The Global Niche Startup Strategy – Cerevo – Iwasa Takuma

Cerevo wants to be a “global niche” player.

That makes sense for this Internet of Things company. The IoT has become so pervasive and so successful that the terms ha become almost meaningless. Today we simply except and accept that almost everything should naturally be connected to the internet.

Of course, it wasn’t always that way, and today Takuma Iwasa, founder and CEO of Cerevo tells us of how he started his career at one of Japan’s big consumer electronics companies trying to force the internet into devices where it really didn’t belong. And how that experience forced him to find a better way and to found his own company.

Takuma also explains Cerevo’s innovative business model. In fact, the company is structured less like a hardware manufacturer and more like a hardware startup accelerator. He and Cerevo are aiming for a series of niche-market successes which will be acquired by large mass-market firms. And his strategy seems to be working.

It’s a fascinating discussion, and I think you will really enjoy it.

Show Notes for Startups

Why Japan's first "smart devices" failed The foundations of the "global-niche" IoT strategy Why startups should build rather than license How to get media attention for cool, new IoT devices How IoT startups really should be using crowdfunding Will Japan ever regain the lead in robotics? Why Japanese companies were afraid of the Roomba

Links from the Founder

Learn more about Cerevo at their home page

[shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan Disrupting Japan, episode 67.

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

The internet of things is unstoppable. It’s so broadly defined these days, connectivity is cheap, and they can be added to just about anything. Of course, whether it should be added or not is another matter entirely. That question is near and dear the heart of Takuma, founder and CEO of Cerevo, one of the most innovative and connected device makers in Japan. Takuma started his career at Panasonic and he had high hopes of creating all manner of consumer devices that could take advantage of internet connectivity.

What he found, however, was that his job consisted mostly of finding ways of trying to force internet connectivity into existing products. Genuinely new products and innovations were being dismissed out of hand. Well, Takuma did what everyone should do, but very few people actually do in that situation, he quit his job, took some of the best engineers with him, and he started his own company.

Now, there are a lot of gadgets and IOT devices being built in Japan, but Cerevo has a genuinely interesting and methodological approach to it. During the interview, you’ll hear Takuma try to downplay that strategy as just gut instinct, but as you listen, you’ll understand the very rational method of what, from the outside, might look like madness. We’ll talk about plenty of cool devices, but I think you’ll find the strategy that underlines Cerevo’s success to be at least as interesting. But, you know, Takuma tells that story much better than I can. So let’s hear from our sponsors and get right to the interview.

[Interview]

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Tim: So I’m hitting here with Takuma Iwasa of Cerevo. Now, Cerevo, I’m tempted to call it a gadget company, but that’s not really fair because you guys do a lot more than just make little gadgets. So can you tell us a little bit about what Cerevo does?

Takuma: Okay, so my company’s name is Cerevo and we say Cerevo is a consumer electronics start up company, not gadget, right. We are really focusing to the connected consumer electronics devices—connected robot, or connected camera, or connected, of course, gadgets. Sometimes we try connected toys, connected sports equipment.

Tim: You guys make so many different kinds of internet of things products, we could spend the whole podcast just listing them all. There’s a huge variety of them. You make everything from tools for IOT developers, to connected sports equipment, to video streaming equipment, but first, let’s back up a little bit. You started—

Takuma: From 2008. So my past background is a spent time Ritsugaku Kyoto University studying computer science, but I’m not good with the software programs.

Tim: So you studied software development, but you just weren’t very good at it?

Takuma: Yes, but I’m working into the very small startup company and in the college student generation, I spend a long time to make a website and I received a job from the boss and I managed many of my friends. I received the job from the client and broke it up.

Tim: So kind of project management?

Takuma: Yeah. I’m also a programmer and manager. In that time, I spent a long time to make a computer programming, that my friend started to from 1 to 100. They spent just 5 days. At the same time, I started almost the same to-do’s that I already spent one week, but I already, I can’t do just only 20 or 25. But I can really easily manage my friends. Then, after college, I decided to go to product manager—not program.

Tim: And you were with Panasonic?

Takuma: Yes. I really like 021 timing. That means in 2001, that timing, the dot com bubbling the years.

Tim: Yeah, just as it was starting to burst.

Takuma: The web-based, internet-based companies are already growing into a big company. And I look to the internet or computer job. But my aptitude is not good for programming. Then, I’m looking for the money, not the purely internet companies. So automotive company, consumer electronics company, I tried some other fashion company, or so many different type of business area.

Tim: So when you were saying you were trying all of these companies, was this—

Takuma: Just looking for.

Tim: Just checking them out?

Takuma: Checking and just go into the interview, then I find the consumer electronics is almost all the blue ocean from the internet deal. So consumer electronics is just born from the 2001 or 2002.

Tim: Well, that’s true. Going back to 2001, almost no companies were seriously trying to connect. They weren’t seriously trying to make smart appliances. There were a few gimmicky—

Takuma: Yes. And also some of the R&D departments, the Panasonic R&D department or Sharp R&D department, that tried an internet refrigerator or microwave.

Tim: Microwaves that could access recipes.

Takuma: And people have to connect the phone cable to the microwave. So that’s really ugly in the really early stage of the internet connected consumer electronics. Then I go to Panasonic, and start to produce internet connected devices?

Tim: What kind of devices?

Takuma: First my job is remote the TV programming, reserving the website for the old style mobile phone. It’s not a smartphone, but people can reserve the recording of one of the TV programs from the mobile phone. After that, the TV, I discussed with Google and YouTube guys, and built in a Google function to the Panasonic TV. And finally my job is connected camera, the camera with the Wi-Fi in the systems.

Tim: So you were working with that at Panasonic as well?

Takuma: Almost all of my business background is IOT, IOT, and, IOT.

Tim: Your first product, Cerevo, is also video streaming. What made you decide to leave Panasonic and start up your own company?

Takuma: That story is very difficult to translate from Japanese to English but I am going to try. So into Panasonic, one or two years, I’m very happy to touch the huge consumer electronics business with the internet business, but I faced on the huge war from the internet based side guys and the consumer electronics business guys’ side.

Tim: So just politics?

Takuma: Not only politics, but their completely different approach or thinking pattern of politics. The image, like Google guys and Bank of America guys, of course they are trying to improve every year, but the two guys, the thinking pattern—

Tim: So they just think differently.

Takuma: Yeah, completely different pattern. But Bank of America, and Google, no need to collaborate with them, but the internet company and the consumer electronic company—my job is connected, so I have to merge to the business area. I faced on this war and finally, the Panasonic is not so innovative and not so user friendly from the internet user vision. From consumer electronics, the cost over vision is okay, it’s almost okay.

Tim: Well I think the biggest difference is that first generation of connected devices, it didn’t really change anyone’s behavior. It was just adding features to a product.

Takuma: Correct. It’s just adding in a different culture, in a different function. I like to make merge the product, internet merged with consumer electronics, not add It’s very difficult to merge because that’s why the war is available. Then I’m looking for the job off and I talked with the Sony guys, the Sharp guys, something guys, but they are completely same culture as Panasonic.

Tim: So they were just trying to figure out how to put the internet into their existing products?

Takuma: Yes. Then I decided to start the new business, start the company with internet side guys and consumer side guys.

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Tim: So did you start the company with friends from Panasonic?

Takuma: At first, I started the company with two investors, the names, Mine-san & Yamada-san. Miene-san is ex-Sony. He go out from Sony and start the investment business, so he knows what is internet company and what is consumer electronics.

Tim: Since you didn’t have a background in engineering or programming, where did you recruit the first engineers from?

Takuma: Also, I have to talk about Yamada-san.