but it’s something we heard many times when VCs were introducing themselves or giving general advice; beyond the obvious, there are many ways to further analyze this advice. In my opinion, it means you should be spending your effort trying to improve your business plan or product, and then get as much feedback and input as possible (not only from VCs). When your startup is attractive, the VCs will ask if you are looking for investment. This sentiment also implies that VCs meet a lot of startups that ask for money without being at the stage to warrant investment. Being able to adjust your plan based on new information is a key characteristic VCs are looking for, so it is important to express this attribute early and often.
3. You can move your startup to Silicon Valley
A common topic in meetings was moving a startup from outside the U.S. to Silicon Valley. Most Silicon Valley VSs will only invest in companies that are located within driving distance, however, many are open to having the startup’s CEO and some of the other founding members in the Valley while the larger team remains abroad. In addition, many accelerators and VCs can help with obtaining visas.
4. Business moves faster in Silicon Valley
Among the Japanese entrepreneurs we met who had relocated to Silicon Valley, this was the most significant difference they observed. Slow decision making in Japan may be the result of requiring consensus and avoiding risk, however, there is also a clear risk in slow decision making in terms of lost opportunities or falling behind competitors. Whether Japanese companies, investors, and startups need to move faster is probably some business student’s thesis at Tokyo University, but a foreign startup looking to relocate to Silicon Valley needs to make sure their own decision making process is fast enough.
5. There are resources in Silicon Valley not available elsewhere
European and Japanese investors and entrepreneurs we met emphasized the resources that Silicon Valley offers. None could define the resources in clear terms, but I think it’s safe to assume they meant the abundance of experienced investors, technical talent, and other infrastructure such as accelerator programs, coworking spaces...etc. On the other hand, entrepreneurs in Tokyo have also pointed out our unique resources, such as the plethora of talented programmers who don’t demand the Valley’s high salaries, who may be more likely to stick with the company through tough times.
6. A different work culture
The Silicon Valley work culture is well publicized, but Japanese or other foreign entrepreneurs still might be surprised by the beer on tap in the office, the casual dress style...etc. I suggest that anyone not familiar with these differences should do their research and make sure they know what they’re getting into.
7. Lastly, San Francisco has some issues
There are many nice things about San Francisco, but the city has its problems with homelessness, crime, soaring rent prices...etc. I’ll give a short anecdote from my trip to illustrate:
One night, I was traveling from our hotel near San Francisco International Airport to a neighborhood called Hayes Valley to meet some friends for a drink. First, I took a taxi to a BART station (light rail train system), waited about 10 minutes for a train, then had a quiet ride until around 24th and Mission St. where a drunk homeless man entered our car. Headphones on, I wasn’t exactly sure what happened, but I believe he got in an argument with a woman about his use of the word ‘fag.’ The argument quickly escalated, but thankfully did not turn violent.
When I arrived downtown, I got on a bus that was going in the general direction I wanted but also through the Tenderloin (a rough neighborhood). An individual best described as a ‘crackhead’ got on the bus and quickly got into an argument with one or two people. It escalated into threats of violence from both sides, at which point the driver stopped and would not move the bus until the crackhead got off. I decided to switch buses at the next stop, where the ‘real-time’ arrival notice promised a 10-min wait. It turned into 15.
I got on the second bus, but it didn’t move. Soon I heard the bus driver yelling at a passenger who was trying unsuccessfully to remove his bicycle from the rack on the front of the bus. At some point, the bus driver explained that he couldn’t get off the bus to help because he had to keep his foot on the brake. By the time I got to Hayes Valley, I had missed dinner.
Luckily, I was in time for Tuesday night discount cocktails.
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Very special thanks to Eli, AkihabaraNews’ human hotline to the founders, creators, and idea guys behind Tokyo’s nascent tech startup movement, for sharing his Silicon Valley experience.
Photos: Eli Lyons; Molcure