It was a unique combination of Naoki’s adventure driving through the US, his ongoing frustration in working for a large Japanese firm, and his love of an anime character from his childhood that inspired him to start his own venture and to try to change the way we communicate with each other via translation.  Conyac is a collaborative translation platform with an innovative approach to ensuring product quality and customer satisfaction.

At the end of the interview he manages to turn the mic back on me and we talk about the challenges of achieving some semblance of a work-life balance while running a startup in Japan.

Show Notes

Naoki explains how Conyac is finding a niche in the hyper-competitive space of crowdsourced translation, their innovative approach to ensuring quality, and how they plan to expand internationally from their current beachhead. We talk about…

  • Pivoting his company from a B2C to a B2B focus
  • The Japanese view failure, risk and startups
  • Raising venture money in Japan. Are we seeing the start of a bubble?
  • How to get large Japanese firms to work with startups
  • The value of Japanese incubation programs
  • Regulations that make things hard for Japanese startups
  • Trying to achieve a work-life balance in Japan

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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.

Today we sit down with Naoki Yamada of Any Door. We talk about how international adventure and his love for a particular anime character led him to create a crowd sourced translation platform. We talk about the competitive nature of online translation, VC funding in Japan, some of the incubator programs here and the changing way that Japanese young people are looking at failure these days. Somehow, at the end of the interview, he manages to turn the mic back on me and we talk about trying to maintain a work-life balance in Japan, which is something that’s pretty hard for all generations here.

So I think you’ll enjoy this one, so here we go.

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Tim: I’m here with Naoki Yamada, found and CEO of Any Door who’s introduced the Conyac crowd translation platform. Instead of having me stumble all over this, whey don’t you explain to everyone what exactly Conyac does.

Naoki: Basically, we doing the crowd sourcing based translation, which is, we gather a bunch of translators on a platform and if someone wants to have translations they just upload their text or whatever they want to translate on to our platform and someone who can do the translation work for the tasks they need to and they are going to get paid for the jobs they do.

Tim: Tell me a bit about your users, is it mainly business focus or consumer focus?
Naoki: We started a company in 2009. Since then, we were focused on consumer side. People who want to translate their emails or let us. We had a hard time finding those people so we switched our business from consumer to business side last year.

Tim: So you changed from a consumer focus to a more business focus about the same time you were raising funds. Is that just a coincidence or was it where the investors kind of pushing you to be more of a business focus?

Naoki: Basically, we decided to switch our business to the business side. We looked at our user basis and analysed it and found out that our users are using our translations services for their businesses. That’s the reason we switched it.

Tim: So you made the change and it just so happened your investors thought it was a good idea too?
Naoki: That is also true. Yeah.

Tim: Actually, I have to ask you this: is Conyac really named after the Doraemon?

Naoki: Yeah.

Tim: It is? Okay, I kind of suspected that.

Naoki: Also, the name of the company is from Doraemon, too, called [00:03:10].

Tim: Oh that’s right — and for our foreign listeners, we should probably explain. Doraemon is a much loved Japanese anime about a robot cat. Go to YouTube and waste hours because it’s just adorable. So Conyac, the Honyaku, Conyac right?

Naoki: Yeah.

Tim: It was –how we going to translate that? You’re the translation expert. How would you translate that?

Naoki: Doraemon was re-made in English this year and the name of that HonyakuConyacu is “Translation Gumi”

Tim: “Translation Gumi.” Okay.

Naoki: If you read it, you can speak any kind of languages you want.

Tim: Excellent. The online translation, especially like crowd sourced translation, it’s really competitive space.

Naoki: That’s true.

Tim: What is different about Conyac from all the other companies?

Naoki: First of all, we don’t do the testing for the translators in the first place because we want to welcome all the people who wants to be a translator.

Tim: How do you evaluate the quality of the translators.

Naoki: Yeah, that’s the key point. After we welcome those translators on our platform, we ask them to translate all the contents on the platform for the consumer. After doing the translations, the translation results are evaluated by the other translators.

Tim: So your crowd sourcing not only the translation, but the evaluation of the translators.

Naoki: That’s true.

Tim: Isn’t there an incentive for the translators to say “no, everyone else is terrible” to get their own profits up?

Naoki: Some of them, yeah, do it. Those evaluations are also evaluated from the other translators.

Tim: It’s just one more layer of meta-analysis. Awesome.

Naoki: So that’s the key part of our business. Also, we are trying to be more translator friendly platform. We want to make our translation platform to become more open platform, which is anyone can join, but if they want to become a expert, they have to work harder than the other translators.

Tim: How would one become an expert? Just translate more documents or get higher ratings?

Naoki: Yes, and also, we now have the test exams to the translators who want to be expert translators. We also have the tests as well as the evaluation system.
Tim: Oh okay, so it’s a two-stage —

Naoki: Yes.

Tim: Okay, that makes sense. Is most of your translation English and Japanese, or do you do other languages as well?

Naoki: Basically, English to Japanese is the biggest market right now on our platform. Many Chinese to English translations and also Southeast Asia languages are getting popular.

Tim: Okay. So crowd sourced translation, as we were saying, is a really competitive and dynamic market; what is the biggest challenge for the market, as a whole, in Japan over the next couple of year?

Naoki: We are getting many, many clients right now because of the 2020 Olympic games in Tokyo.

Tim: Of course.

Naoki: Many companies, and also the business entities, needs to translate their homepages and also their contents into English and also other languages right now. There will be a bigger market in the next couple years.

Tim: Okay. So it sounds like the demand side is getting taken care of.

Naoki: Yeah, right.

Tim: Are you focusing on a particular niche of customers? Are you focusing particularly on, say, e-commerce or are you going more wide with lots of different types of customers?

Naoki: Since last year, after we switched our business to the business side, we are getting many clients who needs translation for their games, social games, and also e-commerce platforms. We have so many clients in those categories, but i think there should be more news for translation in other categories as well.

Tim: Okay. On kind of a personal level, you spent a month or so driving around America and traveling around Europe, right? Did that experience, traveling, did that put the idea in your head about doing a translation company or working in international — ?

Naoki: Telling you about myself. I went to school in Long Beach in California and I studied Entrepreneurship Management there.

Tim: Really?

Naoki: Which is quite unique major.

Tim: What is entrepreneur management? It sounds almost like a contradiction.

Naoki: It’s small, like studying about what the entrepreneurship is and also how to manage the company in a small group of people.

Tim: So entrepreneur management is management for entrepreneurs, not management of entrepreneurs

Naoki: Management for entrepreneurs.

Tim: That makes more sense.

Naoki: I studied there and after starting that kind of stuff, i went back to Japan and worked for a big company, NTT and I felt like i should be in the other companies, which is more goal-able.

Tim: Well let me ask you about that, because I’ve worked in some very big Japanese company. My first job here was working at Fujitsu. It’s another big one. What, specifically, made you say, “I’ve got to get out of here, I’ve got to do something else.”?

Naoki: I actually wanted to learn more about Japanese management system in Japanese companies, but those companies are too domestic for me to think of other stuff. Many of my co-workers want me to do the translations while I was working there.

Tim: You were working there as an engineer?

Naoki: Engineer, yes.

Tim: That’s typical.

Naoki: It was quite frustrating.

Tim: Once they find out you speak English. You get all of this translation.

Naoki: That company didn’t have the translators on hers, so it was quite hard to find the other source to do the translations, so I was the only one doing that.

Tim: Was that the core of your idea of, “there’s got to be some way we can get this done, but i don’t have to do it.”?

Naoki: There should be somebody who is better than I to do the translations. That’s a key part of doing this business.

Tim: Are they one of your customers now?

Naoki: Not really.

Tim: That’s too bad.

Naoki: But we are talking right now.

Tim: NTT. It’s a big Japanese company. It takes time to sell those guys.

Naoki: Yeah, really.

Tim: But once you do, it’s a wonderful thing.

Naoki: Actually, traveling the US and also Europe helped me thinking of a good business ideas because I need to drive hundreds of miles everyday and had so many time to think about.

Tim: And just by yourself?

Naoki: Yeah, right, by myself.

Tim: Nothing to do but think. Wow. What do you find most challenging or frustrating about being an entrepreneur?

Naoki: Carrying the imaginations and also the visions in my mind to the other people is the hardest part. I know what i want to do and i think i can tell, but it’s hard to be understood by most people.

Tim: So to get it out of your head onto paper or onto — that’s interesting.

Naoki: So for the first couple years, I couldn’t do it so I couldn’t find a good people who want to join our company. But right now, we are getting many fellow people right now.

Tim: You seem to be growing really quickly. How many staff do you have now?

Naoki: Over 20 people. Since last year, until we switched our business, we had only two members with my co-founder.

Tim: It sounds like that was a good switch to make. That’s the importance of pivoting. Up until now, what’s been the biggest challenge you faced? Was it finding that right target audience, the business versus consumer? Was it personal? Was it people you worked with? Fund raising? Anything.

Naoki: Most of the stuff were very, very hard, because it was the first time for me to do everything right. The hardest part was first year, I didn’t know how to market our business to mass people who are supposed to have a demand for translations.

Tim: So the marketing side, the promotion side was the hardest? How’d you overcome it? How’d you fix it?

Naoki: I’m still — [laughs]

Tim: Still trying to fix it [laughs]. That’s a great answer. In fact, I think that’s probably the best answer. No matter how successful you are, you should always be trying to fix it, right? That’s great.

Naoki: Yeah, after business are getting to grow, the way of marketing is going to change as well. It’s a kind of journey to find out the best way all the time.

Tim: Sure. Bigger campaigns, bigger budgets, bigger problems. Once of the things that I find really interesting is that, in Japan — the image that Japanese have about start ups and entrepreneurship has really, really changed in the last 10 or 15 years. It’s gone from being something people didn’t do to being very fashionable and trendy. What do you think are some of the biggest misconceptions people have? What are some of the biggest misconceptions Japanese people have about starting a company?

Naoki: I think most of the people in Japan think starting up a company is a risk. People think you cannot start up a company without borrowing money from the other people or from bank.

Tim: Very traditional way.

Naoki: Yes. People don’t know how to raise money and also, i think it is, kind of, cultural thing.

Tim: Cultural in what way?

Naoki: People are more conservative in Japan. People think working for a big company is stable and there’s no risk to work there. I think the time is changing and working for the big company is still a risk to do.

Tim: I think so too. Even the big companies are laying off workers here in Japan.
Naoki: It didn’t happen —

Tim: 20 years, right, it never happened. Everywhere is a risk. I’ve noticed, because i do a lot of teaching and mentoring in Japan. A lot, especially college age students, they’ve seen The Social Network.

Naoki: Right, the movie, right?

Tim: Exactly. They say they want to be an entrepreneur They say they want to start a company, but they don’t — they’re college kids, so they don’t really know. What advice would you tell them for people who want to start a company in Japan?

Naoki: When you are in your 20s, you can do anything and there’s no risk because you probably don’t have a family to take care of. If you are in 30s, you may have to care about your families but it’s good to start up a company and it’s less should be a chance to be a millionaire or leader than you work for a company. You may be able to achieve something that you’ve never imagined. It’s not a good phrase, but you have the power to change the world, right? If you can start up a company.

Tim: So you’d really encourage everyone to try it in their 20s, try it as soon as possible?

Naoki: Yeah, if you are in your 20s. Many of the entrepreneurs who succeed their business say if you’ve start up company for your second time, the risk of becoming bankrupt is less than the first time.

   
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Tim: I think that’s true. Now this is interesting. Maybe this is changed. For example, in America, investors tend to respect founders who have failed once or twice for that experience. In Japan, do you feel investors respect failure or are they scared off by failure?

Naoki: Depends on their investors. For example, our independent investors tend to think that failure is a good thing, like new coming investors. The traditional investors think that failure is a bad thing and they won’t probably invest again to the failed entrepreneurs

Tim: Again, for our listeners outside Japan. In Japanese society, failure was a — well, it still is — it’s a very serious shameful thing to have failed. Whether it’s in high school exams or business or sports or anything really. I’m glad to hear it’s starting to change. Slowly, maybe. Very slowly.

Naoki: Yeah, slowly, but it’s changing.

Tim: That’s good. You went through a Samurai Incubate accelerator program here in Japan. Would you recommend that other founders go through an incubator program?

Naoki: In Japan?

Tim: In Japan.

Naoki: It’s good and bad. Good part is you can have a good mentor, if they are good incubator. You can get a connection with other start ups Bad part is, also the connection with the other start ups If they didn’t grow fast, you think you are okay with that.

Tim: Oh okay.

Naoki: It’s quite mental stuff, i think.

Tim: It’s who you compare yourself to. Interesting

Naoki: That’s a good part and bad part. Also, you have to find out who is the good mentor and bad mentor for you.

Tim: How do you do that in advance?

Naoki: From the critics from the other start ups, I think.

Tim: Oh okay. So for translations, you’re working with a lot of foreign companies as well. What do you think foreigners don’t understand about Japanese start ups?

Naoki: Last couple years, many investors are investing so much money into Japanese start ups, Japanese investors. For example, four years ago, when I was trying to raise money in Japan, it was hard to raise over one million dollars. Recently, many start ups are getting investments over five million dollars.

Tim: That is quite a change isn’t it?

Naoki: Yeah, that’s a big change.

Tim: These are pretty early stage companies too.

Naoki: Yeah. They are starting up a company in the last couple years.

Tim: Yeah, we don’t want to mention any names but there’s been a couple of announcements where it’s been like, “really?”

Naoki: It’s a kind of bubble. It’s quite scary.

Tim: Well, yeah. I think things are getting a bit bubbly here, but once thing I noticed is that — so I was here for the first internet bubble in 2000. Back then, there was a lot of money that was going into very few companies. Right now, there’s probably more money, but they’re much smaller investments being made into many many more companies and it seems to be much healthier.

Naoki: Yeah, that’s true. When I went to secondary, I felt like there’s a, sort of, ecosystem there. In Japan, the connection between start ups and investors are still weaker than that stage.

Tim: What do you mean weaker?

Naoki: Most of the start up companies doesn’t know much about Japanese investors. Also, other startups When you go to the start up event, you know people who are there, but there should be more start ups in Japan.

Tim: Do you think there are a lot of start ups that are in stealth mode? Are they trying to be in stealth mode or just people don’t know about them yet?

Naoki: I think people don’t know about it. When I went to the other side of Japan, I felt like I don’t know anything about the start ups there.

Tim: Let me ask you this. If i gave you a magic wand and said, “if there’s one thing you could change or fix about Japan to make it better for start ups, what would it be?”

Naoki: If I can change the real stuff, I think it’s the hardest part to do a unique start ups For example, it’s quite hard to change the financial regulations in Japan. For example, PayPal couldn’t start up their branch in Tokyo so they have their office in Singapore They have an office in —

Tim: PayPal Japan is operating out of Singapore? I didn’t know that. Financial regulations are pretty tight here.

Naoki: Also, regulations — it’s changing right now. It is still hard to manage regulations.

Tim: Do you have any problems with larger Japanese being willing to work with small start ups?

Naoki: It’s changing right now. Many of the big companies are trying to have a business with start ups, but it takes time. If we want to have a partnership with the big company, it usually takes more than six months.

Tim: A company can be out of business in six months. Wow.

Naoki: That’s true, but it’s changing. We can have a partnership with the big companies. It didn’t happen five years ago.

Tim: That is good. The more people I talk to, the more start up founders i talk to, the more optimistic i become about Japan. All of these things that drove me crazy for the last 20 years. People are like, “no it’s getting better, bigger companies are — “. It’s not easy to work with start ups, but bigger companies are more willing to take a look at small start ups That’s a good thing.

Naoki: There are so many events and meet ups which accelerate the connection between big companies and start ups

Tim: Do you have plans to expand overseas?

Naoki: We actually have an office in San Francisco

Tim: Okay. So sales and marketing.

Naoki: Yeah. Also, we’re thinking to expand our business into Singapore.

Tim: A lot of Japanese start ups are doing business with Singapore

Naoki: Because it’s quite a good place to expand the business, from Singapore and Asia and also other Southeast Asian countries

Tim: Yeah, Singapore really is, kind of, the key to Southeast Asia.

Naoki: Yes, but the toughest part is the price of everything is getting very high in Singapore.

Tim: Wow this is great. Is there anything else you want to talk about?

Naoki: I want to know more about how to manage start ups and also the family. For example, the examples from the states and also the other countries.

Tim: How to balance work life and home life? That is challenging. I’m probably the worst person to ask about that. I’ve never been able to separate it well. My wife is very forgiving of this. My personal life and my social life and my business life all, kind of, blurs together. Just like this podcast. It’s all, kind of, blurred together and my wife Ami is very forgiving. When I was practicing this, I had her all mic’d up and we were drinking wine. She’s used to it. I don’t know, I’ve never quite gotten that. I’m someone who’s always on. Believe me, if I meet someone who’s got that secret I’ll ask them. Work-life balance is so hard. I think in Japan that’s hard for everyone. Even your buddies at NTT were probably going out drinking after work.

Naoki: Yeah, that’s true. All day long. You have to think about after work if you work for big companies. To manage work-life balance is quite hard.

Tim: How long have you been married?

Naoki: Two and a half years.

Tim: It took you way too long to answer that. We’ll edit that down so your wife won’t use it [laughs]

Naoki: It’s quite important to have a supporting wife to become an entrepreneur

Tim: I agree. What does your wife think about this entrepreneurship?

Naoki: She went to the states and studied there, so she’s very understandable about start ups

Tim: I think having the support is really important. So if our listeners want to get in touch with you, what’s the best way?

Naoki: Facebook.

Tim: Facebook? Okay, we’ll put all the links up on the website.

Naoki: That would be good.

Tim: Okay, fantastic.

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Okay, we’re back. Any Door is expanding rapidly and hiring like crazy. If you want to get in touch with Yamada or to see any of the things we talked about during the interview, go to distruptingjapan.com and all of that good information is in the show notes. If you’ve got some comments for us, people you’d like to see on the show, things you think we can do better, let us know at [email protected].

If you do like what we’re doing, please, write us a good review on iTunes. It’s really the absolute best way you can support the show and help us get the word out. I’m Tim Romero, this has been Disrupting Japan. Thanks for listening.