The Hard Thing about Hardware Startups in Japan – Logbar

There’s a very good reason most Japanese hardware startups fail.

Today we sit down with Takuro Yoshida CEO and founder of Logbar, and we dive into the reasons and also go over Logbar’s strategy for avoiding the mistakes that have killed off so many other Japanese IoT startups.

Takuro is the creator of one of the most successful Kickstarter campaigns and two of the most successful IoT projects in Japan, the Ring Zero, which is VR controller in wearable ring form and the ili automatic translator, which is just starting to gain real traction.

Of course, we dive into how he managed to create and bring these products to market, and we also talk in detail about Takuro’s unusual journey from professional bartender to successful startup CEO.

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

Show Notes

How to go from bartender IoT startup founder Why a successful Kickstarter campaign can be a danger to your company Why the Ring failed as a hardware controller Why hardware translators will succeed where software-based translators have failed How hardware devices will survive in the world of a standardized mobile phone platform Why even in Japan all publicity is good publicity Why Japan has fallen behind in hardware and how it can catch up Why Japanese VCs don't want to invest in hardware startups

Links from the Founder

Find out about Logbar Info on the Ili translator The video that got Logbar so much attention

[shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript Welcome to Disrupting Japan. Straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero, and thanks for joining me.

You know. One of the biggest changes I’ve seen in Japanese startups over the last 20 years, in the increasing number that are coming out of Japan’s top universities. I’ve got to say there’s both a positive side and a negative side to the large number of new startups being founded at these universities, particularly at the University of Tokyo.

On the positive side, it’s great that so many of Japan’s top students, students who have the option of a fast track career in government or a Japanese industry are choosing to take a risk and start a company. It’s a concrete sign that things really are changing in Japan.

However, the fact there there’s been such a large number of founders from the University of Tokyo in particular, shows that in some ways, not that much has changed. The fact is that when Todai ramped up their entrepreneurship program, they brought resources to bear that only they could. Todai students have access to government connections, funding, and industry programs, and alliances that no one else in Japan had.

Some founders in Todai rely heavily on these connection, some almost exclusively, and others barely use them at all. And in the end, of course, outside of a small handful of startups that rely primarily on government investment, all startups will succeed or fail in the same public marketplace. Still, however, sometimes the most inspiring founders are those who come from somewhere you don’t expect, someone who takes an unusual and u likely path to entrepreneurship.

And Takuro Yoshida of Logbar is a founder in that mold. When I first met him four, five years ago, he was tending bar and trying to innovate bartending. Over the past few years, he and his team have run one of Japan’s largest Kickstarter campaigns and developed, released, and secured national and international distribution for two completely hardware products. And I think you can learn a lot from him.

But you know, Takuro tells that story much better than I can. So let’s hear from our sponsor and get right to the interview.

[Interview]

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Tim: So I’m sitting here with Takuro Yoshida of Logbar, one of Japan’s most creative internet of things startups. So thanks for sitting down with me today.

Takuro: Thank you.

Tim: Logbar has created both The Ring and ili automatic translator. So before we get started, why don’t you just tell me a bit about the company an about your products?

Takuro: Okay. So we started our company from since like 2013. Actually, Logbar comes from real bar.

Tim: Right.

Takuro: I was a bartender and then I was making a cocktail --

Tim: Well, actually, that’s right. The very first time we met, I was running EngineYard and you were running the bar and you just developed a system that would let people order drinks on the iPad.

Takuro: Yeah, that’s right.

Tim: Yeah, I remember.

Takuro: Okay. Yeah. We are doing that. That was fun. You can order a cocktail in the bar and then you can communicate with people.

Tim: I want to talk about your history in a little bit. But first, tell us about The Ring and tell us about the automatic translator.

Takuro: Okay. So Ring, you put in the finger and then if you do the gesture, maybe you can turn on the TV or you can control the music in the app or maybe you can play the game. And so that ring is kind of a gesture control device that we made.

Tim: Is it Bluetooth?

Takuro: Yes. You connect with Bluetooth to an app on a smartphone like iPhone or Android and then you can use that.

Tim: To control just about anything?

Takuro: Yes.

Tim: And you also released the ili automatic translator which is a hardware device that translates which languages?

Takuro: Japanese, Chinese, and Spanish, and we are supporting Korean too.

Tim: Cool. Let’s back up to your bartending days.

Takuro: Yes. Okay.

Tim: That’s bit of a job. What got you interested in programming in startups and side projects?

Takuro: Each year, I go visit Silicon Valley because I used to live in there for one year and a half. I was a student. And then after I came back to Japan, I always dream of like, I want to be an engineer or I’m going to make like entrepreneurs in Silicon Valley. So every year, I kind of do the presentation. I make some idea and then presenting to the VC in Silicon Valley. But most of the time it doesn’t work. It didn’t work, yeah. But I always challenge that.

Tim: What kind of ideas did you have before Ring and before ili? What were the ideas that didn’t work out?

Takuro: Before, I had a girlfriend. I lived in New York and then my girlfriend is in Japan. So it’s a long relationship, right? So I made web services. It’s like Facebook or MySpace.com but only for two people. Only me and girlfriend. So that’s a kind of SNS like social network service I built. It was great. In Japan, I got some users but in the US, none. It’s kind of hard to get it. So that is the one idea. And then next one is like a Twitter, like one sentence each time and then you can communicate with random people, something like that. So I kind of made some web services mainly focusing on communication.

Tim: You were saying you were talking to VCs and making these presentations and not getting a lot of success that way. But when you started Ring in 2014, you didn’t use a VC money. You ran one of the most successful Kickstarter campaigns. So before Kickstarter, was this an idea the VCs rejected?

Takuro: Before the Kickstarter, we raised some angel fund. It’s not that big amount but amount that is enough for making prototype. And then after we made the prototype, almost ready for the mass production, we started Kickstarter and then we could raise the money for the mass production.

Tim: Okay. So the Kickstarter was a combination of fundraising and marketing?

Takuro: Marketing, yes.

Tim: I mean, you raised over $800,000 on that campaign but the production didn’t go as smoothly as you expected.

Takuro: No.

Tim: What happened during production?

Takuro: Hardware is kind of hard to mass produce always. One change takes some time, two or three months. So at that time, we were expecting to ship it maybe July but we shipped there like October. So three months late.

Tim: By Kickstarted standard, that not too bad.

Takuro: It’s not too bad actually, yeah.

Tim: Were the delays caused just because this was your first time building a hardware or was there any particular problem you ran into?

Takuro: I think that was because maybe we have lack of experience with making hardware because I’m the first time to actually build the hardware that time. So we couldn’t know the risk each time. If I do this, maybe it takes more time or something like that. I don’t know.

Tim: Did you do the manufacturing here or in China?

Takuro: We did the Ring in Japan, actually.

Tim: Really?

Takuro: Yes.

Tim: So all the manufacturing local?

Takuro: Yes. So made in Japan everything, yes.

Tim: Actually, that should reduce a lot of the risk. A lot of the problems that other founders have had with hardware have been dealing with suppliers and quality control issues. What advice would you have for other hardware startup founders or other internet of things founders so they can avoid these kind of delays?

Takuro: I think to avoid the delay, you need to experience the hardware. So we have to trust the factory all the time. The factory, our partner, it’s not their fault actually.

Tim: Right.

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Takuro: Always our fault, most of the time. I always say, “I want to do this. I want to add new function.” And then they said, “Okay. But it takes time. Is that okay for you?” We always try to improve the hardware.

Tim: Okay. For a software startup, development cycle might be one week. You’re doing weekly sprints. You might have monthly and quarterly goals but your basic cycle is a week.

Takuro: Yeah.

Tim: For hardware startup, we are dealing with factory. What’s the ideal cycle time?

Takuro: To make the prototype, usually takes three or four months.