What you can learn from this “PoopTech” startup

The bacteria in our gut affect our lives and our health in ways we are just starting to fully realize, and mapping this biome is expected to advance medical science and pharmacology as mapping the human genome.

However, our gut biota is not a mappable sequence, but a complex ecosystem, and one that may be unique to each individual.

In our conversation, Shinji Fukuda, founder of Metabologenomic (aka Metagen), explains how the science is advancing, what kinds of consumer devices we are likely to see first, the importance of global expansion, and the challenges of being a deep-tech startup in Japan.

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

Show Notes

What Metagen is really trying to do Fecal transplants in Japan Japan's Gut design project - a database of poop The biggest business model challenge for Japan's deep-tech startuups Smart toilets and other consumer products Why Metagen has been turning down VC money Why global expansion is critical for both business and scientific reasons Some advice for Japanese deep-tech startups Why academics need startup founders Why Japanese startups need to stop playing defense

Links from the Founder

Everything you ever wanted to know about Metagen Metagen on LinkedIn

Transcript Welcome to Disrupting Japan, straight talk from Japan's most successful entrepreneurs. I’m Tim Romero and thanks for joining me. Today, we're going to talk about the future of poop, and I promise you that it is both a lot more interesting and also a lot less, well, strange than you might think. Shinji Fukuda is the founder and CEO of Metabologenomics, a startup which is usually, and thankfully, referred to as Metagen. Shinji and Metagen are mapping out the complex biome of the human digestive tract. Our gut biome is an incredibly complex ecosystem that exists within all of us, and it is an ecosystem. These bacteria don't share our DNA and they're not simply along for the ride. We couldn't function without them, and there's a lot of variation between cultures and between individuals. Metagen is now working with some of Japan's largest healthcare, pharmaceutical, and chemical companies to commercialize this research. Of course, Metagen is not the only startup in this space, and Shinji and I talk a lot about when and how this tech is going to roll out to consumers, some of the scam startups that are already trying to get into this bandwagon, and we dive deep into one of the biggest problems facing deep tech startups in Japan. But you know, Shinji tells that story much better than I can, so let's get right to the interview.

Interview Tim: So, I'm sitting here with Shinji Fukuda of Metabologenomic who's researching and monetizing the gut biota, so thanks for sitting down with us. Shinji: Hi. Tim: And by the way, is it okay if we call the company Metagen the way people tend to do in Japanese? Shinji: Yeah, Metagen. Tim: Okay, good. So, listen, I think you can explain this much better than I can, so what exactly does Metagen do? Shinji: Our goal is to create the digital society, so we have a huge number of microbes in the gut and the gut microbiota has a lot of function, and maybe you know it's very important that the imbalance in the gut microbiota are related to some disorders like colon cancer, inflammatory bio-disorders, and also, the microbiota induce some systemic disorders like metabolic disorders and also meta-disease. That's why gut microbiota is really important to keep our health. Tim: It's amazing the amount of research that's being done on this right now and it's still a relatively new field. So, for Metagen, what is the main goal of the company? Are you trying to develop more targeted medicine? Is it better food? Is it a healthier population? What is it that the company is focused on? Shinji: Here, actually, everything, but we have a priority. Our goal is healthcare, to develop the technology to keep our health, healthcare, and also, last year, we established our company Metagen Therapeutics which focuses on the cure for patients with IBD, so the company is now trying to prepare that fecal microbiome juice. Do you know the fecal microbiota transplantation? Tim: Yeah, yeah, the fecal transplants. Shinji: Because our feces contain a huge number of microbes, so they can improve that sickness. Tim: I didn't even know our fecal transplants are that common in Japan, I didn't even know if that is legal and approved yet. Shinji: Not so common but in clinical trials, researchers proved the effect of the FMT in IBD patients. Tim: So, it's still, all of this technology, these treatments are sort of in the clinical trial phase? Shinji: Yeah. Not only in Japan, also in the US. Tim: I want to get back into the research and business model in a minute. So, tell me about your customers, so how are they using your services? Shinji: Metagen is now providing R&D support service, and the main target is the food and supplement companies. Actually, our goal is to control the gut microbiota using some food or supplements because our gut microbiota is affected by our long-term food habit, but we don't know yet how we regulate the gut microbiota. Tim: So, I noticed you've put together the gut design project. It looks like about 40 very large Japanese companies in a variety of industries. What is that about? Shinji: Actually, we have to develop the gut microbiome database, we are now collaborating with many companies. Tim: So, before, you were kind of jokingly referring to this as a poop database, but well, I mean, it kind of is. Shinji: Yeah, actually, in the Japanese company, they have this yogurt supplement but yogurt cannot improve the - everyone has microbiota, we don't know yet what kind of products are good for the person, so we need a database, so that's why we collaborate with many companies to perform the clinical trial, which kinds of products are good for you? Tim: It's a range of food companies and insurance companies, and chemical companies, are they all doing research and contributing to this database, or are they customers or sponsors of the research that's being done? Shinji: Less than half of companies develop the database but the other is running about the gut microbiota. Actually, I have been working on the gut microbiota for other 20 years, and now, many people are publishing regarding gut microbiota, and the importance, so that's why they are to join our gut design project, yeah. Tim: Those sort of open corporate collaborations are funny things. They're useful but it very rarely develops into sort of a center of revenue, so how do you imagine this consortium in five or 10 years? Is it something that you think will help map out and fill put out this database, and then sort of drift apart? Do you think it's going to form the core of the technology you're bringing to market? What role do you see it playing? Shinji: The gut microbiota is really important to keep our health, so do you know your gut microbiome profile? Tim: Not a clue. Shinji: Yeah. Tim: I don’t. It's something I probably should know. Shinji: Yeah, but actually, gut microbiota is tightly affecting our health condition, so that's why our first goal is to develop a new society which everyone knows their own gut microbiome profile. Tim: One of the things I find fascinating about what you guys are doing, not just the research itself which I think is fascinating, but Metagen is an example of one of these deep tech startups that are happening in Japan. I think there is so much incredible research being done that is just now starting to get commercialized. So, you were founded about five years ago, 2015 or so, right? Shinji: Yeah. Tim: It was a joint collaboration of Keio and Tokyo Institute of Technology? Shinji: Yeah. Tim: From a research point of view, it's clear why this is an incredibly important topic, but let's talk about the business side, let's talk about your business model. So, how do you make money? Shinji: Yeah, so at this time, we collaborate with big companies to perform the clinical trials like a CRO because we have the service to analyze the gut microbiome, but in the future, we develop B2C service to analyze your gut microbiome and we recommend some solution to improve your gut microbiome. Tim: Oh, I definitely want to talk about that in a minute, but right now, I want to back up and talk about your current model. Are you strictly doing a services model where the various companies contract the research to you or are they kind of a joint development project where you would get royalties on treatments that you jointly discover? Shinji: Both sides are there, but now, we get some money from the company to perform the clinical trial and also other R&D support services, and also, we now try to prepare the fecal microbiome juice. Tim: Selling to academics and research support, I imagine that market is fairly limited size, so you were talking about direct to consumer products or B2B2C products. What does that commercialization look like? Shinji: We developed a new kit to collect a fecal sample and actually, we had a patent, stabilization of the feces under room temperature because feces contain many bacteria and if they are room temperature, the gut microbiome will change and also metabolites are altered. Tim: That's not really a consumer product per se, that might be something hospitals will use to send out to collect samples before a physical or something like that? Shinji: Yeah, yeah, yeah. Tim: Okay. Actually, I think maybe it was in an interview that you did a while ago, but you were talking about making a toilet that analyzed the feces. What happened with that? Shinji: Yeah. In the future, we will develop the smart toilet to detect health conditions. You rinse your poop, but we don't know yet what kind of index should be required to develop the smart toilet. Tim: So,