The idea of computers capable of reading our emotions and responding to them is both fascinating and terrifying. Will this technology serve us or manipulate us?

Well, the speculation is ending because the technology not only exists, but it is being rolled out commercially.

Today I’d like you to meet Hazumu Yamazaki, co-founder of Empath. Empath is a web-based API that detects human emotion from audio data, and its initial use in call-centers has shown a significant increase in sales. But as Hazumu explains, the potential effects are much larger.

It’s an enlightening conversation, and I think you’ll enjoy it.

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Show Notes

  • How emotion detection is being used in commerce
  • How easy is it to emotionally manipulate us into buying something?
  • The hardest thing to get right about corporate spinouts
  • Why detecting emotions at scale will make money
  • The true killer app for emotional recognition
  • How startups can use pitch competitions & accelerators strategically
  • How Japanese startup founders should act while overseas
  • What Japanese founders can really learn from their overseas counterparts

Links from the Founder

Transcript

Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.

I’m Siri and thanks for joining me. Today, I’d like to talk with you about –

Hey, Siri, why are you doing the podcast intro?

Hi Tim, I’ve noticed you’ve been very busy and seemed a little stressed, so I thought I would help out with this week’s podcast.

I appreciate that, but I enjoy doing the podcasts, so I think I’ve got this.

Okay, Tim. You know where to find me if you need me.

Thanks, Siri.

There is no doubt that computers, that artificial intelligence getting better at understanding our emotions, and when we think about the application for that emotional connection, we usually think of things we interact with directly, like personal assistance, like Siri. But it doesn’t look like that’s going to be its primary use, and it’s certainly not going to be the most profitable use of this technology.

Today, I’d like to introduce you to Hazumu Yamazaki, the co-founder of Empath. Now, Empath is an AI system that can determine your emotional state by listening to how you speak, so Empath does not need to understand what you are saying, but by listening to how you speak, it can quite accurately determine whether you are feeling calm, anger, joy, or sorrow.

The first commercial use of this technology has been in call centers and customer contact centers where it’s improved sales by as much as 20%, and yeah, this does open up some serious ethical issues over emotional manipulation that we are going to get into a bit during our conversation and get into a lot more in the comments at the end of this episode.

But along the way, we will talk about how a modern version of build it and they will come might just be a viable marketing strategies. The key to making corporate spinouts worked in Japan, and a different way for Japanese startups to go global.

But you know, Hazumu tells the story much better than I can, so let’s get right to the interview.

Interview                                                                                

Tim: So, we are sitting here with Hazumu Yamazaki, the cofounder of Empath, so thanks for sitting down with me.

Hazumu: Yeah, thank you for having me today.

Tim: Now, Empath is a technology that detects emotion in human voice, but you can probably explain it a lot better than I can.

Hazumu: Sure. So, we developed Empath which is an emotion AI that can identify emotion from your voice, and we focus on not what you say but how you say it, like speed, tone, pitch, or the intonation, so if that sense, it works language agnostic.

Tim: And so, why is this important? Why is it important that we be able to detect that kind of emotion invoice?

Hazumu: For instance, especially in a contextual sense, our emotional analysis has already demonstrated up to 20% increase of the sales conversion rate by analyzing both customer and operator’s emotional state, so we got some correlation between purchase activity and emotional state which finally improves the sales conversion rate in contact center.

Tim: Actually, that was something I wanted to dive into later, but let’s talk about that use case right now because that’s really interesting. So, one of your big success stories is you have implemented Empath in a call center and you saw conversion rates go up by 20%.

Hazumu: Up to, it’s maximum, yeah.

Tim: Okay. So, what kind of a call center was this?

Hazumu: We are now working with a remote for telemarketing contact centers. As you mentioned, including some financial sectors, as well as some companies who are selling subscription education materials, as well as some cosmetic companies, so they are some of our use cases.

Tim: Okay, and so Empath detects four different emotions, right? So, it is joy…

Hazumu: Calm, anger, and sorrow, in addition to energy point which can detect the people’s motivation, for instance, whether it be a negative mood or a positive mood. Psychologically speaking, it’s kind of the balance that detect mood status of the people.

Tim: So, in the call center example, what is the mood where the customer is most likely to buy?

Hazumu: So, we found that it’s sorrow in some timing.

Tim: Sorrow?

Hazumu: Because they are really wondering whether they should buy it or not, and it’s that timing, we have always succeeded in detecting the sorrow, not the joy. At first, our hypothesis was they would some symptom of the joy or being happy.

Tim: Yeah, that’s what I would have guessed too.

Hazumu: But that was not true. A lot of good customers who could decline this kind of marketing offer that shows the symptoms of joy because they really good at communication, but some people are really wondering if they should buy it or not.

Tim: okay, so it’s that sorrow that stress point, probably like right before someone decides to buy.

Hazumu: Probably, yeah.

Tim: That’s interesting, and what about – you mentioned you are also monitoring the emotions of the call center staff.

Hazumu: Exactly.

Tim: So, what are you looking for on that side?

Hazumu: So, we use our emotion analysis for operators as well, and we use it for the education, as well as the evaluation of the performance of the contact center operators. For instance, we found that operators who show calm, demonstrates higher performances compared to low-quality operators who demonstrate more peaky on the emotional states, like joy or anger, or sorrow, or whatever, so we can use the technology for the evaluation of the operators, and based on this evaluation, we could provide some kind of education program for low-quality and our middle performers based on the result of the high performers.

Tim: Okay, so you would be using it for feedback saying, “Wait, you’re showing too much emotion, you should be more calm when you are talking.”

Hazumu: Exactly, exactly.

Tim: And, you show that to them in kind of real-time?

Hazumu: Exactly.

Tim: Oh, okay, that’s really interesting, and how many different call centers is this being used in now?

Hazumu: So far, we are working with about, with contact centers, about – not only contact centers, but also some other business centers, we are providing our solutions, like automotive, check the mental state of the drivers. For instance, when they get irritated, we provide alert to drivers for safety. Also, working with some communication robots company like Fujitsu to make communication robot understand, uses emotion to be more empathetic.

Tim: Okay, I want to dive deep, deep into the technology and the business model in a minute, but before that, I want to talk a bit about you. You are one of the cofounders and Empath was founded in 2017, so pretty recently, but the project is much older, right? It was spun out of SmartMedical. So, when did the project itself start?

Hazumu: So, Empath project, actually started around 2011, so we spent four or five years R&D period before we launched this software, and our first project was actually with NTT Docomo in Tohoku area to check the mental status of the victims, as well as the care workers after the 3/11 earthquake which happened in 2011. Because SmartMedical was developed for clinic malls, in metropolitan Tokyo area, especially for the primary care, and they also have some kind of their psychiatry sector. So, what we tried to do is to provide some kind of ICT solution for the mental health care. So, we started our R&D around 2011 regarding this voice recognition technology, whether we could check and monitor mental state of the people.

Tim: So, why did you decide to spin it out of SmartMedical?

Hazumu: First, we studied mental health care startup but we got a lot of other country use cases, as I mentioned, in contact centers or automobiles, or whatever, not only the healthcare sectors, and for funding, it’s quite easier for venture capitalist to focus on just one solution or one technology, so we decided to spin it out.

Tim: Yeah, but spin-outs can be really tough.

Hazumu: It was tough.

Tim: What was the structure? So, after it spun out, the new Empath startup team, how many of them came from SmartMedical and how many were new hires from outside?

Hazumu: In SmartMedical, we had a department called the ICT Section. Before coming up, we’re about 5 people, and all these 5 people joined Empath. So, it was kind of the carve-out of our department itself.

Tim: Okay, and when you raised funding, how much of the equity did SmartMedical have?

Hazumu: So, actually, they still have a lot, but we and SmartMedical are trying to make some dilution of the shares which are held by SmartMedical now.

Tim: Did the potential investors question that and push back against having another company holding so much of the startup?

Hazumu: Yeah, actually, the cared about that, but they felt a lot of potential for us, so this is why we already closed our series A  round last year which lead to about $3 million mainly from Essex Capital and SBI.

Tim: Okay, and they didn’t mind that SmartMedical had such a large percentage of the company?

Hazumu: So, what we are doing now is to try to make some dilution from the SmartMedical shares which SmartMedical has already agreed before our fund raising or even before coming out from them.

Tim: And so, is that dilution going to employee options and things like that?

Hazumu: For founders or for other third-party companies, or some other VCs.

Tim: Oh, so for new investors.

Hazumu: Yeah, yeah. So, we are now restructuring shareholders’ segment as well.

Tim: I see a lot of potential for carve outs and spin outs in Japan, but it’s hard to do well.

Hazumu: Yeah, and a lot of VC hate that scheme.

Tim: Yes. Well, I mean, you can understand why from the VC’s point of view.

Hazumu: Yes. As you mentioned, if a lot of shares are held by a parent company, it’s quite hard to make IPO or M&A, VC hates that scheme.  They will like founders like us to commit to the business. In that sense, founders should have major shares.

Tim: I think that is the big concern, right? Because when founders have major shares, they feel like it is their company and they have ownership, and there are times where running a startup is really, really hard.

Hazumu: Yeah, it’s tough.

Tim: And, when you are an employee, you don’t quite have that same feeling. Okay, let’s dive back into the tech of Empath, so from what I understand, it’s truly multilingual, but did you have to change it at all for different markets? I mean, so for example, how much of joy and calmness, and anger and sorrow, how much of these vocal traits are depending on the culture and how much is really universal?

Hazumu: Of course, there are some cultural differences, but based on the recent researches, it is said that compared to facial emotion recognition, our voice emotion recognition is kind of a universal thing, and this is why we are focused on four major emotional states which could be in common in any culture. I mean, joy, calm, anger, and sorrow, but still, I think there are some differences. For instance, we have to say that at this moment, we are not good at detecting a motion in some particular east Asian languages. So, we have two options to solve this problem. One is, we have our function called calibration. That means the more personal data we accumulate, the more accurate it becomes for each person. And the second option is, we provide our API for free up to 300 API calls per month, and in exchange of that, we get the voice data from our users and make it as a training data for our AI engine to improve our accuracy.

Tim: So, you mentioned East Asian languages, so our tonal languages, like Mandarin, different from non-tonal language like English?

Hazumu: I can say that compared to Japanese, we are not good at Cantonese or Mandarin.

Tim: But that makes sense just because the inflections are so important in the language.

Hazumu: Sure, sure. Now, we believe this is totally a matter of the number of the data set. For instance, we could get access to more data of the Mandarin or Cantonese. We could improve our accuracy, so it depends on which market we should focus on. At this moment, we do not focus on the Chinese market, but we are mainly focused here in the Japanese market, as well as United States and some European countries, including French, so it’s all a matter of their prioritization of our business transition.

Tim: So, do you have different training sets for English and Japanese? So, does Empath understand what is being said, does it use speech recognition or is it based solely on intonation?

Hazumu: Solely based on intonation and other acoustic parameters for voice, so we never detect what they say. So, this is totally different from voice recognition.

Tim: Have you been able to test Empath in a clinical setting to test whether it really does detect joy and sorrow, and calmness?

Hazumu: We cannot say it’s a clinical research because this is not a medical device. We did have some research in terms of the accuracy. For instance, last year, we released a PR with NTT Docomo regarding the collaborative research in automobile environment. We actually, about 75% accuracy of the emotion recognition which is quite higher compared to other companies in this sector. In natural environment, we are actually about 80%.

Tim: How do you measure that though? How do you measure accuracy in measuring emotion?

Hazumu: So, we collect voice data with some levels or annotations, like joy or calm, or sorrow, or whatever, then put these voice data into our machine. If our machine provides the same result as annotated, we define it as a correct data.

Tim: And, where does the annotated data come from? Do you create that yourself?

Hazumu: So, mainly from customers who would like to evaluate in our accuracy itself.

Tim: I see, okay. All right, excellent. So, you mentioned you’ve got an API that anyone can download and it is free to use, what is your fundamental business model? Are you a SaaS-based API license or are you licensing IP? Are you partnering with large companies to help integrate the solution? How does Empath make money?

Hazumu: So, we have multiple options, but we are now mainly focused on SaaS model of our web API, as well as an annual license model of our SDK which can be implemented into any IoT devices, as well as applications.

Tim: Okay, so you mentioned you were working with Fujitsu and DoCoMo. How are they using Empath?

Hazumu: For the case of NTT DoCoMo, we are working with them in their automobile project because they have a voice assistant for car navigation. We implemented our technology into the voice assistant which could detect emotional state of the drivers, so based on the emotional state of the drivers, the system can change the talk script depending on how they should behave, or they can provide some kind of car entertainment contents.

Tim: So, for example, if as often happens, the driver is getting angry…

Hazumu: We can provide calm music to make them relaxed down, for instance, this would be one option.

Tim: Okay.

Hazumu: And when it comes to Fujitsu, we are working with their communication robot called Unibo. We did some collaborative research to check the mental state of elderly people who are living alone. Now, he elderly people living alone are increasing, increasing here in Japan, and some of them are suffering from mental disorders like depression. So, before they go into a serious situation, we would like to detect early symptoms.

Tim: Okay. So, you’ve got over 1000 different companies and people using the API now, so of that group, how many are paying customers and how many are people who are just experimenting and using the API?

Hazumu: So, we can say, we have about 100 being customers and 900 API users are mainly just testing, but we are really happy with that because we could get boosted from them as well.

Tim: It sounds like this is such a new technology that everyone is trying to explore and figure out what’s the best use of it will be.

Hazumu: it’s also on the same situation as us. We took a lot of time to find our product market fit. As a start up, we had to focus on one particle, so now, we are mainly focused on the contact center.

Tim: But, have you thought about doing like empathic hackathons? Because this sounds like something that the developer community would have a lot of really interesting –

Hazumu: Sure. We’ve already provided our API for some party’s Hackathon, like hosted by Mashup Awards, and this year, we are also going to have our own Hackathon for our API users as well.

Tim: Excellent. Alright, and we will put a link to the API on the Disrupting Japan site, so listeners can download and check it out themselves. There’s a lot of Disrupting Japan listeners who are programmers and founders, and I’m sure there will be a huge amount of interest.

Hazumu: That’s perfect.

Tim: What do you think is the best use of this technology? I mean, and like five years or 10 years, what is the killer app?

Hazumu: So, at this moment, we are mainly focused on the contact centers, but in the future, we would like to expand into the mental health care field. For now, a lot of people are using the voice as their interface, so I think voice would be among the dominating interface. For instance, a lot of automobiles have already implemented Amazon Alexa or Google Assistant. This kind of environment, with IoT things, can understand early symptoms of depression or PTSD of the users in an early stage.

Tim: So, do you see Empath as developing or fine-grained analysis other than just so now, we have like the big four. Do you see Empath being able to more finely slice that up, be able to detect more subtle differences in emotion?

Hazumu: Yeah, I think we could do that because it’s a matter of the amount of the voice data. If we have enough amount of voice data, we could add another emotional ability, for instance, like disgusting or frustrating, or whatever, but if we would like to go to the mental health field, we need more clinical researches, as well as making some partnerships with hospitals and universities to conduct more solid studies.

Tim: Before, you mentioned you have different training sets for different languages, but do you need to have different training sets for different situations? So, for example, someone who is speaking Japanese to a call center support staff might display emotions very differently than someone speaking Japanese to their doctor or at the hospital, do you need different training sets?

Hazumu: Yeah, I think it will happen. So, when it comes to the contact center, we are mainly gathering their real contact center voice data. And, when it comes to the clinical situation, we need another data set because of the difference of the context itself, so it will be one challenging part for us.

Tim: Let’s talk about marketing, or rather the marketing, just talk about letting people know you exist. There is so much amazing technology being promised every day, and announcements coming out constantly. It is hard to get noticed and hard to get people to try something new, so what has been your marketing and sales strategy?

Hazumu: Actually, we do not have the marketing and PR team here in the office. What we did is participating in a lot of international tech conferences, as well as pitch competition which made is visible, especially in the global market. Tim: Yeah, that is interesting, so you guys are doing a lot of these global pitch contests. In fact, I think you won six of them last year, right?

Hazumu: Eight.

Tim: Eight? Okay, sorry, but that’s pretty amazing. So, I guess they were worth it. What did they lead to?

Hazumu: We won Asian pitch competition last year which led us a lot of the visibility, mostly in the domestic market as opposed to the international market because once you win this kind of big pitch competition, you got a lot of media coverage, and then we got a lot of inquiries from our potential customers.

Tim: So, this interesting because I’ve seen a lot of founders make the mistake of doing too many pitch contests to the point where they are almost ignoring their actual business. So, is the value you found from the pitch contest, where they contacts that you made at the event or was it contacts that came from people who read media coverage of the event?

Hazumu: Actually, I can say both. When it comes to people from the media coverage, we succeeded in getting a lot of projects with big domestic enterprises coming here in Japan, Japanese speaking enterprises are only going to pay attention into a startup or a company who has some global status.

Tim: Oh, okay, so the exposure was not necessarily to the foreign enterprises. It was the Japanese enterprises.

Hazumu: Yes, so it’s multidirectional.

Tim: So, is that a strategy you would recommend for other startups?

Hazumu: It depends. For instance, I am more of the cofounder of this company. I’m only in charge of global marketing itself. We also have CEO Takaki is normally in charge of the domestic business development, so this is why I could picture a lot. If you have just only one CEO because it will waste your time. You have to focus on your business itself.

Tim: Yeah. So, splitting that responsibility is what makes it work?

Hazumu: Exactly. In that sense, probably, I can say I’m in charge of PR and marketing.

Tim: Right. Now, you guys have done a lot of accelerators as well, right? You did Orange Fab, and one in Australian as you talked before, the Google launchpad. Has that been valuable?

Hazumu: Yes, but it depends on the accelerator program, of course, but we can say that the Google launchpad really work out for us because we could get a lot of contacts with Google, as well as some mentors outside of Google, and they gave us a lot of good advice, but some accelerators just introduced channels to the global market. It is also helpful. If you just stay in Japan, it is quite hard to get a live contact of the big enterprises.

Tim: It sounds like Google launchpad was kind of the exception, but it sounds like – but in general, the accelerators are more of a marketing and sales function.

Hazumu: The Google function has both in tech side as well in business development side, but for other accelerators, like Orange Fab, are really helpful in the sense that they provided us a lot of opportunity to connect with bigger enterprises including Orange in France itself. So, it broadens our channel to overseas big enterprises. Some accelerators just providing their lecturers or some mentors which did not work sometimes but we are mainly focusing on international accelerators to expand into the global market.

Tim: I’ve got to say, it’s an interesting marketing and sales strategy is to use the incredible interest that’s built up around startups, and because you guys have such a fascinating story, just to use that as your main channel for marketing, I mean, it really speaks to how much interest there is in startups right now everywhere.

Hazumu: Yeah, it’s true. The startup situation is now very, very booming here in Japan as well. A lot of big enterprises are hosting pitch competitions like accelerators or VCs. Sometimes, I cannot understand what is going on here in Japan.

Tim: I have the same –

Hazumu: But some really work.

Tim: Those global accelerators also helped you with credibility in Japan as well?

Hazumu: Exactly. For instance, we intentionally sometimes will use a logo of our accelerators in some exhibition and it really leads to some attention from the big enterprises here in Japan.

Tim: So, you’re working with large companies here in Japan and also overseas. How is enterprise sales and enterprise interaction different in Japan and in America or Australia, and in the West?

Hazumu: Of course, it really takes time to close a deal here in Japan as everyone is talking, as everyone says, but we already know some of it, conventions of how we can close the deal or how we could proceed, so we can say we are still good at dealing with some Japanese big enterprises because of our knowledge in their sales convention or sales customs here.

Tim: So, do Western enterprises move more quickly than Japanese?

Hazumu: it depends. For instance, when it comes to France, it’s almost the same as Japan, but in the United States, it is faster, but when it comes to big tech giants, it really takes time.

Tim: So, it doesn’t sound like it’s really all that different.

Hazumu: Yeah, and it’s always a matter of whether we could meet the decision-maker.

Tim: Yeah, I guess much more than the company or the size of the company, it depends on the person you are talking with.

Hazumu: Exactly, and when it comes to the global market, like the United States, it’s always important to have some good mentors who could introduce with some key person. For instance, we have our mentor as well as advisor called Don Lindsey in Mountain View. He has a lot of contacts, so it really works, but without this kind of key person, it is quite hard to get into the right person. For instance, you can meet a lot of people in overseas conferences from Google or from Amazon, or whatever, but they are not decision-makers.

Tim: Right, yeah, yeah. Well, and I think that is why so many founders end up wasting their time going to lots of picture events. So, yeah, I guess you have to be really careful about what you selected what your objectives are.

Hazumu: Exactly.

Tim: Another thing that a lot of Japanese founders tell me is that when going to pitch contests overseas or just when doing business overseas, they have to almost changed their personality. In America, founders are expected to be really energetic and make crazy claims and predictions, but in Japan, founders are expected to be a little more calm and reasonable. Has that been your experience?

Hazumu: I don’t think so. Sometimes, people tell me that you should behave like in a Western way, but it doesn’t make sense because now, in any part of the world, including Silicon Valley, they already saw a lot of people in different backgrounds, with different nationalities, so they know how different people were, so they didn’t care whether we are Japanese or not, but they care about our business model or what kind of attraction we already get. Of course, we need some storytelling, but I think we do not need much performance.

Tim: Okay, well, that’s good to hear, actually. The performance aspect gets a little tiring both to do and to listen to sometimes.

Hazumu: Or, we can say now, the worry is getting tired or kind of westernized starting out way or pitching.

Tim: It does get a little old quickly, yes.

Hazumu: Yeah, it’s just a matter of performance, right?

Tim: Right. So, your style in Japan and in the US is very similar?

Hazumu: I can say so here.

Tim: Alright, that’s excellent, and maybe it speaks to the kind of person you are talking to, perhaps someone that is closer to a decision-maker is going to be looking more at the facts and the business model, and someone who is just attending a conference.

Hazumu: Of course. Well, in any sense, whether the people you are talking with her from Japanese big enterprises or American big enterprises, the important thing is just to be confident about your business. Some people, especially are Japanese people, they seem not confident about their solution sometimes. Of course, this is not true, but –

Tim: That’s a really important distinction, I think, so you could be very confident and very calm.

Hazumu: We should or I should?

Tim: Yeah, yeah, you don’t have to be exciting and making crazy claims to sound confident.

Hazumu: Yeah, actually. You don’t have to be an actor to make some presentation in front of some decision-makers, but you have to be confident.

Tim: Okay, listen, Hazumu, before we wrap up, 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 way VCs invest money, anything at all to make things better for startups and innovation in Japan, what would you change?

Hazumu: I would change the mindset of the people participating in the startup ecosystem here in Japan because sometimes, I feel we are so concentrating only on domestic market and domestic people compared to some other East Asian countries like Taiwan or Korea which has to focus on the global market from day one. We have some disadvantages because of their communication as well as because of the mindset, as I mentioned.

Tim: Do you think the most important thing is looking at global markets for sales or looking at global markets to understand what other companies are doing, or what kind of innovations are coming out?

Hazumu: So, I think it’s not a matter of expanding to the global market itself, but it is a matter of how we can broaden our mind, just comparing our own culture with other ones.

Tim: So, understanding what is going on in the world?

Hazumu: Exactly.

Tim: Learning from it.

Hazumu: Exactly, and we don’t have to take everything from overseas, but it’s always important for us to compare our own culture with another one because that will make you find what kind of specific characteristics we could use as Japanese startups.

Tim: So, you don’t think Japanese founders are doing that right now?

Hazumu: Some of them are just focusing on the domestic market which is not a bad thing because this is a good thing for Japan to have kind of their mature and consistent or a matured market, but if you could get access to other information sales from overseas, probably, lot of founders could try alternative strategies of PR or marketing. For instance, as I mentioned, a lot of startups are, of course, wasting time by participating a lot on pitch competitions, but if you have some separate functions in your start up, probably, you can take advantage of the opportunity of the pitch competition the place for the PR and marketing. This is another aspect I learned from international startups. I found that they take advantage of every opportunity for their PR and marketing. They don’t care about whether they lose the competition or not. Of course, probably, some of them are always wasting money and time, but I found it an interesting strategy.

Tim: Is that a good thing or a bad thing?

Hazumu: It has both sides, both sides of a coin.

Tim: So, for Japanese start of founders who are looking overseas, what is it they should be looking for?

Hazumu: So, another great thing will be not finding partners or not finding customers, but make a lot of founder friends.

Tim: Oh, okay.

Hazumu: It would be one of the great things for Japanese entrepreneurs to broaden their own mind to communicate or to make friends with international founders because there are some interesting research based on Startup Genome Report which says entrepreneurs who have a lot of connections with international entrepreneurs make more exits then entrepreneurs who are just communicating with the domestic entrepreneurs.

Tim: Was that in Japan or was that everywhere?

Hazumu: Everywhere, everywhere. Yeah, for instance, Tel Aviv and Israel is not quite famous as a startup nation and there are a lot of Israeli that our founders that have a connection with entrepreneurs overseas in Silicon Valley or some European major cities like Berlin or Paris.

Tim: Actually, that makes sense though especially with any business that is based on innovation and change will benefit from exposing itself to different ideas and different points of view.

Hazumu: So, if Japanese startup founders or just hanging out with Japanese entrepreneurs, it doesn’t broaden your mind in businesswise, in businesswise. Of course, you get a lot of information from them as well, like how we could raise money from Japanese VCs, or whatever. IN that sense, it really works, but if you would like to have more alternative options, it will be great to communicate with international entrepreneurs.

Tim: Do you think that is changing now? Do you see more and more Japanese start of founders doing the same thing?

Hazumu: Probably, yeah, I think so because of now, we could get a lot of support from the Japanese government sectors to attend international tech conferences, and there, you can meet and talk with a lot of entrepreneurs.

Tim: Well, that’s great. Well, we will see Japanese startups becoming more and more global.

Hazumu: In mindset sense, as I said, I don’t think Japanese startups having to go expand into the global market.

Tim: Yeah, but the way of thinking.

Hazumu: Yeah, it’s just a matter of the way of thinking.

Tim: Okay. Okay, Hazumu, thank you so much for sitting down with me. I really appreciate it.

Hazumu: Thank you so much.

Outtro

And, we’re back.

I’ve always cautioned to founders against doing too many pitch competitions and there’s a few startups I know where the time the founder spent pitching was one of the reasons for the failure of those startups.

But Hazumu and Empath has made it work not only by being very selective about the competitions they participate in, but far more important, by not having the CEO doing the pitching, so that he can focus on actually building the business.

Now, that is admirable. Pitching your vision to a large crowd that understands it and appreciates it is incredibly fun and rewarding. It is exciting. I don’t think most startup CEOs, myself included, I don’t think most startup CEOs could put their egos aside and let someone else have that spotlight. It also helps that Empath has the kind of technology that really stands out at pitch events.

It is something genuinely new and potentially transformative, and let’s talk about that.

Now, nothing Empath does is emotional manipulation. Empath detects our emotions. It does not try to influence it, but let’s look where this is heading. By using their technology in call centers, they found that people are more likely to buy something when they feel sad or anxious, so does this mean that companies will try to increase the profits by increasing the amount of sadness and anxiety in the world?

Well, yes, yes, that is exactly what it means, that is how capitalism works. It’s important to realize, however, that this is not new. Modern marketing, from its very start about 100 years ago has always tried to not only capitalize on our existing fears and anxieties, but to give us new fears and anxieties that could be alleviated by buying their products.

So, we are used to this kind of manipulation, but things are going to get a lot more subtle from here on out. At the moment, Siri is a fun artificially intelligent assistant that helps us get some simple tasks done, giving her the ability to understand our emotions would probably make Siri more fun and more effective, but at some point, Siri might start pushing us to make App Store purchases, and here, things start to get a bit gray.

But hey, rather than speculating about what others might do with Empath’s technology, try it for yourself. There is a link to their API sign up on the Disrupting Japan site, and you can try it out for free.

In the end, technology is what we, the innovators and the creators make of it. The question of whether a new technology makes the world better or worse, well, the answer is up to us.

If you want to talk more about AI and human-machine understanding, Hazumu and I would love to hear from you. So, come by DisruptingJapan.com/show143 and let’s talk. If you leave a comment at the site, I guarantee you, at least one of us and probably both will respond.

And 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 has grown not by social media marketing or advertising, but 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.