Japan was once home to some of the most innovative companies on the planet, but those companies lost their innovate edge a long time ago. Today, many are betting on startups to change the course of the Japanese economy and to some extent, that’s already starting to happen. Ijichi Sorato of Creww, however, is betting on a different approach to win out, that of Open Innovation.

The future Ijichi envisions, involves not large, old companies being pushed aside and replaced by newer, more innovative firms, but that of innovative smaller firms being co-opted and absorbed into larger firms, either via M&A or via exclusive partnerships and supply chain integration.

We talk a lot about the challenges large Japanese companies face in working with startups and why hackathons rarely produce value for either sponsor or participant in Japan, and the one thing that needs to change before Japanese enterprises can work conformable with startups.

It’s a great discussion, and I think you’ll enjoy it.

Show Notes for Startups

The rise and fall of Japan’s own Angel List
Why angel investing is weak in Japan
How even startups can build long-term relationships
Why Japan's traditional supply chain is breaking down
How startups can sell to Japanese enterprise accounts
What changes large companies need to make before successfully working with startups
Why hackathons don't work in Japan
How Creww might put themselves out of a job

Links from the Founder

Everything you ever wanted to know about Creww
Friend Sorato on Facebook
Creww's Collaboration Platform is a great way for foreign startups to connect to Japanese enterprise
Creww's Open Innovation project with Toyota

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Transcript from Japan
Welcome to Disrupting Japan. Straight talk from Japan's most successful entrepreneurs. I'm Tim Romero and thanks for listening. Most large Japanese corporations lost their innovative edge a long time ago. But the good news is that many of them realize this and that they're trying to get it back. Some of them are looking to start ups for business and product ideas and this kind of open innovation holds great potential in Japan. We're still at the very early stages. But it Ijichi Sorato of Creww things that open innovation programs will not only take off, but will be fundamental in turning the Japanese economy around. He's so certain of it in fact that last year, against all of his investors wishes and most of his advisors advice, he pivoted his company from one focusing on startup funding and services to one focusing exclusively on open innovation. It's a bet that's now paying off as he sees his customer base growing and they've just closed another three million dollar round of financing.  In fact his biggest concern now is that if Creww continues to succeed at this pace, he'll soon be out of a job.  But I'm getting ahead of our story. And it's best if you hear directly from Serato.  So let's get right to the interview.

[Interview Starts]

Tim: We're sitting here with Sorato of Creww. Thanks for sitting down with us.

Sorato: Thank you.

Tim: Pleasure to have you so Creww launched in 2012 and as I understand it, your mission is to help promote startups in Japan in general and to work with larger companies for open innovation and trying to get them to work with startups.  Is that about right?

Sorato: Yes Sir.

Tim: Okay, but I think you can probably explain it much better than I can. So why don't you explain about what you do at Creww.

Sorato: Basically it's just as you explained.  The thing is I was in the US when I was sixteen and I went to high sch...