Japan wants to learn how to code.

Over the past 15 years software development in Japan has changed from low-level clerical work to a mission-critical skill, and the Japanese government and industry as scrambling to find programmers and develop new talent.

Yan Fan came to Japan on a mission to teach everyone how to code. After opening Japan’s first coding  bootcamp, and she and her co-founder Kani grew Code Chrysalis to profitability and about 50 staff, and continue to grow rapidly.

Yan and I talk about digital literacy in Japan, and she also  explains her blueprint for making sales in Japan without speaking Japanese, identifying a startup’s unique value in Japan, and her experience raising money from both angels and CVCs

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

As promised, here is a picture of “Benesse’s pumpkin”a work by Yayoi Kusama. It will all make sense after you listen to the episode.

Podcast: Play in new window | Download | Embed

Subscribe: Google Podcasts | RSS | More

Show Notes

  • Why Japanese enterprise is looking at coding bootcamps
  • Why software development was a dirty job and how that’s changing
  • Why come to Japan to start a startup
  • Raising money as a non-digital startup in Japan
  • How angel investors add value and what attracts CVCs
  • Attracting your first customers as a foreign startup in Japan
  • Why Japan needs a community-learners mindset where people learn from each other
  • Yan’s networking and marketing strategy  for foreign founders in Japan
  • Why Japan Inc and METI want Japan to learn to code
  • How to improve mobility in Japan’s labor market

Links from the Founders

Transcript

Welcome to Disrupting Japan. Straight Talk from Japan’s most successful entrepreneurs.

I’m Tim Romero and thanks for joining me.

There are a surprising number of entrepreneurs who dream of coming to Japan to start a startup. And recently the Japanese government is working hard to make Japan as attractive as possible to foreign founders by relaxing visa requirements, creating tax breaks, simplifying the incorporation process, and even setting up dedicated teams to attract foreign founders and provide them support in English.

You might think that all this would make it easy to build a startup as a foreigner in Japan, but it’s not. Of course, part of it is just that growing a startup anywhere is really hard. But the culture and linguistic challenges in Japan are very real, and yet a lot of people are doing it.

Today we sit down with Yan Fan, an old friend and co-founder of Code Chrysalis, who’s on a mission to teach Japan how to code.

Yan came to Japan with the goal of founding and growing a startup, and that’s just what she’s done. And in our conversation, she lays out her blueprint, how she built a network when she didn’t speak the language, how she identified her startups unique value add in Japan, and her experience raising money here from both Angels and from CVCs.

Its advice that every aspiring foreign founder or active foreign founder for that matter in Japan really should know about.

We also talk about how the image of software engineers, especially foreign software engineers, is changing some of the ways METI and the Japanese government are trying to teach Japan how to code, and why they now consider that skill to be so important for the future of Japan. And also why there is now a picture of Benesse’s Pumpkin on the Disrupting Japan website.

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

 

Interview

Tim: So, we’re sitting here with Yan Fan, the co-founder of Code Chrysalis, who’s teaching Japan how to code. So thanks for sitting down with me.

Yan: Thanks for having me today, Tim.

Tim: You know, I can’t believe it’s taken me this long to get you on the show. We’ve been talking about it for years and I gave a really high level overview of Code Chrysalis before, but I think you can explain it much better than I can. So, what does Code Chrysalis do?

Yan: We started out as a coding bootcamp here in Japan, but I think we’ve really evolved to, not just providing classes for consumers, but really doing enterprise training, helping Japanese companies leverage their talent from within and create more innovative, agile engineering teams.

Tim: Okay. Let’s talk about both of those groups of customers. So first, the individual programmers or people who want to be programmers. Which is where Code Chrysalis got started. So, how many have gone through the programs so far, and who are they?

Yan: Oh, wow. I think we’re probably over the thousand mark. I mean, we keep those classes fairly small. The typically the people coming through our program is in English, and so you have mostly English speakers looking to either have a career change here in Japan and go into technology or there are cases where people come here from overseas and then go back, or they use us as a transition point in terms of leaving Japan.

Tim: So, you mentioned everything is in English. So, are most of the students non-Japanese or Japanese? What’s the split there?

Yan: Yeah, I would say most of the students are non-Japanese. The split is probably it’s like 30% Japanese historically. So, in every class we’ll always have some English speaking Japanese people. But yeah, it’s predominantly foreigners who found themselves in Japan.

Tim: Interesting. And so why did you decide to do it all in English?

Yan: Yeah, so I think when we first came here, we really saw this gap in the market where, I think you’ve spoken about this with Connie, my co-founder in the past, but software engineering has been like a dirty job. Low pay, long hours, kind of like mind numbing, wasn’t attracting a lot of talent, but when we came here about what, six and a half, seven years ago, we were seeing people in these jobs, but we were also seeing a lot of Silicon Valley-esque or Silicon Valley inspired jobs that were popping up.

Tim: Like what kind of thing?

Yan: Software engineering jobs that actually paid a decent wage that actually had a career.

Tim: Well, I think yeah, your timing was just about perfect on that because I think as recently as 10, 15 years ago, software engineering, software development was considered kind of a clerical job. It was almost like data input. And it was really with the cloud computing boom that kind of kicked off the rethinking of what software engineering was in Japan.

Yan: Yeah. And six and a half, seven years ago, there were also more and more startups. More and more well-funded companies that were popping up. So, like some of the first companies that we partnered with, like Zehitomo, for example, you’ve had Jordan on your show. And like they were needing more than just like a coding monkey. They needed software engineers in, I would say like in the sense that Silicon Valley was kind of pushing out to the rest of the world.

Tim: Since we’re talking about software engineering, let’s talk about inputs and outputs. So, when students come into the program, they have no programming experience or a year or two, and then when they go out of the program, where do they go? Do they go to startups? Do they go to big enterprises?

Yan: For our flagship bootcamp, we require people to get to a particular level of knowledge. There is a bit of a filter there. There’s all this free stuff online, and our program is not cheap. It’s like about 1.3 million yen.

Tim: So, like what kind of filter do you have? Is it like Hello world? Is it like build a website or like…?

Yan: It’s like in between that. So, it’s definitely more difficult than, just being able to output Hello world. It’s a technical interview. Basically it’s like a beginner level technical interview.

Tim: But the goal is, it’s a level that you feel most people can get to by studying on their own on the internet.

Yan: Absolutely. We wanted really serious people, right? Because we were seeing these jobs that paid better, that were like higher quality. And so we wanted to make sure that we were getting high quality people that we could train up. And to your second question, I think most of our students go to like SMEs. So, and that includes startups of course, but like, I think small, medium sized companies have been the ones most active in terms of hiring our graduates.

Tim: Interesting. Why do you suppose that is?

Yan: I think big companies really struggle when it comes to any sort of like career switch or midcareer hires. I mean, you have touched upon this, I think in previous episodes.

Tim: It’s getting better, but it’s still a challenge. It really is.

Yan: So, I think there have been big companies that have been interested, and actually Google hired one of our first graduates. But even though we might have supporters of ours in some of these big companies, oftentimes they are handcuffed by like HR policies that they can’t do anything about. And so it’s a bit more difficult. Whereas I think small, medium sized companies, they’re a bit more nimble. They’re also in a much more competitive environment when it comes to finding talent. Talent in Japan tends to flow towards large companies still. It’s gotten way better, especially since we’ve started. But when it comes to businesses like at our size, for example, we have to compete a lot more heavily because we don’t have the fancy name recognition that like a large company would have.

Tim: Yeah. That does make sense. The SMEs would be more likely to take a chance on exactly different type of education and something that’s non-standard.

Yan: And I would say the graduates coming out of our program are non-standard. These are career changers. So, they come with a previous amount of experience in depth, like they can be actually these really great hybrid talents. And I think like hybrid talents have a bit harder of a time making it in Japan because of how companies are structured here. But if you’re a small, medium sized business, you really need that hybrid talent and you’re a lot more open to changing your ways of working. And so I think our graduates are fairly attractive for that.

Tim: Makes sense. I want to talk a about your corporate programs in more detail. But before that, I want to talk a little about you.

Yan: Okay. What do you want to know about me?

Tim: Actually, I think we first met back in 2016, 2017, just as you were starting Code Chrysalis. At Slush, I think.

Yan: Yes. Actually great memory. That was like where we like officially launched. I miss Slush. That was fun.

Tim: That was a great event.

Yan: Yeah, it was like fun and cheesy and…

Tim: Over the top.

Yan: It was very over the top, but it was like in a fun way. We launched there, it was co-founder me and we had one employee. And my co-founder and I, we made our spouses show up to help us out. So, we gave his wife and my boyfriend, like these T-shirts, these code Christmas T-shirts to wear and they were like trying to…

Tim: To beef up the staff a bit.

Yan: Yeah, like we’re not this dinky little operation. So, they were salespeople for us for like two days.

Tim: So, but you started out your career in finance, right?

Yan: Yeah. So it’s like pseudo finance.

Tim: Pseudo finance…

Yan: Pseudo finance, because I really did not like investment banking. But the nice thing about it is that it allowed me to travel the world. And it put me in Singapore, where I was seeing like a ton of just startup energy. And I think that was what kind of sparked this nascent desire in me.

Tim: Were you a coder yourself?

Yan: No, I did not…

Tim: So, what was the thought process that led to ah, bootcamps?

Yan: I hated my job in commodities so much.

Tim: Lots of people in finance hate their jobs.

Yan: Yeah. But I was around all of these companies and this was back in like 2013, so this was like when like Airbnb and Uber and like all those like companies were coming up and I was really quite inspired by just how fast our lives were changing. And so I started thinking about businesses that I wanted to start. Every time I had an idea, I realized that a big barrier was I don’t know anything about technology. And so I started going to just like free coding events and it kind of went from there. So, then it became, well, I don’t like any of the ideas that I have, so why don’t I try to become a software engineer? Someone told me about this thing called coding bootcamps that had just popped up in the US and I thought, that sounds really frigging crazy, but I need to do something. I can’t stay in this job.

Tim: Like in the process of learning the code, you decided I want to teach this to other people.

Yan: No, it actually happened pretty gradually. Teaching has always been a side hustle of mine. So, in university, instead of like the usual university jobs, I became a bartender. And then I taught bartending classes and whiskey tasting classes, because we had a big…

Tim: I think I see a pattern developing here.

Yan: We had a large portion of people at my university who were going into Wall Street and they needed it to look cool. And so I was like, well learn all these different kinds of whiskeys, how to order in a bar. And I was able to like get some pretty big classes of like mostly frat bros.

Tim: I could see that.

Yan: So, I made a fair amount of money. And so I have always really liked teaching. And in San Francisco when I moved there to do the bootcamp and also to work as an engineer, I was teaching for fun and then it became teaching for as like a side job. So, I taught at like the old bootcamp that I had gone to. And one thing led to another and I ended up starting a coding bootcamp in the Middle East helping start that. And then when I left at, that’s when I met my co-founder. So, it’s sort of like this weird, it wasn’t intentional at all.

Tim: Yeah. But sometimes that leads us to the best destinations. But I mean, the next obvious question is why Japan? You didn’t speak Japanese at that point, right?

Yan: I didn’t.

Tim: Did you have ties to Japan or…?

Yan: Not really. So, my boyfriend at the time, now husband was living here, but I think for me, because I was in Singapore, moved to San Francisco, I wanted to come back to Asia. And was basically had a few cities that I was choosing between. And I thought, I quite like Japan. And I was like, I can see quite a nice life here.

Tim: It’s a nice place to live.

Yan: It’s a really nice place to live. I liked a lot of aspects of Japan. And so I was really thinking of like, well, what can I do here? Like how can I make it work here? At the time, there weren’t a ton of software engineering jobs and I didn’t want to take a massive, massive pay cut.

Tim: Well, I mean, you and Connie certainly spotted a need for teaching people to code and the bootcamp process and things have worked out pretty well. You’re up to like 50 people now.

Yan: Something like that. Give or take.

Tim: And as you’ve grown, have you been completely bootstrapped or VC funded?

Yan: We were bootstrapped from the beginning. So, Connie and I both had savings from working in San Francisco and then we brought on an angel investor, not necessarily for the money aspect of it, but the fact was like, well Connie’s half Japanese, but we didn’t really have very strong ties here. So, this angel investor was able to like, introduce us to people and open some doors and give us a bit of credibility. But in 2021, we ended up raising from a CVC and it was more of a strategic raise than anything. It was a little over a million USD.

Tim: Small round. Can you talk about who the CVC was and what the strategic value they saw was?

Yan: Yeah, so the CVC was Benesse. And so Benesse is I think like the largest education conglomerate in Japan. I think it’s actually the second largest in the world. They own a lot of stuff. Kind of the most famous thing that they had owned was Berlitz, but they do tons of different things here. Everything from like magazines to like IP to LMSs like the tech that they use in school textbooks in everything. They also own the Pumpkin, like the Naoshima Pumpkin.

Tim: I have no idea that, what is the Pumpkin?

Yan: They even like that big pumpkin that the tourists like to go to.

Tim: Oh, that thing?

Yan: That’s owned by Benesse. It’s kind of like my favorite fact about them.

Tim: Okay. I guess it’s got to be owned by somebody.

Yan: Yeah. So and we had made contact with kind of the executive in charge of Udemy, their Udemy Japan investment. And we’d kept in touch. And so it was really, we were trying to build that relationship with the Udemy Japan team.

Tim: But does Benesse they must be running their own coding, if not bootcamps, coding education programs as well?

Yan: I think at the time they didn’t have that. On Udemy, yeah, they have.

Tim: But, I mean, actual in-person coding lesson?

Yan: No, they did not. Well, I wouldn’t be surprised if indirectly they have some sort of involvement and stuff, but as far as I’m concerned, and I could be wrong, they don’t. And I think they were interested in sort of like the community and energy that we had created and wanted to be a part of that.

Tim: Let’s talk about this, especially now since there are, I don’t want to say a lot of coding boot camps, but a lot of let’s call them coding education programs around Japan. What was your marketing strategy? How did you attract the initial students and how has that changed as coding education’s gotten more popular?

Yan: Initially and I think for a long time the company was able to sell itself through events and community building. Like one of the things that I felt was really needed in Japan that I felt was lacking was this like, I don’t know how to describe it, but like this sort of like community of learners. Like when I was an engineer in Silicon Valley or San Francisco, I learned really effortlessly there. Because there were always free events, I was always learning from other people. It’s just like anywhere you go, someone is talking.

Tim: That’s an interesting point. I think also in the US or at least in tech, there is this real sense of people learning from each other. There’s a lot of this horizontal learning where in Japan it’s still very vertical.

Yan: Exactly. And I wanted to bring that here because it wasn’t just about like, oh, we need students, like we need to make money. It was really like, this is really lacking. I just felt like, yeah, we need this in Japan, we need this in Tokyo innovation.

Tim: Has that changed much in the last seven, eight years?

Yan: I think it is still missing. It’s just not an automatic thing that people will do. I think there’s still some hesitation and I understand the reasons why it can be very scary, especially if there isn’t that culture.

Tim: That’s a really interesting point. Especially you were mentioning before that the majority of your students are non-Japanese. And I’m wondering if that rubs off. Do the Japanese participants, once they’re exposed to that kind of horizontal, everyone teaching each other, do they jump into it and participate? Or do they have trouble like getting into that mindset?

Yan: There are lots and lots of meetup groups, a lot more than when we started. And I think just the kind of two communities share in sort of different ways. They kind of prefer different methods. When they come together there’s always that language barrier and cultural barrier. So, that I think anytime we did bilingual events, I always felt like, something could have been better. Like you have to get like that right ratio of people who can be bridge builders and having things structured in a particular way where both sides feel like they can benefit. And that’s pretty difficult to do, I think.

Tim: Yeah. As someone who came to Japan to start a startup with limited connections into the market, what kind of advice do you have for other foreigners, especially other foreign women who are thinking of coming to Japan and following the same path?

Yan: It’s all hustle.

Tim: Let’s break that down a little bit.

Yan: I think one, you have to have passion and you have to believe in your idea and that your idea is something that you think is genuinely going to make a positive impact in the world. And I think if you can communicate that passion that is authenticity. So, like that authenticity I guess is another way to put it is really important. And on top of that, being able to share that authenticity and that passion as widely as possible.

Tim: Let’s talk about that because I think like passion is important, but there there’s lots of passionate people…

Yan: Absolutely.

Tim: …who don’t succeed. I used to be a professional musician. I was surrounded by passionate people who are broke. So, sharing the passion. What does that mean? How do you like build those connections? How did you get people aligned and sharing your vision?

Yan: Yeah. Well, we had a strategy coming in for like, here’s how we can get those first students. And it was through events like I was talking about before. And also because our program was very expensive, we had to build a lot of trust. So it couldn’t just be, hey, here’s a website, go to the website and read all about our programs. It was really making sure that we talked to people then identified who our key customers were. I was quickly able to get a gauge of like when someone would be much more willing to listen to me talk about Code Chrysalis.

Tim: And so were you going to existing events and presenting? Were you going to events and networking? Were you hosting your own events?

Yan: Both. Again, back then there weren’t a lot of existing events.

Tim: Yeah, they’re out there though.

Yan: In San Francisco there would be stuff every day and tons like I’d be booked up. Sometimes I had trouble deciding between like several things to go to. There wasn’t that here. And so for me it was like, well really easy way for us to test is just to put an event page up, post as much as we can tell people about it and see who shows up. And I think for our first event we had like 50 people show up. It was like an intro to HTML CSS thing.

Tim: 50?

Yan: 50, yeah. Five zero.

Tim: That’s really good.

Yan: Yeah. So, I thought like, okay, well maybe we’re onto something. And it was a free event. It was wasn’t as much pitching about Code Chrysalis. It was more just like, let’s get to know the types of people that are coming to this event, what their issues are, what they’re doing in Japan and what they think of this idea. And so from that you start to kind of pick out, okay, there are these certain types of people that seem a lot more willing and open to paying this like, large sum of money to like do this kind of crazy three month bootcamp. For the people who weren’t targets, it was really just making sure that they knew about us. And so something else that I did was targeting existing engineers and getting them to like, hey, these are the problems that I’m seeing and like getting them to vent. To be like, oh, I totally agree with what you guys are doing, and get them to become supporters. And so some of that traction also came from engineers that were already here that believed in what we were doing.

Tim: So, it wasn’t a simple matter of marketing and sales prospecting. You were discovering what needs existed in the market at the same time and adapting your programs to those.

Yan: We didn’t adapt too much, so we had an idea of like, all right, the visa length, for a tourist visa is 90 days. And so we were like, all right, so our program cannot be longer than 90 days. Because if we have people coming from overseas, they’re not going to be able to stay long enough.

Tim: Right, right.

Yan: And they also want to look for a job. So it was like, okay, you do the 90 day program, hop over to South Korea for a weekend, come back, and then you have 90 days to find a job. So, there were some parameters that we had set just based on like, how much can we teach in that amount of time? Where do people need to be at? And so, because we had that 90 day timeline, there’s no way you can take someone from knowing nothing to being like interview ready. So, it was like all right we need some kind of like starting point, and we need to get people up to a level to that starting point where we can be the most productive in the 90 days to get them to a level where they can find a job in Japan.

Tim: And has that strategy stayed fairly consistent as you’ve grown?

Yan: Yeah, it’s still the same in like the core, like the essence of, is still the same. And it was from the reputation that we had created on the B2C side that really helped us segue into B2B.

Tim: Actually, let’s take a step back and talk a little about why coding bootcamps are needed in Japan. Why are there so few qualified programmers here?

Yan: I wouldn’t say that there’s so few qualified programmers. I mean, there’s a lot of engineering talent that’s here, but yeah, there’s a gap. In terms of what universities produce and what companies actually need and so you have a gap there.

Tim: Well, so university programs are famous for being focusing on the abstract and theoretical.

Yan: It’s sort of like majoring in math and then becoming an accountant.

Tim: That’s a really good analogy. That gap you mentioned is very real.

Yan: And it’s very entrenched. So it is changing, but it’s not changing at the speed at which Japan needs. I think Japan, it’s where the US was like maybe 10, 15 years ago. Right now, when I look at my university’s CSS program, they’ve got UX, UI stuff, they have web programming and like frameworks and like they have like all of that stuff already. And if you take a look at any university in Japan their course lists, they don’t have a lot of that stuff.

Tim: Lots of algorithms, lots of theory.

Yan: Yeah. Which is also necessary, but yeah, it’s not what companies need right now. So, I think that plays a part in it. And then two, like I brought this up before, but hybrid talent. Because you need people who can bring something a bit different and I would argue that bootcamps are able to provide that. Where you take someone with a pre-existing bit of knowledge with who can work, who’s had experience working, teach them to code, and they’re kind of like this kind of souped up software engineer hybrid that you can place. So, like a good example is, we’ve had people who were English teachers, and then they became software engineers through our program, and then they ended up working at EdTech companies.

Tim: Right. That segues really nicely into Code Chrysalis’s recent focus on enterprise sales. Tell me about that. What are these enterprises looking for in retraining their staff, in getting people to code?

Yan: You know, that’s such a big question. And I think Japan until recently was the third largest economy in the world. And it was only like recently that they fell to number four, there are these massive, massively influential companies in Japan and they have a lot of people. When you look at like competitiveness and like talent rankings, the things that Japan ranks the lowest in are things like talent. And what was another one? Like productivity and efficiency is also one of the lowest things. Companies are trying to figure out what they can do with their workforce to better prepare themselves for the future. I think companies are trying different things.

Tim: So, I mean, but the Code Chrysalis is customer base, do you think they’re engaging because they think everyone needs to learn to code? Are they taking a group of employees that they want to transfer to a more technical role? What are they doing?

Yan: It’s typically the latter. So, I think what can be used to describe all of our customers is that they are trying to figure out ways to invest in the talent that they have and knowing that they need to improve maybe, or like change up the skillset or re-skill or up-skill the people that they have. And so I’d say some customers are doing just like a full transformation where they’re looking for great employees who have that technical potential that they can train up and maybe put into a different role. And we also have a few customers that are looking for upskilling where they have engineers and they want to like modernize them a bit more or get them to kind of think a little differently or getting them that, just like that.

Tim: Okay. But not so much the, everyone should learn to code way of thinking yet?

Yan: I think that depends. So, there’s a part of a company that I can’t talk about where they had actually all of their new grads take our coding class.

Tim: Oh, all right.

Yan: Do our coding program. So, that was like a 200 person class. But in terms of like the entire company, and this is like a massive company.

Tim: No. What was the company’s thinking on that program?

Yan: Well, it was for their specific team that they thought like, well, we don’t know necessarily what they’re going to go off and do but like this is a useful skill, so why don’t we try this out.

Tim: See, I think that is really forward thinking.

Yan: I agree.

Tim: So, with all the talk in Japan about digital transformation or DX, everyone’s focused on like, well, let’s put in the SaaS software and let’s do remote work and that’s great. But I think actual programming technical skills is what’s going to drive digital transformation here.

Yan: I would add that it’s not just technical skills, because I really think that one of the unique points of Code Chrysalis is that we also have what we call power skills, but soft skills basically that go hand in hand with the technical skills. You really need the meta skills of like how to learn how to work with other people, how to communicate. Those are the things that people need in addition to technical skills. Another thing just to add to that is yes, DX is necessary. We are seeing a lot more jobs that are now requiring coding knowledge that didn’t have it before. So, the example that I always give is marine biologists or like urban planners, for example. 10, 20 years ago you didn’t need to know how to code, but now if you start looking at the job requirements, it’s like, yeah, you need to know how to use Python because you have to crunch all this data. Or if you’re an urban planner, you need to be able to model traffic flows. And so it’s not just, oh, like the new jobs, like the software engineering jobs or adjacent jobs that are needing coding. It’s these older jobs too that have been around for a while.

Tim: It’s just becoming a fundamental skill.

Yan: Exactly.

Tim: Well, I mean, back in the old days, word processing was a specific skill that some people had. And now it’s just, of course everyone can do this. And I don’t know, I think coding to some degree is going to become like that.

Yan: I think it is going to be not necessarily like everyone be a software engineer, but having an understanding of like how to form like that process of instructions that you would give. There’s a lot of the new SaaS software that comes out, or like the marketing software that I see, a lot of it is really just like plug and play coding. Like, if someone clicks on this email, then do this. That’s coding. So, I think at the bare minimum, being able to piece that sort of stuff together is really useful. And I’ve heard numerous times people taking even just our intro course and being like, oh, I didn’t realize this thing that I was doing at my non-coding job was coding, and now I understand that so much better.

Tim: Yeah. I think you’re really right. The base knowledge required for coding now is much less than it was 20 years ago. The interfaces are better. There’s much more tooling there that you just don’t have to build yourself.

Yan: Exactly. but I think, yeah, regardless of like kind of how companies are viewing it as in like, everyone should code or we want to create a team or whatever, we just want companies to think about their employees and how they can help upskill or re-skill the talent that they have. Because there is so much of it that we really believe can be unlocked. Changing careers is a very rare thing in Japan. It’s why the consumer portion of our program is not very big. People don’t do that very often. But I think we’re coming to a point where maybe not a career switch, like going from a company to another company, but I think companies should look at maybe providing something like that internally. It’ll be great for the company. Great Incentives like something providing something maybe new for employees. I also think like there is only so much hiring from overseas that companies can do. One of our first customers actually our very first enterprise customer was Mercari and they hired a bunch of new grads out of the IITs out of like the Indian tech schools, tech universities. And we were actually sent in to do their onboarding and training to turn them into software engineers and so yeah, Mercari is able to do that. Not every company is able to get that kind of talent.

Tim: For example, METI is really pushing digital re-skilling.

Yan: Yes.

Tim: Across the board. And actually I noticed Code Chrysalis has some kind of METI certification for…

Yan: That’s for the consumer side.

Tim: If it’s program, I think it’s people who apply for Hello work the unemployment benefits.

Yan: Yes, exactly. Yes, it is that.

Tim: So, have people been doing that? I think that’s a great thing.

Yan: I actually don’t know. That’s a good question. I would have to check with team members.

Tim: But I think it is great there’s this society-wide push to learn to code, to re-skill.

Yan: Yeah. There is, it’s kind of this like slow moving. It’s happening, but it’s not happening I think at a speed that I think all of us want.

Tim: It’s definitely not happening nearly as fast as we would like it to.

Yan: But it’s happening. And I think the reason why maybe it’s not happening is because no one has like a clear, oh, this worked really well, sort of thing. Like everyone’s kind of trying…

Tim: Trying a lot of different things.

Yan: Right. And it’s because this is a systemic issue so there’s going to be different solutions. I also think that a lot of the leaders of these large companies in Japan, they also are not exactly the most knowledgeable when it comes to what to do. And so I think that also has played a bit of a role in the kind of slow speed at which things are moving.

Tim: Do you still code?

Yan: I do not, unfortunately. I was thinking of getting back into it, but…

Tim: I still code.

Yan: You still code?

Tim: I do, I find it soothing.

Yan: Actually, you know what I do code in like small random things. Like sometimes I’ll get really annoyed by something and I’ll put in like a cron job that like…

Tim: Some people like doing crossword puzzles or Sudoku or, but I like coding. It’s that kind of…

Yan: What do you work on?

Tim: It’s embarrassing. I still do most of my programming either in Java or JavaScript. Actually more JavaScript these days.

Yan: Yeah. I mean, JavaScript is, yeah, I think it’s like the most convenient.

Tim: It’s not what you would call an elegant language, but it gets the job done.

Yan: Fast, it’s easy to get up and going. I mean, that is also the kind of default language that we use.

Tim: It is these days. Everywhere. JavaScript and Python. I mean, if you don’t have deadlines, coding is wonderful.

Yan: Oh, I agree. Absolutely. Going down like fun rabbit holes. Yeah. I’ve always enjoyed that.

Tim: …just for yourself. It’s Fantastic.

Yan: I agree.

Tim: Actually another thing I think might have changed, I want to get your opinion. When you started seven, eight years ago, Japan was often overlooked for China.

Yan: That was one of the reasons why I came.

Tim: Yeah?

Yan: Yeah.

Tim: Why? What do you mean?

Yan: I’m Chinese, but I also have this, I don’t like it when everyone’s rushing towards something.

Tim: You’re just a contrarian by nature.

Yan: I am a bit of a contrarian. I’m like a gentle contrarian. I’m not like on the internet yelling at people. But 10 years ago there was this, if you were interested in Asia, you were going to China. And I always thought that was, you know — I’m flattered that there’s so many people interested in the homeland, but yeah, I wanted to be a little different. And Japan was intriguing because it’s number three. Now you have US as number one. China is number two and everyone is overlooking number three. But number three, it’s a pretty intriguing place with a lot of things to offer.

Tim: Do you think that attitude’s shifted at all with…?

Yan: Oh, absolutely. I think the opportunities in Japan are even more plentiful now. What I really like seeing is the US has really had a renewed interest in just strengthening the relationship with Japan. And I think that presents a lot of opportunities.

Tim: Well, there’s certainly been a lot more American and European VC interest in Japanese startups over the last year than there has been over the last 10 years.

Yan: Yeah. I find that very interesting given kind of the low interest rates here. But yeah, I think that it is building up here and I’m hoping that that renewed interest in Japan is going to benefit just the startup community here. More ideas or more mentorship or more direction, bit more competition.

Tim: Well, listen, Yan, before I let you go. I want to ask you my magic wand question.

Yan: Oh, no. No. We should talk about B2B.

Tim: 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 attitudes towards women in Japan, the attitudes towards the value of coders, anything at all to make things better for startups and innovation here in Japan, what would you change?

Yan: I have to say, I don’t like this question.

Tim: It’s a fun one.

Yan: I noticed that you asked this to everyone.

Tim: I do.

Yan: I have to preface everything that I think and say, I feel like it is, depends on my mood that I’m in. Sometimes I’m like so pessimistic about things here and sometimes I am so happy to be in Japan. I’m sure you go through.

Tim: What kind of mood are you in today?

Yan: I think I’m in a Zen mood.

Tim: Oh, excellent.

Yan: Yeah. Magic wand. What would I do? I would love to see the labor market be a lot more dynamic. I think that there is a lot of dynamisms in Japan. Lot of different ways of thinking ideas and that needs to get unleashed in I think, multiple ways. So one, I would love to see like people going to other companies and gaining experience. I would like to see people getting out these big companies and doing other things.

Tim: Do you think it is that employees are comfortable and don’t want to change jobs? Or do you think it’s the structure of the companies don’t allow people to change jobs?

Yan: It’s both. Companies here aren’t good with mid-career, career changer. And I think there is still a bit of that, lifetime employment mentality that that permeates. But even though that was really vital for Japan to build up back in the fifties, sixties, seventies, I think that there has to be some kind of a shift now where there needs to be sort of that unlocking of talent. And I think like in the fifties, sixties, seventies, that talent was unlocked in very particular ways. And I think we’re in a new era and yeah, I would like to see that.

Tim: I think startups are kind of providing a little bit of that liquidity in that.

Yan: Yes.

Tim: You’re finding more and more people who’ve worked in enterprise for 10, 20 years leaving and going to startups.

Yan: Exactly. And I think that’s great. But with running and building Code Chrysalis, one of the things that’s been a struggle is finding people with that growth experience. Like I’m not even talking about scaling experience, just growth experience. For example, someone who joined a company when it was 30 people and left when it grew to 500, regardless of like what position that they were in. Because I think as a company expands and grows, it goes through, different amounts of like chaos and like changes and shifts. And because people don’t have that experience, it’s much harder to say like, oh, I’ve seen this before.

Tim: Just that cultural experience of going through that.

Yan: Yes. And I wouldn’t say cultural, but just like organizational experience of like what happens to this organization when it becomes bigger? How are you going to reorganize or change the way of working? Or like, oh, when my company did that, when it grew to this size, we adopted these things that helped a lot. So, that kind of experience throughout the different roles, whether it’s HR or finance or operations that is something that I think needs to get built up in Japan. If Japan wants to continue growing…

Tim: I think we’re going to need a lot more startups for that to happen because there’s only one place to get that kind of experience.

Yan: Yeah. But you can also get a taste of that by going to different types of companies and seeing how different companies work. Because if you are only at one company, your kind of mind doesn’t get opened up to different ways of doing things necessarily. And this is not a Japan only issue. Like I remember in San Francisco we’d make fun of people who had worked at Microsoft for like 20 years and left Microsoft and were like kind of lost. Or Google has the same issue. Japan has that as well.

Tim: Do you think it’s getting better or you think there is more of this liquidity developing now?

Yan: Oh yeah, absolutely. It is getting a lot better. It’s not where it needs to be though. I think there was a study done where they were seeing more streams coming from, particularly like the more prestigious universities and the more prestigious companies. Where people were leaving those positions and going into startups. So, that’s a great sign. But yeah, we need more.

Tim: Well, it sounds like we’re on the right track in any event. Well, Yan thanks so much for sitting down with me. I really appreciate it.

Yan: Thank you. Thanks for having me.

Outro

And we’re back.

You know, Yan’s experience really highlights the importance of a dynamic startup ecosystem. Startups simply can’t grow in isolation. Code Chrysalis first corporate customers were startups. They then expanded to more traditional enterprises, which then attracted CVC interest.

It’s a formula that plays out across every kind of B2B startup. Other startups are early adopters. They’ll take risks on a new company in their search for an edge. And once a startup establishes a track record serving other startups, it becomes easier for enterprise customers to use them as well.

And as Yan pointed out, a dynamic ecosystem allows people to learn from each other. And that is the real key to innovation and to meaningful digital transformation.

Digital transformation in Japan has become a buzzword hijacked by SaaS software companies and systems integrators in order to sell software and services. And that’s okay as far as it goes. The software is often a big improvement over the way things are. But a true digital transformation requires changes in skills and changes in attitudes.

Only when coding becomes a core business skill along the lines of using spreadsheets and email, will it unleash a wave of experimentation and innovation that will lead to a true digital transformation.

 

 

If you want to talk more about the joy of coding or how to start a startup as a foreigner in Japan, Yan, and I would love to hear from you. So, come by disruptingjapan.com/show 210 and let’s talk about it. And hey, if you enjoy disrupting Japan, share a link online or just tell people about it. Disrupting Japan is free forever and letting people know about is the absolute best way you can support the podcast.

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

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