SPEAKER_00: Unlike many other countries, Japan has a very, very small and shrinking workforce. So young people, for young people today, it's a seller's market. They have so many opportunities in front of them.

SPEAKER_02: Why do entrepreneurs, when they come here, fall in love with it?

SPEAKER_00: As a measure of, let's say, quality of life, this country is very hard to beat. And I think most of my Japanese colleagues here will agree to that if you've ever lived outside of Japan. And whether it's, I think, particularly as a parent, our kids are riding the subways alone at night. I never had to shuttle them around like a bus driver, like all my friends in America had to do with their children, always worried about where they are, you know, in whatever hours of the day. The food, you know, more Michelin star restaurants than any place else on the planet. I mean, you know, and frankly, there are restaurants who refuse the star because they don't want people who are not their clientele to take up seats.

SPEAKER_06: Right. So it's just a really unique oasis. Obviously, it's quite peaceful.

SPEAKER_08: This Week in Startups is brought to you by Zyte. Zyte is the fastest way to build business software with AI. Go to Zyte.com slash twist to get started. LinkedIn Jobs. Post your job for free at LinkedIn.com slash twist. Then promote it to get access to your LinkedIn Jobs' new AI assistant. Every.io. For all of your incorporation, banking, payroll, benefits, accounting, taxes, or other back office administration needs, visit Every.io.

SPEAKER_14: All right, everybody. Welcome back to This Week in Startups. I'm your host, Jason Calacanis. I am here in Japan, and we've been so lucky to launch our pre-accelerator founder university here with Jetro. We have 30 amazing companies who are watching this live taping and an amazing guest today.

SPEAKER_16: Kathy Matsui is with us. She's a general partner at a Japanese venture capital fund called mPower Partners, and you've got an incredible career. I was watching videos with you. I typed you into YouTube, Kathy, and hundreds of YouTube videos came back, and I got to see you talking on CNBC during COVID about women in the workforce, about the Japanese economy. So there's so many things we can talk about today. But I wanted to start with the fact that you're on the board of a company called Uniqlo.

SPEAKER_06: The official name is Fast Retail. It's the umbrella company, of which Uniqlo is the largest brand.

SPEAKER_20: I'm fascinated by Uniqlo. I've heard of it before. I've been to maybe one of the outlets in the U.S. I became aware of it maybe 10 years ago because somebody said there's this really amazing place where you can get really high-quality clothes at a great price without logos on them. And I said, well, I love not having logos. But they lost my luggage on the way here to Japan, so I had nothing, no toiletries, no suits. And I went to Uniqlo in Ginza, the flagship store, and it was packed. And they were shuttling people. And the clothes are amazing. The price is amazing. Everything fits. And so many different, like, types of fabric.

SPEAKER_25: Did you get a suit, a tailored suit ordered? I didn't. You could do that within 24 hours.

SPEAKER_20: Oh, is it 24 hours? I was so intimidated.

SPEAKER_25: Maybe in your case, Jason, 12.

SPEAKER_20: Yeah, maybe they were. Well, it's interesting. I usually buy my suits at Tom Ford, which I think is a slightly different price point. Slightly different. They told me when I went to Tom Ford, when I was there with my wife, and the person who said, Tom Ford, he makes the suit for the perfect male form.

SPEAKER_31: Daniel Craig, Tom Ford, Jason Calacanis. You can do it off the rack. And I said to my wife, come here.

SPEAKER_34: She said, what?

SPEAKER_35: I said, tell her.

SPEAKER_19: And they told my wife, your husband has the perfect male form like Daniel Craig. And I said, you know, sometimes I look in the mirror, and it's hard for me to, like, just, am I looking at James Bond or not? But what's the secret of this incredible company? That it's become a phenomenon globally.

SPEAKER_16: And it's a company, I'm assuming, that originated here in Japan and has become absurdly popular in America, and I'm not sure where else. And this says something about Japanese culture. So tell me everything about this company.

SPEAKER_00: So I can only speak to the company as somebody from the outside, and it's a publicly traded company, so I'm not going to share any private or confidential information. But essentially, this company was born in Yamaguchi Prefecture, which is in a very rural part of Western Japan. And Yanai Tadashi, Tadashi Yanai, is the current owner and original founder. His father actually founded the prior company, but he essentially transformed this business from kind of a more simple apparel maker or retailer to what you see today. And the big transformation of the company was when they discovered, you know, people basically want durable, good quality clothing at a reasonable price. Uniqlo really, or fast retailing, the parent company does not like to be categorized alongside other fast fashion companies because it's anti-fast fashion. They believe in the customer wearing, you know, their clothing for a very long time and not flipping to the style of the week or the day. And I think the brand, of course, originally started here, but that concept of sustainable wear that's good looking, that's basic, but not overly basic, I mean, that you feel good in, that you look good in, and that is reasonably priced. So it can really cater to all people in all cultures around the world. So their business is actually greater overseas than in Japan, no surprise. Not only the U.S. market, but European markets, they've really penetrated well. So when you go skiing, perhaps, maybe if you hopefully don't lose your luggage again, you might need to go to Uniqlo in Europe. And also across Asia, China is their biggest outside Japan, and then the rest of Asia, they're also penetrating very aggressively. So it's a global company. They have a truly global team and a global mindset, and they're really out to conquer the world. So it's a very unique brand. It is.

SPEAKER_44: And when you say basic, in America, the term basic now sometimes can be derogatory, like, oh, basic.

SPEAKER_46: True, yeah. Boring.

SPEAKER_16: Boring. I thought it was very elegant.

SPEAKER_48: And I think one of their keys of transforming the company is this discovery of functional fabrics, right? So they have heat tech, so when you go skiing, you know, the long underwear that we all wear, it's very thin, very light, absorbent, but breathes, really functional.

SPEAKER_00: And then in the summer, they also have aurism, which is the opposite, right? Clothing that keeps you cool and actually can prevent the UV lights rays from penetrating your skin.

SPEAKER_25: So this functional textile and fabrics, they've managed to, you know, use that and utilize that and leverage that to their advantage and really take share.

SPEAKER_13: It's really interesting because clothing is a very old business, right? Yes. One of the oldest.

SPEAKER_16: And it's so interesting. Highly competitive. Highly competitive. And today, I like to go for a walk after I have my breakfast here when I'm in Tokyo, and I was wearing the heat tech. And when I went there as a skier, I immediately went to the heat tech, and I was like, this was such a great deal, and it's better than the ones I was buying in America as a skier. And then you talked about the lightweight ones before I went out for my morning walk. I had a little jet lag. I got up very early, and I went to the gym, and I wore the light stuff, and I was amazed at how light it was and fit so well. It says something about Japanese culture and product, yeah?

SPEAKER_06: They have a very, very high priority on customer service. I'm not sure how you were treated in Ginza, but that's not just in Japan.

SPEAKER_00: They want to expand or extend that quality of very high customer service around the world, and that also includes their online.

SPEAKER_14: I would describe it as flawlessly efficient.

SPEAKER_00: Very efficient, yeah.

SPEAKER_14: Especially considering how crowded it was, because the flagship store in Ginza was, and it was a holiday on a Monday, and Ginza, they shut the streets down, and people were being shuttled in and out of there.

SPEAKER_16: But so efficiently, I didn't feel rushed in any way. The ability to manufacture in Japan, and you have an expertise in the economy of Japan and the society as well, the ability to produce stuff here at a great price, at a high quality, has that changed over the decades? You have Vietnam, you have China, very low-cost places to produce stuff. And then you also have a country here, Japan, that maybe has population issues. So the ability to build stuff in Japan, maybe you could educate me a little bit about that.

SPEAKER_00: Well, for this particular case, they actually produce most of their products outside of Japan. You can imagine, you know, manufacturing apparel in this country, it doesn't really make sense. So they've identified locations where, as long as they can source the materials and maintain high quality of the assembly, etc., and distribute without, you know, much friction, that's what their advantage is. So they've managed to optimize for that and keep it at very, you know, Japanese-style quality around the world. So it's not the case that they produce everything here and export to the rest of the world. But whatever, then they don't just, for example, produce in Asia, they produce elsewhere, but they really are sticklers for consistency of quality across the board.

SPEAKER_65: So they're very focused on that.

SPEAKER_13: It's very interesting.

SPEAKER_16: When I was growing up in the 80s, we looked at the Japanese culture, we looked at the products as the best products in the world. A Toyota, a Sony, Discman, or a Walkman, or even a Vio laptop. These were the greatest products in the world. And it seemed like Japan had a very outward focus. And then when I started meeting the technology and the software companies, I started to see the opposite. The market here is such a great market. The entrepreneurs became very focused on servicing Japanese customers. Maybe you could educate myself and the audience in America of how entrepreneurs have changed their view and maybe this 20 years of the lost economy, maybe the stock market specifically. You worked at Goldman Sachs, I believe, before this, so you have some expertise there as well. Such a pleasure talking to you. Tell me a little bit about what's changed and where Japan is today in 2026 as we're sitting here at the start of the year.

SPEAKER_00: So, you're absolutely right that, you know, I think we're roughly, I'm older than you, but roughly the same generation. We're both Gen Xers. So, we're very cool and resilient.

SPEAKER_06: Absolutely. And so, when we were growing up, yeah, you know, when I went to college, it was Japan is number one.

SPEAKER_00: Ezra Vogel's book and Japan was going to conquer the world. Everybody wanted to learn Japanese. And then things changed. What changed was this so-called asset bubble that was created during the late 1980s burst. Essentially, reality and gravity set in. And so, what transpired after that was, as you mentioned, maybe not 20 years, longer than that, maybe 25 plus years of economic stagnation, deflation, which to me, deflation, when prices and wages and assets fall in value, that is like poison. Because if you're a rational consumer, and this was me, my kids would say, mommy, mommy, you know, buy this for me. And I said, no, we're going to come back in a month. And it guarantees it'll be cheaper. Right. And you go back another month, and they say, nope, I guarantee it'll be cheaper. We wait another month. Right. And this continues. And same thing from a business perspective. I want to build a factory. But no, I know that the materials and the equipment for that factory will be cheaper if I wait until next year. Right. So, it's this really dire situation for any economy. Death spiral. Death spiral. Death spiral. And so, I think what that did was really caused companies and individuals to hunker down, turn inward. Right. We don't need to go abroad. We don't need to learn that much English. We should stay home and work in a, you know, a safe environment. And, for example, a lot of, I think, young people coming out of school during this period, their desire was not to work at a startup. It was, I need to get a job at a well-known blue chip company so that my parents are proud of writing about me at the cocktail reception. And safe. And safe. Right. Secure. Job security was number one. So, what has changed? I think what's changed is, good news is, since the economy began to turn the corner, deflation turned into inflation, wages started to rise rather than fall. That, and on top of all this, unlike many other countries, Japan has a very, very small and shrinking workforce. So, young people, for young people today, it's a seller's market, right? They have so many opportunities in front of them. So, what's happened is, now you're in a situation where the economic environment is actually pretty good. And if you're a decent young person, meaning, you know, you're smart and you're talented, yes, you could work at that blue chip, you know, trading company or bank. But you also could take a little bit of risk and work at a startup.

SPEAKER_16: All right. When we get back from this quick commercial break, to thank our sponsors for making all this possible on This Week in Startups, I want to talk to you about what you see for the future of Japan, especially when it comes to startup and founders, as well as why so many Americans are so impressed by Japan and are coming here and choosing to live here and how immigration is changing. When we get back on This Week in Startups.

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SPEAKER_90: All right, we're back at This Week in Startups. It's Foundry University.

SPEAKER_16: This is the first cohort of Foundry University we're doing in Tokyo with our partner, Jetro. And I've got 30 amazing companies in the audience. And I'm having a great time here. Japan, one of my favorite countries. I would actually say it is my favorite country. And you probably hear that a lot from entrepreneurs. Why? Why do entrepreneurs, when they come here, fall in love with it and they come back? And there's almost a joke in America that when somebody comes back from Japan, they will not stop talking about Japan.

SPEAKER_92: And it becomes very annoying for the people who've been to Japan because they're like, I've been going for 20 years. And yes, I know all about it. But what is your perception of why this incredible relationship between our two nations is so strong and why we look at Japan and we just say, wow.

SPEAKER_00: Being an American from rural California, and I have lived here, my parents are Japanese immigrants from Japan to California. They are farmers. My family still has a farm. We have the largest orchid nursery in the United States. We produce Salinas Valley. Of course. John Steinbeck Country. And I believe our share as a nursery is about 20% of the U.S. orchid market. So it's a decent-sized business. But having come here after essentially graduate school and lived here since, and I married my German husband, we met here. I have two children who were born and raised here. So I don't have a lot of real, you know, actual lived experience as an adult or post, you know, student life in America. But I traveled there a lot with Goldman because I had to do a lot of visits to see clients in America. But I will say this, as a measure of, let's say, quality of life, this country is very hard to beat. And I think most of my Japanese colleagues here will agree to that if you've ever lived outside of Japan. And whether it's, I think, particularly as a parent, our kids are riding the subways alone at night. I never had to shuttle them around like a bus driver, like all my friends in America had to do with their children, always worried about where they are, you know, in whatever hours of the day, the air, the public transportation. I don't drive in Japan. I've been driving in California since I was 15. I don't actually have a Japanese license because I don't need one. The public transportation is top-notch. And I can get anywhere, you know, going to skiing. You can send all your equipment, as you know, in advance. And then you get on the train or you get on the plane. It's super, super smooth. The food, you know, more Michelin-starred restaurants than any place else on the planet. I mean, you know, and frankly, there are restaurants who refuse the star because they don't want people who are not their clientele to take up seats, right?

SPEAKER_06: So it's just a really unique oasis. Obviously, it's quite peaceful.

SPEAKER_00: Of course, Japan is surrounded by a lot of geopolitical vulnerability. And so that relationship you asked about with the United States is uber important, right? And so this critical security alliance between the two nations is of utmost importance. And of course, it's not lost on any Japanese individual that that security umbrella that is provided by the United States is crucial, right? And so I think that is sort of one of the linchpins in driving this alliance, you know, going forward.

SPEAKER_14: And a lot of my very successful American friends, some of the most successful, have moved here. I had Thomas here earlier, who's an angel investor.

SPEAKER_16: He's living here now and getting a visa and being able to start a company here has gotten a lot easier, too. Maybe you could talk a little bit about that.

SPEAKER_82: And I would say that I think part of, you know, why we're excited as Empower to invest in startups here

SPEAKER_00: is because of what we're seeing at that policy level. The government is now creating an environment that is conducive for people to launch startups, whether you're a Japanese founder or a non-Japanese founder. There are now startup visas being provided by government and local governments included. There's now more capital that is maybe quasi-public that's now being allocated to either funds or companies outright. There's tremendous subsidy programs for deep tech, for biotech, you know, startups as well. But also, I think as an environment, it wasn't always this way, but it's really changed in the last several years. And the government has got quantitative targets for the number of unicorns they want to produce out of Japan. This was, they didn't even utter the word startups when I came here, you know, over 30 years ago. And now that's one of the top agenda items. So I think that in overall sense, it's creating an environment that makes it easier for people not only from Japan, but also outside Japan to come and start a business. We're invested in a company called Sakana AI, one of the fastest unicorns that was created right here in Japan. They've got KOSLA, NEA, Lux as investors as well. But they're recruiting their talent, their AI talent from around the world. And David Ha, one of the co-founders who I used to work with at Goldman, he said, I said, isn't it hard? Because, you know, not just the language, but the tax rate differentials, et cetera. And he said, nope, they want to come to Japan. It's not hard to recruit people to come to Japan. And you can see why as you've heard.

SPEAKER_48: The lifestyle is extraordinary. It's extraordinary.

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SPEAKER_16: And the regulations, the ability to have a fluidity in terms of hiring and firing, there's much work left to be done. Sure. But there is the will now.

SPEAKER_00: There is the will. And what's most exciting, I think, is what you touched on and maybe the people front. Five, ten years ago, if you asked students, undergrads at what's regarded as the top prestigious university, University of Tokyo, what do you want to do upon graduation? The vast majority of them would have said, work at a blue chip, well-known company. A few years ago, this university pulled its undergraduate students the same question. And guess what the answer was?

SPEAKER_117: Start a company.

SPEAKER_00: Forty percent plus of the respondents said, I want to start a startup or work at a startup. Wow. That was unheard of, right, even five years ago. And so we're noticing on pitch decks that we get every day, on the team pages, where did they come from? They're coming from Goldman Sachs, McKinsey, Bain, Ministry of Finance, Mitsubishi Corp.

SPEAKER_118: They're ready to take risk.

SPEAKER_00: Because, I told you earlier, it's a seller's market. So, let's say, you know, they've been working at an established, well-known company, but their college buddy is doing this crazy startup.

SPEAKER_121: I know that if it doesn't go well and it goes pear-shaped, I can always go back to my cushy job, right?

SPEAKER_14: And you yourself, you are the perfect example. Well, you decided to go into venture capital, which is highly risky. Highly risky. And you have a $150 million fund? In our first fund, yeah.

SPEAKER_116: First fund. We're on fund two. Oh, you're on fund two.

SPEAKER_106: We're on fund two. Have you raised it yet or are you in the process?

SPEAKER_128: We're still raising. Do a plug here. Yeah. We're still raising.

SPEAKER_13: What's the pitch? Because the first one, ESG, was a big part of it. ESG, pretty out of fashion right now, especially in the U.S.

SPEAKER_128: Yeah, yeah.

SPEAKER_131: But here, it's a little perceived differently?

SPEAKER_48: It's a bit, it's, I think, much less, how do you say, criticism around that term.

SPEAKER_00: Not as polarizing. Not as polarizing. What we're doing is, to be clear, we're not just investing in, like, sustainability companies. We're investing in startups and helping them integrate critical ESG considerations to help their businesses scale and accelerate growth faster. So, these are simple things like, not maybe it's so simple, but making sure they have robust corporate governance, right? And we're investing, by the way, in middle to later stage growth companies, not seed and early. So, by that stage of maturity, they do need help and they do need to understand. So, if they do want to go public, what are public markets going to be expecting with regard to governance, data security, all of these things? Our second fund that we launched is essentially the same, but with an added, maybe, core focus area we were calling Japan Dynamism. And this is really in reaction to all this geopolitical uncertainty that Japan is surrounded by. And it is a very vulnerable country, if you think about it. It lacks natural resources. It's running out of people. There's a lot of vulnerability. It's an island. And it's an island. So, energy security, supply chain vulnerability, cyber security, food security, all of these, all of the above, are critical needs for this country. So, that's the core kind of focus of Fund2. And we also launched Japan's first women founders focused fund ever. Guess how much capital or startup funding goes to women founders in this country?

SPEAKER_16: Okay, well, actually, I can probably think this through. To CEOs, or is the definition a woman as one of the two or three co-founders?

SPEAKER_104: It can be co-founder or founder.

SPEAKER_16: So, somewhere like 5% or 10% equity ownership or higher is probably the definition, because you have to really get the definition right, I think. I'm going to say right now, because I'm looking here, and I think we had seven of the 30 companies had a female co-founder. We track this ourselves. Is it seven? Yes, I think it might be six, seven. That's an American meme. So, we're 25%, but we're pretty avant-garde, and we're the tip of the spear. So, I'm going to guess it's lower than 25%. I'm going to say 15%. Try two. 2%.

SPEAKER_140: That's really fascinating.

SPEAKER_16: Now, be honest. Like, let's attribute that. Is it because women don't want to take the job, and they want to start families? Is it because capital doesn't take them serious? Is it misogyny? What is it?

SPEAKER_142: All of the above.

SPEAKER_82: And, you know, when we were, after we launched Fund 1 in 21, even though, you know, we're

SPEAKER_00: focused on middle to later stages, I mentioned, but we had many female founders, early stage, knock on our door. No surprise, because we're the only, like, of scale female GP in this country. And so, we didn't want to turn anybody away. We wanted to listen to their stories, but there was no stage fit. And so, we thought to ourselves, as we were launching Fund 2, gosh, if we don't provide or help provide capital for these women, we are going to regret it for the rest of our lives.

David Friedberg: It's a pipeline issue, because if you're a growth stage fund, you can only invest in Series B, Series C.

SPEAKER_00: By the way, in Fund 1, 40% of our founders, and we don't pick on gender or anything, happen to be female founders, just happen to be, okay? And we also did some very interesting analysis. I would love to do this in the United States, but what we found was that across the board, women founders here in Japan, they raise less capital than their male peers. Their companies are valued much lower than their male peers. But, so that's the entry point where you can get in cheap, frankly, as an investor. Then, on the exit side, and most exits in this country are still IPO, which is a problem, but they're still IPO. We looked at IPOs between 2020 and 24, and guess what? We divided men versus female founders that IPO'd their companies, okay, not that many women, granted, but those that did, their companies were valued one and a half times greater than the companies of their male peers that IPO'd. Interesting. So, as an objective, you know, stance as an investor, you get it in a discount, and you can exit at a premium. Like, how juicy is that, right? It's pretty great. And nobody's really focused on this opportunity. So, we said, hey, we're going to start this movement. We want others to join. We have the backing from Tokyo government, from Mitsubishi Bank, from Mitsubishi Estate. We really want to bring others on to this mission. Yeah.

SPEAKER_48: So, we're so excited about that.

Chamath Palihapitiya: It's really interesting to hear the framing you have for it. In the United States, it became- Yeah, I know.

SPEAKER_14: It was very toxic, and there was a lot of shaming. Oh, you're fun to how many women, how many women who are black, Hispanic, Asian, Indian.

SPEAKER_16: And then we had a very bizarre thing happen, and my wife happens to be Korean, so I have three daughters. This is a very personal issue to me. So, I have three beautiful Hapa daughters, and they started saying, well, we're not going to count the Asian founders or the Indian ones. And I did the same thing, I tripped my head, what? That's a significant minority in the United States. And they said, well, they're too high achieving, so therefore they don't count as minorities. And this is where America went cuckoo on this. Then, they started demanding that you hire a certain percentage of women, and then they would name and shame, and then all of these weird, unnatural acts happened. So, the venture firms that didn't have enough women, they got rid of the titles. And then they would take four women who were in PR and who worked in operations and call them partner, so that they could change the stats. Just to stop from being attacked. And they just flattened the entire company. Oh, everybody who works at this investment firm is a partner. And it was like, okay, now you're doing window dressing. It got very weird. But the truth is, if you want to solve this problem, you're going to have to start early. Yes. Right? And the seed funding stage is so important.

SPEAKER_14: Because if you're a woman, and this is one of the really disheartening things I experienced, this woman went to a Y Combinator, and this is not to give Y Combinator a hard time. They've done a pretty good job. She said, I went to a Y Combinator mixer where they were trying to introduce founders and convince them to come to the program and start companies. And she went, and she started talking to some of the partners and the people there. And they said, oh, are you here with your boyfriend? And she said she was so just crestfallen. She thought, maybe I should not be a founder. I'm not wanted here. And then she left and just went and had to go find other funding kind of situation.

SPEAKER_16: When we get back, I want to talk a little bit about what you think, how we're going to get Japanese founders to start thinking like Sony, like Toyota, like Uniqlo, take on the world, as opposed to just be great in this amazing market when we get back on This Week in Startups.

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SPEAKER_92: All right, welcome back to This Week in Startups. What a great guest I have. Kathy Matsui is with me.

SPEAKER_16: She is a GP at a Japanese venture firm called Empower Partners. The founders in the room are a bit self-selecting for ambition, you know, and this is our first pre-accelerator here. Really excited to launch it and spend more time.

SPEAKER_14: I'm going to be coming to Japan twice a year instead of just once. I would usually come just in January to do my 10 days in Niseko, or I usually do six or seven days in Niseko and then three days here going to eat food. Very important.

SPEAKER_16: Very important. Now I get to come twice a year and I get to bring my whole family the other time when they're not in school. How do founders switch from, and what is your best pitch to them to take on the world and to think, like the founders of Sony thought, like the founders of Toyota thought, like the founders of Uniqlo think, hey, we can take on the world.

SPEAKER_78: How does that change occur? And is it occurring just organically now?

SPEAKER_182: Yeah.

SPEAKER_00: So I think the overarching perception has been kind of as you've described it, which is, look, for entrepreneurs in Israel or South Korea or Taiwan where perhaps their own domestic markets are just, you know, not big enough to six million people, their businesses, they have no choice but to go global from day one. Japan is not a tiny economy, not a tiny market. So it kind of does make sense that you'd focus on your home market initially and let's become the most successful whatever company in whatever domain first here. And that's not a, you know, I'm not criticizing that strategy. You don't have to go global from day one, but if you have such a killer technology or some, you know, biotech invention that you know is transferable outside of Japan, what a waste to keep it just within this domestic market. And I think what we're observing that's changing is this mindset. And so, for example, we kind of pitch ourselves because our team is very global. I'm American. We have other nationalities on our team. We're a very global team and we help Japanese startups take their businesses outside of Japan. We've done that already with several of our portcodes. But we also, I didn't share this, 70% of our portfolio is Japan startups and 30% is non-Japan. So we also help non-Japanese startups with market entry or intros into Japan. So we do both ways as a bridge. And I would say since we started, there are more and more companies, startups that come to us precisely because they know we can help them do this. So it's not like they're not interested or they don't have the ambition, but they need help. They don't know the, you know, the enterprises in wherever, you know, Europe or America that are going to buy their products. So they need help, help with their pitch, help with their marketing, who's going to be the distributor, you know, all of these, you know,

SPEAKER_192: lots of tactical issues and then their strategy, of course, but the tactics are so detailed.

SPEAKER_00: Yeah, but I would argue it's not so much lack of admission. They have the ambition, but they just don't know where to start or how to start. And that's how, it's not just us, but I think we are trying to help them.

SPEAKER_14: When an American company comes here, what is the best practice in your mind? What do they need to understand? I've been involved in a couple of them, Uber, which was quite humbling because I came here. Well, I've been coming here since the late 90s, but I remember post Uber, I just was talking to TK and then eventually Dara. And I was like, the cabs here are so good.

SPEAKER_16: The cab drivers are wearing suits and have white gloves on and they're clean and they're affordable and they're so respectful that why do they need Uber? Like, how do we ever penetrate this market? And they figured it out, but I don't think it was easy. And Uber Eats, I think, is doing okay. So, but what should folks know coming here?

SPEAKER_195: So I think in that particular example, Rideshare, right, which is heavily regulated,

SPEAKER_00: there's a very strong domestic taxi lobby, as you probably know, understanding the regulatory environment. This also goes, for example, for healthcare. There are many, many, fintech, financial services. There are many industries where regulation is still very, very heavy and very tricky for outsiders to figure out.

SPEAKER_48: So having somebody, number one is have a face on the ground that hopefully is a Japanese face. Unfortunately, that's the lay of the land. Relationships are very important. Relationships are very, absolutely trust. And you don't get that trust from one meeting, right?

SPEAKER_00: It's multiple meetings. You may think, oh my God, do I got to, and they're kind of like nodding in the meeting, but that nodding does not mean yes. It's just like, I understand kind of what you're saying, but I'm not saying we're going to buy your product or service, right? And just frankly, going out to dinner and just getting to know each other, that's the process of building trust. And there's a lot of areas in this economy where the incumbent, typically very large enterprises, just dominate. So knocking these dominant incumbent players out of their seats is not an easy task, right?

SPEAKER_14: It's the opposite of the United States. In the United States, we do a business deal, and then we decide, should we have a relationship and be friends?

David Friedberg: And should we respect each other? Let's see what happens. Maybe if you screw me in this business deal, we won't be friends.

SPEAKER_00: Because remember here, Jason, there is so much pride attached to the fact that you have a family business that's been around like 300 years. There's a lot of pride in that. Your businesses have been around two years, you're nothing, right?

SPEAKER_143: So it's this long-term durability, sustainability of your enterprise that's really proof of, oh, you really know how to run your business.

SPEAKER_210: It's fascinating.

SPEAKER_14: When I started coming skiing here, right after COVID, I was looking at my ski app, and I was like, where's the powder? Where's the powder?

SPEAKER_16: And I just kept seeing these Japanese names come up in my app at the top. And I looked at it, and I said, there must be something wrong. There's too much powder. It doesn't make any sense.

SPEAKER_63: Like, how could they even maintain the mountain? And that's when I fell in love with skiing here. And I was talking to, I made friends with somebody who has a ski resort here who's an American.

SPEAKER_14: And I said, you know, after having been to a ski resort a couple times, we're sitting there. He's a fan of the pod. And I said, how did this all come about? And he said, oh, I came here like 20 years ago. I fell in love with it. There were too many ski resorts. They were very local. They were for day trips or overnights. And there were a lot of kids. And then there were just too many of them. And now they were shut down, and this one town had this incredible mountain, but it was in complete disrepair. So I said, hey, I would like to take over the mountain and license it or buy it. And they said, oh, okay. Nodded. Took them four years. Yeah. And it took them four years of just building trust, he said. And I said, well, why didn't you just make them a great deal? I said, it's nothing to do with money. That's right. It had to do with, would this mountain being restored here be of benefit to the community? Would I be respectful of this tiny little town outside of Niseko that nobody knows about, where the houses are all empty and falling apart, but the remaining people really cared?

SPEAKER_63: And I was like, did they just string you along for four years or whatever?

SPEAKER_35: He's like, I really don't know, but it took me four years to build that trust.

SPEAKER_00: I think it's a bit of a litmus test as to how committed you really are. If you don't make a ton of money at the outset, or you can just pull up and run, or do you have staying power? Yeah. So I think it's a bit of a test that they're applying as well.

SPEAKER_98: They were definitely applying a test. You like to think about big picture things, I can tell. You've got an incredible background having grown up in America and then living here now.

SPEAKER_14: There's a place between America and here that's really becoming prominent as well in the startup scene and the funding of it, the Middle East. I'm curious your take on UAE, Saudi, these incredible cultures where, again, it is based on trust and meetings and family and tradition, but now they're modernizing and they want to play a big role in technology, in business, in the future. They've all been educated in the West now, like yourself, but they return home and they're building these businesses. Have you spent time in the Middle East? And what do you think about the relationship that's brewing and developing between America

SPEAKER_90: and the Middle East? And I know India and the Middle East and also Japan.

SPEAKER_48: So Japan historically has actually had a pretty strong relationship with the Middle East,

SPEAKER_00: largely because of energy. Yeah. There was a very high degree of actually, you know, energy dependence for oil in that part of the world. So I would say historically there's been this affinity with that part of the world, but there's also at the same time a lack of, to me, because I actually did a white college thesis on the Middle East, so I know a little bit more than the average person I think here, not a true or holistic understanding of what the politics and geopolitics really are about. Having said that, it's very interesting you asked me this question because I would say in the last maybe one to two years, all the countries you've just named have done a mega marketing campaign here in Japan. Yes. So for example, Saudi, this is public information. The PIF has made a very significant commitment to invest in Japan. The UAE, you know, Dubai, they've been doing these very large, massive conferences, inviting the top CEOs of all the big industries here in an effort to basically explain to them, we're not just about oil anymore. We're diversifying and we have to decouple from this dependency on oil. We know that and we're doing it and we need your help with infrastructure. We need your help in modernizing. We need your technology. You know, of course, they're going to get it from other countries as well, but we really would like Japan to play a big role.

SPEAKER_03: Japan's pretty good at ports, pretty good at factories.

SPEAKER_00: Trains and infrastructure like that. So I think that that's going to be a very interesting development going forward. Again, the U.S.-Middle East connection, I have no idea. I listened to that latest podcast where Freiburg was saying something about Iran and that may actually stabilize and there's other parts of the Middle East which may not be so stable. I don't really know. I have no crystal ball. But I do think that as a region for Japan to really contribute to and get a lot out of long term, I think it makes perhaps a lot of sense.

Chamath Palihapitiya: The way they explained it to me is in both of the countries, Saudi and in UAE, that

SPEAKER_14: they estimate they have 30 years left on fossil fuels. And after that, in some cases, there just might be a limited customer base as we get to fusion or small modular nuclear reactors, solar and batteries continue to grow and renewables. So they outlined for me, here's the 11 businesses that we are very interested in. And private equity and venture capital is very high on the list. As you know, real estate, tourism, technology, renewable energies. And so when I started spending time there and having spent time here, I just made a decision. I want to build a bridge between these three locations. And I know the one here is just starting, but the one between the U.S. and those countries is very strong now, very deep. They're not the dumb money at the table like some of my contemporaries in Silicon Valley and in the U.S. were like, oh, you just go there and grab a bunch of money. They're desperate to invest. Nope. Educated at Stanford, educated at Harvard, educated at Oxford. And they come from these incredible legacy businesses that have been built over many generations. They don't just want to be LPs. They want to be board members. They want to be the lead investor in Iran. So you watch Mubadala out of the UAE, out of Abu Dhabi. You watch the PIF, Sanabu, who we have a partnership with Sanabu to do founding university there and here with Jetro. They are really thinking strategically and long-term, just like Japan is.

SPEAKER_63: Japan's number three or four economy still in the world. Yeah, four.

SPEAKER_14: Yeah, India is now the most populous. What do you think about globally and geopolitically? Obviously, you have conflict in the Middle East and some instability in places. And then we have this very interesting moment in time here with China and the South China Sea and their relationship with Taiwan, America's relationship with China, pretty contentious. North Korea sending missiles over Japan.

SPEAKER_144: And then Japan now may be building, you know, may have to build a significant military. How do you think about all this?

SPEAKER_00: Look, I think Japan ultimately has to become or has to be pragmatic about itself, its position in this world. I think that the good news about being tied at the waist with the United States and the security umbrella, protection for Japan has, of course, benefited Japan very significantly. No doubt. Okay, I'm an American. I'm going to say this. But if you ask people here privately how, what's the word, trustworthy, do you think the United States will be going forward? Yes. That's not backward, forward. Are they going to be that ally that you could just depend with your eyes closed no matter what? There are question marks now, I will tell you. Because I speak with a lot of very senior people in not just private sector, but public sector as well. And so I think what that means is that Japan essentially has, I wouldn't say fend for itself, but has to do more proactively to build relationships where it needs to build.

SPEAKER_246: You mentioned the Middle East. There's a lot more they can do in the rest of Asia, right?

SPEAKER_00: Yep. There is the, what is it called, Quad, you know, India-Australia, the relationship, but there's a lot more like Africa. They barely, like, scratch the surface in Africa, right? So I think Japan needs to seriously think strategically about where will it be positioned in the world? And is it always going to continue to be this sort of passive, we're just going to accept standards, I'm talking very broadly about all sorts of standards, and just accept it, or are we going to be involved in the rulemaking process ourselves? And that is not a position that Japan has historically been in, right? To speak out, to be at the forefront, to make the rules that other countries will follow. And so I'm not saying Japan is going to become, oh, you know, this really aggressive military might, you know, sort of country that's not, I think, in the game plan. But I also think it has to take a different tack or strategy from where it's come from. And partly, I'm sorry to say, I think it's because of this uncertainty about how dependable the United States can be for Japan.

SPEAKER_98: It's really important, I think, for Americans to understand this, because recently there's been this, you know, Monroe Doctrine, like, sort of rehash, like, well, maybe we should just, you know, AIPAC is not strategic for us.

SPEAKER_14: Maybe we should let China, you know, rule their hemisphere. Middle East and EU can do what they want to do, and we'll just take the Americas. And I think it's a huge mistake, because these countries have had such a long relationship. And I actually think it's possible for, I think I'm optimistic about the relationship between America and China. How do you feel about it? You know, do you think in the AI race that we've been talking about so intensely for the past two years, that America or China are going to win, and that's it? There can only be one winner? Or can there be many winners? Can these two giants coexist, or are they just on a collision course over Taiwan?

SPEAKER_251: How do you think about it? I hate to ask you these very simple questions.

SPEAKER_252: I know, first of all, when it comes to, you know, that question, all I can say is I'm an optimist, ultimately, and I believe, you know, what do I know about China?

SPEAKER_00: I know very little, but I do not think that the current regime wants to be written up in the history textbooks decades from now as causing war, you know, destroying peace. I think they're looking to be written up as a global leader. Right. And if you want to be a global leader, you have to behave in a global leader-like way. Yes. It is my gut feel. Now, again, but then you have all these skirmishes and attacks, and you get confused. But I think China also has many vulnerabilities, right? Climbing population. Exactly. They have a sense of crisis about them. So they have to do what they have to do, right? And so I think perhaps their behavior outside, from the outside in, may seem irrational, but I think a lot of things that countries do are ultimately very rational, right?

SPEAKER_14: They're going to think in the best interest of their citizens.

SPEAKER_00: Exactly.

SPEAKER_14: And they've got a very unique situation where they establish this incredible middle class, had this incredible boom building iPhones and any number of products for the rest of the world. And in some ways, they're a victim to that as well, because India, Vietnam, other places became good at manufacturing as well, and their hourly wages are a third or half. And now they find themselves in China realizing they're not the lowest cost goods producer. When you move up the stack, be careful what you wish for. Can you imagine if there was an economic downturn that was significant if 100 million Chinese workers were out of jobs? I mean, when you have that number of people lose their jobs, civil unrest is a…

SPEAKER_204: That's not a scenario the Communist Party wants to see.

SPEAKER_14: They had it, Tiananmen Square, and you and I are of the age to remember it. Most of the people in the room do not.

SPEAKER_63: And that was teetering. There was a moment in time – isn't it interesting to think about that? There was a moment in time when we were 15 years old, was it 80-something, where we were watching TV thinking, I wonder if it's going to be a complete civil war inside of China. Wild. Kathy, it's just amazing to sit down with you for an hour and talk. I'll take two questions from the audience.

SPEAKER_266: I'm Yuki from Aradine. We've been developing the smart trash can can sold garbages into recyclable or not with AI.

SPEAKER_269: My question is, so how can I be so unique, so as our start-up, so we are mixing and we can improve the waste management with the technology. So how can I convert and fit our start-up? What do you think?

SPEAKER_00: So without totally understanding your business, I will try to answer the question. I think that what you're trying to provide is a service that is going to disrupt the current process of waste management. Is that correct?

SPEAKER_269: Yeah, yeah.

SPEAKER_00: I'm assuming your pitch to customers, are your customers enterprises?

SPEAKER_269: Our smart trash can should be in the train stations or airports. So we can help their cost reduction and reduce their waste to get rid of the resources like passive water from the other waste.

SPEAKER_00: So proving that you can, like a potential customer, you do a POC with them and that POC results in X millions of yen of labor cost savings of X whatever units of CO2 emissions that is reduced in the atmosphere. And I think if you can prove that impact in a very simple way, that I think is a very compelling pitch for you to make.

SPEAKER_14: I also think that you did something a lot of entrepreneurs don't do, which is instead of starting with the consumer, sometimes the people have the least money to spend.

SPEAKER_90: And you found somebody who acutely has the issue, like an airport has a lot of trash. Yeah. And they have lots of people going through it and train stations have tons of people going through it. So I think you found a really good ideal customer profile because if you can save them, you know, 10 minutes or $10 per trash can, you know, it adds up because there's so many people going through. And so how does the technology work? Computer vision sees the garbage come in and then you sort it properly and people don't?

SPEAKER_269: Yeah, we are dealing with computer vision and with edge AI. And so we can reduce the memories on the computer resources from the cloud, I guess. And so, yeah, we can make the AIs with so affordable, yeah, affordable costs.

SPEAKER_279: The trash goes into the can and it sorts it automatically. Yes, yes. I like that in my home. Yeah.

SPEAKER_00: Because in Japan, you have to, it's a lot of effort to separate your recyclables, non recyclables, burnables, non burnables.

David Friedberg: In America, we do it and then they bring it all to the same trash heap and they pour it all together. And we know this scam. We have a big corruption problem in America. We know this scam because people started putting air tags into things that were in the recycling bin and then they tracked them and they went to the furnaces to be burned. And we're like, we're spending all, literally spending three or four times as much time and money to sort it at the consumer side only to have the waste management companies dump stuff into the ocean.

SPEAKER_63: They caught them doing that, dumping it into furnaces. It turns out in America, the waste management system is slightly corrupt and it's a little bit of fraud. But I, you know what the other thing is, you have a big mission and it's one of the things I really like about a company because you could start with smart trash cans, but it could go anywhere. You know, Sony in Akihabara, when they started, they were doing, I believe it was either rice cookers or heating blankets were the first product.

SPEAKER_90: And I became obsessed with Sony at a time because I worked for Sony music. It was one of my first jobs in America. And I just got obsessed with the, the, the founders and they just wanted to make things that help people made their lives better. Yeah. Didn't matter what it was. And yours is like a very noble mission. I think if you wind up starting here, but you wind up running the plants as well, or the trucks or the robots that go sorted, like there's many different places for you to take this mission. And it's an incredibly boring mission, but it matters to you. Mm-hm. And that's what's important as a founder, because you care about it. Yeah. And you wake up every day obsessed with it, I think. Yeah?

SPEAKER_269: Yeah. Yeah. My ideas are based on my, the, the, where I grew up. So because, so I grew up the, the land, the, made by the 75% of landfill. Oh. So that's why. And I, I have to dissolve this program, the, a lot, very, very dedicated to this, solve this.

SPEAKER_98: In America, I got pitched on a couple of desktop units that you keep in your kitchen.

Chamath Palihapitiya: Yeah. For composting. Yeah.

David Friedberg: And you put the food in it, and it has some sort of heating element or whatever, and it composted much faster. Oh, right. Yeah. Paper, you know, food waste, as opposed to putting it down the drain and using a compactor. Do you have compactor? Do you have, um.

SPEAKER_302: Disposals. Disposals here? We do. It's very, very rare.

SPEAKER_21: Very rare. But most houses, apartments do not have that.

SPEAKER_267: Because they don't want to flood the pipes. Yeah. They don't feel the pipes can keep up with it. Yeah. Yeah. New York was like that as well. The density makes it impossible. California, you're very easy to have it. Mm-hm.

SPEAKER_306: Great job. I'm Maya. I'm a founder for Outsource Global, and I love listening to you guys talk. I lived through so many incidents that I was like, cannot stand. So I built this platform to make sure that we are aware of all the risks, including supply chain. My most recent job is to basically make strategy for where we source our products. And then I, my background is engineering. So I designed the components and I work with the suppliers, mainly because I was working for a Japanese company. We have a network that is already trusted. But when I work for a startup, there's nothing, none of that. So there's always constant supplier discovery. There's like a failure. You have to do more due diligence. But there's a lot of needs that I can find, like we can provide for those startups that we can connect the right supplier to the startup. So they can scale faster and you can diversify the risks. My question is that like, there's a policy side as well as, you know, I know Japan has a lot of policy that, you know, have to go through paperwork. My mission, I feel like is I want to help the startup to, to grow faster. So I will be building a lot of platforms that will be product market fit. And from the policy side, how are you going to be helping this startup?

SPEAKER_00: Just generally speaking, those startups that are in regulated, regulated sectors, we often help connect them with people in the ministries that are responsible for their particular industries or not just bureaucrats, but also politicians, because here ultimately the politicians, you know, can make or kill rules. So getting them connected to those key decision makers. But also we have some of our portfolio company founders who are involved in committees that are helping to set these rules. For example, ride share or some unique, you know, biopharmaceutical space. We also have a fusion, a laser fusion energy company in fund two. So fusion energy is a very big, exciting area for Japan's government. But you also want to be involved in that rule making policy making process. So to the extent that you can have a say or participate in that arena is very, very key. And it's great because now that I think the government never used to have people who are in startups in these committees. Now they're welcoming this involvement. So it's a great opportunity.

SPEAKER_310: It's also a great change for the country. Yeah. Great question.

SPEAKER_315: I'm Raki, founder of DOI. So we do factory automation in the United States. My question is what you take on to this policy for the government in Japan and the United States when it comes to immigrants. Because what we do is basically getting rid of people from the factories. It's good for us as long as, you know, the government keeps that policy, you know, continued in Japan and the United States. But, you know, Ms. Takahichi is doing an awesome job in Japan. But my assumption is that one day she's going to quit and then that a bunch of bunch of people from Africa will be in Japan and then fill the gap of, you know, lack of factory work. Yes.

SPEAKER_14: So what's your thoughts on the immigration policy we're seeing in the United States, Japan and many places, maybe a more reasonable immigration policy, maybe even point-based system. Like, I think you have point-based system here.

SPEAKER_00: Yes, we already have. We already have. You can immigrate here. You can get a work visa if you have certain qualifications and skills, as you know. For more, what I think you're referring to as more blue-collar workers, there's also a system for what they call a technical trainee program. So if you're a construction worker or a nurse, a hospitality worker, you can actually get specific visas for that. This is before Takahichi, by the way, the new prime minister. So, you know, look, I think at the end of the day, while I don't know what you're building and it sounds amazing, but you're still going to need humans to control, right? The robots. What these robots are going to be doing ultimately, I understand, right? It's not all going to be automated.

SPEAKER_325: All going to be automated with a human, right?

SPEAKER_93: With a human, right?

SPEAKER_327: No, humanoid, he's saying. You're of the belief no more humans. No more humans.

SPEAKER_315: So we are only packaged, right? No more humans. So industrial robots, ARM robots, AGV, AMR, that, at the end of the day, they need human to monitor and observe, right? Exactly. We're going to put humanoid on top of it, so it's a whole package. Human in the loop.

SPEAKER_00: Right. So human in the loop means that you still need some humans, and if Japan doesn't have a sufficient supply of humans who can operate your robots, that's a problem, right? And so I think, you know, Japan is a very homogenous society, as we all know. And it's been very, very tough to accept, you know, non-Japanese people. I'm actually still on a work visa myself. My blood is 100% Japanese, by the way. I have been on a work visa for 35 years. I do not have citizenship. I do not have permanent residency, okay? Don't even get me started on how tough it is to get my visa renewed because, anyway, that's another story. But anyway, you know, look, at the end of the day, when push comes to shove, when I said pragmatism earlier, Japan will face a reality that they do not have enough people to do a lot of the jobs, maybe not for you, but who's going to be, you know, taking care of the elderly people, who is going to be cleaning up the streets, who's going to be collecting all that trash that, you know, you're going to be processing, sorting. So I think ultimately, they may not call it immigration reform, but I think they will quietly accept more people who want to come to Japan, frankly, right? Yeah. And it's not just people who are venture capitalists and, you know, and amazing founders, but also people who have to do jobs that I'm afraid robots aren't going to be able to do everything. Maybe they will, but as of today, you know, are they going to be able to, you know, take care of elderly people 24 hours? I don't think so, right? So that's, I think, where the pragmatism will come in, and they will be forced to accept more non-Japanese people who are willing to do those jobs.

SPEAKER_315: I need to keep my message correct. So my, you know, my product is that all those, you know, incumbent robots, and on top of it, we have human eyes, right? Yeah. And then a question towards, Jason, to you as well. What is going to happen in the United States? I mean, in terms of immigration law?

SPEAKER_337: I see it's going to keep people out of the country.

SPEAKER_338: Well, I've had a number of conversations with J.D. Vance about it publicly.

SPEAKER_14: And when I challenged him on that at the All In Summit, I said, are you going to deport 20 million people like sometimes Donald Trump says, sometimes he says something different. I asked President Trump on the podcast, what about people getting their degrees? He said, we will put a green card, very famously, attached to their degree. And then the people in the MAGA group said, Donald Trump's a sellout. Oh my God, this is terrible. President Trump has betrayed us. And so then they went back on it. But pragmatism, I think, is the word that all leaders wind up having to face. Pragmatically, we could not sustain what Biden was doing. For some crazy reason, he decided to open the border. Some people say it was to boost the economy. Some people said it was to get votes. Some people said it was because he was in cognitive decline. Whatever the reason is, it was not a sustainable number of people. Just like some countries in Europe realized, you can only have so many people at a certain pace in order to have them assimilate to the society without causing chaos. They're on a pace to do exactly the number of deportations as Obama did. It's just like maybe 400,000 a year. So it'll be fine. And it's mostly people who are DUIs, drinking while driving, you know, and doing felonies, etc. Although it's a little bit more dramatic than it needs to be, it won't be 20 million people in America. It will wind up being 1.5 million, 2 million, which is very similar to Obama and other presidents. It's always three or four hundred people get to three or four hundred thousand people get deported every year. We have the lowest unemployment of my lifetime. It's 4.6% now is as low as 4.4. When unemployment is that low, it actually is not good for the economy. Businesses have a hard time finding people. However, because of AI and robo-taxis and all this stuff, young people are having a hard time finding jobs.

SPEAKER_63: So the theory in America is because we had too much immigration, and there might be as many as 30 million or 40 million illegal immigrants in America, we don't know.

David Friedberg: But probably 20 is a good number to start with. If we don't let more in and we on the margins deport a little bit, maybe that will blunt the unemployment and the employment displacement we're going to see from robo-taxis,

SPEAKER_63: and other human robots.

SPEAKER_14: So it is a very big topic in America. Because remember, America was based, Statue of Liberty has a big speech on it. Bring us, you're tired, you're hungry, you're poor, masses yearning for freedom. It's a little heartbreaking for me. I'm seventh generation Irish in America, third generation Greek and Swedish on my father's side. So I've been there for a while. My Irish family immigrated to the Five Points in Manhattan when it was like Gangs of New York. We were there early. It's heartbreaking for me that we don't have this immigrant culture anymore. But I also understand reasonably that it has to be orderly. So maybe it's a 90% consensus we shouldn't have an open border, but it's maybe 50-50 should we let people in on a regular basis. The great irony of it is the Republicans were the ones who were driving it for most of my lifetime.

SPEAKER_63: They wanted to have an open border with Canada and Mexico, NAFTA, and that people who are Mexican and Canadian could, like the EU, just come in and out of those countries and work. You probably remember this in the 80s. And they were like, yeah, Mexican people coming here to work is great. They come, they work in the fields, and then they go home to their families. After a season of working, they need work. We need people to pick strawberries and orchids, perhaps. Maybe you had some folks working there. Maybe it's hard now. It's a very interesting moment in time.

SPEAKER_14: I'm very embarrassed for America about what we're doing with the ICE agents. You may have seen very violent deportations. I think it's going to be very sad for America, ultimately. It reminds me in some ways of what happened in the Japanese internment, which I think was before your parents' time, where we have in America sometimes, what is it called, a mania? Or like a contagion, where people fear foreigners, which is kind of crazy, considering the only people who were there originally were the Native Americans. There's a very small number of Native Americans. But I do think the robots and job displacement will be very real. I think what you're doing, what Tesla is doing, I went to see the Optimus 3 maybe three weeks ago on Sunday. I went with Elon. He showed me the, like, secret factory. And I saw Optimus 3, and I saw maybe there was a large number of people working there on a Sunday at 10 a.m. It was bonkers. And what those robots are going to do, attached to LLMs, they're going to be able to do surgery. They're going to be able to sort garbage. They're going to be able to work in any factory. It's going to be pretty wild in five or ten years. And Amazon is already, I think Amazon in America will be the first singularity company, which is to say the number of robots at Amazon. Right now, I think it's half the number of humans. And they have 1.5 million humans and 600,000 robots, so it's maybe a third. I think it's going to be in five years, they'll have 2 or 3 million robots and maybe the same number of humans. It's a very interesting moment in time.

SPEAKER_252: And I think, because I know, listening to the pod, that you often talk about job displacement.

SPEAKER_00: And here in Japan, I would say, like, we need AI yesterday. Right. Because the labor shortages are so acute. And so there's not this massive allergic reaction when people say, oh, yes, you know, we need to embrace AI in the way that I think some places in the West. It's opportunistic here. It's opportunistic. Yeah. And the faster the better. And, you know, because we just cannot, the people don't exist, right? Right. And they're not going to open the floodgates to immigrants tomorrow. That's just the fact. And so I think the good news for AI founders is here.

SPEAKER_25: This is a market that's welcoming to your technology and your business, as opposed to other markets where you're kind of not sure.

David Friedberg: All right. This has been an amazing episode of This Week in Startups with Kathy Matsui from M Power Partners.

SPEAKER_14: What a delight to talk to you for an hour and 15 minutes. Likewise. Okay. We'll see you all next time. Bye-bye. Okay.