We are about to start seeing more cars but fewer drivers on the road. Self-driving vehicles are already moving out of the labs and onto the roads world-wide, and Yuki Saji thinks Japan has a unique competitive advantage in the space.

Yuki is CEO of SB Drive, Softbank’s autonomous vehicle subsidiary which was recently spun out. We talk a lot about the future of driverless cars, of course, but also look into what Softbank, one of Japan’s largest and most valuable companies. is doing to ensure that it can continue to innovate and to also make sure the innovators within the company connect with each other and stay part of the corporate group.

It’s a great discussion, and I think you’ll enjoy it

Show Notes for Startups

  • The goals and origins of SB Drive
  • Building a team of entrepreneurs inside Softbank
  • Why self-driving cars will show up in rural areas first
  • How Japanese technology compares to the rest of the world
  • Why AI will become a commodity
  • Japan’s secret advantage in driverless cars
  • Why full autonomy will win out over assistive technologies
  • What’s holding back driverless cars in Japan
  • Advice for companies wanting to spin out startups

Links from the Founder

Transcript from Japan

Disrupting Japan. Episode 46.

Welcome to disrupting Japan. Straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for listening.

In the coming decades there will be more cars but fewer drivers on the road. Companies from all over the world from start-ups to major automakers are ramping up both research and production of autonomous vehicles with the objective of dominating this new sector and Yuki Saji the CEO of SB Drive thinks that Japan has a very special advantage in this race. SB Drive was recently spun out of SoftBank to develop the technological platform for autonomous vehicles.

We talk a lot about the state-of-the-art in Japan now and what’s most likely to change both domestically and internationally in the coming decade. We’ll also talk in detail about how SoftBank, one of Japan’s largest companies, is setting up processes to foster innovation even disruptive innovation within both the parent company and across all of its corporate groups.

It’s something a lot of large firms can learn from, but I don’t want to give too much away. So let’s get right to the interview.

Tim: I’m sitting here with Yuki Saji, president of SB Drive. Thanks for sitting down with me and cheers.

Yuki: Cheers.

Tim: Even though it’s only coffee.

Yuki: Only coffee because at our office we can’t drink beer before 6 PM.

Tim: I think that’s probably a good thing. You’re actually an entrepreneur within SoftBank and SB Drive is the new company spun out to develop autonomous vehicle technology but you can explain it better than I can. Why don’t you tell us a bit about SB Drive?

Yuki: SB Drive is very new company of SoftBank group. I once worked for SoftBank for eight years. I was planning the communications service and campaign, I thought new IoT — Internet of Moving Things — is very very important.

Tim: Yeah, it certainly is. This is interesting. So SoftBank, for listeners overseas who might not know the company, I know it’s unthinkable in Japan everyone knows but overseas maybe. It’s one of the few entrepreneurial, true entrepreneurial companies in Japan and they make pepper robot, they run one of the largest mobile carriers. So you started out in the Telecom section, how did you end up with autonomous vehicles?

Yuki: Step-by-step I explained both autonomous vehicles is one of telecommunication device. Autonomous vehicles needs important telecommunication.

Tim: SB Drive is interested in more than just that infrastructure piece, right?

Yuki: Yes, yes. Important thing is cost of the infrastructure. We have that telecommunication infrastructure for Smartphone already. Can use that infrastructure for autonomous vehicle.

Tim: So is SB Drive’s focus on building up the infrastructure or is SB Drive also going to be involved in the AI research and the other parts of autonomous vehicles?

Yuki: We called it group synergy.

Tim: Group synergy?

Yuki: Yes. We have many types of infrastructure throughout AI or big data algorithm to telecommunication networks, Internet security system and so on. This is just infrastructure. SB Drive want to provide every customer autonomous vehicles as a service. So in service we can use our many infrastructure.

Tim: I see, OK. Actually let’s talk a little bit about you. You seem like an unusual candidate for entrepreneur who graduated from Sophia University and you worked at SoftBank since you’ve graduated for eight years?

Yuki: Yes

Tim: Now you’re being spun out and starting this company. SoftBank is a huge company. Tell me a bit about how that spin out works?

Yuki: Last year the idea contest was held in company, I have a several plans of business but finally the autonomous vehicle is the most important device of future telecommunication. So in the contest, I won and that event gave me a presentation just for executive people.

Tim: OK. You made a proposal, you got the executive team behind the idea, they were excited about it. Do you have equity in the new company?

Yuki: SoftBank have many innovation system for entrepreneur program like Softbank Academia. Very, very simple program. Academia students make presentation for our president and executive team. They make a decision to make it business for very very simple.

Tim: I think so. When I see big companies really screw up on innovation so usually the executive team at any large company, they’re smart people so they can see this is a good idea. We should be doing this but actually executing that, having a small team that can successfully operate is much, much more difficult. When you they structure this new company, are you just getting a salary to run it? Or do they give you stock options? How do they structure it?

Yuki: In fact, structural is building now because which structure is best for my company? No one knows. Just my hope I want stock option and high salary so now we can negotiate.

Tim: Still negotiating?

Yuki: Yeah, yeah. Still negotiating.

Tim: I’ve noticed that the team is bringing together to run this company is not all a bunch of Softbank people. You got people from different companies and universities and that’s very unusual for the spin outs. Was that hard to convince Softbank to let you build your own team?

Yuki: Our team is still a small bag people from Yahoo or other SoftBank groups.

Tim: OK. So they’re related companies?

Yuki: Related companies. Yeah. I had the original idea in my team there are many people each of them have their original idea before we met. They’re also entrepreneur.

Tim: So the team was formed by different people in the SoftBank group who had the same idea. That’s great and the programs just brought the people together.

Yuki: Yes. I made presentation in my contest and in Yahoo the same type of contest was held under some people win by autonomous vehicles idea. We met after we won the contest. In Yahoo my CTO was famous for autonomous driving and me famous for autonomous driving in software. Other people said CMR and me should meet.

Tim: It’s impressive that SoftBank is running the program to try to hook up entrepreneurs within the companies. I have to admit when we first met it wasn’t clear to me why SoftBank was interested in autonomous vehicles. I’ve got to admit, it does make sense now. When I looked at the website, the brand-new website.

Yuki: Brand new website. Thank you for visiting.

Tim: It talks a lot about mobility in general not just cars. Is SB Drive looking at something much bigger than just cars?

Yuki: We focus on transportation so not only car, train, a big truck and some bus, we call that smart transportation device.

Tim: We talked last week at the Swiss embassy on their event on autonomous driving. I was really surprised at how much progress is being made in Japan right now. Japan’s Ministry of land infrastructural transport and tourism and a couple other government agencies and all the big automakers have put together a big research fund with $400 million last year. SoftBank is a part of that, Nissan’s a part of that. How do you think Japan is doing? There’s so much interesting stuff going on in America and Europe with the Google self-driving car both Volvo, Tesla a lot of companies have autonomous features. How is the technology in Japan compared to the rest of the world right now?

Yuki: Technology is same in the world I think because of the service. The service should be more localized for that area. For example the planning or AI will be a commodity

Tim: If AI becomes a commodity and actually you might be right. A lot of these big companies are open sourcing.

Yuki: Open sourcing. AI products.

Tim: Where is the real added value?

Yuki: Fast, the population is aging faster than the America. So we can get experiences for the how transportation service should be.

Tim: Not sure if Japan is on the Asian curve the population is about 10 years older than Europe, a little more than the US, so Japan will definitely get the advantage of having the first real market for these. What kind of technologies do you think are most appropriate for these aging markets?

Yuki: In Japan you know many, many famous Toyota, Honda, Nissan and also have famous university they are building adaptive cruise control or auto brake system. The quality of ADAS system in Japan is very high level because aging population requires more high level of ADAS system for example road of Japan is very very narrow, very small and traffic jam is very terrible.

Tim: Horribly difficult to drive in Tokyo.

Yuki: Very difficult. Situation of traffic is more difficult than foreign country like America.

Tim: That makes sense. That’s a really good point. If a technology is proven and works on the streets of Tokyo, it will almost certainly work in any developed countries.

Yuki: I think so.

Tim: Let me ask as this seems to be one of the biggest debates in autonomous vehicles. Assistive technology in which there’s using AI techniques to help the driver versus 100% autonomous vehicles. What is your opinion and what is SB Drive’s opinion on which technological direction is best?

Yuki: The same direction of technology?

Tim: For example, one way the assistive is to make small improvements, so better braking, better collision detection, self parking. The idea is to help the driver and the other direction is full autonomous which means the car is the driver, everyone is a passenger. It seems that right now the industry is splitting into these two camps.

Yuki: My personal opinion, we should challenge the fully autonomous driving because driving human and machine is the most difficult technique.

Tim: I think Google came to the same conclusion. They found that as the technologies get more and more helpful, the drivers get more and more lazy.

Yuki: Yes, that’s a humor.

Tim: The chance of an accident becomes even higher. It’s interesting looking around Japan, Nissan and Toyota have been doing assistive technologies but robot taxi are doing full autonomy driving now.

Yuki: Do you know autonomous levels?

Tim: No. What are the autonomous levels?

Yuki: Level 1, level 2 and level 3 means cooperative human and machine, adaptive cruise control or pre-crash. Sometimes human override the machine driving but after level 4 people cannot override the system.

Tim: In a level 4 vehicle, there is no steering wheel, there is no gas pedals, there’s an on-off switch.

Yuki: Right, just emergency switch will be there.

Tim: To turn off?

Yuki: Yes, turn it off. Level 5 even the emergency switch disappeared. We can control the car outside of the car.

Tim: Level 5 would allow control of the vehicle from some control center?

Yuki: Yes, control center.

Tim: I’m going to ask you to pull out your crystal ball and tell me the future. How are autonomous vehicles going to evolve in Japan? What are we going to see next?

Yuki: I think the first step of autonomous vehicles is robot bus. Not robot taxi because bus is very simple transportation here.

Tim: I use it to travel the same route all the time.

Yuki: Yes. In fact in rural areas the bus is very appearing now. It’s a very important program of Japan. We start from bus and then we challenge very simple truck, the robot truck. Finally we will approach robot taxi.

Tim: So you think that most of the technology will be introduced first in more rural areas, countryside?

Yuki: Yes.

Tim: And slowly move towards the cities?

Yuki: Yes, that’s the basic concept.

Tim: That makes sense, it’s simpler. There’s less things moving. Excellent.

Yuki: In Japan there are many many little islands so we can do the test in the islands.

Tim: One of the biggest things holding back driverless cars is not necessarily the technology. A lot of there’s legal structures, liability problems. Is Japan moving to solve those? Are they changing the laws?

Yuki: Changing the laws is very difficult. We will make a statement for the government also important thing is we call it statement of people.

Tim: Right now the whole industry is now lobbying the government to try to change the laws?

Yuki: Yes. We will do the lobbying but it is not the right business.

Tim: Yeah, the technology always changes much faster than the laws do.

Yuki: Sometimes we try autonomous vehicle test in the foreign area.

Tim: Really? Where you are you testing?

Yuki: For example Singapore because Singapore is very very aggressive.

Tim: They’ve change the laws to make it easier for autonomous vehicles?

Yuki: Yes, changing, changing. Singapore has to import and export, two ports. There’s a lot between two ports. The fast service for autonomous driving joined…

Tim: Between the two ports?

Yuki: Yes between two ports.

Tim: The hope with experimenting in Singapore is that you’ll be able to show the data from the safety of the cars and the legal structure of Singapore law to the Japanese government and say, “Hey, this works. Let’s change the law.”

Yuki: Yes. Sometimes the power of outside is most efficient for changing inside.

Tim: Yeah, in Japan that’s been true. Japan seems to change much faster if you can point to successful examples outside Japan.

Yuki: As a topic, it is in China. In China driverless car can drive right now maybe only country in the world.

Tim: Right now in China driverless cars are completely legal?

Yuki: Legal, yes.

Tim: It’s interesting that sometimes the biggest hurdles to adoption of new technology aren’t technology, the legal structure here but also there are psychological factors as well. Have you found people are not wanting to try driverless cars? Or have people been very anxious to try them?

Yuki: People will be anxious for using autonomous cars. In fact, trains, several trucks very very high speed…

Tim: I can see that while things like a commuter train could run autonomously and the passengers don’t even know it’s autonomous, long-haul trucking on the highways because that’s very much a business decision. Are everyday people willing to get into car with no driver?

Yuki: Maybe people don’t know how the autonomous driving car works. The important is safety image for the customers. Safety image is very very important for use.

Tim: The example that seems the closest is elevators. Originally they had a person in there running the elevator and when they changed and made them automatic, they were faster, they were safer, they were simpler but people didn’t trust them. Are people trusting automatic cars more quickly or do you think it will take more time?

Yuki: Maybe autonomous driving car is the horizontal elevator. Just ride and move.

Tim: So that people will get used to it very quickly. Excellent. Let me ask you the more general question about innovation in Japan. A lot of big Japanese companies are trying to innovate, they’re trying programs to help in entrepreneurs, seems like SoftBank is doing this very successfully. What advice do you have for other companies who want to follow this model?

Yuki: One thing speed is one of the step to make new business but the important thing is the speed to make failure. In SoftBank if you want to do your business faster, easier just do it.

Tim: Everybody says that failure is acceptable and it’s a necessary part of the process but…

Yuki: They don’t do.

Tim: Exactly. In most big organizations, they’ll say it but they don’t really follow through with it like failure can hurt your career.

Yuki: An idea-man is likely be alone in his company.

Tim: One of the important things is be able to pull the team together.

Yuki: Pull the team, yes. A good point of SoftBank is that there are many contest or idea sessions or Hackathon to build up the team.

Tim: It’s very valuable too. It is a very much a start-up environment. They’re trying to help these founders and entrepreneurs find each other within your organization. OK. Let me ask you my magic wand question. If I gave you a magic wand and I said you could change anything about Japan, its education, the way people think about risk, to make it better for start-ups and for innovation. What would you change?

Yuki: Do you know the Dokodemo door ? Doreamon.

Tim: You can go anywhere.

Yuki: Yeah, go anywhere. I want to realize that Dokodemo door. Once people use the Dokodemo door, people cannot forget experience of that transportation. I want to make an autonomous vehicle like the Dokodemo door. I just want to change the people divided for transportation. Many people autonomous driving is useful for only elderly people or small children. They should get more free way of transportation but we don’t know because we don’t have now.

Tim: You would change the way people think about transportations?

Yuki: Yeah, think about transportation. If we can imagine more clearly and convenient transportation, we can change the law. We can change the most difficult thing for me is explain the usefulness of autonomous vehicle to ordinary people. Right now they think I don’t need autonomous vehicle.

Tim: Right now Japanese people are too accepting of the status quo?

Yuki: Yes. Japanese people don’t know the convenience of transportation.

Tim: So you’d like for Japanese to be a little more upset when things aren’t quite right, to complain more?

Yuki: Yes, if I can use the magic, I want to teach the real convenience transportation for Japanese people.

Tim: Listen, before we wrap-up, is there anything else you want to talk about?

Yuki: There is many many rival of SB Drive…

Tim: There’s a lot of competition?

Yuki: Yes, lost of competition. Competition is at the same time a partner in making different world. We’re trying to make collaboration with some competitor. Good rivals.

Tim: I have noticed that it is and I think the fact that the government is involved in sponsoring so much research that most of the Japanese companies in this space are working together.

Yuki: Government is likely to make-up on Japan team. It’s not good strategy for global and business.

Tim: OK. It’s important to work with global teams as well.

Yuki: Yes, global. Sometimes we will collaborate with global players.

Tim: Listen. Thanks so much for sitting down with me. I really appreciate it.

Yuki: Thank you.


And we’re back.

One of the most interesting splits that is going on in autonomous vehicles right now is that of rolling out fully autonomous vehicles from the start versus gradually introducing better and better driver assistive technology until the car is finally ready to take over for the driver.

What you find is that almost every start-up in this field favors building autonomous vehicles from the beginning and nearly all existing automotive companies favor the incremental approach. Testing shows that the fully autonomous approach is better incremental improvements actually make driving less safe when drivers begin to rely on them too much.

It’s also bit surprising but it makes perfect sense that although the technology behind autonomous vehicles is associated with companies in big cities like San Francisco and Tokyo, but the technology will be rolled out in rural areas first. Not only because it is technologically simpler, but because there is a greater need for autonomous vehicles there. Mass-transit in cities almost always makes economic sense but that’s rarely the case in rural areas. In many places having an autonomous bus route that runs 24 hours a day will be a huge economic and social value.

From its inception, the automotive industry is been driven by exciting marketing and sexy advertising. However, I think the reality of how autonomous vehicles will be introduced in the next few decades will take a much more practical and dare we say it common sense approach.

If you’ve got an opinion about driverless cars or open innovation in Japan, Yuki and I would love to hear about it. Come by disruptingJapan.com/show046 and let us know to what you think. When you drop by, you’ll find all the links and sites we’ve talked about and much much more in the resources section of the post. I know you’ve been meaning to do this for a while now but when you get the chance please leave us an honest review on iTunes. It’s really the best way you can support the show and help us get the word out.

And 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.