Cerevo wants to be a “global niche” player.

That makes sense for this Internet of Things company. The IoT has become so pervasive and so successful that the terms ha become almost meaningless. Today we simply except and accept that almost everything should naturally be connected to the internet.

Of course, it wasn’t always that way, and today Takuma Iwasa, founder and CEO of Cerevo tells us of how he started his career at one of Japan’s big consumer electronics companies trying to force the internet into devices where it really didn’t belong. And how that experience forced him to find a better way and to found his own company.

Takuma also explains Cerevo’s innovative business model. In fact, the company is structured less like a hardware manufacturer and more like a hardware startup accelerator. He and Cerevo are aiming for a series of niche-market successes which will be acquired by large mass-market firms. And his strategy seems to be working.

It’s a fascinating discussion, and I think you will really enjoy it.

Show Notes for Startups

  • Why Japan’s first “smart devices” failed
  • The foundations of the “global-niche” IoT strategy
  • Why startups should build rather than license
  • How to get media attention for cool, new IoT devices
  • How IoT startups really should be using crowdfunding
  • Will Japan ever regain the lead in robotics?
  • Why Japanese companies were afraid of the Roomba

Links from the Founder

  • Learn more about Cerevo at their home page

 Leave a comment

Transcript from Japan

Disrupting Japan, episode 67.

Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for listening.

The internet of things is unstoppable. It’s so broadly defined these days, connectivity is cheap, and they can be added to just about anything. Of course, whether it should be added or not is another matter entirely. That question is near and dear the heart of Takuma, founder and CEO of Cerevo, one of the most innovative and connected device makers in Japan. Takuma started his career at Panasonic and he had high hopes of creating all manner of consumer devices that could take advantage of internet connectivity.

What he found, however, was that his job consisted mostly of finding ways of trying to force internet connectivity into existing products. Genuinely new products and innovations were being dismissed out of hand. Well, Takuma did what everyone should do, but very few people actually do in that situation, he quit his job, took some of the best engineers with him, and he started his own company.

Now, there are a lot of gadgets and IOT devices being built in Japan, but Cerevo has a genuinely interesting and methodological approach to it. During the interview, you’ll hear Takuma try to downplay that strategy as just gut instinct, but as you listen, you’ll understand the very rational method of what, from the outside, might look like madness. We’ll talk about plenty of cool devices, but I think you’ll find the strategy that underlines Cerevo’s success to be at least as interesting. But, you know, Takuma tells that story much better than I can. So let’s hear from our sponsors and get right to the interview.

[Interview]

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Tim: So I’m hitting here with Takuma Iwasa of Cerevo. Now, Cerevo, I’m tempted to call it a gadget company, but that’s not really fair because you guys do a lot more than just make little gadgets. So can you tell us a little bit about what Cerevo does?

Takuma: Okay, so my company’s name is Cerevo and we say Cerevo is a consumer electronics start up company, not gadget, right. We are really focusing to the connected consumer electronics devices—connected robot, or connected camera, or connected, of course, gadgets. Sometimes we try connected toys, connected sports equipment.

Tim: You guys make so many different kinds of internet of things products, we could spend the whole podcast just listing them all. There’s a huge variety of them. You make everything from tools for IOT developers, to connected sports equipment, to video streaming equipment, but first, let’s back up a little bit. You started—

Takuma: From 2008. So my past background is a spent time Ritsugaku Kyoto University studying computer science, but I’m not good with the software programs.

Tim: So you studied software development, but you just weren’t very good at it?

Takuma: Yes, but I’m working into the very small startup company and in the college student generation, I spend a long time to make a website and I received a job from the boss and I managed many of my friends. I received the job from the client and broke it up.

Tim: So kind of project management?

Takuma: Yeah. I’m also a programmer and manager. In that time, I spent a long time to make a computer programming, that my friend started to from 1 to 100. They spent just 5 days. At the same time, I started almost the same to-do’s that I already spent one week, but I already, I can’t do just only 20 or 25. But I can really easily manage my friends. Then, after college, I decided to go to product manager—not program.

Tim: And you were with Panasonic?

Takuma: Yes. I really like 021 timing. That means in 2001, that timing, the dot com bubbling the years.

Tim: Yeah, just as it was starting to burst.

Takuma: The web-based, internet-based companies are already growing into a big company. And I look to the internet or computer job. But my aptitude is not good for programming. Then, I’m looking for the money, not the purely internet companies. So automotive company, consumer electronics company, I tried some other fashion company, or so many different type of business area.

Tim: So when you were saying you were trying all of these companies, was this—

Takuma: Just looking for.

Tim: Just checking them out?

Takuma: Checking and just go into the interview, then I find the consumer electronics is almost all the blue ocean from the internet deal. So consumer electronics is just born from the 2001 or 2002.

Tim: Well, that’s true. Going back to 2001, almost no companies were seriously trying to connect. They weren’t seriously trying to make smart appliances. There were a few gimmicky—

Takuma: Yes. And also some of the R&D departments, the Panasonic R&D department or Sharp R&D department, that tried an internet refrigerator or microwave.

Tim: Microwaves that could access recipes.

Takuma: And people have to connect the phone cable to the microwave. So that’s really ugly in the really early stage of the internet connected consumer electronics. Then I go to Panasonic, and start to produce internet connected devices?

Tim: What kind of devices?

Takuma: First my job is remote the TV programming, reserving the website for the old style mobile phone. It’s not a smartphone, but people can reserve the recording of one of the TV programs from the mobile phone. After that, the TV, I discussed with Google and YouTube guys, and built in a Google function to the Panasonic TV. And finally my job is connected camera, the camera with the Wi-Fi in the systems.

Tim: So you were working with that at Panasonic as well?

Takuma: Almost all of my business background is IOT, IOT, and, IOT.

Tim: Your first product, Cerevo, is also video streaming. What made you decide to leave Panasonic and start up your own company?

Takuma: That story is very difficult to translate from Japanese to English but I am going to try. So into Panasonic, one or two years, I’m very happy to touch the huge consumer electronics business with the internet business, but I faced on the huge war from the internet based side guys and the consumer electronics business guys’ side.

Tim: So just politics?

Takuma: Not only politics, but their completely different approach or thinking pattern of politics. The image, like Google guys and Bank of America guys, of course they are trying to improve every year, but the two guys, the thinking pattern—

Tim: So they just think differently.

Takuma: Yeah, completely different pattern. But Bank of America, and Google, no need to collaborate with them, but the internet company and the consumer electronic company—my job is connected, so I have to merge to the business area. I faced on this war and finally, the Panasonic is not so innovative and not so user friendly from the internet user vision. From consumer electronics, the cost over vision is okay, it’s almost okay.

Tim: Well I think the biggest difference is that first generation of connected devices, it didn’t really change anyone’s behavior. It was just adding features to a product.

Takuma: Correct. It’s just adding in a different culture, in a different function. I like to make merge the product, internet merged with consumer electronics, not add It’s very difficult to merge because that’s why the war is available. Then I’m looking for the job off and I talked with the Sony guys, the Sharp guys, something guys, but they are completely same culture as Panasonic.

Tim: So they were just trying to figure out how to put the internet into their existing products?

Takuma: Yes. Then I decided to start the new business, start the company with internet side guys and consumer side guys.

Tim: So did you start the company with friends from Panasonic?

Takuma: At first, I started the company with two investors, the names, Mine-san & Yamada-san. Miene-san is ex-Sony. He go out from Sony and start the investment business, so he knows what is internet company and what is consumer electronics.

Tim: Since you didn’t have a background in engineering or programming, where did you recruit the first engineers from?

Takuma: Also, I have to talk about Yamada-san. He is the CEO of a fast-growing second-hand market company and the first engineer from Tokyo University, he is just a part-time job student, and the second one is my right hand CTO, he is called Matsuken. His real name is Matsumoto. He is my business partner into Panasonic past time.

Tim: When you first started, your product launch was LiveShell, the video streaming.

Takuma: The first one is very small and tiny digital camera. Basic functions, just a Wi-Fi digital camera, but this one is the world’s first live-streaming enabled point and shoot camera. Then I shifted to the LiveShell business.

Tim: It seemed like you were really focused on streaming video, streaming photos for the first four or five years, and then suddenly, last year, Cerevo introduced a whole lot of new products, a tremendous number. So what changed?

Takuma: So roughly 2.5 or 3 years before, I and my board members decided to start a new business strategy, I named it the ‘global niche strategy’. The strategy is very simple. We are a Japanese company and it’s very difficult to invest for a very huge amount of money. The U.S. companies came and China-based companies have a very huge amount of the investment capital money, but Japan, not so much. So once we were going to go to the mass market like GoPro, we have to fight with Panasonic or fight with GoPro, if we are going to the mainstream market. So I decided to make a very different type of niche product. We are going to sell the niche product to the many different types of countries.

Tim: okay, so let’s talk about that because your current strategy is building many different niche brands, rather than having them all under the Cerevo brand. So you guys have the technology to build almost anything, all kinds of devices, so tell me what is the creative process inside? How do you decide what projects go forward and how do you decide when to turn this into a brand?

Takuma: Deciding process is really simple. No research, no calculations, and no business discussion.

Tim: That sounds like a dangerous process.

Takuma: I think it’s not that dangerous because I think we are going to try a whole new market. The smart snowboard binding is a whole completely new product, no market at that time. It’s a really funny toy; it’s a whole new product and really difficult to research, and difficult to amount or the business scale. Three years before, we finished to make a great manufacturing process. We can make a whole new this type of product, just 4 or 5 people, time is just 10 months. If you are going to calculation, 5 people, 10 months costs just a few hundred thousand dollars.

Tim: Even then, you must have more ideas than you can build. Is it more of a gut feeling that this will work.

Takuma: Idea has no value. Everyone can make ideas but we can make a product. Everyone cannot make a product. We have so many ideas, our strategy is, “Okay, let’s go try to make product one. Let’s go try product two, three, four, five,” then the ask to the market.

Tim: So a very agile process, you bring the product to market very quickly, then how do you decide to continue production or to shut it down?

Takuma: It completely depends on the revenue. One of our very strong points if we have a really good relationship with the component vendor in the assembly factory, so then we can make a whole new product from just only 500 pieces. This is a very low risk business and of course we are going to try a few hundred, or 1,000, and try and ask to the market. If the pre-release sold out the product, we are going to renew, renew, renew. After spending a half-year, or one year, we are going to, if the product process is very good, we are going to try to make a second model for this model line.

Tim: Right, so continue to improve it. Interesting. The team is still not that big. How many people working?

Takuma: We have with the full-time guys and the part-time guys, totally, roughly 95 or 96 people.

Tim: Okay, so how do you keep track of all the different product lines? Are there individual teams, like these 4 or 5 people are in charge of this one line, and these 4 or 5 are in different?

Takuma: Yes. From my view, we are investing to many small startup companies. It’s my vision.

Tim: Right. That makes sense. It’s very similar to a startup accelerator. So basically, if a team comes up with an idea and says, “We want to build this,” you, as a company, will invest a few hundred thousand dollars to see if it works, and if it does, you’ll put more money behind it and let it grow. Excellent. I imagine that much be really motivating for the teams involved.

Takuma: Yes of course.

Tim: Let’s talk about going global because you mentioned early on the importance of being a global niche brand. You’ve been very active at the consumer electronics show from early on. Right now, what percentage of your sales are overseas, and what percent are Japan.

Takuma: Roughly 60% comes from other countries.

Tim: So 60% overseas? That’s really unusual. That’s really a great sign for a Japanese hardware manufacturer.

Takuma: And also, we don’t have any full-time partner outside of Japan.

Tim: But actually, you went global really soon, really quickly after funding, from your very first products.

Takuma: Not so fast. I started business from 2009 and I launched first product after 2010. The first global selling product. This one is launched at the end of 2011, and I started a global business from 2012, February.

Tim: Okay, so it took a few years to ramp up and to go global. For all Japanese startup founders who are wanting to go global, the advantages are clear. It’s much, much bigger markets, much more access to customers. What was the most challenging part about going global as a small startup.

Takuma: Currently, we are selling to 50 different countries. Of course, the biggest market is the U.S. and the second one is Europe. And now they are growing in some Asian countries, including India and China. We have a strategy but we do not do so much. Just showing the very unique product into the CES or IFA, that’s it.

Tim: Your main market strategy has been trade shows and exhibits?

Takuma: I have to say no. The main strategy is product planning. The planning the so unique product, right now, in 2016 or 2015. I know the media guy’s heart. And in this 5 or 6 years, the media guys are raising up every year. Who is media? I don’t know. Blogger is media and public access is also media. And also sometimes YouTube is also media guys. Everyone can be media. Every media guy is looking for a whole new something. Then I decided to make a really tricky and really edgy IOT devices, then maybe the media guys are really easy to picking up a product. Of course, it’s not only U.S. guys or Chinese media guys.

Tim: Do the media find you through trade shows mostly, or do you do marketing and outreach directly?

Takuma: Basically the trade shows.

Tim: If you don’t have an interesting product that will spark peoples’ imagination, no one will write about it, so that makes sense.

Takuma: Basically, traditional trade shows are to talk with the distributors or to talk to the sales guys, but the current trade show is to show the product to the media guys.

Tim: That’s true. It has really changed in the last 10 years or so. That should be very encouraging to not only Japanese founders, but any hardware makers around the world, because if you make something worthwhile, it sounds like it’s pretty easy to get the attention of the media.

Takuma: One of the correct choice things is CEATEC is the Japanese most, biggest consumer show in Tokyo, but we don’t talk about the CEATEC guys; just talk to the CES guys or IFA guys.

Tim: So you don’t do trade shows in Japan? Is that because you have already direct access to the media and there’s no real advantage.

Takuma: And also the NHK and TBS guys are also coming to the CES.

Tim: That’s true. The Japanese media comes to those shows as well. For an example, let’s talk about one of your brands, the XON brand, which is smart bindings and video camera—gear for snowboarders mostly. What is your target for that? Is it pros, is it amateurs, is it just geeks who love new gadgets?

Takuma: One of the most important customers is the geeks or the gadget guys. The second one is high end amateur guys. And it doesn’t focus to the snowboard items. We are going to run in this month, the whole new bicycle device, the name is Ride One. So the XON brand is we are going to change the sports equipment of sports equipment to the IOT in IOT.

Tim: Sports equipment is very big, very competitive, and very specialized market. So why did you decide to create your own brand, rather than going the OEM route and licensing your technology to existing brands?

Takuma: That’s a very good question. I understand completely the huge brand behavior. That’s why I worked in Panasonic. And my colleagues worked in very huge companies. Before the launching the snow one, the binding, if I go to the head of a huge company, if I go to them, and if I’m going to presentation my idea to them, maybe they are going to think about thinking 2 years. But we can make our new product in 10 months. Most shortest and effective way is to make our whole new brand and the whole new technology snowboard binding, at first using just 10 months or 1 year, then I’m going to bring the product to collaborate with the existing huge companies.

Tim: Okay. In many ways, this is the proof of concept for the market. All right, that makes a lot of sense. And is that sort of your general strategy for other brands as well?

Takuma: Yes. We are a start up company. I feel the most important things on the start up company is the speed. So every time I think and decide what way is the most speedy.

Tim: And do you view these teams as startups? Would it be, for example, would Cerevo be looking at selling this unit to Burton, or to sell that unit to an acquiring company?

Takuma: Yes. That’s a very happy future for me. But not yet.

Tim: Well, you know, step by step. But it makes a lot of sense. If you really think about Cerevo not so much as a company, but as an accelerator, it’s much closer to an accelerator business model than a traditional manufacturing model. And do the team members also have stock or bonuses based on the team performance? Do they feel like they own that product themselves?

Takuma: Currently, we don’t have this type of bonus or stock systems. That’s very Japanese style.

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Tim: So the founders, the team leaders are just regular employees? Cool. Actually, you guys are involved in a lot of different IOT projects here in Japan, so you co-operate the DMM Make facility, right? Which is an astounding internet of things maker’s heaven.

Takuma: Yeah. Currently, my company is one of the important partners of the DMM Make. Many startup companies are to make large prototypes but these type of people have to shift up to the mass production. So we have many know how to do mass production or know how to distribute a product in other countries.

Tim: Well, it seems there is actually three different levels of mass production. You have what’s going on at DMM Make and so many other maker spaces, which is closer to prototyping. You have small op production, which is some of the niche brands that Cerevo is making, and then there’s that next level like back what Panasonic was doing. And it seems to me that jump from the niche brand to the truly mass market is extremely difficult. Do you know any startups in Japan that have been able to make that jump?

Takuma: I think it depends on the money. The jumping have to spend a huge amount of the promotion fee, it’s not my company issue. So if there are people, one of the startup companies makes a very general product, like a camera, or a microphone, or something like that, at first they are going to try to prototyping, it’s easy. Then the second type, it’s not so much amount of their mass production, like a few thousand pieces or 10,000 pieces. We can’t support this area. This hopping is really—they have to spend a huge amount of the money to.

Tim: So that’s still a very expensive jump. So if an IOT startup became so successful that they were getting distribution through department stores and electronic stores—

Takuma: And not only promotion fees. Promotion fees are a few million dollars. And also if we are going to try that 20 or 30 million dollars promotion, we have to make a huge amount of the stock.

Tim: You have to get 20, 30 million dollars together.

Takuma: The timing is very important. So the financing, timing, and mass production timing, and promotion timing. In Japan, that type of financing is really difficult.

Tim: Okay. So then I guess it makes sense to, for part of Cerevo’s business strategy, to sell off the business units, instead of really trying to build a global brand. That makes a lot of sense.

Takuma: Yeah, that’s why we are changing strategy from mass production to the global niche product.

Tim: Okay, excellent. Well I’ve noticed you guys have run crowd funding campaigns in the U.S. Have those been mostly just for marketing purposes or have you used the revenue as the basis for building products.

Takuma: Just research. We have money but once we are going to try the really edgy product, we like to prove the acceptability, then I’m going to use crowd funding.

Tim: Okay. Now this gets back to what we were talking before. I knew it couldn’t be so simple as just gut feel or no research, no nothing. When you do get an idea for a product, you do market research in the form of crowd funding and what else?

Takuma: We are separating the edgy product or the really edgy product. So edgy product, the risk is just 50 or 60 percent. But really edgy product risk is 80 or 90 percent.

Tim: So what’s the example of a slightly edgy product and what’s an example of a really edgy product where you worry?

Takuma: One is the LiveShell, or video streaming, or one of the toys, the name is The Dominator—the toy gun. It’s a very edgy product but it can’t be easy to imagine the customer is available in the market.

Tim: Sure, it’s a licensed product, it’s got that tie-in to the anime series.

Takuma: Just slightly the edge. But we try to make tape measure iPhone case. The name is iTape Measure. The tape measure is stored to the iPhone case, very small, real tape measure.

Tim: So you could pull a physical tape measure out of the iPhone case? That was a really edgy one?

Takuma: A really edgy product. And our board member decided to we have to market research into the Kickstarter.

Tim: And what happened with Kickstarter?

Takuma: It failed.

Tim: Well, no, that makes sense. Now you know. Okay, excellent. Let’s talk about Japan in general. For someone who is very passionate about, and his spent his career so far in consumer electronics, Japan, in the 70s, the 80s, was amazingly innovative—Panasonic, Sony, all of these companies were introducing these creative projects that were capturing the imaginations of the world. High quality, low cost, really innovative, but something happened and they stopped. So from your perspective, what do you think happened to make Japan fall behind, and how do you think Japan can change to catch up and once again become a world leader in this?

Takuma: I think that’s a very nearly way to reborn Japan. Of course, you are correct when you say in the 70s, 80s, the Japanese hardware situation, not only consumer electronics—it included cars and some other business that were really growing up and really innovative—but not so long, the future, just 10 years, 5 years, it’s so difficult I think. The 70s or 80s, the Japanese government is completely following up, at that time, startup guys, Mr. Honda or Mr. Toyota, and we are really tightening up with the government to change the importing and exporting issues. But right now, Japan was already big country, regulating is really tough and really tight, and also not so much, passionate entrepreneurs are not available right now.

Tim: So you think it just got too comfortable, the relationships with the government and the existing market just got too comfortable for the big companies?

Takuma: Yes. And difficult to bring back to the top runner. So we have to focus on specialized areas.

Tim: So right now, the outlook is pessimistic and negative?

Takuma: Yes, very pessimistic and negative.

Tim: So what’s the fix? How do we fix it?

Takuma: We lost so many missing pieces. The one is investing, the money, and let’s make companies also. Panasonic doesn’t take any risk. So one of the things of the Panasonic guys, the robot, the automatic robot vacuum cleaner.

Tim: Right, the Roomba.

Takuma: Yeah, Roomba. So once Roomba is coming to the market, 2003-04, but the Panasonic, Hitachi, Sharp, every Japanese consumer electronics brand is just looking—don’t do. You know the reason? Because in Japan, the elder person, the house has odor and odor has candles available. And once the automatic vacuum cleaner hit to the odor, the candle will be falling down, and the Japanese house is made of paper, really easy to burn out. That’s why they don’t try the automatic vacuum cleaner.

Tim: You make a really interesting point because this is something I have noticed about discussing new projects and new ventures with Japanese companies, the large Japanese companies I’ve worked with, everyone will tend to think of reasons why it won’t work. If you get a table with 5 people around you, everyone will be trying to come up with as many reasons as possible why it won’t work.

Takuma: So that’s one of the missing piece, but there are finances also, and every time I talk the risk management or something like that. Of course, everyone says no passion is going down, so I think the passion is one of the missing pieces.

Tim: I think we are seeing some changes. For example, the same model that you use to test market products, even Sony has been experimenting with this. Sony has experimented with using crowd funding to try what they thought was really crazy, risky products. So do you think we might be seeing more of that, more of the same model that Cerevo is using, just having bigger companies use it?

Takuma: Maybe bigger companies will use the same way, but they are a huge battleship, container ship. Once they decide to go around, they have to spend one day. From what I understand, they are just turning.

Tim: Maybe they’ve started their turn already.

Takuma: But the good news is that right now, we are collaborating with a huge company, the DoCoMo, Panasonic, Toshiba, and they like to trial and error using the crowd funding, or using very small proof of concept mass production, but they can’t do it right now because they are now turning. But once my startup company and huge companies collaborate with the project, we can really easily make a proof of concept product in the market. Last year, we launched a product with Panasonic and we launched a product with Toshiba, and this year, we will launch a product with DoCoMo.

Tim: All right, well that sounds very, not pessimistic at all. It sounds optimistic that things are slowly starting to turn. Well, listen, before we wrap up for today, I want to ask you what I call my magic wand question. If I gave you a magic wand and I told you you could change anything about Japan, anything at all, the education system, the laws, the way people think, to make it better for startups, what would you change?

Takuma: If I received that question 2 years before, maybe I said it’s the education system. But today, the education system was slightly changed and the people’s mind was changed in these two years. So I have to choose the other magic wand.

Tim: How has it changed in the last 2 years?

Takuma: It’s really simple. Two years before, startup CEO is not here, but the Prime Minister and some other guys are changing the culture. So nowadays, if I’m going to ask to Tokyo University guys or Kyoto University guys, maybe they are feeling—I don’t know exactly the answer—but they are feeling the image is the entrepreneur is cool. It’s completely changed.

Tim: That’s true. There’s a lot more role models. So you have to use your magic wand on something else.

Takuma: To change the different language from the Japanese language.

Tim: To English?

Takuma: Yeah, not Chinese.

Tim: How would that change things? Why would that be better?

Takuma: I thought many different startup companies and entrepreneurs and huge company guys. Some of the guys have a very good idea and some of the guys have a very good prototype, but they can’t introduce the good things to the global. If they can’t speak their English very well—so I have to change not only the language, but communication skill is English. Because U.S. guys is—not only U.S. guys, but Chinese also—they are really passionate, they have a very high communication skill. That’s a very important skill in startup business and entrepreneurs.

Tim: You think a lot of Japanese startups are not going global simply because they lack that communication ability?

Takuma: In part, they have many different type of reasons. Not only language and communication, but one of the important parts is language and communication.

Tim: Hopefully we’ll be seeing more of that and more of mobile startups going forward.

Takuma: And also, I like to use the magic wand for me. I have to change my English skills.

Tim: Well, I think you’ve done pretty well.

Takuma: Thank you so much.

Tim: Thank you so much for sitting down.

[Outro]

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And we’re back.

If someone had simply told me about Cerevo’s marketing approach, at first I would have said it was just wishful thinking. Simply building really cool things and then showing them off at major trade shows sounds like a recipe for frustration and failure but Cerevo has made it work and if you listen closely to Takuma, it was pretty clear that the actual strategy was a much more proactive and complex one than his first description.

I found it particularly interesting that he found the international trade shows were the best way for a Japanese IOT company to attract the attention of the Japanese media. While it’s true that Japan is very outward-looking in terms of trying to spot technology trends, I also found Cerevo’s business structure to be particularly interesting. They are set up less as a consumer electronics company and more like a hardware IOT accelerator, with small independent teams responsible for the development, growth, and success of each product.

The missing component to this model is, of course, that the team members themselves are employees and don’t have equity in the projects. I don’t think that structure would work in the U.S., but it doesn’t seem to be hurting them here. In fact, this situation is not unusual in Japan. Startup stock options are becoming more common, but they are far from universal here.

Still though, it makes a lot of sense that Cerevo does not want to be and probably cannot be a true mass market manufacturer. But their strategy of building cool technology, building just enough of them to prove themselves in the marketplace, and then selling the project to a true mass market manufacturer in that space seems to be an excellent one and one in which they are already beginning to success.

If you want to know more about the internet of things, or Cerevo, or cool geeky gadgets in general, Takuma and I would love to hear from you. So come by DisruptingJapan.com/show067 and let’s talk about it. When you drop by, you’ll find all the links and sites that Takuma and I talked about and much, much more in the resources section of the post.

But most of all, thanks for listening and thank you for letting people interested in Japanese start-ups know about the show.

I’m Tim Romero and thanks for listening to Disrupting Japan.