The secret edge of Japan’s best SaaS startups

There is a very good reason B2B SaaS is huge in Japan right now.

Today we sit down with Chiemi Kamakura, co-founder and CEO of Agatha, and she explains why.

Agatha is a Japanese SaaS company that has been global from Day 1, but is leveraging some unique strengths developed in Japan.

We talk about how Japanese SIs have responded to SaaS, why Japan is likely to see a lot more female founders soon, and the fact that Japanese managers and regulators actually hate paper just as much as the rest of us, but there is one thing that keeps them from going digital.

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

Show Notes

The real reason Japanese hospitals can't get away from paper Why it's hard to innovate from inside a company Can Japanese SIs survive in the SaaS era Agatha's commitment to being global from Day 1 How global and Japan SaaS markets are different (and how they're not) How SaaS can thrive in highly regulated industries. The importance of a personal network in high-trust products How to develop more female founders in Japan Some good advice on going global with a SaaS product

Links from the Founder

Everything you evert wanted to know about Agatha Connect with Chiemi on LinkedIn Friend her on Facebook A good Forbes article about Agatha

Transcript Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for listening. Today, I'd like to introduce you to Chiemi and to Agatha. Actually, Agatha is the startup created by Chiemi Kamakura and her co-founders to solve a global problem in the record-keeping required for clinical trials that are run by pharmaceutical companies. Chiemi tells a great story, and one that illustrates why SaaS is slowly taking over the business world. We talk about the challenges of launching a SaaS startup in a highly regulated industry, the advantages of thinking global from day one, and selling to Japanese customers who always seem to want customization. And Chiemi also explains that contrary to the stereotype, most Japanese workers and regulators don't really like having to rely on mountains of paper. For the most part, they hate it just as much as the rest of us. And today, we'll explain the two things that are actually keeping them from going digital. But you know, Chiemi tells this story much better than I can. So let's get right to the interview. Interview Tim: So we're sitting here with Chiemi Kamakura of Agatha, who makes clinical and regulatory document management for small early stage clinics and life sciences companies. And Chiemi, thank you so much for sitting down with us today. Chiemi: Of course, thank you for inviting me to this opportunity, that's a great honor for me. Tim: The honor is all ours. So I gave just like a really brief explanation of what Agatha does, but can you flesh that out a little bit? Can you explain in more detail, what is it Agatha does? Chiemi: We are offering Document Management Cloud Service for clinical trial for hospitals and pharmaceutical companies. Tim: So is it just for the research stage, just for the trials themselves, or is it more for operational support as well? Tim: Yeah. So main target is clinical trial business, but not only that, it's from research and also marketing and manufacturing. So we are covering all stages. What we do, especially in clinical trial, for clinical trial is operated between pharmaceutical company and hospitals. There are many, many communications on trial, those communication still paper is used. Tim: Okay. Well, let's get into some specifics. So maybe tell me about your customers. If you're improving the communication between the hospitals and the laboratories doing the trials, walk me through an example. How does that work? Chiemi: Yeah. In hospitals, that people who are managing clinical trials, so that's our user, and in pharmaceutical company side, also people in clinical trial department, they are our users. Let me explain what happens between pharmaceutical companies and hospitals. First, pharmaceutical company visit hospitals, and then request to conduct clinical trials at this hospital, and then send applications and other documentation. So there are really a lot of documents. I researched how much document is used in one hospital, two ton of paper are used in one hospital every year. Tim: The medical industry is famous for generating huge amounts of documents and huge amounts of paperwork. But I'm sure there's still a lot of actual paper being used, but it's 2020, how are these companies solving these problems now? They can't really be doing everything on paper now. Chiemi: After COVID, it's moving a little bit, but still, paper is used, because I think doctors and people at hospitals, they are really concentrate on patients and their family, so they don't have enough time to think about IT system or new technologies. They are really focused on patients. Because if you use paper, you don't have to think about anything. Tim: The reason that it's still on paper, it's not due to regulations, it's just the conservative nature of the industry? Chiemi: Yeah, I think so. It's a conservative -- I'm IT person, but even if company who wants to implement new IT system, you need to do a lot of things. You have to change the process, you have to keep training for users, those many staff, you have to do that. It's a barrier for hospital people, I think. Tim: Okay. I really want to dive into the market itself. But before we do that, I want to take a step back and talk about you. Yeah. You started Agatha in 2015, right? Chiemi: Right. Tim: What motivated you to start a company? Chiemi: Yeah. Actually, I found this issue. There are so many paper in clinical trial. I found that in 2007, when I visited one of the hospital, at the time I was working at Hitachi. I was looking for a new business for Hitachi, and then I visited one hospital. And then in one meeting room, I saw that a lot of paper, like 30 centimeter paper per person, then they are for 20 people. So I was so shocked. What is this paper? And then I asked the person at the hospital, and then she answered, "This is a document sent from a pharmaceutical company, it's for application for clinical trial. And then next week, there's a meeting for that. And then after that, then everything will be destroyed." I was so shocked. Tim: I bet. But after that, did you go back to Hitachi and say, "Hey, we've got a great opportunity here to making new product"? Chiemi: Yeah. Right. Exactly. I'm so chocked. So Hitachi should be the company who sort of solves issues by IT. And then what was that? Then I talked to my colleague and then he said, "Yes, Hitachi has great product that costs 2 million USD. All right. They cannot buy, they are not afford. Tim: So were beginning to see why these hospitals are using so much paper. Chiemi: Right. Tim: It's not that they're so conservative necessarily. It's just they can't afford to upgrade their -- oh, wow. Chiemi: Yeah. That's how I met this opportunity about clinical trial papers. And then it was 2007, there are still on premise system was used. Then after 5 or 10 years, many service moving to cloud, then if you use Cloud, there are many systems downsizing. So not only hospital or life science. Tim: This is really interesting. I think, all over Japan now, we're in the middle of this SaaS Renaissance, this Golden Age of SaaS, where customers are realizing, enterprises realizing that wait, we don't need to go with RSI. We can bring in these little systems and we can experiment and we can try something new. Chiemi: Right. That's exactly what I thought. Hospitals are a little bit conservative. It's always as the industry go first, and then coming to healthcare or life science. I saw that many SaaS startup companies bringing new innovation to many business processes. Then in 2015, I thought it's the timing, we can bring the hospital and pharma. Tim: Well, looks like your timing was good. Chiemi: Yeah. Tim: Let me ask you, why Agatha? Does that have any special meaning? Chiemi: Agatha is a mission, is aspirations for good health and life. So there is a-G-A-T-H-A in that. Tim: Okay. All right, right. It's a very pleasant catchy name. Your blog is like Aggie's Blog. Chiemi: Yeah. I heard it from the name of a saint of ancient Greece. Tim: You've been very fast and aggressive in your international expansion. So you've got offices in Boston and Leon, France. Were you international from the very beginning? Chiemi: Yes, yeah. Co-founder is in Leon, France. So pharmaceutical companies are all working globally. So even if Japanese pharmaceutical company, once they go to market and then they sell their product as a country, they're working, pharmaceutical companies are working globally. So therefore, Agatha also have to provide our service globally, otherwise, it doesn't make sense for our clients. Tim: But it's a big challenge as a startup, how is the team spread out? Is it like most of the development in Japan or how many people do you have in each location? Chiemi: Yeah. Now we have 40 people in total, and one-third is outside of Japan, so like 10, 12 in Leon, that's our development team, and three, four people in US, that's the marketing team. Tim: And internationally, now obviously, in Japan you're marketing yourself as a Japanese startup, you are a Japanese company. But when you go international, do you present yourself as a Japanese company or do you try to present yourself more as a local company? Chiemi: Well, we really don't specifically introduce ourselves as a Japanese company. I think in France, they are saying we are just French company, and in US probably they are saying US company. I don't think that they know. Tim: I was just curious, because many Japanese startups when they go abroad,