How A Failing Music Startup in Japan Pivoted to Global Success – Nana

It’s hard to make money with music apps. The competition is intense, and most people simply are not willing to pay much for music apps; either because music is something they only do casually or because if it’s something they do professionally, they probably don’t have money.

Akinori Fumihara of Nana, however, is succeeding despite the odds. Nana is a collaborative music creation app, where different users upload and submit different tracks to a song, which can be edited and remixed by others to create an unlimited number of arrangements.

Today Nana has a highly engaged global user-base that numbers in the millions, but it almost did not work out that way. Three months after the initial release, Nana was running out of money and was watching new installs trend towards zero.

How Aki and his team managed to turn things around is an amazing story, and one I think you’ll really enjoy.

Show Notes for Startups

Why "casual music" is important How to develop an overseas user-base by word of mouth Why teenage girls form the heart of Nana How a YouTube video inspired an iPhone app Why it's hard to monetize a music app Why startups in Japan (outside of Tokyo) struggle The difference between Tokyo and Kansai startup founders

Links from the Founder

Everything you ever wanted to know about Nana Friend Aki on Facebook Check out Nana on Facebook

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Transcript from Japan

Disrupting Japan, episode 80.

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

I’ve always had a soft spot in my heart for music apps. The competition in this space is intense, and almost every niche seems to be filled. So trying to differentiate a music gap calls for a lot of creativity. But it’s usually their quixotic quest for business models that is the most interesting. The problem is that people just don’t want to spend money on making music. The amateurs and the dabblers don’t spend enough time on the hobby to invest much. And the professionals, well speaking as a former professional musician myself, I can tell you that professional musicians never have money in the first place.

Well today, we sit down with Akinori Fumihara of Nana, and they might have just cracked the code. Nana is a collaborative music creation app where different users upload and submit different tracks to a song. Which can be edited and remixed by others to create an unlimited number of arrangements. Now Nana has become a huge hit with its millions of users. And just like Google, the name Nana itself has become a fully conjugatable verb in Japanese. “Nananu Nanateru, Nanata.” “I use Nana. I’m using Nana. I used Nana.”

Now I’ll warn that Aki’s English is not as good as some of our other guests. But the man is really excited about reaching out to foreign listeners and so he decided to make it work and come on the show. Nana is a very cool app, and Aki’s a pretty cool guy. He’s got an amazing life story, and he started a fascinating company. But you know, Aki tells that story much better than I can, so let’s hear from our sponsors and get right to the interview.

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[Interview]

Tim: Cheers.

Akinori: Cheers.

Tim: So I’m sitting here with Akinori Fumihara, the CEO and founder of Nana. Thanks for sitting down with me today.

Akinori: Nice to meet you.

Tim: That’s great. Now Nana is a social music platform, but can you explain what is social music? How does Nana work?

Akinori: Nana is music collaboration. I’ve found and enjoyed that biggest feature is collaboration and over dubbing. For example, like the base line, boom, boom, boom, boom, boom, boom. Next, with the base add drums, boom, boom, boom, boom, boom, boom, boom, boom. So with the beat it adds piano.

Tim: So each user adds a new part to the piece—

Akinori: Yes, yes.

Tim: And they collaborate to build the song. To build the orchestration. Do they record directly into their iPhones? Or do they upload tracks?

Akinori: Yes, yes, yes. You can just use smartphone.

Tim: Okay, so are there editing features within Nana, or is everything sort of recorded live to layer on top of other tracks?

Akinori: User can upload and overdub.

Tim: Okay, so this really is a casual music app?

Akinori: Exactly.

Tim: So the focus is not creating a finished work, it’s really just having fun?

Akinori: Yes, exactly right. So in music is communication.

Tim: Well, tell me a bit about your customers. Who uses Nana?

Akinori: Okay, we have 3 million users and mostly teenagers.

Tim: Mostly teenage boys, teenage girls, a mix?

Akinori: Teenage girls.

Tim: Mostly teenage girls?

Akinori: Girls, yes.

Tim: Alright. Nana’s also available in English, right?

Akinori: Yes. In fact, we have 13 languages available.

Tim: How many of your users are in Japan, and how many are global?

Akinori: 2 million users in Japan, and 1 million is overseas.

Tim: Wow, so one third of your users are overseas. What are the main countries besides Japan that people are using this?

Akinori: 5 countries; Taiwan, America, Vietnam, India, and France.

Tim: Okay, that seems like a strange collection of countries. So why those countries in particular?

Akinori: I don’t know yet.

Tim: Okay.

Akinori: Because grows naturally. Yes.

Tim: So just word of mouth growth?

Akinori: Yes, yes.

Tim: Excellent. Okay, if we say teenage girls are the biggest user base, what are they using Nana for? Are these people who want to become professional musicians? Are they people who are just having fun with their friends? Why are they using Nana?

Akinori: I think everybody just want just to sing, and they’re both tweeting to their friends. And they want everyone to just listen to their songs. And they’re not wanting to be professional.

Tim: Okay, so it’s more of a hobby?

Akinori: Yes, hobby. Yes.

Tim: But I understand a lot of your users are very engaged. They have their Nana ID on Twitter profiles and social media quite frequently.

Akinori: Yes. Users who has energy engage to our app 10 hours a day.

Tim: 10 hours a day?

Akinori: A day.

Tim: Okay, that’s some pretty heavy use.

Akinori: Yes.

Tim: That’s not a hobby anymore. That’s— Let’s talk a little bit about you.

Akinori: Me? Okay.

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Tim: So you have a background in music, right? You used to be a professional singer.

Akinori: Yes, yes, yes. I wanted to be a professional singer. And I loved Stevie Wonder, and Bree Joab—

Tim: Excellent.

Akinori: —and Ray Charles—

Tim: That’s nice.

Akinori: —and Janis Joplin. I love jazz and rhythm & blues.

Tim: Was that your main motivation for starting Nana?

Akinori: Yes. But also I can post the video on YouTube. This was sung by 57 amateur singers all over the world. As a Haiti earthquake relief and I was greatly moved. It’s awesome. People are united through the song and harmony. It was so amazing. But I don’t see any Japanese here. Yes. Then I realized that that concept: music uniting the world, is rather spoken yet it isn’t realized. I’d like to create that world without loneliness by connecting people all over the world with music.

Tim: Okay. Yeah, I remember that video. So it was this collaboration of people from all over the world who were creating this song—

Akinori: Yes.

Tim: —together.

Akinori: Yes. “We are the world” for Haiti, YouTube edition.

Tim: And so that was your inspiration for Nana?

Akinori: Yes, yes, yes.

Tim: Okay. Before starting Nana— What were you doing before Nana.

Akinori: I was a mature racing driver.

Tim: You were a race car driver?

Akinori: Yes.

Tim: Okay. Tell me about race car driving. How long were you doing that?

Akinori: 5 years. 5 years. And to 2004 to 2009.

Tim: Okay. From being a race car driver to starting a music start-up is a pretty big change. Why did you quit racing cars?

Akinori: At that time, my dream was become a Formula 1 Driver, but it costs so much so I had to quit.

Tim: You couldn’t get the sponsors?

Akinori: No, I had no sponsor.

Tim: Okay. So changing from race car driving to music. These are targeting things where there’s very little money. But okay, so once you got the idea and the inspiration for Nana—

Akinori: Yeah.

Tim: —you were a part of Movida’s early acceleration program?

Akinori: Yes. It brought me a lot of benefits. It works, and they have invested me when I haven’t established a business model so it was very, very helpful for me. But they wasn’t able to bring a financial side.

Tim: Oh, okay. So the amount of money they invested was very small, but I guess you were there learning how to run a company, and how to hire, and how to build the product. So you guys went live in November of 2012. How much traction did you get initially?

Akinori: At first, we achieved 4 thousand downloads in the initial launch, but that then decreased to 2,000, 700, 200, 100 [laugh].

Tim: Okay, so after the big announcement and the big release, you got a lot of attention, and then it just trailed off.

Akinori: Yes, yes.

Tim: Okay. Well, how did you turn it around? How did you start attracting users?

Akinori: It was by tuning UI/UX opposite app. And also after app store optimization grew our users’ pack.

Tim: What did you change about the UI?

Akinori: All.

Tim: So it completely changed it.

Akinori: Yes, immediate change.

Tim: So it’s very unusual for simply changing the UI to cause an app to suddenly become successful. So you guys also did a lot a social media outreach, and you even had some live events, right?

Akinori: The biggest reach was users sharing on SMS,