Everyone agrees that the Japanese education system needs to be modernized, but EdTech startups still face an uphill battle in Japan.

Of course, academia and governments are not known for being particularly innovative or forward-thinking, and that’s why Kohei Kuboyama left a fast-track career at Japan’s Ministry of Finance to launch an EdTech startup.

Kohei lays out his blueprint for getting new technology and new products adopted in Japan’s schools, explains the challenges of leaving government service to start a startup, and talks about a few optimistic long-term trends he sees in Japan’s eduction system.

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

Show Notes

  • Why it’s so hard to leave the government to start a startup
  • The three waves of “founder acceptance” in Japan
  • Why EdTech startups sell to cram schools instead of regular schools
  • The key to turning teachers into product advocates
  • The biggest challenge in selling to high-schools in Japan.
  • How to create life-long learners in Japan
  • The appropriate role of the Japanese government in supporting startups
  • The biggest risk with government funded startups
  • Getting over the fear of failure in Japan

Links from the Founder

Transcript

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

I’m Tim Romero and thanks for joining me.

Edtech Startups in Japan need to overcome some significant barriers in order to succeed.

Oh, it’s not that people really want those barriers there. There’s a huge desire for change in innovation. In fact, there is an almost universal agreement that the way Japanese children are taught needs to be modernized and reformed. The hard part, however, is getting people to actually agree on what concrete changes need to be made.

Well, today we sit down with Kohei Kuboyama, the founder of okke. And Kohei lays out his strategy for getting EdTech startup products approved by and used in Japanese schools. He also tells the story of how okke evolved from a simple YouTube curation site into an integrated testing and tutoring platform.

We also talk about Kohei’s surprising decision to leave his fast track career at the Ministry of Finance to start a startup, the key steps to selling to Japanese high schools and cram schools.

And we dive deep into the Japanese philosophy of education and instruction, how it differs from that in the West, and exactly how Japanese high schools and even cram schools are starting to change.

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

 

Interview

Tim: We’re sitting here with Kohei Kuboyama, the founder of okke and maker of Dr. okke. Who’s helping high school students learn. So, thanks for sitting down with us.

Kohei: Thanks for having me.

Tim: I talked really briefly about what okke does but I’m sure you can explain it much better than I can.

Kohei: Yeah. So, our mission is to make a world where every person learns actively and every person can make their lives fulfilled. We are providing two products. One is for high school students and one is for schools. One product is called okke, this is actually an app for high school students and they can use our app for free. So, the basic concept of okke, is to let high school students learn wherever they want to, whenever they want to, and wherever they live. The basic concept is the search engine. So, there are a lot of useful and helpful learning information and contents on Google and YouTube, for example. But there are many kinds of information there. Game and contents of music and so on. We are making the search engine under the platform focusing on learning.

Tim: So, how does it work? So, I think like at first you originally started just curating videos. And recommending educational videos, but okke’s developed into a much deeper platform than that.

Kohei: As you mentioned, the main contents are the videos, especially on YouTube. So, we are curating many lecture videos on YouTube, and every high school student can search, for example, like if they cannot understand the concept of some fields of math, they can search that field’s name. So, they can search by levels and the fields and the units they want to learn.

Tim: And you also have like quizzes and tests built into the app as well, right?

Kohei: We are providing quizzes for schools, but maybe in future, we are incorporating that in the app.

Tim: So, who are your customers really? Are they cram schools? Are they public schools? Are they parents? Who pays for okke?

Kohei: Yeah, actually okke is free for high school students, and we are not monetizing that. But second product we are providing is called Dr. okke. This is to be service and for cram schools and schools. So, the basic concept of Dr. okke is to let teachers provide tests with their students.

Tim: So, the cram school product is not something the students use, it’s something only the teachers use.

Kohei: Yes.

Tim: So, how do the two products work together?

Kohei: Yeah, we are combining the products. We are incorporating the Augustus contents into the Dr. okke which means students answer the questions on Dr. okke. And after that, there are many like, details, answers, and below that we are incorporating videos and the articles which is explaining the question.

Tim: So, a student can take a test and then based on the results of the test, okke would recommend you should watch these videos to better understand the points you missed, that kind of a thing.

Kohei: Yeah, yeah, exactly.

Tim: Okay, that makes a lot of sense. Before we get into the marketing and the go-to market. I want to talk a little bit about you and your background.

Kohei: My background.

Tim: So, you graduated from the University of Tokyo. You went into the Ministry of Finance which is just a very typical successful path, right? I mean, it’s…

Kohei: I know what you mean.

Tim: I mean, I’m sure your parents are very happy with that. But after about three and a half years, you decided to leave the ministry. So, why? What made you decide to move out of that really great career path?

Kohei: Yeah, so I graduated from the University of Tokyo and I went to the Ministry of Finance because I wanted to make a direct impact on our society. When I was 22, I was thinking of how I can make an impact and yes, I have to become a bureaucrat in Japan. And I went into that. But after three and a half years, the Ministry of Finance provided me the chance to study abroad. And I went to the University of California Los Angeles, UCLA, to get the MBA and during the MBA years — so I had to do an intern, but I was sponsored by the government, so I couldn’t get income in the US. So, I applied for many major companies in the US but I was rejected because I couldn’t take the money from the companies.

Tim: They didn’t want you to work for free. It wasn’t part of the program.

Kohei: Yeah. It’s illegal. So, I had to do the intern in the startup. And then I jumped into the startup world and I was excited. This is very fun and maybe I can make a direct impact on the society from startups.

Tim: What kind of startup were you interning with? From UCLA? Was it an EdTech startup?

Kohei: No, it’s actually AI startup, so it’s like emotional analytics. But when I was working in that startup, I wanted to do myself. And also I was born and grew up in rural area in Japan, and I went to Tokyo in university. So, I felt like educational regional differences in Japan. So, that’s the deep program. I felt. So, when I was thinking of making my own startup, I felt very deep program in education in Japan. So, okay, I will do that. And I make my own setup.

Tim: So, after you got your MBA, you came back to Japan and started a startup?

Kohei: Yes.

Tim: And was the Ministry of Finances said about that?

Kohei: Yeah. So, I had to go back to the Ministry of Finance, of course, because the ministry paid my tuition of the MBA, so I had to pay back all the tuition to the government. So, that’s very tough. But yes, so I paid back all the fee to the government and also like my boss, like scolded me, of course. Actually it was just start of the coronavirus, the spring of 2020. Actually the day when we launched the website, the Prime Minister of Japan decided to close all the schools in Japan. So, we are introduced by many articles and media. So, it was a good timing and I was able to decide to leave the ministry.

Tim: I mean, that’s really exciting. But it’s very unusual in Japan for someone to leave. Well, no, I find it fascinating because it comes in wave. The first wave was kind of like, so when I started my first startup in the nineties here, only people who had to start startups started startups. If you know what I mean. But then it was students from like, really good universities from Todai and Waseda started starting startups and then more people from like mid-career at really good companies started starting startups. But it’s still very unusual to see someone from one of the large ministries starting a company. So, what was the reaction from like your colleagues?

Kohei: So, I didn’t know the person who left the Ministry of Finance to start their own startup directly. So, there are many people, for example, go to the consulting companies and then do their own startups. But this is like an irregular case, to like start my own startup directory after leaving the ministry. So, the working in consulting companies, it’s kind of similar to working on the Ministry of Finance. So, it’s like a negotiating and the managing many counterparts. But this is like, I don’t know how I can say that, but the startups and the ministry is kind of like opposites. So, it was interesting, but many colleagues cheered me. So, they couldn’t stop me and I think they cheered me because many colleagues in including me didn’t know the world of startup. So, we didn’t know how to make the companies bigger. So, they just cheered me.

Tim: That’s great. It’s great to hear they’re supportive.

Kohei: Yes.

Tim: That’s awesome. That wasn’t the reaction I was expecting. What did your parents think?

Kohei: So, finally they cheered me, but first they couldn’t understand what I mean. But when I was a child, I was stubborn and my parents knew that of course. So, they were supportive as well, finally.

Tim: That’s great. Eventually. Well, no, like, it just seems like your timing was really good. And you know, cram schools are a really good test market for Edtech in Japan. They’re private, they really care about results. They’re measured really strictly in publicly on how many students they get into good universities. So, was it easy to sell to cram schools? Do you find they were ready to try to new technology or was it pretty difficult to get them to adopt?

Kohei: Even for cram schools, it is tough to introduce new technology in their usual work because they are teaching by themselves. Many teachers in cram schools want to teach by themselves. So, it is kind of difficult to replace all their work to some technology.

Tim: So, like each teacher wants to set up their own system and their own…

Kohei: Yeah. They want to their students. Like it’s a concept and like math and equation and something like that. So, they usually don’t want to replace that teaching part into the technology.

Tim: So, they just enjoy that part of the job?

Kohei: Yes. Oh, interestingly, yes, I can.

Tim: No, that makes sense actually. I mean, that’s really teaching,

Kohei: Yes. So, they love the communication with their students.

Tim: Alright, so I find it interesting. So, EdTech is one of those areas where your customer and your user are very, very different. So, and then this is just a perfect example of that. So, the students might really want to learn online, but the customer doesn’t. They love that part of it. So, what value did your customer see in the product?

Kohei: The biggest one is to get results. We are not replacing the teaching part of the teachers, but we are aiming for like, the arm of the teachers. So, the teachers are using our product to make their communication with the students much more variable. The problem of the teachers is they cannot understand what students actually understand. So, for example, when I was a high school student, if I was asked by my teacher, okay, so do you understand this? And I will answer, yes.

Tim: Yeah, of course.

Kohei: But when I answered like for example, quiz, I couldn’t do that. So, there is a large information asymmetry between the teachers and students. So, the teachers are using our test tool to know the status of the students.

Tim: And I guess it would make sense from the student point of view too because after they take the test, they get directed to additional videos and information to help them improve. So, the teachers still get to teach.

Kohei: Based on the result of the tests.

Tim: I see how that would work really well. Do you also sell it to regular schools?

Kohei: Yeah. In future we are aiming for that, but now we are targeting the cram schools because the teachers of cram schools can decide much more quickly than the regular schools.

Tim: It seems that selling to high schools, junior high schools, even universities in Japan is difficult.

Kohei: Yes.

Tim: Why is that?

Kohei: The regular schools decide how to use their budget once a year. So, the timing when we can sell our product is once a year. So, it’s kind of difficult. But in cram schools, so they are always searching helpful products and useful products. So, it’s much more easy to communicate with the teachers on cram schools.

Tim: So, when you’re selling to public schools or regular schools, does each school have the ability to decide on tools like okke, for themselves? Or is that decided at like a city level or county level?

Kohei: There are two types of schools. One is the private school and one is a public school. And in private schools so each school can make the decision by themselves. But in public school, if my understanding is correct, the city or like the county level should decide whether each school in their community introduces some product or not.

Tim: And does that make it harder to sell or easier to sell?

Kohei: I think if my company becomes bigger, it’s easy to sell a product to schools maybe because there will be some branding. But difficult part is that the teachers are in every school, of course, but the people in the city or like the prefecture, they are not teaching in like actual schools. So, I think there is some gap between like what they are focusing on and what they think and what actual teachers think. So, I think it’s much more tough.

Tim: Yeah. Especially as a small startup.

Kohei: Yes.

Tim: But in general though, for the EdTech market in Japan, does new product adoption, do we often see products like first being used in cram schools and then moving to private schools and then to public? Is that a normal path?

Kohei: Yeah, I think so. For small startups it’s a normal path, but there are some companies who start with regular schools then after to cram schools. But they are big companies.

Tim: So, they’re the ones that already have the relationships with the…

Kohei: Yes. Yeah, exactly.

Tim: That makes sense. So, looking forward, do you see this platform as something that cannot replace cram schools, but that students could use instead of a cram school?

Kohei: Yes. So, our mission is to enable every person to learn actively, which means they are not depending on cram schools, for example. But the thing is, the teachers have much value on students’ learning. So, the value of cram schools is not to teach some contents to their students, but to provide the atmosphere of learning and to communicate with the students. For example, there are some students who can learn by themselves in their house, for example, but other students cannot concentrate on their learning at their own rooms. But if they go to the cram schools, they can focus on their learning even without any lectures from the teachers. So, I think the value of cram schools is changing from teaching to something like that.

Tim: Well, actually that’s a really good point. I’m wondering how cram schools are changing in Japan, because over the last, certainly the last 10 years, there’s been a lot of discussion about how Japanese education needs to change to be more creative, to teach students critical thinking, to be less test oriented and less, yes, no, type thinking. But cram schools are very much focused on the yes, no, this is the answer. I mean, that’s fine. That’s their job is to get students into universities. So, are they changing? Can they change?

Kohei: They are actually changing and we want to accelerate the change. This is kind of my personal thought, but I think we cannot divide like the test oriented education and critical thinking and much more like meaningful education. I think they are combined, even if we have to do test oriented education, but we can manage how to teach the type of learning. So, the learning of cram schools is usually knowledge based, but we can change how to learn to make them useful for their lives.

Tim: Oh, I see. So, the idea is you’re still teaching the same subjects. You’re still teaching the same topics, but they’re being taught in a different way. You’re teaching mathematics in a way that that helps students learn to think critically and question why things are this way.

Kohei: Yeah. The current learning is kind of too passive, but I think we can change the way and let the students learn more actively.

Tim: So, what kind of techniques are useful for that? How is okke enabling that kind of creativity and a new way of teaching?

Kohei: Yeah. That’s a very difficult question, and I am always looking for that. But one thing we are thinking of is to let the students choose by themselves. The biggest part of that type of learning is to set their goals by themselves. If the teachers decide their goals, maybe the learning toward that goal will be passive. But whether their goals are short or long, if their goals are set by themselves, they can learn actively and the teachers only support their students to head for the goal.

Tim: Well, that makes sense. And that’s something we would definitely need a technology platform to allow that kind of independent inquiry and independent study. Everyone talks about the importance of students learning critical thinking and the way students learn, but I think I wish people would talk more about adult education and like actual lifetime learning.

Kohei: Yeah. But it’s difficult to penetrate that kind of service to actual adults.

Tim: Well, but maybe if students get used to learning themselves when they’re in high school, they’ll continue that behavior as they get older.

Kohei: Yeah. That’s actually our mission, is that, yes. One of the biggest programs of Japan’s education is to set the goal to pass the entrance exam of the universities. So, students stop learning after they finish the entrance exam.

Tim: So, check finished.

Kohei: Yes. Yeah. So, we are aiming for changing that.

Tim: And yeah, like you said, the key to that is getting the students to feel they’re in control of their own learning path.

Kohei: Yeah. We would like to change the way university students and adults learn, but as a first step, we started out with high school students.

Tim: Yeah. Well, the high school students will eventually become adults.

Kohei: Yes.

Tim: You mentioned before that your colleagues at the Ministry of Finance, many of them had never even heard of a startup, like what is it? But I find especially in the last three or four years, the Japanese government’s been playing a very active and very visible role in supporting startups. What do you think that the government’s doing well, and what do you think like the government role should be in supporting startup ecosystems? Because you’ve been sort of on both sides of this.

Kohei: Yeah. So in my opinion, the role the government should play to support the startups is to provide risk money.

Tim: So, actually funding the startups.

Kohei: Yes. I’m not sure if the policy to increase the number of entrepreneurs works well. Like I decided to become an entrepreneur internally. So for example, like if there’s some education to become an entrepreneur, I don’t know this is a good way to become an entrepreneur or not.

Tim: Yeah. I think that’s a really good point. I don’t have an answer either because I think a lot of the programs like this year METI is spending a lot of money sending young Japanese overseas to Silicon Valley and to New York and Boston and London just to be exposed to startup culture. I understand the theory of that, and I mean, and it worked for you, right?

Kohei: Yes, exactly. Yeah.

Tim: So, we’ll see. I think there’s a lot of people trying a lot of different kinds of things, but yeah, how to get that mind shift is, I have no idea.

Kohei: I think one good thing I saw in high school students is there are some students who is thinking of becoming an entrepreneur in their high schools. So, I think this is a very good thing because people are able to know what an entrepreneur is and what is to make their own companies. I think this is a good thing for students. But another big problem is I said like, the government should provide risk money to the startups. But the thing is, the government cannot provide money to the startups directly. They are providing their money to finance institutions. So, I’m not sure they are the people who can judge which startups will grow or not.

Tim: There’s a lot of government money flowing into startups, as you mentioned. It’s kind of indirectly, but they’re funding university startups. There’s quasi government funds like INCJ and Cool Japan Fund. Usually it’s in partnership with private VCs or things like that. What about the government working with startups? This is something that everyone I talk to on both sides thinks is a great idea and wants to do and wants to use like this startup creativity to help solve government challenges and better communicate. But no one seems to be able to make it work.

Kohei: That’s very tough. In my opinion like the decision speed is like opposite of the government and the startups. So, I think that would not work, for example so, there are many types of subsidies and I was looking for that, but there are a lot of documents we have to provide to the government. And I gave up. I was working in the ministry, but I gave up. No, no, I couldn’t spend much time on such kind of like a paper stuff. But I think one good point is to get some, like branding from the government. If a small startup can corroborate with the government, it makes much easier to like sell the products.

Tim: Yeah. Other companies have more confidence in working with them. And so I think the strongest impact of like the J startups program from talking with like the founders who are in there is exactly that. It’s the credibility of the government saying, well, we’ve selected these startups and we think they’re interesting and worth looking at. And that does make it much easier to do business with Japanese companies.

Kohei: Yeah. So, they are weak with authorities.

Tim: Well, and I mean, it’s a new thing for everyone. So, I think that that extra bit of like confidence helps.

Kohei: Yes.

Tim: Do you still keep in touch with some of your former colleagues? Are more and more of them learning about startups?

Kohei: Yeah. So, in the ministry, we have very strong relationship with the colleagues who join the same time. When I was 22, I jumped into the government and many students joined at the same time. And yeah they are good friends and we are like drinking sometimes, for example. But I’m in the education field, so we are not discussing our business just like keeping good relationship.

Tim: Well listen, Kohei before I let you go, 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 learning, people’s attitudes towards risk, anything at all to make it better for startups and innovation in Japan, what would you change?

Kohei: I’m sure this is difficult to change, but what I think is to change the atmosphere where people criticize people who are not following the communities. In Japan I think this is actually changing, but I think one possible thing which is prohibiting the people’s innovation is the fear to fail.

Tim: Why do you think there’s such a strong fear of failure in Japan?

Kohei: One thing is people don’t have confidence in themselves. This is kind of related to education, but so people do not choose their own goals by themselves. They are working on the paths which is decided by others. So, that’s one possible reason not to feel confident in themselves.

Tim: So, that goes back to your original comment about people getting criticized for doing something that’s different. So, you feel like even starting it, people will get criticized. Although, well, you were saying your colleagues and everyone were very supportive of you.

Kohei: Yeah, that’s a good point. So, maybe the problem is not to criticize the people who are not following path, but to feel the fear to jump out of the path. I didn’t feel such types of fear when I decided to jump into the startup, but I know many people in Japan feel like much fear to jump out of their comfort zone.

Tim: But it seems to be getting better. We seem to have more and more people leaving large companies to start startups and even government as you mentioned, like indirectly taking a few steps first, but then going…

Kohei: Yeah. I think young people are actually doing that. They go to the big companies just after graduation from the universities, and maybe they work three or four years, then move to startups and other companies. I think the thing is changing.

Tim: I do think it has so much to do with what you were saying about education, about how for the first 17, 18 years of children’s lives, everything’s decided for them. This is your goal and you get the answer on this test, and your goal is to pass this test and pass this test and get to use this university, and then you’ll get this job and you’ll be fine. And maybe like after they get that job, more people start thinking like, wait a minute.

Kohei: Yes. Oh, is this what I wanted to do? Yes. And that’s one reason I started my own startup.

Tim: But I guess maybe with like you’re saying, like even with high school students learning about startups and thinking about startups, if there are more teaching in the way that okke is teaching, which is more self-directed, we might see a big change in that in the coming five, 10 years.

Kohei: Yeah. We are creating that wave now.

Tim: That’s awesome. Well, listen, Kohei, thanks so much for sitting down.

Kohei: Thank you for having me.

 

Outtro

And we’re back.

Founders like Kohei, founders who move from government to startups are still quite rare. But every year we’re seeing more and more people from enterprise and academia leave to join the startup world.

And this movement will no doubt eventually reach government bureaucrats as well, but even when it does, we’ll only be halfway to where we really need to be.

The true value, the real innovation comes when there is a revolving door. When people go to the startups bringing their enterprise and government knowledge and experience with them, and then come back bringing in new ideas and startup experiences with them. This not only makes enterprises and government more innovative and responsive, but it makes it easier for startups and enterprises and governments to work together.

It’s a virtuous cycle that benefits everyone. But you know, after talking with Kohei, I’m left wondering how much the Japanese education system will really be able to change. I mean, at least how much it will be able to change from the inside.

Despite the near universal agreement that education needs to move away from rote learning and test-based instruction cram schools in Japan are a booming business. And Japanese cram schools exist for one reason and one reason only to teach students how to pass university entrance exams.

Kohei’s key insight here, however, is the importance of getting students to set their own learning goals and strategies. If students learn how to learn, they’re more likely to become lifetime learners. And that perhaps more than anything else, is what leads to creativity, innovation, and positive change.

So, maybe Japanese schools won’t be able to change on their own, but just maybe the people who will change them might be the students themselves.

If you want to talk more about lifetime learning or selling to Japanese schools, Kohei and I would love to hear from you. So, come by disrupting japan.com/show212 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 it 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.