Masanori Hashimoto is the hardest woking slacker in Fukuoka. He’s bootstrapped a collaborative diagramming company that is growing internationally and founded Myojyowaraku, the largest technology, music and arts festival this side of South By Southwest.

Masa and I talk a lot about the importance of work-life balance, and Masa puts almost as much effort into supporting the startup, technology and arts scene in Fukuoka as he does building his own company. Globally, the Japanese have a reputation as being a rather uncreative people, but if you get a chance to attend an event like Myojyowaraku, you’ll see how unfounded that reputation is.

We talk a lot about the unique startup ecosystem in Fukuoka and the possibility that future Japanese companies will be led by teams rather than kings.

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Show Notes for Startups

  • Why Columbia and Taipei were NuLabs first export markets
  • Why you sold stop calling Fukuoka (or anywhere else) “The Silicon Valley of Japan”
  • What is the most effective way for governments to support startups
  • Why your team will make or break your company
  • A new, socially responsible startup exit event

Links from the Founder

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Transcript from Japan

Tim:    Welcome to disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I am Tim Romero and thanks for listening. Today we sit down with Masanori Hashimoto of NuLab. A man I like to call “the hardest working slacker in Fukuoka” no one works so hard to maintain a work life balance, and we will talk a lot about some of the arts projects and the start of a community that he is working so hard to build in Fukuoka.

NuLab actually makes three different products and it’s best for me to quickly run through them now because we don’t really give much of an introduction in the discussion itself.  There is Cacoo which is his collaborative diagraming program. There is Backlog which is the collaborative project management software, and there is Type Talk which is a multi-user collaborative chat.

Those of you who know me know I have a soft spot in my heart for Fukuoka, and in fact I think of all the startup communities in Japan Fukuoka really is doing it right. To be sure it’s a small community. What is unique in Fukuoka is that it is the only start up community in Japan of any size that is really led by the founders themselves. In Tokyo the community is largely led by the venture capitalists. In Osaka it is still largely being led by government initiatives. And I think that perhaps you need a certain amount of distance from government and financial power in order to truly innovate. And, I think what is happening in Fukuoka is that the government really does have very few resources to invest in startups. So, they do what governments really do best, they shine a light on their activities. They will make event space available as long as the community itself takes the initiative. And as a result there is a disproportionate number of innovative starts up companies coming out of Fukuoka these days.

And the other thing I will say that I truly respect about Fukuoka when startups from Osaka or say Sapporo get big, they tend to move to Tokyo.Those in  Fukuoka however tends to open a sales office in Tokyo but keep the headquarters in Fukuoka.

Now we will also talk about the event called Myojowaraku that Masa is running, it’s an event modeled after South by Southwest. It’s more like South by South East Asia. And it is an incredible combination of technology and arts and music. And, Japan overseas has a somewhat undeserved reputation of being uncreative. But, if you have any time to visit the country and can attend and event like Myojo Waraku or Design Fiesta in Tokyo you will radically change your opinion. There is a real depth of creativity in Japan but it often doesn’t bubble up into the higher reaches, but still there is wonderful arts festivals here.

So without further ado let’s sit down and met Masa.

— Interview Starts —

Tim:    So I am sitting here with Masanori Hashimoto of NuLab thanks for sitting down with us Masa.

Masa:  Thank you.

Tim:    So NuLab makes collaboration tool, your collaborative diagraming, project management, and actually rather than having me NuLab it makes more sense for you to explain it..

Masa:  Our Company named NuLab is provides three collaboration services: Back Log, it is project management tool, and the other one is Cacoo, it is diagraming tool. You can share drawing diagram in real time. Finally we released – called Type Talk. It can create good collaboration on the Type talk with your co-workers and your friends.

Tim:    Now what’s interesting about NuLab is you have customers that are not just in Japan they are all over the world. So there are many project management tools available on the internet. There is many diagraming tools. So what is special about these tools that lead to their popularity in Japan and abroad? What’s unique about them?

Masa:  Cacoo has users all over the world, but Back Log mainly Japan; few users living outside of Japan. Cacoo it has 1.5 million users now. 85% users from outside of Japan.

Tim:    So 85% outside of Japan?

Masa:  Yeah. Many in the US, next maybe Columbia.

Tim:    Columbia? That’s interesting. There has to be a story there, why Columbia?

Masa:  We don’t know, but we have many users in Columbia.

Tim:    Okay, you started NuLab without venture funding?

Masa:  Yes.

Tim:    You started as a bootstrap company?

Masa:  Mhm.

Tim:    So NuLab originally made it was doing outsource development for other company’s right?

Masa:  Yes

Tim:    And if I recall you made Back Log as a free tool?

Masa:  Yes.

Tim:    What made you decide to change into a product focused company? And second how did you change from giving away a free tool to making people pay for software?

Masa:  First question, we want to expand our brand. Customer is not able to expand our brand.

Tim:    What do you mean you wanted to expand your brand?

Masa:  We want to work as an artist.

Tim:    So you just wanted to follow your own vision? Create your own software instead of having other people tell you what software to make?

Masa:  Yes.

Tim:    That makes sense. So Cacoo has been your real biggest overseas success.

Masa:  Yes, thank you .

Tim:    It sounds like all of your marketing has been organic, it’s all social media, its customer referrals, its word of mouth. So where are your major markets now? It’s Japan, Columbia?

Masa:  There is organic marketing in Taiwan.

Tim:    Taiwan?

Masa:  Media mentioned our status of Cacoo. We have many people from overseas. Also Tech Crunch. Next step we launched Cacoo for Chrome store. Chrome store brings many users to Kakou.

Tim:    Cacoo  just for our listeners is the collaborative diagraming and planning tool right?

Masa:  Mhm.

Tim:    So for a relatively small company you have teams in a lot of different countries don’t you?

Masa:  Yeah.

Tim:    Where do you have staff? You have offices In Japan and?

Masa:  Our head office in Fukuoka, and many branches in Tokyo, Kyoto, Singapore, Taiwan, and recently launched a New York office.

Tim:    That’s right just a few weeks ago right?

Masa:  Oh yes.

Tim:    Well congratulations on that.

Masa:  Thank you. Maybe three weeks ago.

Tim:    It seems that there is almost a conflict between growing organically and then going global. So do you wait for interest to develop first and the move into a market? Or for example Singapore did you target Singapore as a market or did you follow your users who are already there?

Masa:  Already we have users in Asia. Singapore have country of Asia.

Tim:    So following your users.

Masa:  Yeah and to support.

Tim:    That makes sense. NuLab is very focused on building community and I noticed that you personally are very focused on community both here and Fukuoka and recently in Taiwan as well. And you’ve been doing several different cross country events between Fukuoka and Taiwan. Like the Myojo Waraku this Startup Weekend which we are out in the hallway talking. But the Myojo Waraku Event is particularly interesting in that it’s technology it’s art, its culture. Can you talk a little bit about that event and why you started it and what you are hoping to achieve.

Masa:  I wanted to go to South by South West, but I can’t go to South by Southwest because travel cost is very high. I cannot pay. I had one idea: we hold South by Southwest here.

Tim:    In Fukuoka. So you wanted to create your own South by Southwest.

Masa:  Yes.

Tim:    And how many years ago was that?

Masa:  Total attendance the first time was 1,200 attendees. Second time we have 3,500 attendees.

Tim:    And those are people from Japan and form the rest of Asia as well?

Masa:  Yeah came from Tokyo and Kyoto, of course Fukuoka, and foreign countries for example Singapore, Taiwan, Hong Kong.

Tim:    I’ve been a couple of times and just so I can explain it’s very different then South by Southwest but I think it has the same spirit if you will. It’s a lot of artists, it’s a lot of technology, a lot of startups. It’s just this very positive creative exhibit and conference for people. And this year you launched it in Taiwan in Taipei as well? How did that go?

Masa:  It was very exciting. We had a total of 5,000 people.

Tim:    For the first year in Taipei? Wow that is huge. Congratulations.

Masa:  Very biggest festival.

Tim:    So was it similar in Taipei with a lot of artists and technology?

Masa:  Yeah with Taipei startups maybe three or four came to the festival and many artists came to the events.

Tim:    That’s awesome. So from this year it’s going to be every other year between Taipei and Fukuoka? Changing back and forth?

Masa:  Yeah.

Tim:    That’s exciting.

Masa:  Taiwanese love Japanese culture.

Tim:    I’ve noticed that a number of people have told me that, that there is a similarity and a good will between Japanese and Taiwan in both business and culture. Why do you think that is?

Masa:  I don’t know. But they are global mind, Taiwanese are global mind.

Tim:    So global mind they are thinking globally?

Masa:  They can speak English very well. Of course more than me.

Tim:    No you are doing great!

Masa:  But I heard Taiwanese startups go to San Francisco about 20 companies in one year.

Tim:    So 20 Taiwanese companies a year are going to San Francisco.

Masa:  In Japan one company go to Silicon Valley, everybody–

Tim:    That is true it is still unusual. I think these days more and more people are moving. More and more start up founders in Japan are moving to San Francisco. Well actually let’s talk about Fukuoka and you know I love Fukuoka.

Masa:  Ah thank you.

Tim:    I do it’s just a great place. However, I hate the phrase that “the Silicon Valley of Japan”. I just hate that phrase.

Masa:  I also. But Silicon Valley is image of the future of Fukuoka.

Tim:    I think so. So let’s talk forget Silicon Valley for a minute. What do you think is going right in Fukuoka? Why do you think Fukuoka is so good for startups?

Masa:  Fukuoka is special area to begin a startup company easy.

Tim:    But I notice both the Fukuoka city mayor and the Fukuoka prefectural governor are both very supportive of startups and they both have separate programs to try to encourage startup in Fukuoka.

Masa:  I think there are creative people in Fukuoka city government. Very creative and very brave man.

Tim:    Well you don’t hear people say that about government officials. Creative and brave aren’t usually things you think about.

Masa:  They have strange ideas. Fukuoka sees our event and they get ideas from them. They say it’s a great festival and we want to make environment for technology people and creative people.

Tim:    So they were actually inspired by the event and trying to improve and cultivate on that.

Masa:  Yeah.

Tim:    Well that’s good. I’ve noticed startups in Fukuoka once they have become successful will open an office in Tokyo but the headquarters stays in Fukuoka.

Masa:  Yeah NuLab also.

Tim:    Yeah you guys also. Companies that start is Osaka they tend to move to Tokyo. I think it’s great and I think it’s a wonderful thing. Is there a reason for that? What’s the secret?

Masa:  I heard most of Fukuoka people are of this area, they don’t want to move to Tokyo.

Tim:    They just don’t want to leave.

Masa:  Because Fukuoka has quality of life.

Tim:    Having the successful entrepreneurs in Fukuoka I think really helps the new generation of entrepreneurs come up. And I think something that Osaka is really struggling with now.

Masa:  Really?

Tim:    I think so because all of the really successful entrepreneurs move to Tokyo.

Masa:  Oh.

Tim:    Well let me ask you this because you started NuLab 10 years ago.

Masa:  Already past 11 years ago.

Tim:    11 years oh okay. 11 years ago, things in Japan have changed so much in that time. What do you think is better or worse? How have things gotten better for starting a company in Japan?

Masa:  I think to start company needs three founders. Also NuLab has three founders. Three founders has three different important things.

Tim:    So each founder has a different set of skills.

Masa:  Our CTO is keeping technology current, our CMO focuses on marketing, and I am CEO I focus on team building and community.

Tim:    So you think the most important thing is getting the right team together?

Masa:  Yeah.

Tim:    So 10-11 years ago when you were first starting NuLab there wasn’t venture capital available easily at all. It was still very hard to start a startup in Japan. What do you think the most important change has been in the last 10 years?

Masa:  I think startups needs users not investment; users now. The startup try to grow around English and global marketing. If they can do it they can easily start the company.

Tim:    If I am understanding right you are saying if pretty much today any Japanese who has a global mind, a global vision can start a company? That certainly wasn’t the case 10-11 years ago when you were starting. Let me ask this then because it is so much easier today, and in fact some ways it seems too easy. But, what advice would you give a new Japanese founder? Someone who is just starting a company in Japan today?

Masa:  You go outside of Japan to talk foreign people, to meet foreign people, and you should know different cultures, different people, and different–

Tim:    So learn other perspectives, learn other ways of looking at problems?

Masa:  Mhm.

Tim:    Where should they go? Everyone says San Francisco.

Masa:  San Francisco, I think San Francisco is better but my first pick is New York. New York is very exciting city. I got passion from New York University to make global mind.

Tim:    So I guess anywhere outside of Japan whether it’s New York or London or Singapore would give you a different way of looking at problems in Japan?

Masa:  Yeah.

Tim:    But then you would want them to come back to Fukuoka to start a company?

Masa:  Yes. I love Fukuoka.

Tim:    I do.

Masa:  Many startups born in Fukuoka now much business come to Fukuoka now and they research start up culture in Fukuoka.

Tim:    So they are coming to learn, –they are coming not just looking for investment but also coming to try to learn the culture and what they are doing right?

Masa:  Yes.

Tim:    That’s good to know.

Masa:  But now Fukuoka startups don’t get investment because we don’t try investment because we have a high quality of life and if we get investment very, very work hard.

Tim:    So you are saying many of the startups don’t want to get investment because then they have to grow and work really hard?

Masa:  Mhm.

Tim:    I don’t know about that. I know and awful lot of founders here who are working very, very hard. I think that might be a little bit of pretend.

Masa:  CIO of IPO company they look unhappy.

Tim:    Yeah a lot of them do, it’s a stressful life.

Masa:  Maybe we need some new exits.

Tim:    Something besides the IPO or M&A.

Masa:  Yeah. I don’t have an idea but we need a new exit which is we don’t know yet.

Tim:    So an exit, what would the goal be? Something that would benefit the community?

Masa:  Mhm.

Tim:    So it wouldn’t have to grow huge just something that can continue to provide value to the community.

Masa:  Yeah.

Tim:    I don’t know what that would be, but it sounds good. It sounds like something worth doing. Another thing that has really changed in Fukuoka, –so the first time I came here was 2000, maybe 2001. And at that time Fukuoka was mostly outsourcing.

Masa:  From Tokyo.

Tim:    Companies in Tokyo and a little bit of Osaka but mostly Tokyo were having programmers in Fukuoka do the development work because it was cheaper. Well I guess that is what NuLab was doing at first to outsource development?

Masa:  Yeah.

Tim:    I didn’t come for a long time and then I came back again 3 years ago and the situation had changed completely. There were so many new companies here now. And I am sure some people are still doing outsourced work but most people seem to be wanting their own creative control.

Masa:  Yeah. Fukuoka company want to create new service by own hands and not outsourcing.

Tim:    So it sounds that your own ideal is a company that is creating something of value that is your’s, that is your design generating enough money to pay everyone, to grow and to keep building news things, but not necessarily IPOing or growing to the sky. So do you think a lot of founders in Fukuoka are starting companies with the goal of growing just big enough?

Masa:  Yeah.

Tim:    It sounds almost like building a company as a form of creativity, a kind of art just so you can continue building what you love.

Masa:  Mhm yeah.

Tim:    Do you think that’s common in Fukuoka that a lot of people start companies for that reason?

Masa:  Fukuoka has startup movement maybe from New York and we want to start up chance.

Tim:    So connecting different types of startups together? Collaboration again.

Masa:  I think diversity is very important things for startups and make new services. When Tokyo people come to Fukuoka we talk about something and create ideas and hold our events. We will go to London and we try to hold our event in London.

Tim:    Is that for the NuLab event or is that for Fukuoka?

Masa:  Fukuoka yes.

Tim:    Fukuoka really is, they seem to be making a really big effort to collaborate and network with other cities for startups.

Masa:  Fukuoka thinking also diversity is the most important thing.

Tim:    Yeah I think so. Diversity and collaboration. Well listen we are almost out of time, is there anything you want to talk about?

Masa:  Do you have an idea of where we can get success more?

Tim:    From Japan or from Fukuoka?

Masa:  Do you have an idea?

Tim:    Well if you read my articles and you listen to my podcasts you know I am very optimistic about Japan. I think there is a lot of good going on here. And I think that also outside of Japan to your point Japanese are having more of a global mind, a global vision so that’s really important but also other countries are getting more interested in Japanese startups.

Masa:  Really?

Tim:    Sure there are VC’s in London and San Francisco who are investing in Japan where 10-15 years ago a lot of VC’s would force the companies to move to their city before they invest. So I think yeah there are some very positive things about it that are very positive trends. Well what do you think is the one thing that should change to help Japan become stronger for entrepreneurs?

Masa:  I think CEO of Japanese startup needs progress and as- a country people and inside country people.

Tim:    So mentors?

Masa:  Mentors also but team.

Tim:    So it gets back to they need to have that team. But I guess that is kind of new in Japan. Traditionally the Shacho the president who is one person and ran his company like a king.

Masa:  Yeah king. It is wrong.

Tim:    I think you are right, that really has changed. 30 year ago there was one company founder. These days a lot of companies is 2-3 people with skills working together to found a company.

Masa:  Founders including me need support to employees with new ideas from employee works and encourage the growing of the service.

Tim:    So to actually listen to your employees and get ideas form them. Yeah I think that is true the idea from going bottom up is very important.

Masa:  Bottom up is very important. Most companies top down model. Top down model is killing employee’s ideas.

Tim:    But actually is guess that is like when you talked about the Fukuoka government they are all so willing to go bottom up. So they will look at ideas from your festivals and things and say “this is something we can us and we can help”. That is, –I don’t want to say that is new to Japanese culture, but traditionally everything is very top down in Japan isn’t it..

Masa:  Yeah top down model is killing the ideas and many services. No employees great they can make new services and new ideas more than founders.

Tim:    Yeah I think that is true. Hopefully more and more founders will be acting like a leader and not a king in the near future. What is the best way to get in touch with you if some of our listeners want to get in touch? Is it Facebook or the NuLab website?

Masa:  Mhm.

Tim:    Which is in English I remember.

Masa:  Yeah, please check our website and move to our team member’s introductions page.

Tim:    So the team member introduction page. Okay and we will put links up on the website and the show notes so people can find you. Well listen thanks for sitting down and talking to me, I know you are really busy today.

Masa:  Thank you.

Tim:    Okay great that’s it thanks a lot.

Masa:  Thank you.

— Interview Ends —

Tim:    And we are back. I think Masa’s point about the future of Japanese companies being led by teams rather than kinds is an excellent one. It’s something that hadn’t really occurred to me until we sat down to talk. But more and more startups really are led by teams. Decisions are being made more and more by groups rather than autocratic and top down, and that can only be good for Japan in the future.

If you want to see any of the resources or sites we talked about please drop by Disrupting Japan and it’s all that information is in the show notes. If you have some ideas on how we can improve the show let me know at Feedback at disruptingjapan.com. And if you like what we are doing tell people about it. I think there is no bigger compliment to me and the show the not tell people you like what we are doing or leave us a review on I-tunes. Until next time this is Tim Romero at Disrupting Japan, thanks for listening.