Class note ;The Entrepreneurship Training Course Workshop in MBA at Hosei university, Japan

This is a report on the Entrepreneurship Training Course Workshop at Hosei University on November 14.
Speaker: President of IT equipment manufacturer

First part: overview. Current situation, background of starting a business, comparison between Japan and Silicon Valley, etc.

I've lived in Silicon Valley for 8 years. A lot of companies in Silicon Valley explain their mission before they give an overview of their company. For example, Facebook would say its mission is to connect the world and then explain what it is doing to achieve that mission.
No company sells both English learning software and translators. Learning and speaking for pleasure may seem to be contradictory, but in our case, they are not contradictory, since our mission is to eliminate the language barrier. We also add a learning function to the translation machine.
I didn't speak English until I was 20 years old. When I was a student, I fell for a catch-up sales pitch at an English school. I won an amazing one. They made me take out a 500,000 yen loan. The materials were terrible. After that, I fell for the same scam again, this time for 1 million yen. This time it was 1 million yen.
When I told the 1 million yen scammer that I already had a loan of 500,000 yen and I couldn't pay more, he negotiated to cancel the 500,000 yen contract.
Since English conversation school teachers are foreigners, they often understand English but not Japanese, so they may not be able to teach English in a way that can convey the nuances of Japanese. But with a translator, you can do something close to that. For example, "I went to Kyoto for the first time in three years. For example, "I went to Kyoto for the first time in three years," and you can translate and learn on the spot. In the future, I would like to add features such as the ability to practice pronunciation.
When I was waiting for my child's school bus in Silicon Valley, they were all from different countries. In Japan, it is considered a problem if you can't do the same thing as others, but in Silicon Valley, there are people who attend a Halloween party dressed as normal.
The rule of black hair color, which is common in Japanese school rules, is impossible in Silicon Valley schools because the original color of the hair is not always black.
There should be no language barrier. If Japanese people understood English, they wouldn't have fought in the war.

Product Development
The 4Ps are always written out during product development.
The translation is not done by the translator itself, but by the server, which needs to be connected to the Internet. That's why it has a global SIM. The decision was made because we didn't want the current selling price to be too high for many people overseas, but we decided that we couldn't sell it at a higher price than it is now.
The target customers are those who have money to spare, like to travel, and are not very good at languages. These people are likely to be relatively old, and not many of them would be able to download an app from the App Store, for example. Also, because we want people to try it out at mass merchandisers, it's sold at mass merchandisers as well as at Amazon. They are also sold on TV shopping.
Even in the B2B market, for example, high-dollar brands such as Bulgari, Tiffany & Co. and Shiseido have introduced translators because they thought they could make more money than the cost of installing them.
At the Japan Railway Company (JR), these machines are placed in the stations of the Shinkansen. Some foreigners sometimes sit in the green car without a ticket. The first class passengers may be able to understand, but it seems difficult for foreigners to understand that the green car is a high-class seat. In transportation services, translating the language won't increase sales, but it will lower support costs. However, individual employees' phones cannot be used for work. The microphones don't have noise cancellation and the translation app takes a long time to launch.
Public schools. Not many, but there are quite a few foreign children.
The top uses are foreign travel, learning, and customer service.

Why the president is on the store floor
I want to hear the true words of the customers. Not at all, is there a new one, or why didn't you turn on the camera?
I was once lectured for an hour by a man whose face was not well known to me. Once people knew that I was the president of the company, I could only listen to the polite conversation. You can understand what's popular in the world and the literacy of each age group. I thought it was a sophisticated question that overturned my preconceived ideas about women in their 60s.

The company's vision and mission
Our mission is "to spread joy and excitement to people around the world through our products.
I once sold a typing software for 3,000 yen, and it sold 6 million units. At that time, if you go to computer classes, you have to learn how to type, and it cost about 50,000 yen. With software, it's cheaper and you can practice whenever you want, and the product is transnational.
The product can cross the border: 3,000 yen x 50,000 units = 1.5 billion yen. Distribution is difficult. Amazon only has a presence in 15-6 countries. Wal-Mart is also struggling in many countries.
The vision is "to be the most exciting company in the world", we need a definition of exciting. It is defined as right, pleasing and interesting. Define right and you can't sell a product that you feel guilty about. A translation machine creates a conversation.

Application of Technology
Tablets that allow people with hearing loss to read in letters
There are 205.9 billion people in the world with hearing loss, and in many cases, once the hearing gets worse, it doesn't get better. Hearing aids are not very effective in severe cases. Glasses were invented around 1400 AD. Before that time, people with bad eyesight could not engage in social activities. Nowadays, it is difficult for people with bad hearing to get a job. Such a situation could be improved.
Automatically convert minutes to text
Some companies are reluctant to use Google's GCP from a security perspective. Future issues. There may be value-added products such as text mining of minutes.

Why did you move to Silicon Valley?
On a global level, the most successful companies are in Silicon Valley. The world is a big place, but the only very successful companies are in Silicon Valley. Currently, the total market capitalization of GAFAM is higher than the total market capitalization of the first section of the Tokyo Stock Exchange. I thought if I was going to go to Silicon Valley, there was no other place to go but Silicon Valley. But many Japanese companies go to the United States and come back at a huge loss. If they try to sell their products suddenly, they are unknown and marketing costs are high. They don't have distribution. In our case, first of all, only the president of our company went there and tried to import promising technology to Japan. When it comes to buying technology, the idea is to offer technology from around the world to our customers through us. If you are the president, you can also meet the president of the other company.
Also, there are a lot of successful people in Silicon Valley, so I wondered if I could get some hints from them. One of the things I noticed was that many companies give out stock options to all employees. In American magazines and other publications, the first thing that comes to mind is the name of the company and in the column of accomplishments, the kind of company they sold and how much they sold it for. The background to this is that selling a company for a high price may allow employees to exit the company. This is difficult for Japanese to understand, as most Japanese companies do not give their employees their shares.
The third goal is to create a global product that can be used worldwide. I dare to make this the third goal.

Difficulties.
Networking. Many people struggle with not being able to meet people. Anyway, I tried to increase the number of opportunities to meet people. A lot of appointments are conference calls, but that doesn't work. They don't like me to just ask if I want to meet with them, but the rate of acceptance is high if I say I'm going to meet with them. They meet for lunch. They don't drink much in the evening. If you spend 8 years on 200 days a year, that's 1,600 lunch opportunities.

About the product
There aren't many pieces of hardware that are made in-house, even for the iPhone. But the core of the product is iOS and the App Store. There is already a lot of basic technology in the world. In terms of translation, there are DeepL, Google, etc. How do you finally deliver it? What matters is the UI/UX.
For example, the translator is basically an Android device. I don't think it's important to have a search engine that can compete with Google or a world class OS to add value to the customer. We don't have in-house translation software. Basic technology is positioned as a component; Google sells it. Google sells it; we buy it. We do our best to do UI/UX in-house, but we don't have a lot of people in-house to do coding. COBOL and C, which used to be the main languages, are rarely used anymore. It's better to outsource these things to someone who knows the new technologies of the time. If it doesn't sell, it's useless. Focus on the parts that touch the customer directly. I think there are many products that are too difficult for customers to use. We need more and more customers to use our prototypes. Get them to use prototypes and see how they react in stores.

How do you find new companies?
How do you find new companies? We'll find them in Silicon Valley and find out if they're allowed to use it or if they have a sales pitch. Initially, it's often employees who find them. They come up with ideas in the employee's daily report. They hear about it from customers, etc. The development of a transcription machine for the hearing impaired was triggered by the fact that someone was using a translator from Japanese to Japanese and a letter was received from a customer. At first, I wondered if there was a market for it, but I thought it would be a social contribution. But when we tried it, we got quite a lot of sales. I don't mind whether it's novel or not. For example, whether it was the first of its kind in Japan or the world. Since this is a business, I won't do something that won't be profitable in the short or long term, but I can afford to take on some challenges, so I will try.

Why did you move to Silicon Valley yourself?
There was no president who went with a publicly traded company at the time. There's something to be said for listening to me because I'm the president of the company. There is respect for founders of listed companies. It's better to make a decision right away. If he doesn't get there, he can give up. But it's difficult to gain trust from the CEO himself because he can't go to a home party unless his family comes with him. In Japan, a company's credibility is judged by the Teikoku Databank, but in the U.S., they look at the president himself and his family. It's probably closer to the rural Japanese way of thinking. Sony's Mr. Morita went to the U.S. by himself at first, but when he read about it, he decided to take his family with him.

Why did you decide to start a business?
His father did not have a good image of a civil servant tax office president. He picked up a headhunting call from a senior colleague in the back seat at a previous IT company. It was a big increase over my current salary. For example, I thought, why not just donate the difference? But now I feel that it's better to make a positive impact on society by making a good product than by donating. For example, Bill Gates has been putting a lot of effort into donations, and Steve Jobs has been having a positive impact on society with the products he has created even though he doesn't seem to be donating much money.
We believe that when you have a good product or service, your employees can be proud of it and the retention rate is high. I think our company has a high percentage of female executives and managers among Japanese IT companies. We offer stock options to all employees. It is important to raise the stock price as a listed company,

About Failure
If there are no failed products, it means that you are not trying. And while a failure may be a failure at one point in time, you don't know much about it in the long run. If you learn from it and connect it to what you do next, it may lead to something else. If the company doesn't go out of business, I think of it as an experiment for later success.
For example, there are many reasons why a product does not sell well, but if you look at the 4Ps, most of them are price problems, then promotion problems.
For example, there are many cases where we have sold products that other companies couldn't sell, and we have sold them a hundred or a thousand times as much. And if you put the blame for failure on one person, you will not become a company that takes on challenges.

As a manager with an engineering background
I'm an SE by nature, so I know how engineers feel. Engineers are happy that what they create is used by someone else; all of Google's services, which are used by over a billion people, are free. But in the case of running a company, technology alone is not enough, for example, if you become insolvent or have a 3-5% equity ratio, the bank will come every day and you won't be able to work. Legal is also very important...I feel like I almost went bankrupt about six times. In that sense, we're lucky. According to Mr. Miyauchi of ORIX, when people die, one organ goes bad and they die. The same is true for a company when it goes out of business due to problems in certain areas, such as sales force and management problems.

Communication with Employees
He believes that in his previous job he did not have regular care in communicating with employees. In my current company, we have a birthday party twice a month. I buy a birthday card and write a comment of about eight lines on it for each of them. They write something that they can brag about to their families.
Normal communication is daily. Not once a week. You'll get ideas when you know what's going on and where.
Use of customer sales data
We change SIMs and priorities depending on which countries they are used in, but we do not, for example, analyze the translated content.

Diversification
Last year, for example, translator sales exceeded 50%. The company wants to diversify by offering a variety of products. The world is changing these days, with Pfizer's stock going up and telework shares going down.

Company Size
A certain scale is necessary to make a contribution to society. It is meaningless if we are doing it but no one knows about it. We don't want to increase the number of employees, but we want to keep it to a few thousand.
About Terminology Translations
If you leave it to deep learning, the jargon will be weak because it doesn't come up much in many conversations. At the moment, it's aimed at consumers, but we'd like to think about many things in the future.

About Investment Partners
Firstly, does the other party want to invest? Secondly, is it worth investing in? The first prerequisite for investment is to do business with us. They will not invest in a company just because it is profitable.

As a resident of Silicon Valley, I can see the challenges for Japanese companies
I think there are a lot of weaknesses as a global company, but recently they are starting to emerge, such as Uniqlo. I think it's important to be successful in the US. I think it's better to focus on marketing rather than products. Products will be commoditized.

Impressions
It may be more important to come up with new customers than to come up with something new.
Looking at the example of a translator, if it's not widespread in the world, it might be worth asking why it's not widespread, even if it can be done with a smartphone. There is a distance between what is technologically possible and what is accepted by the people.
As for the comment about the language barrier, if the Japanese people had understood English, the recent presidential election in the U.S. suggests that it is not that easy. However, there are different ways to fight, and it is clear from the Enigma example that it is better to understand what the other side is saying without letting your intentions be known, so that you can proceed with the fight to your advantage.
I think it's a kind of qualitative research and fieldwork for the president to go to the store himself.
He told me that, due to the influence of his father in the tax office, he was not very impressed with the people who were presidents in the beginning, but I think that listening to the stories of various presidents has helped him. I think it would be useful to know how they make money, whether they go bankrupt or not, and what happens to people when they make money.