We have always loved maps. Maps combine artistry and utility in a way that very few disciplines allow.

But of course, it’s always been a trade-off. The beautiful, ornate maps from centuries past told you where the major landmasses were, but provided little detail. And today’s GPS-based maps provide an unprecedented level of accuracy but uninspiring in their presentation.

Machi Takahashi, founder and CEO of Stroly, has a best-of-both world’s solution.

We also talk in-depth about the unique challenges facing women founders in Japan, and what can be done to make things better for everyone.

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

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Show Notes

  • Strolling with stories: How Stroly works
  • How to make Google Maps community-oriented
  • How Stroly pivoted to prosperity during Covid-19
  • How industry will be using VR after Covid-19 ends
  • Why corporate spinouts are so hard in Japan
  • Why Japan has problems commercializing fundamental research
  • The challenges female founders face in Japan
  • How Japanese women are taught they should not really be CEOs
  • Why Japanese startups need to think globally

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Transcript

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

One of the most common themes on Disrupting Japan is the intersection of tradition and high technology. Stories about what things that we’ve known and loved for generations can teach us about how we should use technology today.

Now, I’m not sure how much of this is due to the fact that I personally find such startups fascinating and important, and how much of it is due to the fact that there’s something about Japanese startups and Japanese culture that encourages and appreciates these kinds of innovations.

Well, today, we sit down with Machi Takahashi of Stroly and we discussed that while mobile GPS mapping is awesome, there’s something important that we’ve lost in our rapid adoption of that technology and it’s something that Stroly is bringing back.

We also look into how COVID is not only changing things but changing some things for the better and how this is really a time for innovative startups to shine.

And we also talk in some detail about the challenges women founders face in Japan and some simple ways to improve the situation. But you know, Machi tells that story much better than I can, so let’s get right to the interview.

Interview

Tim: I’m sitting here with Machi Takahashi, the CEO of Stroly, so thanks for sitting down with me.

Machi: Thank you, Tim, for having me.

Tim: Stroly makes custom maps that are overlaid onto Google Maps, but I think you can explain it a lot better than I can, so why don’t you explain briefly what Stroly is, how it works?

Machi: Okay, sure. So, Stroly is our company name and also the name of our service and it means to stroll with story, so we came up with this idea to combine illustrated maps with GPS positioning while we were developing a new guide system for a theme park, and instead of choosing Google Maps, we chose to use this beautiful hand-drawn illustrated map of this theme park and we came up with this technology to combine these latitudes and longitudes on top of these illustrated maps.

Tim: Okay, so when people are visiting the theme park, instead of looking at Google Maps or Apple Maps as they are wandering around the park, they would look at those kind of cute hand-drawn illustrated maps and they’d navigate on top of that?

Machi: Right, exactly. So, we have this technology where we can adapt these GPS positioning on top of any kind of a map in any form so people can actually exaggerate some of the spots in the map, and then actually draw some of the spots in the map.

Tim: Are most of your customers in tourism and entertainment?

Machi: Yes, most of them are in tourism and also, some of them are in transportation and also in area development. Well, our platform is open, so you can start free and people can upload their maps themselves, so a lot of people who upload their maps themselves are not necessarily business customers, so they could be just some community leaders who want to show great things about their cities. But for the business users, it’s mostly in the travel area.

Tim: So you mentioned people can upload their own maps. How difficult is the system to use? Does it require…

Machi: It’s very easy. Even some people who work for, I don’t know, like a library – I shouldn’t say that, but I don’t know –

Tim: Non-programmers, non-programmers, yeah, that’s right.

Machi: Non-programmers, right, exactly, so it’s very easy. People who draw their maps, they can upload the image of the map and they would have this correlation of positions on top of these maps, so they put some thoughts on the map and Stroly will show all the other places with GPS positioning.

Tim: Oh, I see, so they would kind of like pin a few key points and then Stroly will sort of interpolate the others and so people can see their position on the cute illustrated map?

Machi: Exactly.

Tim: So far, you mentioned a few cases of the people creating their own maps. I mean, what kind of maps are they uploading?

Machi: During this COVID-19, people actually suddenly started realizing how important their local business is. Some designers have started drawing their own city or their own neighborhood with the restaurants or the food stands where you can take your food out. So, some maps were made to empower these local communities or local businesses.

Tim: Wow.

Machi: That’s something we didn’t see before this COVID-19, so that was quite interesting.

Tim: So from the consumer side, the user side, it’s just a chance to feel, I don’t know, more connected or less standard, more special. Is that the –

Machi: I think so because if you imagine like, moving into a new town and you have this map that shows how this small business is doing around your neighborhood or like these attractive places, small places where if you go into just one alley down, then you would find them, then it just makes your life so much richer and more interesting.

Tim: You know, it is interesting because kind of the tourism apps, those illustrated maps, in a sense, they serve a really different purpose.

Machi: Yeah, it does.

Tim: Like, Google Maps has replaced a lot of kind of the street maps that used to be for sale at every gas station in the world, but in tourism, they never would use a street map, they always would use these kind of illustrated and fun, engaging maps, so there’s definitely something there.

Machi: Yeah, I think so. These maps have their own points of views. It kind of sets up the context of the city. With  this kind of viewpoint, you would start to see different things in the city.

Tim: So, how do you get users onto the app? How do you get users using Stroly? How do they find out about it?

Machi: Our service is not an app, it’s a web-based service, so these maps actually work on the websites. We encourage these paper map creators to put a little QR code on their paper map so that people can actually read it and they can start immediately with their browser on their phones.

Tim: So, this is like, really cool technology. It’s fun, but what’s your business model on it? How do you make money?

Machi: We have this B2B service. If you are using Stroly for business, you obviously want to put your brand on top of these maps, and we help them put their logos on their maps and we also unlock the foot travel data, how these maps are used.

Tim: Okay, so you’ve got a kind of data collection, data analytics component to this as well?

Machi: Yes. The users, they have their GPS positioning on while they are using our map and we have analytical data of how people tend to use these maps.

Tim: From your customers’ point of view, do they view the main value of Stroly as being the presentation, the ability to show these lovely kind of illustrated maps or do they see the main value coming from those data analytics?

Machi: I think the first value comes from presentation of it, yeah, because you cannot control how Google Maps would look.

Tim: Well, yeah, everything looks the same on Google Maps or Apple Maps, right? Just, everyone in the world has the same presentation and that’s useful too, but it’s not good for branding.

Machi: Right, right, exactly. First, it’s the presentation and nowadays, because of COVID-19, users cannot come to their park or cannot come to the areas.

Tim: Yeah, that is something I wanted to ask you about, and since your business is so focused on tourism, COVID-19 must have had a huge impact on your business and your startup.

Machi: Yeah, it did. Well, kind of hit directly to our clients and we were actually planning to have a lot of things coming up for the Olympics and Paralympics, of course. All these got canceled and we had to develop our service so that we can help our clients stay connected with their users.

Tim: How do you do that? Because I mean, Maps is such a – you know, it’s such a…

Machi: I know. Location-based .

Tim: I can’t think of anything that is more directly like being there, right?

Machi: But the thing is, we said Stroly maps are more about branding or just communicating how great the place can be to the users. So, what we did is that we’ve created this virtual map service where people can actually come into the map with an avatar and there is a tour guide who is standing in the map showing around how the park looks like. Actually, we have this one experiment with the theme park already, the same theme park, and they’ve filmed the movie in the themepark so that this guide person of this virtual map can show around where this film was taking, and a lot of people actually applied to participate in the virtual tour, and they enjoyed it very much. And the comments from the users were very positive. They all said they wanted to actually come to the theme park after this COVID-19 is gone. I think it was a great success.

Tim: It is interesting how… Well, I mean, crisis always brings out innovation.

Machi: Right.

Tim: And something like the theme parks, it’s something they might never have tried with COVID.

Machi: Exactly.

Tim: Let me ask you, is that just like a one-off creative idea by one customer or do you see this as a trend? Is it something that’s happening, these kind of virtual tours, is that happening?

Machi: Oh, I think it’s happening everywhere, even when the COVID-19 is gone, we still have to have some kind of virtual tour, keep the users more engaged to the place. Also great for planning and also for –

Tim: So you think even after COVID-19 is over and the world returns to something like normal, these kinds of virtual tours are going to continue?

Machi: I think so, yeah. I think it’s going to be more mature, it’s going to get much more exciting and fun, and also, encourage people to go to the real place if you have a good virtual tour.

Tim: Excellent. Well, that’s really – I mean –

Machi: Yeah, we had this idea of having this virtual tour before COVID but we never implemented it because there were no needs from our clients.

Tim: Yeah, there is no demand for it, right?

Machi: No, no, no, no, and we suggested it beforehand as well but nobody really cared about it. Now, it’s more like a popular thing.

Tim: Yeah, I mean, innovations and new ideas are always coming from the startup side, so I’m glad to hear that you guys are pivoting, and not only pivoting but you’re actually kind of changing the industry for the better that way.

Machi: Yeah.

Tim: Awesome. Hey, listen, let’s talk a bit about you.

Machi: Okay.

Tim: Before you started Stroly, you were president of ATR Creative for a long time. You were making like, human-robot interface type work?

Machi: Yes, so Stroly was originally a part of this research institute called Advanced Telecommunications Research Institute in Kyoto, and they had some subsidiary companies and ATR Creative was one of them, and what we did in this company was to transfer the basic technologies into commercial-based service or business, and some of them completely failed. Research, especially.

Tim: Especially with new technology, so was Stroly something that came out of this or was Stroly something completely different that you started?

Machi: We had this AI lab in this research institute where we had this recommendation system and we were turning this into a guide system in a museum and we were starting to sell that, and one of our clients happened to be – not the museum but a theme park and that’s how we came up with the idea of Stroly. As we were turning it into a web service, we needed more investment and we also needed more freedom to hire people to do a lot of things outside of ATR.

Tim: So, you spun it out into a separate venture company?

Machi: Yes, so we’ve bought up the company in 2016 ourselves and became independent.

Tim: You know, that’s interesting. I’ve talked with a number of startup founders but I mean, corporate spin outs are hard.

Machi: Yeah, it is.

Tim: But the thing I find most mysterious about this, the corporate spin outs that are more traditional that you just basically have this, oh, I don’t know, this business unit that gets spun out and they’re never profitable and they are just like, employing – there’s no real reason to spin them out, those tend to be successful and kept on the balance sheet for decades, but the truly successful startups, once things start taking off, it seems like the parent company is more than happy to sell those startups to the management team, which I don’t understand that. Do you know what I mean? It’s like, wow, we’ve got something, it’s working, there’s interest. Let’s sell it now before it takes off. Why? Why did they want to sell?

Machi: Right. I think they realize that there’s a lot of risk to really roll. In my case, it was not a company but it’s more like a research institute, so it’s more like a university or an academy type of place.

Tim: So they didn’t really have an interest in managing a company of any type?

Machi: Yeah. They really wanted some of the research ideas to grow and expand but we also realized that we couldn’t do it within the research company because we were so good at doing zero to one, and also, maybe one to something but to go like from 10 to 100, it’s just not –

Tim: You know, this is interesting because Japan is really, really good at core research, at fundamental research. There’s just amazing stuff going on, but there is a real challenge in commercializing it and productizing it and turning this research into meaningful companies, and do you think this kind of model is something that like, ATR is going to do in the future or similar companies will do in the future? Will they try to spin off little companies?

Machi: I think so. I felt that it’s really, really hard for researchers to become best friends with these business people.

Tim: So it’s very important to get the two together but it’s very difficult.

Machi: I know, I know, it’s very difficult. With our team, my cofounder, he actually used to be a researcher but he really opened up the business world. I also was looking for some kind of business person who could take our research to big business, but I couldn’t find anyone, like it was so hard to find somebody with the same level of passion, the same level of knowledge, and the business people who came to our labs were only into business and not really into, how do you call it? Like, invention, it’s really important for us and also, there is like, innovation. People who come from this innovation world, they don’t care so much about invention sometimes.

Tim: Those are two – explain the difference between those two, what’s the difference between invention and innovation?

Machi: Innovation is something that really accelerates making innovation into business, and some people actually do invention while innovating something but we came with the invention first, so it was really hard to get this invention to get into this cycle of innovation.

Tim: Yeah, no, I agree with you, so invention is just coming up with a new idea whereas innovation is doing something useful with that idea, bringing that idea into the world, and it is so much harder than the invention.

Machi: Yeah, it is, but also, invention is also very hard because I worked in the research institute, I understand how hard it is to invent something that is so unique that doesn’t exist in the rest of the world.

Tim: Actually, sometimes, that kind of invention can be the most difficult thing to turn into innovation.

Machi: Totally, yeah!

Tim: Because something that’s brand-new that people just don’t know what to do with, it’s very hard to convince people to try it.

Machi: Definitely. So the first time when we came up with the idea, even turning illustration maps into digital, a lot of people from this business side told us that, “Oh, but who’s gonna use it and who’s going to pay for it? And what’s the business model?” So we had to start proving ourselves that it works and there’s a demand for it. So, that’s how we had to become independent from the research lab, because we had to do this innovation part ourselves.

Tim: Right, so did the core team all come from the research lab or was it some from outside and some from the labs?

Machi: Some people came from the lab and some people came from outside, and when we became independent from ATR, the first thing I did was to ask some people from the business side to join our company so that we can actually start turning this into like a real business model.

Tim: Alright. Yeah, I also want to ask you about the situation of women founders in Japan because I know you’re very active in the space, you run the Japan chapter of Wize24 and are very supportive of women founders, so what are some of the challenges that women founders face in Japan?

Machi: Women founders in Japan in the information technology field is very, very small. We have very few of us. That’s why we have little access to funding and also for the ecosystem in general.

Tim: So why aren’t there more women entrepreneurs in Japan?

Machi: I want to ask you.

Tim: You want to ask me? I’m not sure. I mean, it is… I mean, the numbers do bear it out, even compared with the rest of Asia, there is a much smaller percentage of women founders in Japan, there is a much smaller percentage of women who say they want to be startup founders in Japan and I’m not sure. I don’t have the answer.

Machi: I don’t have a good answer either, and I have this feeling that it’s not that – I think women are not used to taking this chance to scale, you know what I mean?

Tim: You mean do you think women are reluctant to like, be in leadership roles?

Machi: I think women are so used to working as like, behind and not in the front. When they are asked to go front, they just go, “Oh, no, no, no, no, I’m not worthy of it,” or “I’m not ready for it.” And once you’re in front, then you get used to it and you start to feel like you’re the one who is taking the leadership or you’re the one who is in control of this place, but a lot of people don’t take that as like a good opportunity to do so.

Tim: Do you think the biggest problems are internal, the way women think about themselves or the external, the way, say VCs think about women founders or things like that?

Machi: I think it’s both ways because there’s not enough women founders who actually visit VCs. I don’t think VCs care so much about it but at the same time, it’s about having diversity anywhere in the society. In Japan, it’s the older men who tend to be in the higher position, so not only women but also younger people don’t want to take their chance so much in that kind of culture.

Tim: Yeah, I know what you mean but I think in Japan, there is kind of an image of a typical Japanese founder, right? And they’re always men, late 20s, early 30s, went to good school, dresses very casually, speaks English, and that’s kind of the image everyone has of a founder, and so yeah, the woman founders just don’t fit.

Machi: Yeah, they don’t fit into the image and they are not in that community either. Okay, so one thing is that women, they differ but also they just simply don’t have access to the information because they are not part of the community. This is one experience that I had when I became a CEO of this company and I was asked to go to this female founders community event, and these people who were there were all running small, medium businesses, like running a store.

Tim: Family business kind of thing?

Machi: Family business, pancake shop, or things like that. So if that’s the community that you think that you belong to, then you never have access to the VCs or you never have the idea of turning your business into something as a startup instead of doing a small business.

Tim: Yeah, so actually, a number of women founders, a number of my friends who are women founders and have been on the show have mentioned that they’re very skeptical of a lot of the women founders programs and support systems in Japan saying they find it kind of, I don’t know, patronizing, like they’ll talk about how women should do startups focused on cosmetics or fashion, right?

Machi: Right, right, yeah.

Tim: And there’s a lot of that. So, what kinds of things would actually benefit women founders in Japan?

Machi: Something that helped me was that I got access to Women Startup Lab in Silicon Valley.

Tim: Ari’s program, yeah.

Machi: Right. It was five years ago and there’s no other serious startup acceleration programs in Japan either, so I took the chance to go to Silicon Valley and took her program, and there, I finally learned what the difference between small-business and the startup is, or to get funds or how to become independent from your parent company, like how it’s important to have your own stock, how to hire people. This is like, kind of basic knowledge but I had no access to it until I joined that program.

Tim: So it is – I mean, the Women Startup Lab is a great program but like, all of the things you’ve mentioned – I mean, the information is out there, it’s online, and so I don’t know, was it really beneficial to have it in like a women’s focused program? Was it like having role models? What was the difference?

Machi: The difference was that I felt like I could be one. Like, it was not something that was happening out there but it was more like, oh, now I feel like I could become a CEO, finally. You know what I mean?

Tim: Yeah, yeah, yeah.

Machi: It’s like to me, other founders from all around the world who are also female and also like, in the tech field and all these things, I finally realized that, maybe I could do this, like maybe I could take this role and pursue my business or my career in this field instead of like trying to find somebody else who could do the role.

Tim: It wasn’t so much the information, it was the fact that instead of seeing a bunch of, I don’t know, Japanese guys in their late 20s or early 30s, it was seeing other women role models? Was that really the kind of –

Machi: Yeah, role models, and maybe the other startup founders in the same stage who had similar issues and similar problems. Yeah, like having the same people in the same batch, that’s very, very helpful for me. Back then, all the female meetups in Japan were for those people who wanted to start a mobile pancake business.

Tim: Family business?

Machi: Family business. So I felt like I had to fit into that or if I’ve been to a startup event, it felt like I didn’t fit in, so yeah, it was the first time I felt like oh, this could be somewhere I could start my own business.

Tim: So then, in Japan, the most useful thing would be role models, a community of peers?

Machi: I think so, yeah, having other people you could talk to and ask similar questions in the same stage. Like, I have a lot of male startup CEO friends as well, so I talk to them as well but for example, I don’t travel with them or I don’t spend too much time with them, but with female founders, it’s more like we could talk like, all night, like being in pajamas and talk about your business, you know what I mean?

Tim: Yeah, I know. It’s not so much just the business exchange information, it’s about feeling close and almost like mentoring and you feel safe enough to open up.

Machi: Right, right, right, exactly.

Tim: That makes a lot of sense.

Well, listen, Machi, before I let you go, I want to ask you what I call my “Magic Wand” question, and that is, if I gave you a magic wand and I told you that you could change one thing about Japan, anything at all – the education system, the way people think about risk, the status of women in Japan – anything at all to make things better for startups in Japan, what would you change?

Machi: One thing is that believing in success globally first instead of success in Japan first and then go global.

Tim: So start out with like a global mindset from the beginning?

Machi: Totally, yeah.

Tim: You know, that’s something I hear a lot not only from founders but even from city governments and national governments. Is that something you see changing? Do you think that founders are more thinking global or is it still very much Japan market-focused?

Machi: I think it’s changing in the last few years, but we still have this mindset where we think that we have to succeed in Japan first because that’s less risk than going abroad.

Tim: So why is it important to change that mindset?

Machi: Because you lose your chance to succeed globally while you’re struggling in Japan. You struggle anyway, so why not do it like –

Tim: Well, no, but I hear that – actually, I agree with you, but one of the things, particularly VCs would say when they are trying to push a company towards the IPO track, they’ll say, “You know, expanding globally, it’s complicated, it takes a lot of capital, just focus on Japan and when that’s stable and safe, and then you can go overseas,” so why is that a bad strategy?

Machi: Yeah. You just get old, you know? As a founder. You start to lose the same passion, like the same motivation.

Tim: So that success in the Japanese market, that safety makes you less likely to take risks?

Machi: I think so.

Tim: That makes sense, yeah, yeah.

Machi: I mean, if you become successful enough in Japan, why go abroad and take more risk? Because of that, companies don’t take the risk to hire staff with diverse backgrounds or they don’t do a lot of things because of that.

Tim: Well, yeah, and I think it’s diversity not only of staff but if you go outside of Japan quickly, you very quickly understand what parts of your product and service are attractive overseas and what isn’t, and it’s always easier to fix things early on in the company lifecycle.

Machi: Totally, yeah, definitely. So, that’s why we have a team outside of Japan who are constantly communicating with the people who are submitting maps.

Tim: Do you see that changing at all? Do you think founders are still too focused on Japan or more looking overseas?

Machi: I don’t think so. I think that we are looking more into overseas but there’s always the language problem and also the funding problem, and if you get funding within Japan, like you said, the IPO track is there. I mean, I don’t think it’s a bad thing. It’s a great thing if you become successful in Japan, but it’s just that you have to really think about going global at the same time.

Tim: We were talking before about role models. You know, until now, all of the successful companies had built their business and IPOed in Japan, but I think as we see more and more successful startups building businesses overseas, more founders will follow that.

Machi: I know, I know. So, yeah, and also yeah, having access to that kind of founders or to that community, and that’s why I’m doing the Wize24, because we need to connect with the founders outside of Japan to be aware of what’s happening around the world instead of just talking with each other in Japan.

Tim: Fantastic.

Well, listen, Machi, thank you so much for sitting down with me virtually. Thanks so much.

Machi: Thank you.

Tim: And we’re back.

Outtro

Crisis forces us to try new things.

Let’s face it, people don’t really like change, even the most vocal champions of disruption are always talking about the value of disrupting other companies’ business models, not their own. In general, we change when we are forced to change. And over the past few months, we’ve seen Japanese firms adopt Work from Home and teleconferencing after years or even decades of focused groups and research showing that Work from Home was simply not possible.

But of course, it always was. And now that we are being forced to change and everyone knows it’s possible. These same companies are starting to announce that they’ll continue such programs, even after the coronavirus and lockdowns have passed.

As Machi explained, Stroly’s pivot to VR was not so much a pivot but something they had wanted their customers to try for a long time. The users love the online experience. It improves branding, it makes them more likely to visit the off-line destination, and this, this is something that will not only continue after the coronavirus has passed but will become a standard part of the marketing toolkit for the travel and tourism industry.

But of course, adopting new technology doesn’t mean, or at least, it shouldn’t mean throwing away the past. That brings us back to Stroly’s core appeal, which brings us back to maps.

Now, I’ve always loved maps, not Google Maps or Apple Maps. I mean, those are awesome, but I mean older maps, paper maps with all their inaccuracies, omissions, and exaggerations. In fact, I think we love these maps because of their inaccuracies. From the happy pastels of tourist city maps to the thick high-contrast lines of political maps, to ancient navigation charts with unknown areas marked by the words ‘here there be dragons.’

These maps tell us as much about the society that created them as they do about the world they supposedly represent. The uncluttered consistent universal layout of Google Maps or Road Atlas is great for telling us where we are, but not why we’re here. They say nothing about who we are and our role in the story.

And that’s really the appeal of Stroly. It pushes the utility and the technology back where it belongs: behind the scenes. The user interface, no, no, the human interface is the kind of maps that we have used and loved for centuries.

In a way, this is technology at its very best. It’s a technology that helps us get where we’re going without forgetting who we are.

If you want to talk more about maps or female founders in Japan, Machi and I would love to hear from you, so come by DisruptingJapan.com/show169 and let’s talk about it. If you leave a comment, I guarantee, Machi or I, or maybe both will respond, and hey, if you get the chance, check us out on LinkedIn or Facebook but even better, if you like the show, tell people about it. Disrupting Japan is my labor of love. It’s free forever and we have no advertising budget. People hear about the podcast because listeners like you enjoy it and they tell their friends about it.

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

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