Entrepreneur and Investor Tak Miyata helps US startups ‘go global’

Tak Miyata

Before becoming a venture capitalist, Tak Miyata built and sold two startups – one in the US to Google and another in Japan to online social network mixi. Now, with a first-hand understanding of the risks and rewards associated with entrepreneurship, he supports US startups to gain a foothold in Asian markets.

Miyata’s first startup, Neven Vision, was built on facial and object recognition technology developed by co-founder Dr. Hartmut Neven of the University of Southern California. Clients NTT DoDoMo and Vodaphone (now part of Softbank) bundled their software onto garake ‘Galapagos’ cell phones which existed in Japan before the iPhone was introduced. “Thankfully, Google bought Neven Vision in 2006,” said Miyata with a smile.

Previously Miyata had studied nano science at Waseda University. After graduating in 1997, he worked as a software engineer for a large multinational. Two years later, he switched to work for an up-and-coming Internet agency. It was 1999 and the height of the internet boom. Everybody needed a homepage.

There, Miyata helped build the websites of big companies like NTT, Toyota, Sony and of large US companies that needed a web presence in Japan. He met Dr. Neven along the way which led to the creation, building and eventual sale of Neven Vision. Post acquisition, Dr. Neven remained with the firm to head Google’s Quantum Artificial Intelligence Laboratory. Miyata, on the other hand, left to found his second startup called J-Magic.

J-Magic’s service, Kao Chekki, analyzed and matched users faces with those from a database of celebrities. The service, which could be accessed through garake cell phones, told users they looked 60% like Tom Cruise or other such stars. Kao Chekki became a smash hit. In only three weeks 50 million people in Japan were using it. Three years later mixi bought J-Magic. The sale to mixi in 2009 could not have been more perfectly timed as the iPhone debuted in Japan one year before.

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With his experience and wealth, Miyata wanted to support the next generation of entrepreneurs operating in our new era of the Internet. These ‘New Age’ entrepreneurs were in their 20s and 30s. To do so, Miyata launched San Francisco based Scrum Ventures about a year ago.

Scrum Ventures helps US startups ‘go global’. “All US startups try to expand into China at first but soon realize it’s not that easy,” said Miyata, who advises entrepreneurs that want to ‘go global’ to first concentrate on Japan and Korea before moving into China and India.

Scrum Ventures has made 30 investments to date into firms which operate in diverse areas such as e-commerce, healthcare, education, video and the ‘Internet of things’. Miyata’s company co-invests with other top VCs including Google Ventures, Andreessen Horowitz, New Enterprise Associates, True Ventures and Felicis Ventures Management Company. Noom and Le Tote are examples of startup firms that Scrum Ventures has backed.

Noom is a New York based later stage startup with 28 million healthcare management app downloads. The app monitors user exercise and eating habits. Noom works with the National Institutes of Health, an agency of the US Department of Health, to analyze meta-data obtained from the app. Together they aim to get obesity in America under control. Miyata claims those who use noom’s app lose on average 10 pounds.

Le Tote is a fashion rental website for budget conscious women aged 20 to 30 years old. These customers don’t care about ownership but want new clothing to show off. They pay $49 each month to get access to Le Tote’s online rental service. According to Miyata, Le Tote is a super hit. “It’s growing so fast,” he said.

Interestingly, Scrum Ventures does not invest in Japanese startups. That is not because there is a shortage of talent in Japan. The country has some great software engineers, many who speak English. Rather, the firm’s strategic advantage is built upon Miyata’s personal contacts in Japan and Korea. Leveraging them, he helps US firms to enter Asian markets earlier than they otherwise probably would.

Another reason he cites for not investing in young Japanese firms is that the startup ecosystem in Tokyo is underdeveloped compared to the one in Silicon Valley. Miyata finds that a higher proportion of VCs in the Bay Area are experienced entrepreneurs in their own right. Without an understanding of the hardships involved in launching a startup, he suggests, Japan’s VCs often treat entrepreneurs as if they were bankers lending money.

“One reason I started my VC in America is that entrepreneurs in the US are on top. The VCs support them. In Japan, it’s the other way around.” Tak Miyata

That situation is slowly changing as Japan’s serial entrepreneurs become investors themselves. He thinks it might take 20 or 30 years for Tokyo’s startup ecosystem to begin to resemble anything like that found in Silicon Valley.

In the meantime, Miyata is attracted to the business dynamism of the San Francisco Bay Area. He attributes that dynamism to the diversity of its inhabitants. He points to the mix of Indian, Chinese, Israeli and other nationalities living there. “Everyone talks about new ideas. It stimulates the brain,” he said.

Tak Miyata

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