Terrie's Take 860 -- How to Deal with a Shortage of Data Scientists, e-biz news from Japan

Terrie's Take terrie at mailman.japaninc.com
Mon Aug 1 08:29:03 JST 2016

* * * * * * * * 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. 

General Edition Sunday, July 31, 2016, Issue No. 860

- What's New -- How to Deal with a Shortage of Data Scientists
- News -- Smoking rate falls further
- Upcoming Events -- Free Shochu Tasting
- Corrections/Feedback
- Travel Picks -- Matcha in Uji, Ikebana in Saitama
- News Credits

SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at: 

http://www.japaninc.com/terries_take, or, 


The week before last, a Japanese organization did what is probably the 
biggest online content sales deal in the nation's history. No it wasn't 
an anime sale, nor was it some massive multi-player online game 
cross-license. Instead, it was the sports broadcast rights for J.League, 
which runs the national soccer league here, sold to Britain's Perform 
Group. The deal is worth JPY200bn (US$1.88bn) to J.League over the next 
10 years -- massively more than what it gets in fees from local TV 
stations. Perform gets the right to live stream all matches for J1, J2, 
and J3 matches on both its pay-per-view web platform as well as certain 
satellite stations. The deal doesn't include terrestrial TV, which 
doesn't bother Perform since they think most of the user demand will be 
from Asia anyway.

This is a lot of money for a still somewhat (internationally) obscure 
sports league, so why is Perform so confident of their chances?

Buried within the two companies' announcement is the comment that, 
"Perform Group distributes sports content in around 100 countries. It 
operates ePlayer, one of the world's biggest digital platforms for 
sports video, and has strength in program production and sports data 

Analytics... now there's a word we're hearing evermore frequently these 
days, and it's probably key to Perform's confidence. By having millions 
of users on their platform Perform can do unlimited pre-testing and 
analyze preferences, spend, trends, etc. Unlike a primitive one-way TV 
broadcasting system like those owned by Japanese firms, Perform is able 
to fine tune and personalize right down to the individual user, and thus 
it is able to predict what those users will buy. We're assuming that in 
making this rather huge offer, Perform analyzed in some detail Asian 
customer interest in Japanese soccer and the numbers tell them it will 
be huge. This seems to be a much better way to expand your business than 
to make guesses based on personal hunches of the CEO. Now it's done, it 
won't be long before Japanese broadcasters start to realize this as well.

For Perform, analytics is not just limited to audience evaluations. 
Although we're not familiar with their ePlayer, if it's anything like 
those of its competitors (we did some preliminary work with one such 
company several years ago), then it is likely to be able to put out 
tremendous amounts of statistical data on the teams, players, history, 
games rules, stadiums, and even weather. This data is really addictive 
and gets fans forking out for more as they to guess who will win each 
game - kind of like how Japanese gaming companies put weapons out for 
players to buy. Sure, putting the stats together for the first time 
requires a huge financial outlay and is a herculean effort, but once 
done, it can be used over and over so long as the presentation system 
has the smarts to automate and personalize the process.

Analytics, which these days goes with everything from "Big Data" to 
Internet of Things (IoT), to Machine Learning (ML), and Artificial 
Intelligence (AI), is the ability to make sense of large volumes of 
incoming data such that ordinary people, and particularly ordinary 
senior management of Japan's public companies, can make investment or 
competitive decisions based on what is really happening and not just 
what they hear on the old boy's grapevine (or worse still, in the old 
boy's newspapers).

Unfortunately for Japan, analytics involves learning some rather 
difficult statistical techniques and using one's left brain - both of 
which are often in short supply in elderly boards and senior management. 
Normally, the solution, as with software engineering, would be to go 
hire in some boffins from your friendly Systems Integrator (SI) and let 
them get things done. The problem is that there is a major shortage of 
Japanese-speaking data scientists among the SI firms as well.

So for this reason, Japanese major tech firms are starting to use M&A as 
one way to acquire the necessary expertise.

--------- Micro Loans Program in South Pacific ------------

SPBD and MicroDreams seek to combat poverty in the South Pacific by 
enabling women to become entrepreneurs. These women apply for small 
loans, as low as US$120, to launch, grow, and maintain small businesses. 
Previously, many of our clients did not have a stable source of income 
to support their families. We work alongside these hardworking women, 
teaching them essential business and financial skills to expand their 
businesses and generate steady income and improve their quality of life. 
With our program, these women turn dreams into reality as they reap the 
rewards of their efforts.

Read about our remarkable clients 
http://www.microdreams.org/success-stories. You can also donate to the 
program at: http://www.microdreams.org/donate-today.

[...Article continues]

For example, in June last year, HDS (Hitachi Data Systems) bought a 
leading data integration, visualization and analytics company called 
Pentaho (which still has billboards up along Highway 101 in Silicon 
Valley). HDS bought the company because it is committing to an IoT 
vision and realizes that the huge amounts of data that all these devices 
will generate will need some very sophisticated and scalable processing. 
In 2014, IoT research accounted for about 24% of Hitachi's entire basic 
R&D spend, and it is preparing to ramp this up to 64% over the next 
couple of years. By 2018, Hitachi reckons it will have about 2,900 
researchers around the globe, mostly in China and the USA. Ironically 
only a few of these people will be in Japan.

Hitachi sees its sensors-to-smart-sense strategy giving it an edge in 
connected transportation (automobiles, trucks, and trains), connected 
energy (drilling to production), connected factories and farms, and many 
other applications besides. Certainly it wants to be sure that it can 
compete against foreign majors such as IBM, SAP, Oracle, Google, 
Microsoft, Amazon, and others who are all pouring tons of cash into this 

A couple of months after the Hitachi acquisition, Mitsui made a 
strategic investment in a US-based oil drilling analytics company called 
WellAware, which targets the shale oil industry. WellAware has a 
soup-to-nuts solution involving IoT devices at individual production 
sites that monitor fluids, chemicals, and production levels so as to 
predict the condition of a given site. Mitsui is apparently planning to 
rejig the solution to expand into mining and agriculture as well.

There are many other examples, and we see this M&A/Investment trend 
picking up pace over the next 1-2 years, as the slow-pokes among the SI 
firms start to realize what is going on. This is good news for the many 
foreign analytics, ML, and AI companies out there, mostly in the USA and 
India, who are in a cutthroat race to create automated solutions and 
customers wanting to use them.

Indeed, here at home, machine smarts are starting to make the press in 
the form of real results. Last week Toshiba touted spectacular 
production improvements from incorporating AI and ML into the production 
of flash RAM at the company's super-sophisticated memory chip plant in 
Yokkaichi (Mie). Toshiba reckons their wafer fabrication times have 
fallen from six hours to just two, while wafer yields have also improved 
(they didn't say by how much - although we note that Sony got a 3% 
improvement with a similar system in 2014). We believe Toshiba is 
getting its technology from a US firm - where else?

Other Japanese end-user companies have been slower on the uptake, 
although EVERYONE is aware of the importance of IoT for the future. A 
December 2014 survey by the Nikkei found that 53% of 92 major companies 
were planning to utilize Big Data (thus inferring analytics to interpret 
it) in some way to improve business efficiency. However, those actually 
using the big data are mostly focusing on simple logistics and product 
quality control, which isn't particularly different to what they having 
been doing in the past with proprietary systems, meaning they miss the 
real opportunity with analytics, especially recently emerging streaming 
analytics - which is to not do batch checks then make modifications some 
months earlier. Instead, analytics/ML/AI now days offer the opportunity 
to provide real-time feedback which can be built directly into the 
production system, prompting same-day modifications, improvements, and 

So which sectors are lily to use the latest analytics technology? Most 
receptive to intelligent feedback and same-day improvement are probably 
Japan's convenience stores, which with 100,000 outlets and fierce 
competition between them, are hyper sensitive about things like today's 
weather and the sales of chicken sandwiches versus pork fry ones. So if 
you want to see the direction that Japan's majors will take on 
analytics, especially real-time analytics, watch 7-Eleven, Lawson, and 
their cohort. Soon after them will be the large retailers and B2C 
companies doing business overseas.

...The information janitors/


---------- NZ Related VC Fund, Seeking Investors ----------

Global From Day One Fund II is a USD 30M+ venture capital fund that 
invests in high-growth technology sectors in New Zealand and Taiwan. GD1 
provides expertise and capital for growth and scalability for early 
expansion companies generating USD 1-3million in revenue with a path to 
generating over USD 10million in revenue within 2 years.

The cornerstone investors are the NZ Venture Investment Fund and 
Taiwan's Sovereign Fund, NDF. These two government entities conducted 
due diligence for over a year leading to a USD 15m commitment. GD1 is 
run by an experienced General Partner team with a track record of 100+ 
early-stage investments in the last decade. Notable exits in both New 
Zealand and Taiwan include Xero (NZX:XRO) and KKBox. (Include exit size 
for these two)

Fund 1 returns = 70% IRR p.a. significantly outperforms the Cambridge 
Associates Upper Quartile benchmark of 29% for 2012 vintage VC funds.

Investment Min: US$100,000 (US$20k p/a for 5 years)

Contact: Micaela Lewenz: micaela at gd1apac.com


+++ NEWS

- Kagoshima governor to challenge government over reactors
- Start-up Paidy scores US$15m in Series B
- GPIF loses US$51bn in FY2015
- Safecast gets a major article in LA Times
- Smoking rate falls further

=> Kagoshima governor to challenge government over reactors

The Abe government severely underestimated just how badly people feel 
about his government trying to re-start the nation's reactors. He may 
have been reelected nationally because the opposition is weak, but 
voters are finding another way to show their displeasure - and that's by 
voting in regional politicians who are anti-nuclear or even anti-LDP 
(per the Tokyo governorship win on Sunday). One such politician is the 
new governor of Kagoshima, Satoshi Mitazono, who has said that he wants 
to close down the Sendai (Kyushu) reactors, that are currently the only 
re-started reactors in service in the country. ***Ed: Although he can't 
close the reactors down directly, since the reactors are so old (more 
than 30 years) he can request further inspection checks and deny 
replacements after the current units are retired. He can also make life 
uncomfortable for the government and Kyushu Electric by convening expert 
panels to publicize the debate even further.** (Source: TT commentary 
from asahi.com, Jul 29, 2016)


=> Start-up Paidy scores US$15m in Series B

Yet another foreign-run start up in Japan has scored the big time after 
proving itself at the frontlines. Paidy, an alternative payments 
company, has just received US$15m from six investors participating in 
the Series B round. The raise could be the largest by non-Japanese 
founders, eclipsing a US$12m round by translation company Gengo three 
years ago. Paidy will apparently use the money to further grow its user 
base here in Japan and to create new financial products. ***Ed: Paidy 
substitutes user ID and security for purchases normally done with credit 
cards with two-factor authorization using email addresses and mobile 
phone numbers. Users are also screened against consumer credit data to 
help reduce defaults. Nothing earthshaking in the technology, just very 
well executed.** (Source: TT commentary from techcrunch.com, Jul 28, 2016)


=> GPIF loses US$51bn in FY2015

Even as the government tightens the screws on small companies and 
workers everywhere by inexorably ratcheting up the cost of pension and 
health contributions, once it has the money it is proving not so adept 
at keeping it. The background is that the Bank of Japan is swamping 
purchases of government bonds to prop up Abenomics, so the GPIF, the 
worlds largest pension fund, has been forced into riskier domestic and 
international stock investments. As a result, the fund is suffering for 
its newly increased exposure and last week it declared paper losses of 
JPY5.3trn (US$51bn) through til the end of March, 2016, which is 
approximately -3.81% of its equity. ***Ed: The GPIF is so huge that it 
owns almost 1% of all the publicly traded stocks in the world, and 7% of 
Japanese stocks. And to be fair, the GPIF was not the only large 
international government fund to suffer in the current stock market.** 
(Source: TT commentary from wsj.com, Jul 29, 2016)


=> Safecast gets a major article in LA Times

Japan's very own citizen-based radiation monitoring network, Safecast, 
has hit the big time PR-wise, with a major article in the LA Times. The 
newspaper interviewed founders Pieter Franken, Joe Moross, Jonathan 
Wilder, Azaby Brown, and Kohei Matsushita, about their efforts to 
validate Japan's actual radiation levels outside the Fukushima exclusion 
zone. As the article points out, Safecast is really an amazing 
phenomenon, having generated with homemade radiation detection devices 
over 50m data points all across Japan since 2011. ***Ed: And so what 
does Safecast have to say about Japan's radiation levels in 2016? A 
recent group report said they are almost back to normal and far below 
internationally agreed upon safety limits. In fact, it's safe enough 
that Safecast has decided to expand beyond radiation readings and is now 
starting to do pollution readings as well. They'll need new sensors for 
that, but once ready we believe they will have no shortage of volunteers 
around the globe to do the readings.**
(Source: TT commentary from latimes.com, Jul 6, 2016)


=> Smoking rate falls further

In a development that may help Japan's longevity stretch even further, 
Japan Tobacco announced that the rate of male smoking had fallen to less 
than 30% for the first time since the company has been polling the 
public. The estimated distribution of male smokers is now 29.7% of the 
adult male population, down 1.3% over 2015. The rate for women actually 
rose 0.1% to 9.7% of the adult female population. As a result, there are 
now estimated to be about 20.27m smokers in Japan. ***Ed: How 
unfortunate that they always go to the same bars and restaurants that we 
like...** (Source: TT commentary from japantimes.co.jp, Jul 28, 2016)


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.

--- Japan Travel Inbound Travel Professional Services -----

Japan Travel's inbound company travel professional services team now 
serves incentive and group training logistics and support. We assist 
your headquarters HR teams in hosting your foreign employee groups in a 
successful program in Japan. Our services include: hotels, 
transportation, meals (including special diets), entertainment, 
activities, help desk support, telecommunications, guest speakers, and 
of course the core training (delivered by our professional training 
services partners). We work on a menu-basis, providing as much or as 
little as your management team needs to get the project done.

If you have a group needing assistance, we invite them to contact us at: 
tours at japantravel.com.

Or visit our pages at:http://bit.ly/29c2eG5


--------- Free Shochu Craft Liquor Tasting Event ----------

Discover the charms of Japanese spirits! On Sep 8 at Togo Kinenkan, a 
variety of Japanese craft liquors will be presented, with information, 
at a special event. Tasting opportunities available. Free attendance; 
registration required.



=> A Half Day Trip to Uji, Kyoto
Guide to the Matcha City

You're looking at your Kyoto travel itinerary and wondering what other 
wonders Kyoto has to offer. You hope to find a place that is a little 
more local, perhaps with less crowded sightseeing areas, and a place 
where you can stroll around leisurely at your own pace. Then you stumble 
across the name of a city called "Uji" on Google, and decide to look up 
more about the southern city of Kyoto. Information on Uji is a bit 
scattered and you're unsure of what to do. But no worries, this article 
will give you a guide to Uji.

Sample Itinerary: Matcha Soba/Ramen - Byodo-in Temple - Matcha 
Soft-Serve - Walk along the Uji River - Taiho-an Teahouse

Uji is famous for its matcha, so each meal you have in Uji, should most 
definitely include some kind of matcha product, whether it be a sample 
of hot tea, a flavored main dish, or a dessert. Byodo-in Omotesando 
(Byodo-in street) has a lot of shops that sell a variety of matcha 
dishes and products. Try some matcha noodles - soba or ramen or both! - 
at one of the stores for lunch. The taste and texture of the matcha 
noodles will definitely be one of the most unique you will ever try.


=> Ikebana Class in Kawagoe, Saitama
Try your hand at traditional flower arranging!

Ikebana, or Kado, is a Japanese style flower arrangement that focuses 
not solely on the flower but also on the beauty of a plant's leaves and 
stems to create a unique display. Unlike the very full and multicolored 
bouquets often seen in western style flower arranging, Ikebana draws 
more attention to creating a scene or symbols with the plants at hand. 
Derived from Buddhism and Shintoism, Ikebana as has spiritual 
connotations such as patience and relaxation through art. Though it 
takes years of practice and studying to truly hone the craft, a class in 
a Kawagoe community center gives locals and foreigners the opportunity 
to learn the "way of flowers."

Although the majority of students are Japanese, there is no need to be 
hesitant in taking a class as the Ikebana sensei, Rihou-san, has taught 
foreigners numerous times. However, those with at least some Japanese 
speaking ability will gain more out of the experience and have an easy 
time truly following along in class.

The hour long class begins with setting up all of the plants, pots, and 
tools needed to prepare your arrangement. Each student starts out with 
the same apparatus and types of flora. The teacher gives a basic 
explanation of the image students should attempt recreating, but from 
there, students are allowed to attempt building an arrangement by 
themselves. Testing out different angles and configurations of the 
flowers, students can exercise their creativity through Ikebana...



SUBSCRIBERS: 6,691 members as of July 31, 2016 (We purge our list 


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

HELP: E-mail Terrie-request at mailman.japaninc.com with the word 'help' in 
the subject or body (don't include the quotes), and you will get back a
message with instructions.

Send letters (Feedback, Inquiries & Information) to the editor to 
terrie.lloyd at japaninc.com.

For more information on advertising in this newsletter, contact 
ads at japaninc.com.

Get Terrie's Take by giving your name and email address at 
http://www.japaninc.com/newsletters/free_sign_up, or go straight to 
Mailman at:

http://www.japaninc.com/terries_take or, 

Copyright 2016 Japan Inc. Communications Inc.

----------------- Japan Inc opens up Japan ----------------

J at pan Inc authoritatively chronicles business trends in Japan. Each 
posting brings you in-depth analysis of business, people and technology
in the world's third largest economy.

Visit www.japaninc.com for the best business insight on Japan available.

More information about the Terrie mailing list