Startup Life in Korea: VCNC Brings on Japanese Talent as it Prepares to go Global

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Keisuke Kajitani is the new general manager for VCNC’s Japanese branch, the Korean startup behind the popular couple’s app Between. As a middle and high school student, Keisuke lived in Seattle due to his father’s business. Once he returned to his home country, he majored in business commerce at Keio University and eventually made his way into the startup world while working for JAFCO Ventures, one of the largest and oldest venture capital companies in Japan. In November 2011 he was responsible for bringing some of the top Korean startups to Tokyo for the Youth Venture Summit. I sat down for a chat with Keisuke about his experience in a Korean startup so far and what he plans to do for the company in Japan. CEO of VCNC, Jaeuk Park, also joined us to further explain the startup’s intentions in 2013.

 

When was your first time in Korea?
Keisuke: “My first time was for a two week exchange program with Yonsei university as my university has a relationship with them. It was basically working during the day and then drinking in the evenings! It was where I first met Korean entrepreneurs and everything began. I met Sangyong Jeong, the current Co-founder of MVERSE who was just a student back then, and I listened to his story and I asked him to introduce me some startups in the Korean scene.”

What were you doing when you organized the Youth Venture Summit?
Keisuke: “I was just a student actually and here I was asking the top Korean startups to come to Tokyo without us paying for anything. I was really surprised that even though I was just a student and didn’t have much background knowledge, I could be somewhat helpful to the Korean startups because I spoke English and knew some of the Japanese startup network. The event ran for three days and one of those days we invited them to Techcrunch Tokyo. Startups were offered a booth of their own to demo their product to see how a Japanese audience reacted. One startup also gave a pitch and one an award at the event.”

Jaeuk: “The event was really great. He brought us to the office of Mixi and other big Japanese companies. So it was really helpful for understanding the Japanese market and it was the first time I met Keisuke too.”

Keisuke: “It’s really fantastic for me because the relationship we made through that event is still continuing and the CEO of Spoqa Richard Choi was even invited to speak at Techcrunch Tokyo last November.”

Keisuke speaking at the Youth Venture Summit in November 2011.

Keisuke speaking at the Youth Venture Summit in November 2011.

How did you round-up such a great collection of Korean startups?
K: “The way we got to know them is I asked each company to introduce me to another great startup, and then when I met that startup I asked them the same thing. All the startups were global minded and I brought them to Tokyo because I really wanted to show Japanese startups that we have to think globally. I started working for a venture capital firm called JAFCO in April 2012, which is the oldest and largest VC firm in Japan.”

Why did you leave JAFCO to join a Korean startup?
K: “I didn’t leave the job because I didn’t like it, I loved it and was surrounded by great people. But everytime VCNC came to Japan, Jaeuk and I talked about global expansion especially in the Japanese market. I couldn’t stop thinking about it. When I was living in Seattle I had a time when I was treated differently because I was Asian, I felt like I wanted to prove myself. So I had a the feeling of wanting to start something and grow something in Asia, and this feeling was also shared by VCNC. That was the motivation for me to move to Korea I guess.”

J: “We really needed smart people to penetrate the Japanese market so when I met Keisuke, my co-founder and I always told him to come to our office and join our company. I was serious but he thought we were joking!”

K: “I came to Korea in August with several Japanese entrepreneurs including Kiyo Kobayashi and that’s when I made my final decision. The entrepreneurs around me told me that I actually need this job, that I should really want it and Mr. Kobayashi pushed me to take the last step.”

Is there anything you’ve found different between the two startup environments?
K: “There is the founding stage, the user acquisition phase and lastly the exit stage. It seems that getting funding at the ‘seed’ stage seems to be a little bit easier here but is still fairly similar. Korean seems to have a lot higher variation in the market compared to Japan. Also, I think user acquisition is more difficult to do in Japan than Korea because people are more segmented. We have so many different styles like Harajuku style, Roppongi style and they all get information from different sources. So for this area you really need to know about the cultural context.”

J: “I heard that Japanese people are very conservative and less likely to found their own company. There are less startups in Japan than Korea.”

K: “Yeah, actually nowadays it’s not students who are doing startups and I think there are two trends in Japan these days. One is, entrepreneurs are coming from big companies as people realize that major corporations, which are declining, are no longer that good to work for. So VCs are intentionally approaching those companies to extract talent for startups. The second trend is hardware and creating things. For example the Techcrunch Tokyo winner was a wheelchair company. So employees from manufacturing companies might be getting into startups too.”

Visiting VCNC with Japanese entrepreneurs in August 2012.

Visiting VCNC with Japanese entrepreneurs in August 2012.

What challenges have you experienced while working in Korea?
K: “Not being able to understand casual things that people are talking about in the company is the hardest thing. The whole reason I came to Korea was because during Skype meetings we only talk about the agenda, but I really wanted to listen to other things, like how the developers are talking to the designers. Since I can’t speak Korean it’s hard to listen in on what is happening between areas not directly related to my assigned work.”

Why did you decide to hire him?
J: 
“I’ve met several Japanese people but Keisuke is the most passionate person I’ve met in Japan. He has a very good network in Japan in the venture industry. Me and our business development team thought that Keisuke was the right person to be in charge of our Japanese branch.”

Why did you choose to focus on Japan as your first overseas market?
J: “We analyzed data from all of our users and we found that Japanese users are very loyal. There is a big ‘viral effect’ in the country and the brand identity of Between is growing well organically there. We met several companies in Japan and they were really interested in our service and they thought Between would be very successful there. We made partnerships and that’s how we came to enter the market.”

K: “I was really surprised that VCNC had everything to join the Japanese market, brand image, business partnership, a great market and a user base in Korea to justify the monetization.”

How will the Japanese branch work?
K: “I’m actually thinking about creating a team but fundamental growth of the company such as development, marketing and designing will be based in Korea and so I think we’ll have a fast moving business team in Japan. For the first couple of months I’ll be focusing on user acquisition and retention after that. Monetization we’re figuring out in Korea but I think it should be done after we acquire more users.”

How is your current Japanese user base?
J: “We have about 130,000 Japanese users at the moment and the number has increased rapidly since August, 2012 when we visited Japan for a promotional event. We attended the Hanabi Festivals which is one of the largest festivals of Japan. The event is a large fireworks display in Jingu Park where lots couples come to watch the event.”

Do you think the Between app reflects the way Japanese couples interact with each other?
K: “Certainly. But we definitely need localization. I’ve been to dating spots in Korea and seen couples there, but their behavior or activities are slightly different. Couples in Japan might be a bit shy or not express affection to each other in public compared to Koreans. So we may need to change our marketing methods or how we want Between to be viewed by users.”

J: “Many Korean couples also brag about their relationship but Japanese people don’t tend to do that.”

K: “Right, this is why I think there is a strong potential demand for a private app for couples and is probably why Japanese customers are more loyal as well.”

What is your largest market for Between, and how do you see it changing?
J: 
“Korea is the biggest market for us but I think that in the future, Japan will be the biggest market. Right now they are second biggest market for us so that’s why we are focusing on them. The app is already in 13 different languages so it makes it easy to access our service.”

Keisuke Kajitani is also part of the team which has organized the upcoming “Asia as One” event which will see Japanese mobile companies Mobcast and Metaps give an insight into the mobile market in Asia, together with other Korean startups and entrepreneurs. The event will be held on Thursday, January 17 and more details can be found here.

About Author

/ andy@venturesqaure.net

Andy has lived in Korea since 2007 and is the Global Editor for VentureSquare.

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