From its Shibuya headquarters in Tokyo, Kaisei Hamamoto has been part of SmartNews’ rise to a $1.2 billion valuation from the beginning. The news aggregator app launched in Japan back in 2012, but now has its sights set on rivals Apple News and Flipboard.
What’s the biggest opportunity in the Japanese market that’s often overlooked?
Japanese people had been accustomed to subscribing to premium content or services on feature phones even before the era of smartphones, so they tend not to have much hesitation to make a purchase on a smartphone if they can find good value in it.
What is one challenge you faced as an early stage startup in Japan?
We struggled to hire people in the beginning. Working for an early startup company was considered to be a riskier decision in Japan than it is now.
What has changed in the Tokyo startup scene over the last five years?
Over the past several years, it has become much easier for startups in Japan to raise large amounts of capital from investors, thanks to the development of the ecosystem. The number of VCs and angel investors has grown and there seems to have been an upward spiral where entrepreneurs have started to take bigger risks, make a success, and attract more talent and capital from the market.
What was one challenge in localizing your products for the U.S. market?
Users in the U.S. have much more diversity compared to those in Japan. Therefore, after launching in the U.S., we had to cater to so many different needs from different people by investing in content-recommendation algorithms.
*This 3 Minutes With interview first appeared in Rest of World’s weekly newsletter. Sign up here.