There are a lot of passionate opinions about Japanese design. From the beauty and subtlety of the best Japanese anime to the design horrors of most corporate Powerpoint presentations, Japanese design covers a huge range.

Things are changing though, and today we sit down and talk with Naofumi Tsuchiya, the founder and CEO of Goodpatch, one of Japan’s leading, and most richly valued, UI/UX design startups. We talk about how Japanese design is evolving and why we might be seeing (for better or worse) a more global design standard and sensibility.

Goodpatch is one of the new breed of Japanese design firms, and they’ve been able to raise substantial venture funding. Nao and I also talk about how that venture money has forced his startup to move in very specific strategic directions.

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

UPDATE: The conversation below on the future of Goodpatch’s two products is a bit confusing. Goodpatch has stopped development of Balto, but is continuing development on Prott. They are now in the process of a major rewrite and will soon launch a revamped Prott 2.

Show Notes

  • How you can choose your customers in Japan, and why most startups think you cannot
  • How a life-threatening illness actually turned Nao’s life around
  • What makes a product meaningful
  • How to discover passionate teams hiding inside large enterprises
  • Why it’s hard for a startup to move from services to products
  • Why design in Japan is so different today
  • How to improve user acquisition by over 50% (at least in Japan)
  • How we should be raising the next generation of designers

Links from the Founder

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Welcome to Disrupting Japan. Straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for joining me.

Today, we’re going to be talking about design in Japan and it’s going to be good. Because Japanese design is a topic that people have a lot of strong opinions about. From the subtlety and nuance you see in the very best of Japanese anime to the visual horrors of Japanese corporate PowerPoint presentations. The topic covers both the wonderful and the terrible.

And so, to dance us through this minefield is Nao Tsuchiya of Goodpatch.

Now, Goodpatch is one of Japan’s fastest growing and most highly valued design startups. We’ll talk about Japanese design not only as it exist today but why we might see a global convergence of design, style, and UI sensibilities in the coming decades. Even if it’s inevitable, it’ll be sad to see the current global diversity disappear.

And though we don’t talk about it during the interview, I first ran across now a while back when I recommended Goodpatch to one of my larger consulting clients. Before providing an estimate or drilling down into the requirements, Goodpatch sent back a detailed questionnaire, asking this enterprise about their dreams for the project and who their ideal users were, and how they normally communicated with them.

Now, these are great, in fact, even common sense questions for designing a user experience. They show that the designers really do care about what they’re building over at Goodpatch. But the enterprise employees running this project simply did not know how to deal with it. And rather than trying to answer the questions and challenge their own assumptions about the project, they went with a more traditional and more obedient vendor. The final product was definitely the last because of that decision.

I’ve been a fan of Goodpatch from the day I saw that corporate client questionnaire. But you know, Nao tells the story much better than I can. So let’s hear from our sponsor and get right to the interview.

Tim: So I’m sitting here with Nao Tsuchiya of Goodpatch, one of Japan’s fastest-growing digital design firms.

Nao: Thank you.

Tim: Now, normally, I avoid service companies because the demand for web and mobile app design, this demand rises and falls with venture investment but Goodpatch is doing things a little bit differently. You’re actually creating your own products, Prott & Balto.

Nao: Yeah.

Tim: So tell me a bit about those.

Nao: We decided to stop making those.

Tim: That’s interesting. When did you decide that? When did you make that decision?

Nao: We made the decision last month. They’re already some released to the public.

Tim: So just announced?

Nao: Yes.

Tim: A little later on, let’s talk about why you made that decision and the challenge of product versus service. Because I think that’s really important. Tell me about your customers. Who are your main customers right now?

Nao: Our customer not really the big or small. They want to make meaningful product.

Tim: A meaningful product?

Nao: Meaningful product.

Tim: So what is a meaningful product?

Nao: Market and the people need – they also want impact for the society.

Tim: Not just making money?

Nao: Yes, not only. They have to be profitable, of course, but not only.

Tim: It’s interesting. One of the companies that I work with actually sent you a request. They wanted to work with you. What was interesting is you sent them back a very detailed list of questions. Not about their product but about their vision and how they wanted to – what their relationship was with their customers. I’ve got to say, it scared of scared them off. They didn’t know how to answer. So when you say companies that just want to make money versus having a vision for a better society, let’s dig into that. What does that mean? Because I think most people, whether it’s a company or an individual, they think they have a vision. They believe they have a vision. How do you tell the difference between a company that has a vision and wants to make money and a company that just wants to make money?

Nao: Company has strong vision. They have the passion, strong passion. If I can feel the passion, I want to work there.

Tim: Does that mean you’re usually working with startups? My image of large Japanese companies isn’t very passionate.

Nao: Yes.

Tim: Does that mean you’re mostly working with startups or do you work with big companies who have passion as well?

Nao: The big company has the passionate people. I don’t know there are few people. But they have.

Tim: So sometimes you can find maybe like a passionate team inside a big company.

Nao: Yes.

Tim: Okay.

Nao: And we send a message for market.

Tim: Are you approaching people you want to work with or–?

Nao: Yes or through broad media.

Tim: So you attract people you want to work with?

Nao: Yes. We attract the kind of people we want to work with.

Tim: Okay. That makes sense. Before we talk more about the Goodpatch story and why you changed from product to pure service, I want to back up and talk a little about you. You have a rather interesting history. You left college for health reasons. And after you recovered, you went back to school but decided to quit again. Why is that?

Nao: When I was 21 years old, I had a very big health emergency. Then I heard tomorrow cannot come.

Tim: You were worried you’re actually going to die or you were just worried about your future in general?

Nao: I actually was worried about dying. I am not alive a long time, I felt that time.

Tim: Okay. After you recovered and you went back to school for a brief period of time, you moved to Silicon Valley to, as they say, follow your dream. You moved to Silicon Valley to learn and you even worked at B-Trax for a while. What did you learn in Silicon Valley?

Nao: Manage motivational people and how to work Silicon Valley people.

Tim: Why Silicon Valley?

Nao: I thought I have to go to Silicon Valley. It’s a gut feel.

Tim: But at that time, you didn’t speak English at all.

Nao: Yes.

Tim: What did you learn there?

Nao: Work environment, different. People, more international people. Japan is only Japanese and I heard most impressive is weather.

Tim: The weather?

Nao: Weather.

Tim: Okay.

Nao: Silicon Valley, I was wondering why talented people and smart people go to Silicon Valley. I live in Japan so I don’t know. But when I went to Silicon Valley, I understand. The clear sky, the blue sky, and comfortable temperature.

Tim: Okay. Very nice weather, especially if you like fog in the summer times. You left and came back to Japan and started your own company.

Nao: When in worked in San Francisco, summer school is very popular, startups. Many startups launched —

Tim: Yes. More in San Francisco than probably the rest of the world put together.

Nao: Yes for experience, Uber, that time, maybe it has only around 10 people, maybe has only 30 people.

Tim: Right, right.

Nao: Instagram has only 10 people.

Tim: Right. That first generation of cloud-based startups was just getting started in 2011.

Nao: Yes. Very small. But the first growth in the five years.

Tim: In 2011, in Silicon Valley, the startup boom was moving along fine. It was growing.

Nao: Yes.

Tim: But in 2011 in Japan, things were still pretty slow for startups. It was before the boom really started. So why come back to Japan and start a design company at that time?

Nao: Silicon Valley and San Francisco startups, they knew the importance of design. The UX and UI. They put so much effort. They were aware of user-centered design.

Tim: Okay. Let’s talk a bit about design in Japan because I think the idea of user-centric design is new in Japan. Design in the west and Japan is very different. Japanese design tends to be very crowded and a lot of information dents.

Nao: Yes. Like Rakuten advertise.

Tim: Yes. Or Japanese PowerPoint presentations are just —

Nao: Yes. Very elaborate.

Tim: My question is, does that kind of design, the crowded design, does it work better in Japan? Are these designs AB-tested or is just convention?

Nao: That time, people wanted crowded design. But 2008, Apple released iPhone. The iPhone changed everything. The interface, very simple. Japanese people bought iPhone, many people.

Tim: That is really interesting because I think iPhone is the most successful consumer device in history.

Nao: Yes.

Tim: Android, it’s similar UX-UI. Do you think that because of the iPhone, that we’re heading towards a global UI standard?

Nao: Yes. IPhone changed the whole concept. Apple, de-invented for.

Tim: For example, new Japanese e-commerce sites, are they more likely to use the cleaner Apple-inspired designs?

Nao: Maybe. For experience, Zozotown, a little bit clean. And Rakuten website is crowded but platform application is a little bit clear.

Tim: Interesting. So there is a change. The PowerPoints are still horrible.

Nao: I don’t know.

Tim: It’d be nice if the online design is changing.

Nao: Yes.

Tim: So you think that is filtering into broader design sense in Japan? Is it changing graphic design and print design also?

Nao: I don’t think change the graphic and the print design.

Tim: So the impact so far has just been online?

Nao: Yes. Especially smartphone.

Tim: Well, smartphone, it makes sense because you want to be consistent.

Nao: Yes.

Tim: Okay. Let’s go back in time a bit. So when you were just starting out, Goodpatch’s first really big and successful client was Gunosy.

Nao: Yes.

Tim: In another interview you did, you mentioned that because of your redesign, it improved their user acquisition by 50%. What kind of design changes did you make to get a 50% increase in user acquisition?

Nao: The first design is very horrible, so horrible. They created logo to use PowerPoint.

Tim: Wow. So they basically took the horrible PowerPoint and put it on mobile?

Nao: Yes.

Tim: Okay. That’s horrible.

Nao: So it’s student work, Tokyo University student. I met the founder when I was in San Francisco. First time I saw Gunosy, I want to redesign this.

Tim: So you approached him and said, “Your site is really bad. Let me fix it for you”?

Nao: Yes. I felt Gunosy has potential but design could have been much better.

Tim: Let’s use this as an example because a lot of people talk about user-centered design. I don’t think many people really understand what it means. In the Gunosy example, where they had basically a PowerPoint on mobile, what did you change to make that user-centered?

Nao: Gunosy is very simple size. The user want to read article. Gunosy’s UI should not interrupt the user’s behavior.

Tim: The ideas allowing the user to get the information with as few clicks as possible or understand the user’s desire or motivation?

Nao: The Japanese media is crowded. So unnecessary information was there.

Tim: So that crowded design again?

Nao: Yes. Gunosy should be simple. They want the simple media in Japan.

Tim: Okay. You built your company off of that success and improved conversion rates and designs for many other companies. But let’s get back to your products, because I think a lot of services companies particularly software developers want to make products and it’s a really hard thing to do. Let’s walk through it step by step. Why did you decide to start making the products instead of just services?

Nao: The way I started Goodpatch, I wanted to make own product.

Tim: Also, that was your goal from the beginning.

Nao: Yes. Someday.

Tim: How early did you start work on the products?

Nao: After two years have passed.

Tim: Okay. The two products, Prott & Balto, were tools to help other designers and to get user feedback, right?

Nao: Yes.

Tim: One of the most common problems that CEOs have when trying to create a product inside a services company is the conflict between your vision and your customer’s vision.

Nao: No conflicts. The Goodpatch vision, Prott & Balto vision and mission are very related.

Tim: As you were mentioning before though, just yesterday, you announced that you were closing down the standalone products. What happened?

Nao: They cannot gross a product.

Tim: So just not enough users?

Nao: Yes. User basis and I cannot sell other product.

Tim: It’s very hard to do both services and product in the same company.

Nao: Yes.

Tim: From now on, are you going to focus strictly on services or do you have another product idea you’re thinking about?

Nao: Yes. I want to enable new product.

Tim: Anything you want to talk about now or is it still secret?

Nao: Yes, secret.

Tim: Okay. That’s fair. One thing that’s very unusual in Goodpatch’s history is that you’ve been able to raise a lot of venture capital, both from digital garage and SMI and Sumitomo. Just this year, actually, invested quite a bit. VCs usually don’t invest in services company.

Nao: Yes.

Tim: Are the VCs pushing you to do more products or are they investing you in just services?

Nao: Both. VCs intersect Goodpatch because Goodpatch has service and product offerings.

Tim: Are they also partners? Are they using your service or are they strictly focused on you as an investment?

Nao: They don’t really use product. VC is not designer.

Tim: Okay. So they’re probably pushing you pretty hard to do another product.

Nao: Yes.

Tim: That makes sense. Also, though, you’ve been very aggressive internationally as well. You opened up an office in Berlin and Taipei as well, right?

Nao: Yes.

Tim: Why Berlin and Taipei?

Nao: I had the ambition to open international offices four years ago. I used some product, Wonderlist and Soundcloud. Wonderlist and Soundcloud in Berlin startup.

Tim: Right. So you were just attracted by the design sense of the startups coming out of Berlin? I was there earlier this year and the startup community in Berlin, it’s small but there is a lot of really interesting companies there.

Nao: Yes. One German student joined Goodpatch.

Tim: Is the Berlin office a design team or mostly sales?

Nao: Both.

Tim: Okay. Let’s talk about the future of design. I think it was really interesting, you talked about how the smartphone UI-UX changed Japanese design. This interface changed the way everyone thought about UI and UX. But I think in the next 10 years, especially in Japan, there’s going to be a real move towards the internet of things. How is that going to change the way we interact with devices? Because we don’t always want to be going to the smartphone.

Nao: Basically things not change. We focus user experience, we design the experience regardless the devices. We focus on user experience.

Tim: I’ve noticed, when you look at internet of things and consumer hardware, there seems to be two different schools of design. A lot of Japanese, if you look at, for example, Panasonic or Sony, their devices tend to be more and more complex design, display screens, more features, more functions. And the other school seems to be the device seems to have one button and then the complicated things are managed on the smartphone. Do you see one of these two schools as wining or do you think that they will keep going independently?

Nao: Depends on the context. Depends on what the users .

Tim: So no definite trend but very much sort of a case by case basis?

Nao: Yes.

Tim: Do you have any advice for foreign companies coming into Japan? Should they rethink the way their websites are designed? Is there something they should be thinking about in terms of design?

Nao: Many foreign company failed in Japanese market.

Tim: Yes.

Nao: Japanese is a very unique market. One thing is they should collaborate with a Japanese company. They need Japanese context.

Tim: When you’re saying collaborate, do you mean they should have a joint venture partner or just they should engage a Japanese design firm? What level do you think they should?

Nao: Joint venture is very powerful but a partnership with a Japanese company.

Tim: Okay. Do you have the same advice for Japanese companies going to the US or to Europe? Should they try to partner or should they redo their design?

Nao: I cannot say. Berlin office is successful because the leader there is excellent.

Tim: Okay. So you were able to build the right team or the right person to build the right team.

Nao: Yes, build the right team and the right person.

Tim: Before we wrap up, I want to ask you what I call my magic wand question. 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 legal system, anything at all to make things better for startups in Japan, what would you change?

Nao: I want to change education system.

Tim: The education system?

Nao: Yes.

Tim: How would you change it?

Nao: More design. Japanese market lack designer.

Tim: You mean design sense or more of a design thinking?

Nao: The thinking approach. Many designers don’t have design experience, only graphic. They can design graphic and the print. The market need more designer should experience.

Tim: I’ve taught design thinking and I think one of the biggest challenges or one of the biggest differences between design thinking and Japanese educational system is that in design thinking, there’s no right answer. I find a lot of the Japanese education system is focused on giving the one right answer.

Nao: Right. I think the program – a university cannot run the business. The future designer should have design and technology and business, should have the three skills and the balance.

Tim: So is the problem without those skills, they don’t understand the user’s needs?

Nao: It’s not that but the discover needs, they need a balanced knowledge of these three areas.

Tim: I see. So the biggest change would be changing specifically how designers are taught design.

Nao: Not only for designers but fundamentally, educational leadership and programming or entrepreneurship can be taught to everyone.

Tim: How early do you think people should be taught that, high school, elementary school?

Nao: The programming should be around elementary school, more early phase.

Tim: So really early?

Nao: Yes.

Tim: Recently, there has been some programs to introduce Japanese elementary school and junior high school to programming. Do you think this is a trend? Are we going to be seeing more of this in the future?

Nao: Maybe continuously.

Tim: Okay. Well, I hope it does. Listen now, thank you so much for sitting down with me today. I really appreciate it.

Nao: Thank you.

And we’re back.

I love Nao’s idea of wanting to do meaningful work and to work on meaningful projects. I think that’s a sentiment that really everyone shares. We want to believe that what we are doing has an impact beyond just the work itself and just collecting a paycheck. In practice, however, it’s a lot harder than it sounds.

Goodpatch discovered this firsthand when they tried to transition from being a services company to a product company. It’s one of those things that sounds easy and logical. We’ll use the revenue from our clients to fund our dream but it’s insanely hard to do in practice. As a startup, you never have all the resources you need. You’re always understaffed. And when you have clients who are paying the bills, the temptation is usually far too great to create a product that will make your existing customers happy, rather than one that has forward-thinking features and will bring on new users.

The hound that chases two rabbits catches neither of them.

And Goodpatch, quite sensibly. Decided to shut down its products and maintain their services business. However, it’s clear that Nao’s heart and perhaps more importantly his investor’s wallets remain fixed firmly on creating a new product, and it does seem that one is already in the works.

So all we can do at this point is sit back and see what Goodpatch comes up with next.

If you’ve got a story about Japanese design, either the good, the bad, or the oh so very ugly, Nao and I would love to hear from you. So come by and let us know what you think. When you come to the site, you’ll see all the resources and notes that Nao and I talked about and much, much more in the resources section of the post.

And hey, I know you’ve been meaning to do this for a while now but when you get the chance, please leave us an honest review on iTunes. It’s really the best you can help us get the word out and support the show.

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.