A 7-Week Program by 500 Startups
“500 Kobe Accelerator”, a world-class, top-class acceleration program for providing training and support to entrepreneurs, was begun in Kobe in 2016. It was held again in 2017 for 7 weeks from August 21st to October 10th (with a 2-week break from September 2nd to 18th).
In recent years, various organizations have organized acceleration programs geared toward entrepreneurs all over Japan. However, only in Kobe can you attend a 7-week intensive training program by “500 Startups”, the global venture capital fund based in Silicon Valley that has rendered assistance to over 1500 companies from 50 countries. If your application to the program is accepted, participation is completely free of charge. During the 7 weeks, a different mentor from Silicon Valley (someone who can provide guidance and advice for entrepreneurs) is there each week from Monday through Friday, 10am to 5pm. Participants listen to lectures on the business process in the morning and receive pitch training (for presenting in front of investors) or one-on-one mentoring in the afternoon. Participants immerse themselves in an intense program that gives them non-stop advice from mentors so that they can revise their business plans using the feedback received. This cycle is repeated over and over again. At the end, the participants give a 2-minute pitch to an audience that includes investors, company representatives, and university officials at a public event called “Demo Day”.
The presentations on Demo Day are the culmination of the participants’ hard work, with not a minute or a second wasted. With the thrilling atmosphere of the live pitch, charged with spirit, tension, and enthusiasm, the audience can feel the fruits of their training to the marrow of their bones.
A Place to Create the Ultimate “Unicorns”
The idea for this program originally started when the mayor of Kobe City visited Silicon Valley in 2015. He was deeply impressed when he met with members of the 500 Startups. That meeting led to a full-blown young entrepreneur training program run by the local government and with private investment funds as partners, a program that was rare in Japan. At the 500 Kobe Accelerator interim presentation event, the mayor said, “Kobe City would like to create new things by focusing on young people. There are few ‘unicorn’ companies* in Japan compared to other countries. I hope Kobe will be a place to find and nurture these growing companies.”
* ‘Unicorn’ companies are privately held startup companies valued at more than $1 billion. They are considered to have the potential to bring tremendous amounts of profit to investors such as venture capitalists. Such companies are rare, which is why they are called unicorns, after the imaginary creature.
The first trial of the program was conducted back in 2016, and a second one of a larger scale was again held in 2017. Twenty-one companies were selected out of over 200 applicants. Those that were chosen consisted of 5 overseas companies and 16 domestic ones: mostly from Tokyo, with 3 from Kobe, and 1 each from Kyoto, Osaka, and Yokohama.
The program is free; however, transportation and accommodation are the responsibility of the participants. Participants also need to allocate a certain amount of time during the 7 weeks, so this takes substantial determination.
If you are a current or would-be entrepreneur, attending the Demo Day and watching the carefully prepared and focused pitches will show you the quality of this program and the high level of the participants. It may even motivate you to consider joining the program in the future!
The Value of Bringing Entrepreneurs and an Outstanding Program Together
The mentors dispatched from 500 Startups are impressive entrepreneurs active in Silicon Valley and other places. They give very practical and straight advice that comes from their vast experience. One participant put it this way: “The mentoring is like a nonstop knock 1000 times every day.” Another participant said, “Based on their advice, we completely redid our entire website the next month (laugh).” The mentors constantly remind the participants of the most important aspects of their business. Of course they place importance on accuracy to detail, but then they suddenly cut deeply into one’s core: “Is your service really useful and valuable to society?”
“B2B or B2C? How does the KPI* look? Is the CPA (Cost per Acquisition) adequate? Et cetera. They strip a business to its core and then the next moment, they build it back up to see it from a higher perspective. They just constantly inspire.”
*A Key Performance Indicator is a measurable value that demonstrates how effectively a company is achieving key business objectives, and it is used to evaluate their success at reaching targets.
We spoke with Max Fram-Schwartz, Kobe-based program manager of 500 Kobe Accelerator, who said, “The program offered in Kobe is more focused on education. Entrepreneurs with high potential exist everywhere on this planet, not only in Silicon Valley. However, one of the most important things is whether one can find opportunities with educational benefits. If an entrepreneur encounters a quality program, his or her company will grow more effectively. We are focusing our efforts on supporting entrepreneurs with our experience and resources.”
He also said that mentors’ roles are to think about what is best for the company. The program is a place for practical support, so the mentors offer help and advice for materializing a business plan to secure and utilize financing.
Becoming a Dynamo for Transforming Communities
Now allow us to introduce some of the participants of this program. First, here is a company in Kobe that is developing a cloud system to easily check cognitive functions using tablets, which will help with preventing dementia. Since they started the service in March 2017, they have successfully secured contracts with more than 200 medical facilities. Next, a Tokyo-based company that is providing an online mental health consulting service. Their number of monthly users has rapidly grown to 300,000 within just one year of starting the service, and their B2B business is also taking off.
Others include a company from Hong Kong that provides a service for matching local photographers and companies to create stylish promotion videos. A female entrepreneur from Kobe is going to start a service to support re-employment for working poor this coming December. Another Kobe company is developing an AR (augmented reality) app using Japanese comics as a new undertaking. All the participating companies stand out for their uniqueness.
Here are some reviews from the participants in 2017:
“The acceleration program is really high level and I am very satisfied. Other than that, it would have been nice if there were more opportunities for social interactions with the locals in Kobe.
We have always been based in Tokyo. But while we were staying in Kobe for such a long period of time, we came to realize that more work could be done remotely than we had previously thought. We also received an order from a company in Kobe, so we would like to maintain our connection with Kobe from now on. As we expand the business in the future, we will eventually need a base in Kansai as well. We want to consider opening a branch office here.”
“Kobe is photogenic city with rich resources like the mountains, city, and bayside. We feel it could be a model city for the business plan that we are proposing, i.e. to promote a city using pictures effectively. Kobe has lovely buildings and we really like it here (laugh). We hope to keep the connections and visit Kobe again.”
The 500 Kobe Accelerator program attracts young talent from Kobe, other areas of Japan, and other countries, who we hope will generate the power to transform communities. At the same time, the program has the undoubted effect of seeding a unique business ecosystem* in Kobe that will sprout and grow. We cannot wait to meet more unique entrepreneurs and entrepreneurs-to-be next year.
*A business ecosystem is an “ecosystem” or network that creates technological innovation and social transformation through the interactions among companies, entrepreneurs, universities, research institutions, and public administrators.