Disrupting Japan

Slithering robots sounds vaguely horrifying, but it turns out they're incredibly useful.

Soft-robots lack the charisma of their more acrobatically-inclined rigid counterparts, but some startups are betting on the unique role they have to play.

Today we sit down with Toru Ichihashi, the CEO Solaris, and we talk about what it takes to turn a university research project into a viable startup, what happens when Japanese VCs decide it's time for a startup to change CEOs, and the most likely path for soft robots to slither onto the world stage.

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


Show Notes


The creeping problem with pipes
How to stuff a robot into an industrial pipe
What's driving the early adopters of soft robotics
Turning a university spin-out into a business-focused startup
When do Japanese VCs decide its time to change CEOs
The importance of both funding and marketing partnerships in Japan
Can partnerships help Japanese startups go global?
Why we don't see more soft-robotics in the real world
Why Japanese investors focus more on risk than opportunity


Links from the Founder

Everything you ever wanted to know about Solaris
Watch videos of the Soha soft robot crawling through all kinds of things.
Connect with Toru on LinkedIn



Leave a comment



Transcript
Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs.
I'm Tim Romero, and thanks for joining me.
We've been talking a lot about robotics on Disrupting Japan recently, and frankly, that's because there's been a lot going on in robotics in Japan recently.
Today, we're going to be focusing on soft robotics. And by soft robotics, I don't mean that they're cute and fuzzy, but that they are non-rigid. Soft robots are robots that can bend and curve and even slither.
So today, we sit down with Toru Ichihashi, CEO of Solaris, the makers of the soft robot Soha, which crawls through industrial pipes to inspect and to clean them. It's a natural, real-world use case for soft robots. But of course, things are not quite so simple. Even in Japan, bringing a robot to market is a lot more challenging than you might think.
Now, during the podcast, both Toru and I make truly heroic efforts to try to describe how this robot actually moves and manages to crawl through these small pipes, but you really have to see it to understand. There's a link to the videos up on the site of Soha crawling through transparent pipes, so check those out.
Toru and I talk about the real challenges of establishing a new market in Japan, why sales partnerships are much more important in Japan than they are elsewhere, and what happens when startups investors decide that it's time for a new CEO. But you know, Toru tells that story much better than I can. So, let's get right to the interview.

Interview
Tim: So, we're sitting here with Toru Ichihashi, the CEO of Solaris, who's making the Soha robot, a small-diameter pipe inspection and cleaning robot. And thanks for sitting down with me. I really appreciate it.
Toru: Yeah, I'm the same here, so I really appreciate this opportunity.
Tim: Yeah, in your brand new office too.
Toru: Yeah, yeah, just a week.
Tim: So, tell me a bit about Soha. What is it exactly?
Toru: Okay, so do you have a camera or not?
Tim: No, yeah, so for our listeners, it is sitting right in front of us, but this is an audio podcast, so you'll have to explain.
Toru: I see. Our target is narrow pipe. Especially diameter is 150 millimeters or less. Just think about social infrastructures. So, many narrow pipes everywhere.
Tim: So, is it mostly like water pipes or pipes carrying like chemicals and exhausts in factories? Just all kinds of things.
Toru: Yeah, all kinds of. So, we could say this is a kind of veins for social infrastructures. However, these narrow pipes are very small. That is why humans cannot access. Conventional robots also cannot access. So, let's take an example of a factory. When they need to inspect or clean, they stop manufacturing equipment and they...
Tim: They like disassemble everything.
Toru: Yeah, disassemble pipes. Then by brush, they clean manually.
Tim: Okay, so they take it apart and clean section by section.
Toru: Yeah, exactly.
Tim: And so what does Soha do?
Toru: Our robot is -- ket me show you how to move.
Tim: Well, it's coming into the same problem of being an audio podcast.
Toru: Ah, yeah, that's not good.
Tim: But no, no, I get it. I mean, you mentioned before that it was inspired by the way an earthworm moves. So, kind of like sticking out its head and pulling up its tail and sticking out its head and pulling back its tail again, right?
Toru: Yeah. So, to move into narrow pipe, conventional robots cannot move. For example, caterpillar, such kind of robot cannot move. People think, okay, that's mimic snake or inchworm.
Tim: Because it can't bend in the pipe, right? It can't move up and down.
Toru: Yeah, you're right.So, Snake move by winding, so narrow pipe, snake cannot move. Only earthworm can move into narrow pipe because earthworm moves, expand and moving this way.
Tim: Pushing, like head pushing forward, pulls up behind, push the head, pull behind.
Toru: So, our robot is mimic earthworm movement.
Tim: In practice, like how do you get it into the pipe? Can it go in through like an open valve or something, or do they still have to disassemble?
Toru: That's a very good question. Such kind of easy operation is very important. So, we have station for the robot to start up. Then this station can be connected with customer's pipe.
Tim: Okay. For example, you take off a section of the pipe and the robot can crawl in.
Toru: Yeah, yeah, yeah, yeah.
Tim: Okay. So you don't have to disassemble the entire thing?
Toru: No. In case of factory pipes, some cases at the end, open area is there, and also some connection is there between pipe and pipe. So, just disassemble connection only, then connect our starting stations, then our robot can move into the customer's pipe.
Tim: That's cool. And how far can it go?
Toru: Currently, 20 meters. So in case of factories, 20 meters is enough.
Tim: Yeah, I can see that. It's actually quite far. I mean, there'll be some kind of break every 20 meters. And since it's an earthworm, it can even climb straight up and straight down as well, right?
Toru: Yeah, yeah. Vertical climbing, no problem. And also these kinds of complicated curves, also we have no problem to move.
Tim: Right. So, it can move through very sharp turns and straight up, straight down.
Toru: Yeah, exactly.
Tim: Well, what I think is also really astounding about this is that it's pneumatic. It's all powered by air.
Toru: Exactly. No electric, only air.
Tim: I mean, I can definitely see the advantage in that it would let you go into explosive environments. Was that the main reason for going with air or there are other engineering concerns?
Toru: Our main purpose is how to mimic earthworm movement. Air is perfect. Let me explain how it works. So, this is artificial muscle.
Tim: So, each segment of this earthworm has a kind of an air bladder, an air segment to it.
Toru: Yeah. Then let me -- so, this artificial muscle...
Tim: We're going to have to turn this off because you won't be able to hear me out there.
Toru: So, you can see once air is inflated, this artificial muscle expands this way only. And this way contracts.
Tim: Okay. So, each segment would balloon out. And I guess when it's ballooning out, it's kind of gripping the side of the pipe. Okay. And then pulling everything up behind it. So, it's not an autonomous robot. It's controlled by the person...
Toru: Controller. Yeah. This is very simple. Move forward, stop, move back.  So this robot, inspection and cleaning, we can do simultaneously.
Tim: So, tell me about your customers. Who's mainly using this robot?
Toru: Our current main target is semiconductor factory. Because semiconductor factories manufacturing process by narrow pipes, such kind of dust, they push it out.
Tim: Okay. So, just the extreme demands of semiconductor manufacturing means the pipes have to be very clean.
Toru: Yeah, yeah. Once this pipe is sealed with dust, manufacturing line is stopped. So, this is a very critical maintenance process.
Tim: I can imagine. But it would seem like these kind of pipe inspections are needed, I mean, across all kinds of manufacturing.
Toru: Yeah, of course.
Tim: Do you have customers in more traditional manufacturing as well?
Toru: Yeah, yeah, exactly. Why I said semiconductor is the first target is because once manufacturing equipment is stopped, opportunity loss is huge. Currently, they are doing manually. They need to stop manufacturing equipment for a day or two days. But by using our robot, just one hour or two hours stop is enough.
Tim: Okay. So, their cost saving is not so much the cost of the cleaning itself, but of the opportunity costs and shut down the line. But again, I imagine that's true in a lot of industries.
Toru: Yeah, you are right. So, also chemical industries, car manufacturers, all kinds of factories, they have same kind of issues. So, currently our deals, which we are working with, 70 or 80% are semiconductor manufacturers. The rest is chemical factory or car industries. As you said, other industries also cleaning pipes is very important for them.
Tim: Okay, but perhaps just not quite as urgent. So, they'll take a little longer.
Toru: Yeah, that is why I believe we need to make a business model by semiconductor manufacturers. Then we expand our business.
Tim: That makes sense. I want to get back to the business model in a minute. But before that, I want to talk a bit about you. So, you've actually been in robotics for quite some time now. You were at Melton and ZMP.
Toru: So, my background is I spent about 30 years at Toshiba. And the first decade, I was software engineer....

Japan was once the the undisputed global leader in robotics, but that's simply not true today.

In fact, with China and America dominating the spotlight, many question whether Japan is even still in the game.

Well, last month I had the chance to find out what the world really thinks. At the inaugural Tokyo Humanoids Summit, I interviewed seven global leaders in robotics, and I asked each of them where exactly Japan stands and what Japan has to offer the rest of the world.

I'm compiled all their answers so you can hear the full range of what people are saying about robotics in Japan.

There are some great conversations, and I think you'll enjoy them.


Show Directory and Links


Junghee Ryu,  Founder and CEO of RLWRLD

LinkedIn
Company Site


Leopold Beer, VP Sensing Division of Renesas Electronics

LinkedIn
Company Site


Mehrdad Farimani, Founder and CTO of MERPHI

LinkedIn
Company Site


James Wells, CEO of Sanctuary AI

LinkedIn
Company Site


Rikiya Yamamoto, CEO of Yamariki Edge

LinkedIn
Company Site


Hagen Wegner, Director at FEV Consulting

LinkedIn
Company Site


Terence Bennett, Executive Director of Bay Area Robotics Association

LinkedIn
Company Site









Leave a comment



Transcript
Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs.
I'm Tim Romero, and thanks for joining me.
Last month, at the Tokyo Humanoid Summit, I had a chance to interview seven of the leading innovators in the field of humanoid robotics from around the world.
Now, I'll be sharing the full interviews on Disrupting Japan's social channels, and I encourage you to check them out. There are some really interesting discussions there. Of course, with industry leaders flying into Tokyo from around the globe, there was one question that I wanted to ask all of them.
What does Japan really have to offer globally? How can Japan compete and even regain its status as a global leader in robotics? I mean, is this even possible now? Well, I've collected all of their responses into a single, focused episode for you. You'll see that there are some common themes and also a few surprises. But overall, the world is feeling very optimistic about what's happening in Japan.
But you know, my guests tell that much better than I can. So let's get right to the interviews. So we're sitting here with Junghee Ryu, the founder and CEO of RLWRLD, who's building dexterity models for robots.

Ryu Junghee,  Founder and CEO of RLWRLD
Tim: Thanks for sitting down today.
Junghee: Thank you for having me today.
Tim: You've got an office here in Japan. You've spent a lot of time in Japan. What unique strengths do you think Japan has in the area of humanoid robotics and physical AI?
Junghee: One of the biggest pros of the Japanese market is the culture. Think about the US citizens. They hesitate to just embrace the power of the humanoid. But in Japan, I met a lot of their kind of C-suites here. They know the power of humanoid because you guys already experienced the early times and the robot like Ashimo or Aibo.
And there are a lot of their animations like Atom, Gundam, Evangelion. So culturally, I think that the Japanese society is ready for embracing the human power.
Tim: You know, that's a really interesting point, because in media and popular culture in Japan, robots and humanoid robots in particular are almost always positive and helpful.
Junghee: Yeah, the companion of humankind.
Tim: Right. And like in Hollywood movies, they tend to be very dangerous.
Junghee: Yeah. The enemy of mankind.
Tim: Right. You get the Terminator. So that's really interesting. And have you found that in your conversations in Japan and your pilots that companies are more willing and more open?
Junghee: Yeah, because the Japanese society suffered about population cliffs since 30 years ago. So it's a long time. So mostly their industry leaders, they understand the urgency, the demands for automation, especially the focus on the humanoid. Already they automated almost everything. But the remaining things should be done by their human level dexterity and intelligence. That's why.
Tim: Well, it's definitely exciting times. And it sounds like you guys are doing great things in Japan.
Junghee: Not only great things for Japan, great things for all the mankind in this world.
Tim: Absolutely. So thanks so much for sitting down.
Junghee: Thank you for having me.
Tim: I appreciate it. Yeah, thank you.

Leopold Beer, VP Sensing Division of Renesas Electronics
Tim: So we're sitting here with Leopold Beer, the VP and General Manager of the Sensing Division of Renesas Electronics. So thanks for sitting down.
Leopold: Thank you for having me.
Tim: So listen, with your time in Japan and at this Humanoid Summit, what unique strengths do you think Japan has to offer the world in terms of humanoid robotics and physical AI?
Leopold: Definitely there are lots of things that Japan brings in already today and can bring in in the future. Starting from my company, Renesas, with the broad portfolio of semiconductors, we already serve lots of these applications. But when you look at the specific context of Japan, Japan always has been an innovator in terms of robotics and automization. And I think the Japanese society is much more open to technology than in some European societies.
I'm not talking for the US, but in Europe, there's always a kind of skepticism. When you bring in a new technology, okay, what's the risk? And I think Japan is much opener to technology. So having the foundation of these strong technologies companies, and I name Renesas one of them, but there are others playing very strongly in the field of automization.
And given this openness of the society, and as we heard this morning, even the willingness of the society to bring in more automation as a solution to solve social problems, but Japan is the perfect environment.
Tim: And so do you see this openness on both the industrial commercial side and the consumer side?
Leopold: Absolutely. I think there are two sides of the story. On one hand, of course, robot manufacturers, they want to push their solution. On the other side, there needs to be an acceptance and the pull from the market. And I think we have both in Japan.
Tim: So Japan might end up being the perfect testbed, the perfect place for proof of concepts to figure out how to make all of this really work.
Leopold: I would say yes. That'd be fantastic.
Tim: Well, listen, Leopold, thank you so much for taking the time to sit down.
Leopold: It was a pleasure.
Tim: I've really enjoyed it.
Leopold: It was a good talk. Thank you.
 
Mehrdad Farimani, Founder and CTO of MERPHI
Tim: So we're sitting here with Mehrdad Farahmani, the founder and CTO of MERPHI. So thanks for sitting down.
Mehrdad: Thank you, great to be here.
Tim: With your time in Japan so far and what you've seen here at the Humanoid Summit, what unique strengths do you think Japan has to offer the rest of the world in terms of humanoid robotics and in physical AI?
Mehrdad: Absolutely. So when I was very junior, young in robotics, Japan was the place to go for humanoids. We had Asimo and we had all these great robots from SoftBank and we had all these different companion robots and social robots.
Tim: That was more than 20 years ago.
Mehrdad: It was, right?
Tim: It’s amazing.
Mehrdad: And there were actually, to be honest, there were two countries who were really leading robotics. One was Japan, the other was Germany. So Germany or DLR in Germany, they created some of the greatest robots out there. So has Japan. And Japan was, of course, leading more.
And then one of my surprises over the years was that what happens to both Germany and Japan. Germany also, they really slowed down. And actually, we had this funny conversation with a friend the other day and we were like, okay, is it that they slowed down or the other countries they kicked off? Because I remember in 2012 that there were only six countries that they were building humanoid robots.
So of course, US, France, Germany, Japan, and we had Iran and then one more country, I don't remember. China was not even among them, right? And now we see that China is actually leading a lot in the human area only in this 15, 20 years. So one of the things is that for me, what has always been interesting about Japan is the culture that accepts robots.
People who live with robots and they like robots. And one of the greatest robots, not a humanoid, unfortunately, but one of the greatest robots created in the history of robotics is a robot called Paro, P-A-R-O. It's a robot for elderly care. It's a companion robot.
Tim: Oh, yes, yes, absolutely.
Mehrdad: There's an amazing story behind it. Technologically, it's competing very well with today's technology and everything. But so what was the story? There was this research center. They built that robot. They built something around 3,000 units. They distributed all over the world. Actually, in Sweden that I'm living, we have a few of them.
And they're in the museums mostly. And then they stopped. They stopped the production because they were like, yeah, this was a research project. Research is done. So we don't want to make money out of it.
Tim: I see that happening so much. There's so much wonderful innovation and then it never gets fully commercialized.
Mehrdad: Exactly. I have two reasons for that, actually, so today my job is mostly, to be honest, advising investors and startups mostly on the human area. And I usually think a lot about what are the underlying reasons behind this.
One of the reasons is that robotic companies has historically been created by roboticists. Even today they are. It's only the few past years that they were created by business people or entering robotics.
Engineers and roboticists,...

Japan is much further ahead in real AI deployment than most people realize.

Today we talk with David Ha, CEO of Sakana AI, Japan's clearly most valuable, and arguably most innovative, AI startup, and he explains how Japanese enterprises are using AI in production environments today.

We talk about selling advanced software to conservative enterprises, how Sakana is customizing existing LLMs to fit Japanese sensibilities, and why smaller, more flexible routing models will likely win out over the massive, expensive frontier models.

David also shares some great advice for anyone starting a startup in Japan.

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


Show Notes


When it's best build for Japan instead of (or before) going global
How to raise money overseas as a KK and raise large rounds in Japan
It's actually very easy to start a startup in Japan
Sakana AI's three-stage go-to-market strategy
The tradeoffs between B2B and B2C strategies in Japan
How to drive AI adoption in the Japanese enterprise
Designing AI workflows that prevent users from outsourcing decision making
Why routing models will win in the market over frontier models
What "data sovereignty" actually means in practice in Japan
How Sakana AI is adapting existing models to make them reflect Japanese sensibilities
David's best advice to founders in Japan


Links from the Founder

Everything you ever wanted to know about Sakana AI

Follow them on Twitter @SakanaAILabs
Connect with Sakana on LinkedIn


Follow David on Twitter @hardmaru



Leave a comment



Transcript
Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs.
I'm Tim Romero, and thanks for joining me.
To say that AI is hot right now understates the mania.
AI startups accounted for over 60% of global VC investment in 2025, and things are on track to be even more AI-focused this year. And while investor and media attention remain stubbornly focused on the U.S. and China, things are moving surprisingly fast here in Japan, although things are moving in a slightly different direction.
Today we sit down with David Ha, the co-founder and CEO of Sakana AI, Japan's most valuable and arguably most innovative AI startup.
Now this episode's a bit longer than usual, but it is well worth your time, because by the end, you'll understand why the frontier model companies, the open AIs, the Anthropics, might be pursuing a flawed and very expensive strategy, and why there's a real chance for Japan to be a global leader here.
In fact, as David explains, enterprise AI adoption in Japan is far more advanced than most people realize. And we're talking about actual production deployments here, not just POCs and press releases, but actual daily use.
Now David and I talk about raising capital from both Japanese and foreign VCs, the global importance of AI sovereignty, the best way to drive AI adoption in large conservative Japanese companies, and why AI use in Japan is more widespread than you probably expect.
But you know, David tells that story much better than I can. So, let's get right to the interview.

Interview
Tim: So, we're sitting here with David Ha, the co-founder and CEO of Sakana AI. So, thanks for sitting down with me. I really appreciate it.
David: Awesome. Yeah, it's actually really great to have a chat with you, Tim. I mean, as you know, I've been following your podcast for more than a decade before I started a company.
Tim: I mean, I love to hear that. I honestly do. Nothing makes me happier.
David: Yeah. I mean, I have no idea that I would start a company like 10 years ago.
Tim: Let's start with the founding, because the Sakana AI team is really an interesting test case in Japan, I think. So, the founding team itself, it's a mixture of foreigners and Japanese. Tell me about it. Tell me how it came to be, how the three of you got connected and thought this was a good idea.
David: It's a really unique, I would say, experiment. I founded this company a little bit less than three years ago. It's myself, David Ha, and Llion Jones, my colleague at Google, who was one of the co-inventors of the transformer architecture, the T in ChatGPT. And when you start a company in Japan, it cannot just be two foreigner guys, especially if you want to be the frontier AI company in Japan. But luckily, I was able to recruit my friend Ren Ito, who used to work at Mercari. And he was sent to Mercari Europe as well to run Mercari, one of the original unicorns.
Tim: So, how did you know Ren?
David: We worked together at different startup events before. Earlier, also, I worked at another startup briefly called Stability AI. At that time, Ren was working in the UK for that company, and I was working as a contractor remotely in Japan. So, we connected there.
Tim: And you were kind of like, hey, I've got a better idea.
David: Yeah, something like that. The best way to meet co-founders and colleagues is when you're working at other startups. And when you're working at other companies.
Tim: I think that's so true because it is being able to work with someone and see how they work and having that experience is invaluable when picking a founding team.
David: Yeah, I totally agree. I think in our founding team, not just the co-founders, many of our employees, the founding employees, are people that I've personally worked with at Google, at Goldman Sachs in Japan, also at other companies like Mercali and Yahoo in Japan, like people that we know. And I think when you've worked with someone before and you kind of know how to coordinate different tasks and work together well, it's like a great mix.
Tim: Yeah, yeah. There's fewer surprises, the better, right? So, tell me about the kind of pre-seed team. Was it just you three?
David: Yeah, it was just us. It was crazy. I think all three of us have different motivations of starting this company. I'll tell you mine. So, our company is founded in Japan to develop AI technology for Japan. Like when I was looking at your podcast like 10 years ago, there's like many founders in Japan, like they really want to go international right away. They want to move to the valley and try their luck. But there's also other companies that are focused on Japan. Remember this, one of your podcast episodes, like you have so many startups in your podcast. One of them are like focusing on developing the product that produced the best invoices for Japan. Like those companies.
Tim: That's a need. But you guys, I mean, I think what's unique about Sakana is that you had a product that, I mean, yes, it's targeted to Japan, but it's truly a global market. And when you first raised money, you went overseas. Your first round was from overseas investors rather than Japan. So why?
David: Yeah, exactly. I mean, for us, having worked at Google before and Goldman Sachs before, I think like my experience is generally easier to raise money from overseas markets.
Tim: Well, I agree with that for sure.
David: Especially in the VC ecosystem. I think in Japan, the VC ecosystem is growing. There's a support, lots of government support as well. But at the end of the day, if you want to have a strong funding round, we wanted to go direct to Sand Hill Road. So, I think what happened was when I started this company, I co-founded with Llon at the beginning. We just announced that we're going to start a company called Sakana AI, an R&D company in Japan. And I just basically sat there working on our tech, working out what we're going to do. And from there, we had many reverse inquiries. Like maybe on Twitter, because I have some following on Twitter as well.
Tim: So, inquiries from VCs?
David: Yes, from VCs. Basically, all of the VCs reached out to us.
Tim: Both Japanese and foreign or primarily…?
David: Many foreigners as well. I worked at Mountain View for Google for a few years, and many VCs knew me at the time. I also had many personal connections in that community. So basically, if you have a choice, you might as well try to pitch to Deluxe Capitals, the Vinod Khoslas, the Andreessens, and the Sequoias of the world, right?
Tim: So, for the seed round, you raised $30 million. But then the next round, you came back to Japan, and you raised something like $200 million from a series of rounds of Japanese investments. And so why the shift back to Japan?
David: For our seed round, it made sense for us to raise from Silicon Valley investors. I think also the nature of the VCs, especially in the seed round, when you raise from prominent Silicon Valley VCs, they want to dominate the entire round. Because the seed round of a company is your highest cost of capital. It's the lowest valuation if your company continues to exist. So, if a VC has decided that they're going to bet on you at the seed stage, it makes sense for them to invest as much as possible. So, there was not a lot of room to involve other companies at our seed stage. We did make room for NTT and Sony and KDDI, but we couldn't. Basically, the first year of our existence is primarily R&D driven. There's absolutely no plan for monetization. As we started out, we wanted to build a foundational R&D company in Japan. We recruited many of our top research colleagues from Google, Prefer Networks, Stability AI. And we set out to actually produce pretty amazing research in the first year, like the AI scientists. Something like that didn't exist before.
Tim: And it's actually got a published research paper now, right?
David: Yeah. I mean, after two years, it got published in Nature magazine, like the top scientific journal.
Tim: That's amazing.
David: That's not going to make me money directly as a company, but as a researcher, it's kind of proud that a Japanese AI company can publish something in Nature.
Tim: Absolutely amazing proof of concept and proof of suitability.
David: So,...

Things don't always go as planned. In fact, they usually don't.

Four years ago, femtech was both a rapidly-growing product category and a nationwide movement vocally championed by politicians, industry, and the media.

As the market began to grow, however, Japan's incumbents took note and took action. The femtech social movement began to decouple from the products.

Today we talk with Amina Sugimoto about the future of femtech in Japan, the fragile nature of public promises in the face of corporate lobbying,  the likely impact of Prime Minister Takaichi on femtech, and how, despite aggressive lobbying by the incumbents, foreign femtech products are starting to enter the Japanese market.

There is a lot of important advice for anyone thinking of entering the Japanese market. It's a great conversation, and I think you'll enjoy it.


Show Notes


What femTech means in Japan
Why its hard for men to invest in femtech -- even when they want to
The transformation of femtech in Japan
Massive social and political support does not always translate to sales
How Japanese incumbents (still) stifle innovation
The core challenge in introducing new innovation in Japan
Prime Minister Takaichi's likely impact on femtech in Japan
What other innovators should learn from femtech in Japan
WHat's next for femtech in Japan

Links from the Founder

Everything you ever wanted to know about Fermata

Follow Fermata on Twitter @hello_fermata


Friend Amina on Facebook
The Kegg Crowdfunding Page



Leave a comment



Transcript
Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs.
I'm Tim Romero, and thanks for joining me.
FemTech is, well, it's just different in Japan.
FemTech in Japan is part market disruption, part social movement, part technological innovation, and part bureaucratic red tape. It's something that everyone seems to get behind and support, but at the same time, that support is often slow, sometimes very slow, to translate into real action.
Well, today we sit down once again with Amina Sugimoto, founder of Fermata. And Amina is absolutely on the forefront of Japanese FemTech, women's health, and the regulatory challenges that these products face in Japan.
Now, since we last had the chance to catch up with Amina three years ago, Fermata has had a change of fortunes and a change of strategy. Amina saw the growing social movement that powered FemTech in the early days start to decouple from the technology and take on a life of its own. And so she restructured Fermata, shrinking the team of 35 down to a small core team, and then refocusing and rebuilding.
Amina and I talk about why FemTech is having so much trouble crossing the chasm in Japan, what happens when Japanese incumbents decide they don't want you in their market, and what's really going to be at stake for women's health in Japan over the next five years. But you know, Amina tells that story much better than I can. So, let's get right to the interview.

Interview
Tim: So, we're sitting here with Amina Sugimoto, the founder of Fermata, and one of the most active advocates for FemTech in Japan. So, thanks for sitting down with us and welcome back.
Amina: Thank you so much for having me again. I'm super excited for this.
Tim: So, we've got a lot to cover because so much has happened in I guess the last three years since you were on the show last. Just to kind of set the stage, like the word FemTech, it means a lot of different things to a lot of different people. So, what is FemTech?
Amina: So yeah, it does mean a lot of different things for different people. Initially, the term itself, people started using it around 2017, I think 18-ish. And it used to be a term that being used between investors and entrepreneurs. And at the time, a lot of sort of entrepreneurs working in sort of women's health, they were having a hard time getting investment. So, they came up with a term to communicate with investors. And it literally sort of back then means the latest technology being applied on women's health. So, it was very broad back then.
Tim: So originally, it was more of a financing, an investor-focused term, rather than a consumer-focused.
Amina: Yes. It really was.
Tim: Interesting.
Amina: Because back then, FemTech, edotech, I think all these terms started to sort of appear. Back then, and it still is, the majority of people working in finance are men. And it's not like men's fault, but it's just difficult to communicate about the industry. Like this product is for menstruation, this product fertility, rather than saying that the FemTech sounded a bit easier for investors to sort of...
Tim: And I see what you mean. It's not really discrimination exactly. It's just investors tend to invest in what they know.
Amina: Or what they like, or what...
Tim: What they understand, I mean.
Amina: Exactly, exactly. So, there was a gender imbalance within the investor world. And so the term then was used to raise money.
Tim: But now it's taken on a much, much broader use.
Amina: Yes. So interestingly, the term, so just sort of like around the same time as COVID. And I think that's when the people start to get more interested about their own well-being or wellness. So, when Fermata started, it was in 2019, we started to use the term FemTech for consumers. It was during COVID, so we started to events on women's health, and we started to use the term FemTech. And I think that sort of, it was the right timing. So, the term itself in Japan sort of spread really quickly. All these major magazines, newspapers started to pick up. But sadly, compared to what's available in the US or Europe, there are not many tech products available in Japan yet. It's just that the word simply became a lot more popular than the actual industry.
Tim: Is that because of regulations around medical technology? Is it just a Japanese consumer's reluctance to try new things? Why do you think it's?
Amina: Well, I think there's a lot of things. And one of it is, of course, deregulation, which I can tell you more about later. Another thing would be that we have a pretty good health system. So, for people in Japan, compared to let’s say Americans, we are less interested in purchasing new products, because it's easier and cheaper to go to a doctor. So, the mentality and sort of the industry itself is a lot different. However, there is a trick. The Japanese health system only covers clinical stuff, not prevention. And women's health, most of it is related to prevention. So, we can only get covered by government if we have a breast cancer. But to prevent breast cancer, the only way to prevent it is to go to the checkup provided by the government. But there's no intention. There's no motivation to create something in between. Something that maybe we can track something at home.
Tim: So, last time we spoke, Fermata was experimenting with a lot of different business models and business directions. You were working with a lot of imported products. You had some pop-up stores, a couple of physical stores in e-commerce, and doing B2B consulting. And where is Fermata today?
Amina: I made a decision in February 2024 to shrink the size of the company to just myself. The market didn't grow as fast as I predicted. So, February 2024 is when Fermata hosted our signature event called FemTechFest. We had over 6,000 people coming and we rented out the entire floor of Roppongi Hills. But then I realized soon enough, the market in Japan when it comes to women's health and FemTech will hit the chasm. So, we managed to just capture those individuals who's early innovators or those who's interested in this kind of product. But we struggled enough to get into the mass market. So, the women's health industry was hitting the chasm. And then I felt that when I hosted the event of over 6,000 people, we can host an event and bring in loads of people, but it doesn't directly link that with our sales. And there's something wrong is happening.
Tim: You know, it is. I mean, one of the things you told me last time we spoke really stuck with me about FemTech in Japan. And I think it goes directly to what you're telling me now. Last time you mentioned that FemTech is more than a product category in Japan. It's more of a social movement. It gives people kind of social permission to reexamine gender roles and to reexamine these conversations that were once considered settled about what's appropriate for women to do and things like that. Can you talk a bit about if that's still the case? And is it more that the interest was more on the social dynamic side than the product side?
Amina: I think it still is. So, we couldn't get any of the signature tech products out in the market in the last five to six years because of the regulation, because of the market dynamics were spread. And then people had this high expectation and motivation. Yes, we can now freely talk about our own health issues, period, menopause, whatnot. And that did get to a certain level in Japan, there's a TV shows and stuff. So, the environment around it has changed. But yet it has a lot stronger social movement connotation to it. And then not so much of the business industry side. So, when it comes to B2B business, we get a lot of inquiry from companies. Okay, we would like to do something about FemTech. And I'm like, what do you mean by something about FemTech? And for me, I'm like, whenever we speak with the Japanese, especially the big companies, it's not their fault, but they're just very general. And I guess those people who's responsible leading this project, they're often women. And they have something that they want to communicate. They have these passions and maybe the struggle that they have gone through over the time working in the company. But it's usually like more of a social side and the product development.
Tim: Yeah,...

Welcome to Disrupting Japan, straight talk from Japan’s most innovative founders and VCs.
This is our 250th episode, and I wanted to give you something special; something I have been thinking about more and more as my career in startups and venture capital has developed.





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Today we are going to talk about a group of people who are perhaps the most reviled and maligned by technologists and innovators worldwide. People who stand in opposition to everything innovators hold dear. Today we are going to talk about the Luddites — those individuals who through a combination of ignorance and shortsightedness opposed technology and change.
But that’s not really true. The Luddites were not who you think they were. In fact, almost everything you have ever been told about them is wrong.
In truth, the Luddites were not really opposed to new technology. Not even when it threatened their livelihoods.
There is growing concern today about AI taking our jobs, but if AI had emerged 220 years ago, the Luddites would have embraced it. Far more important, they would have held a much better understanding of the true dangers posed by today's new business models than do most of the AI advocates or critics talking about it today.
Although the Luddites are accused of opposing the very technology that resulted in the incredible progress and the rise of living standards that we have experienced over the past 200 years, that’s simply not the case.
In fact, as you’ll see, although the higher living standards and shared prosperity enabled by the technology of the industrial revolution are undeniable, we actually have the Luddites, and not the technology, to thank for that.


The Luddite in the Mirror
So who exactly were the Luddites?
You have probably heard that they were cloth workers in late 18th century England who, early in the industrial revolution, saw their livelihoods threatened by the new textile factories, and they tried to shut down those factories by destroying automated looms and other textile equipment.
That much is completely true. The important question, however, and the one with a wildly misunderstood answer is “Why?” “Why were the Luddites breaking machines and shutting down textile factories?”
The mythology is that Luddites rejected the new technology because they benefited from the old system. Rather than embrace technology which would lift millions out of poverty, lengthen lifespans, and lead to greater shared prosperity, the Luddites selfishly wanted the world to stay as it was. They were backward-looking rubes who simply could not see the bigger picture.
And that, all of that, every single word of that, is simply wrong. If anything, the Luddites were alarmed because they saw the big picture far too clearly.
So let’s take a quick step back into the world of the Luddites and see just how much like us they really were. And also see that although the technologies are completely different, how the new business models of the industrial age changed society in very much the same ways as the new business models of our emerging AI age.
As the industrial revolution was gaining momentum in the closing decades of the 1700s, textiles were one of England’s most important and profitable exports, and they were manufactured using what was called the “domestic system.”
Textile workers worked with their own machines in their own workshops. Some of the more enterprising had multiple machines and employed others. The work was distributed, done mostly at home, and the finished product delivered to merchants. This system is where the English term “cottage industry”comes from.
By and large, these clothworkers did not have leisurely or even particularly comfortable lives, but it was a better living than agricultural work and much better than most of the newly emerging factory jobs. What these clothworkers did have, however, and what they were very afraid of losing, was a degree of economic freedom.
The freedom to negotiate fair prices with their customers and, based on those negotiations, the freedom to decide what and how much they would produce.
These proto-Luddites had no problems with machinery or technology. They used and maintained machinery. They experimented with and developed technology. What they objected to was not the new technology, but the new business models.
To understand the Luddite’s position here, we need to understand that new technology was not the only thing powering England’s industrial expansion. These new factories were also powered by some of the most horrific forms of child labor imaginable.
Children as young as six were forced to work 14 to 16-hour shifts crawling under machinery to recover scraps of cloth and reaching into running machines to untangle threads and remove debris. Some business owners even made deals with the government to take orphans off public hands and put them to work in their factories.
And to be absolutely clear, these children were not paid. They were given enough food to keep them alive and only allowed to sleep a few hours a day. When children tried to escape, they were brought back in chains. These children would either die in one of the frequent industrial accidents or they would literally be worked to death.
Working conditions could have easily been made safer, but pausing or turning off the machines would lower profits. The whole point of this innovative new business model was that it produced textiles continuously, 24/7.
Things like idling machines or buying safety equipment would cut directly into shareholder value.  Since there were always more bodies to feed the machines, it would have been unfair to the shareholders not to leverage that resource.
No one knows how many children died in those factories. Neither the politicians nor the business owners benefited from that kind of record keeping. Slaughtering children has always been bad optics.
Today we usually try to gloss over this behavior with the rejoinder that “attitudes and values were different back then”, but that’s not really the case. Even by the standards of the day, these new business practices were appalling. Many religious, social, and political groups were outraged and worked to force business owners to respect social norms and basic human decency.
Many business owners did, of course, but they were quickly outcompeted and bankrupted by the business owners who chose not to. Working children to death was just so damn profitable. William Blake famously referred to these factories as the “Dark Satanic Mills”.
Our proto-Luddites were not simply worried that their way of life was changing, but that it was changing into something horrible.


The Broken Legal Shield
It’s also important to understand that these business owners were actually breaking the law. Not just social norms, but the actual law. Labor protections in that era were not exactly robust, but some basic rules did exist.
When challenged on their illegal labor practices, the new business owners responded in exactly the same way today’s new business owners do. They claimed that since no one imagined this new technology when those labor laws were created, they clearly did not apply to them. Forcing them to abide by the law would only slow progress. And just like today’s business owners, they had legions of supportive journalists and caravans of lobbying money to amplify that message.
It’s quite impressive how effective and unchanged this strategy has remained. Over the past decade, Uber and other gig-economy companies executed this playbook exactly. They claimed that since their new technology did not exist when the relevant labor and licensing laws were passed, those laws should not apply to their new business model. They argued that if they were forced to pay minimum wage or comply with licensing and insurance laws, their business model would collapse and that would slow the march of progress for everyone.
Interestingly, that playbook worked well in the US, but not everywhere. There are many markets where Uber is required to follow local labor and licensing laws. And you know what? Uber does fine in those markets. They are a little less profitable, of course, but they do fine. Their business model never required them to ignore labor and licensing laws, it is simply more profitable if they can do so.
For over 200 years, business owners have used this slight of hand to sidestep both criticism and regulation. They simply assert that any criticism of their business practices is actually hostility towards and fear of progress and technology.
Right now, this “old laws don’t apply to new technology” grift is being used by AI companies to deflect copyright concerns.
I’m not talking about using copyrighted works to train AI. Admittedly, that’s a grey area. Rather, I‘m talking about the simple fact that I can pay OpenAI $20, and with a bit of prompting, it will sell me all kinds of copyright-infringing images and whole passages lifted from books and screenplays.
That is straight, blackletter-law copyright infringement for profit. It makes no difference what the user does with the image they paid OpenAI to generate. OpenAI is violating the law when they sell it without permission. It’s a commercial transaction.
The AI companies usually imply that the customer is at fault for requesting the images. But again, No!  The law is clear. Asking a company to create a work that could infringe on someone's copyright is not illegal. However, creating and selling that work without securing the necessary rights? That’s illegal.
My point here is not that AI companies should be shut down for copyright infringement. I don’t think they should be. The point is that we need to stop falling for this 220-year-old slight of hand where the existence of a new technology is used as an excuse to violate any laws or social norms that might reduce profitability.
I’m not anti-technology. I’m just anti-bullshit.
 
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