Terrie's Take 756 -- Japan Getting Easier for Foreign Entrepreneurs. E-biz news from Japan.

Mon May 19 07:11:42 JST 2014

* * * * * * * * TERRIE'S TAKE - BY TERRIE LLOYD * * * * * *
A weekly roundup of news & information from Terrie Lloyd, a long-term
technology and media entrepreneur living in Japan.
(http://www.terrielloyd.com)

General Edition Sunday, May 18, 2014, Issue No. 756

+++ INDEX

- What's New -- Japan Getting Easier for Foreign Entrepreneurs
- News -- Exciting new lithium battery technology
- Web Content/Tech Job Vacancies -- Video blogging/editing
- Upcoming Events
- Corrections/Feedback
- Travel Picks -- Matsushima Bay, Miyagi and Imperial Villa, Kyoto
- News Credits

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+++ WHAT'S NEW

Over the last few days we have been attending the Silicon Valley
TiECon 2014, the largest event of the largest entrepreneur network in
the world. It was quite an experience to be among 3,600 entrepreneurs
in the same place at the same time, and just goes to reinforce the
fact that Silicon Valley is the center of entrepreneurship not only in
America but the world. As can be expected, Venture Capitalists were
out in force, as were Asian government business organizations looking
to attract foreign entrepreneurs to their own shores. The Koreans
(KOTRA) were there, folks from Invest Hong Kong and Singapore as well,
even Bangladesh -- but nary a hint of the Japanese. Which was
disappointing, because Japan is supposedly getting ready to ramp up
the hosting of foreign entrepreneurs in its soon-to-be-established
Special Economic Zones (SEZs).

At the TiECon sessions we learned that foreign entrepreneurs are
attracted to Silicon Valley by five main things (yes, this is not an
exhaustive list):
1. A liquid market that allows them to get an "earn out" from their
ventures after an appropriate amount of effort and results.
2. Availability of capital to get started.
3. Availability of resources to apply the capital against.
4. Size and availability of market.
5. Lifestyle.

At the same time, they are hobbled, even in the USA, by the following:
1. Visa restrictions
2. Access to early stage capital
3. Language -- non-native English speakers find that they need to be
eloquent to secure the best funding results.

You might think the early stage capital point is a non-issue, given
how much venture capital is applied just in Silicon Valley alone
(approx. $8.3bn in 2013), but the pressure of competition coupled with
the fact that most venture capital goes into already established and
"ramping" companies, means that it is just as tough for start-ups in
the valley to get early-stage funding as it is in other countries.

[Continued below...]

------------ Japan Travel Seed Round Funding --------------

www.japantravel.com has become the largest content creator for inbound
travel to Japan and the second largest site for traffic. The Japan
Travel KK company was formed in December 2013 to take advantage of the
significantly improving inbound travel market and the 2020 Olympics.
It is now about to start its first outside round of funding and
invites expressions of interest from qualified early-stage investors.
Per Japanese law, Japan Travel KK will only accept the first 50
applications and will contact each potential investor individually to
discuss the opportunity further.

Interested parties should contact: terrie at japantravel.com
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[...Article continues]

Actually, the conclusion we drew at the end of the conference is that
in the context of money, market, and visas, Japan actually compares
quite favorably with the U.S.

Capital:
OK, no one beats Silicon Valley for the shear amount of capital
available at all stages of development. There are angels, incubators,
and accelerators for the early-stage businesses, then early-stage VCs
(Series A rounds) for those with a product and initial market
traction, and mezzanine investors (Series B, C) for later-stage
companies. Interesting to see a lot of Japanese corporate capital
being applied alongside the mezzanine investors in the USA, largely
because this gives them exposure to new technologies at low risk, and
of course they are hoping that companies at this funding stage are
expanding abroad, providing thenm with an opportunity to tie up for
the Japanese market.

Japan's big negative is its lack of early-stage capital. While we are
seeing a boom in incubators and accelerators, there are still very few
angel investors. This means that because accelerators are short-term
and very sparing in their investments, early-stage companies are
constricted in the amount of capital they can raise during the
product/service development phase and therefore the products/services
they can produce are seldom very advanced compared with start-ups
overseas.

We see this funding gap as an area the Japanese government can fill to
great effect and we hope that they do so. You can see that there is
already an awareness of the need for early-stage capital, from the
formation of the US$600m Cool Japan fund. Unfortunately that
particular fund has decided to position itself more at the advanced
Series A level (minimum investment amount of JPY150MM), and so an
earlier stage government fund is needed. We suppose that the ready
availability of bank and government guaranteed debt does cover the gap
partially, so it's not all bad news.

Indeed, on the positive side, once a start-up does start to earn
revenues, the Japanese funding environmnt is quite rich, although slow
to move. Unlike the USA, Japan has many corporations willing to make
early-stage strategic capital investments as a means of building up
the investee to collaborate with their own businesses. Such companies
are generally very hands off, but do expect that their investment will
translate into business, so the foreign investor needs to adjust
his/her business plan to accommodate them and their needs.

Market:
With a market of 127m people and net household assets (excludes
housing loans and consumer finance) of about JPY1,193trn, 55% of which
is in cash, the Japanese consumer is still highly attractive. We hear
a lot about the greying of society and how this is restricting the
flow of consumer spending because the elderly are a lot more
conservative. While this is true, at the same time the aging
population is creating a whole new range of services and products that
entrepreneurs can bring to the market quicker than the big boys do.
Consider recent developments in the travel, food, supplements, home
products, sectors.

The other attractive point about Japan is its proximity and
involvement in the Asian region in general. Both from a physical
travel point of view and from the ability to mesh with existing
Japanese initiatives in the region, there is rich opportunity for the
foreign entrepreneur. For example, although foreign owned, since the
company would be Japanese in registration, it can apply to get
involved in Japanese government funded Asia-based projects.

Visas:
Of all the first world countries, we believe that Japan has one of the
easiest immigration regimes for foreign entrepreneurs who want to be
resident in the country. An Investor visa only requires a commitment
of US$50,000, and doesn't require an investment in people (minimum of
2 nationals) or office until AFTER the 3-year visa is issued. In this
regard, we see little or no impediment to a foreign investor thinking
of setting up here. Curious, then, that the Japanese government has
identified visas as an item to be further deregulated.

Reports coming from the various advisory panels include an
"entrepreneur visa" which even further relaxes requirements for
companies setting up the new Special Economic Zones (SEZ), slated for
Tokyo, Osaka (medical focus), and Fukuoka. This could mean that even
people with a basic high school education could conceivably be allowed
entry into Japan, so long as they agree to set up a business. No word
yet on just what the actual requirements will be, but they will surely
be a lot easier than the minimum for equivalent U.S. EB-5 Immigrant
visas, which require hiring 10 people and an investment of between
US$500,000 and US$1,000,000.

...The information janitors/

***------------------------****-------------------------***

----------------- Tour Operator in Japan? -----------------

www.japantravel.com is now Japan's largest inbound travel portal by
content volume and second largest for traffic, and continues to grow
rapidly. The company is now soliciting interest from travel operators
around Japan who would like to become charter members of our new
tours-and-travel-experiences marketplace, due to open soon. Unlike our
existing advertising-based media offerings, companies in the
marketplace will do business with the Japantravel.com portal on a
commission basis. Preference will be given to those operators able to
creative unique and visually attractive travel experiences to our
250,000+ unique visitors a month.

For more information, contact info at japantravel.com.

www.japantravel.com
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***------------------------****-------------------------***

+++ NEWS

- Iconic publishers to merge
- Very cool new garbage disposal unit
- Pocari Sweat drink powder to become lunar souvenir
- Highest radioactive readings in Fukushima sea water
- Exciting new lithium battery technology

=> Iconic publishers to merge

It's a sign of the times when a proud traditional publisher like
Kadokawa takes a backseat in a merger with an Internet content
provider (Dwango). But this is what happened this week. The two
companies will merge on October 1, and Dwango Chairman Nobuo Kawakami
will become chairman of the new company. The structure of the new
business will be that of a holding company and two separate operates
as subsidiaries -- presumably so that the two very different cultures
can be gradually merged into one in bite-sized projects. Dwango is
best known for its Youtube-like video sharing service, Niko Niko
Douga. (Source: TT commentary from the-japan-news.com, May 14, 2014)

http://bit.ly/1mHfjsY

=> Very cool new garbage disposal unit

Kitchen in-sink garbage disposal units are rare in Japan because
householders are worried about the slurry clogging sewer pipes. Now a
Hamamatsu company has come up with an amazing new product that uses
microbes to completely consume any biodegradable garbage, leaving only
water to go down the pipes. The company is called Eiwa and the garbage
disposal device is called the Zero. The microbes are kept in a resin
ball inside the unit and can digest everything from oils and fats to
bones and eggshells. Current microbe-based disposal units leave
residue which has to be extracted. The Zero leaves nothing behind.
(Source: TT commentary from asia.nikkei.com, May 15, 2014)

http://s.nikkei.com/1t4siXL

=> Pocari Sweat drink powder to become lunar souvenir

Non-news of the week. An innovative PR exercise by Otsuka, the maker
of Pocari Sweat electrolyte drink, will see Japan's first lunar
(unmanned) space expedition leave a can of Pocari Sweat powder behind
on the moon, purportedly as a time capsule for future astronauts to
recover and enjoy. The powder requires water to reconstitute it to
drinkable form. The can will be delivered in October next year, on the
Falcon 9 space craft. (Source: TT commentary from washingtontimes.com,
May 16, 2014)

http://bit.ly/1n6eBs8

=> Highest radioactive readings in Fukushima sea water

Fukushima continues to be in the news, as power company TEPCO admitted
that levels of tritium and stontium-90 were found at record levels in
sea water in the port next to the plant. Tritium was recorded at 1,900
Becquerels/liter, up from 1,400 bq in April, and strontium-90 was
recorded at 840 bq versus 540 as a previous high. The increasing
leakage rates are likely to spur the government to act more quickly on
put in the JPY31.9bn ice wall to lock in the radioactive ground water.
Interesting to see that the ice wall will require 45.5 gigawatt/hours
of electricity to maintain -- enough to power a large township. ***Ed:
We heard the other day speculation that the radiation leakage could
stimulate the Olympic committee to revoke the 2020 Olympics for Tokyo,
on the basis of safety concerns. If so, Osaka?** (Source: TT
commentary from japantimes.co.jp, May 17, 2014)

http://bit.ly/RLQUXq

=> Exciting new lithium battery technology

Although we often hear about battery breakthroughs which promise to
pack more energy into smaller profiles, we seldom see them come to
market. However, a new technology from Power Japan Plus might be a
real step forward. The new technology uses carbon for both the anode
and cathode, not only reducing the cost of metals in the cell, but
also significantly increasing charge/discharge time without thermal
changes. This will be a huge advantage for high-power applications
such as autos, where thermal runaway is a major problem and requires
extensive electronics to control. The new batteries are called "Ryden"
batteries and for a Nissan Leaf would charge in just 12 minutes,
versus four hours for current Lithium technology. (Source: TT
commentary from cnet.com, May 13, 2014)

cnet.co/1mWZWLr

NOTE: Broken links
Some online news sources remove their articles after just a few days
of posting them, thus breaking our links -- we apologize for the
inconvenience.

***------------------------****-------------------------***

+++ WEB CONTENT/TECH VACANCIES

=> Are you in web content, sales, or engineering? If so, this section
is for you.

** HIGHLIGHTED POSITION

- Part-time video editors and bloggers

We are inviting applications from amateur video editors and video
bloggers who own their own equipment, to provide stories for our
travel website business clients. You must have strong experience with
either Final Cut Pro or Adobe Premiere, and be able to show work
samples that have been commercially published or which have garnered a
high number of views on public video sites. The positions require
strong communication skills, availability at least several times a
month to do shooting during business hours, and strong Japanese. You
should be located close to one of the following cities: Naha, Fukuoka,
Osaka, Nagoya, Tokyo, Sendai, or Sapporo. Payment rates vary according
to client, but are NOT at full commercial level, meaning that these
positions are best suited to talented non-professionals. Please send
your resume to info at japaninc.com.

** OTHER MEDIA POSITIONS VACANT

- Bilingual account manager for major tourism portal
(www.japantourist.jp), JPY3M - JPY5M
- Bilingual sales trainee for web media properties, JPY2.5M-JPY3M +
10% commission

Interested individuals may e-mail resumes to: jobs at metroworks.co.jp.

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***------------------------****-------------------------***

+++ UPCOMING EVENTS/ANNOUNCEMENTS

------------------ ICA Event - June 19th-------------------

Speaker: Jason Hurst, Representative Director, Tokyo Japan,
International Solution Group
Title: "CONGRATULATIONS! 2013 Japanese Taxes are finished, we made it!"

Details: Complete event details at http://www.icajapan.jp/

Date: Thursday, June 19th, 2014
Time: 6:30 Doors open, Buffet Dinner included and cash bar
Cost: 4,000 yen (members), 6,000 yen (non-members) Open to all. No
sign ups at the door!!!!!!!
RSVP: By 4pm on Friday 13th June 2014
Venue is The Foreign Correspondents' Club of Japan

http://www.fccj.or.jp/about/access.html
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***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

=> No comments this week.

***------------------------****-------------------------***

+++ TRAVEL DESTINATIONS PICKS

=> Matsushima Bay, Miyagi
Beautiful in all seasons for all time

The name Matsushima conjures images of clusters of rugged, pine-clad
islets in a snowy winter mist, framed in a glittering summer bay, or
soaked in a magnificent sunset. Such scenes have been immortalized in
cultural works such as the 1643 Three Views of Japan, as well as The
Narrow Road to the Deep North (by traveling poet Basho). Today, they
serve as possibly the premiere tourist attraction in Miyagi and
although the bay has long since been developed and re-developed, the
picturesque tree-topped outcrops remain much as they have always been.

http://bit.ly/1jWQvwI

=> Shugakuin Imperial Villa, Kyoto
Simple, peaceful, rustic place for Emperor Go-mizunoo

Shugakuin Rikyu (Imperial Villa) was a retreat designed by Emperor
Go-mizunoo. It was completed in 1655 in the early Edo Era. The total
area of the villa is 54,500 square meters, almost equal to that of
Yoyogi Park in Tokyo. 90% of the grounds are terraced fields and local
farmers still cultivate them even now. The emperor loved working in
the fields and communicating with farmers. There are three teahouses
that are connected by paths through rice paddies lined with
well-trimmed pine trees. Nijo-jo Castle, the Shogun's Kyoto residence
at the same time in Japan's history was gorgeous and showy. But
Shugakuin Rikyu was a simple, peaceful, and rustic place. You need to
make a special application to visit this beautiful villa.

http://bit.ly/1gX2dTb

***------------------------****-------------------------***

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+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd at japaninc.com)

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