“We know how to build an entrepreneur,” Peasuke Kawahara, the co-founder and CEO of Techfund told me. Only 25 years old, Kawahara’s confidence can be mistaken for youthful, maybe even naive, exuberance. The sartorial adherence to his company’s colors – black and yellow – and triangular gold earring dangling from his left ear do not help. Even so, disregarding him as a young guy who has tasted a bit too much entrepreneurial catnip would be a mistake. The strategy behind Techfund speaks to a very real problem in Japan’s startup community – the stark lack of mentors.
Entrepreneurs can be born, but. in Japan at least, many are made. Most of the Japanese entrepreneurs interviewed by Tech in Asia are in agreement that they did not grow up wanting to “crush it” in the #startuplife. In fact, most are best described as exceedingly intelligent, capable people who once decided to leave a strong position at a large corporation to try their luck.
This creates a supply and demand problem in the ecosystem. Waiting every year for a handful of inspired executives to emerge from their corporate chrysalis is not how venture capital makes money quickly and it certainly will not make a dent in Japan’s perilously low entrepreneurship rates.
Kawahara recognizes this issue and is willing to take on the risk of shaping young people – high school and college students, recent graduates – into entrepreneurs who can build startups and push boundaries.
An inveterate entrepreneur himself, Kawahara has been engaged in freelance design since he was 15 years old. The inspiration for Techfund came during his two years at a struggling startup. “One of the reasons for the failure was we did not have a mentor to help on our product. We needed someone who could give product advice on a technical level,” he says. “A mentor is often an investor, a serial entrepreneur, or a venture capitalist. I decided to combine that concept with the technical perspective.”
Kawahara at a Tech in Asia pitch event.
Patient teaching, quick execution
Kawahara and his co-founders – Yuta Matsuyama and Motoki Ozawa – used YCombinator as a template and started working on Techfund in January, finally registered a regular corporation in October. The three are dedicated to making Techfund a place that can teach young entrepreneurs how to improve and sell their products. As such, the firm strongly parallels local incubator Beenos.
Beenos takes serial entrepreneurs struggling to break through and adopts them along with their future company (with a product often yet-to-be-decided) for a healthy chunk of equity. Founder Hiro Maeda is another strong believer in the principles of YCombinator as well, having teamed up with Netprice and Digital Garage to create the Paul Graham-inspired Open Network Lab back in 2011.
Techfund’s strategy is to target the other side of the spectrum, offering entrance to an 88-day program (“Sunrise”) to first time entrepreneurs in exchange for five percent of their company. The Techfund team helps the entrants use data to better understand their users, how to conquer KPI, and other essentials of starting a company. With some technical assistance, the entrepreneurs make their prototypes and then go about iterating it, again with support from Sunrise.
Outline of the Sunrise program. Entrepreneurs hand over five percent of their company in “sweat equity.”
Kawahara’s connection to Japanese youth is perhaps Techfund’s most defining characteristic. Every large Japanese corporation or venture capital fund is hunting for new talent. A few young people will self-select themselves in the startup community but the vast majority of potential entrepreneurs are hesitant to commit. Techfund’s willingness to seek out both sides and whip them into shape adds value that few rivals can give equal claim too.
“We are different from other VC’s in that we really know how to build a service,” Kawahara says. He notes over 125 teams have approached his company for help since January. Included among them are Seeeds, a Kickstarter-for-classes designed by two Japanese students at Harvard, and Vocrowd, a crowdsourcing website for voice recordings.
A major tenet of the Techfund philosophy is speed. All the senior members carry the unofficial title of “One Day Hacker,” meaning that they can identify a problem, figure out a solution, and implement the fix within 24 hours.
See: Tokyo’s Open Network Lab Partners With AQ To Improve UX For Start-ups
What do you get when you combine it all?
Like a good entrepreneur, Kawahara is ambitious but clear-eyed. He knows he needs more than just a strong incubation program to make his mark. Already, Techfund is throwing a lot of weight behind two new services, both of which position the firm as an essential resource for all members of the startup community.
The Techfund startup database has 150 signups so far and will act as a quick reference for new companies in the region. Considering Techfund’s connections to the fresh entrepreneurs, the database is likely to feature a variety of pre-money companies.
The database will work in concert with “Elevator Pitch.” The second service is exactly what it sounds like, a collection of elevator pitches by companies. This has a matching feature wherein entrepreneur accounts can be linked up to investor accounts if there is mutual interest, a la Tinder. Living up to his “One Day Hacker” rank, the elevator pitch site was made in eight hours.
Built in less than a day, the site offers different portals for entrepreneurs and investors.
The collective sum of Techfund’s parts are more than intriguing. The company has recently received funding of about US$200,000 but the benefactor(s?) remain undisclosed. With the right stewardship, Techfund can become a fixture in Japan’s startup sky. But will it reach the heights of Kawahara’s inspiration, YCombinator?
It’s all too common to hear someone in Japan or greater Asia proclaim that their city, their company, their VC fund, is going to be the next Silicon Valley, Facebook, or Andreesen/Horowitz. These claims are often made in order to grab a juicy headline or instill confidence in employees and shareholders. The harsh reality is that saying you are going to be a new YCombinator means claiming you are ready to match Sam Altman and Paul Graham in industry knowledge and connections. If you are saying that at 25, you might be about to learn the hard thing about hard things.
Yet, that is exactly what is refreshing about Techfund. Its founders know the challenges they face. That’s why they are just doing the damn thing. And doing it quickly.
This post Techfund wants to be the YCombinator of Japan. But it invests using technology, not money appeared first on Tech in Asia.
Techfund wants to be the YCombinator of Japan. But it invests using technology, not money
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