Japan’s Startup Revolution (feat. Kathy Matsui) | E2235

28:14And 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 happen. 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 flatten the entire company. Oh, everybody who works at this investment firm is a partner.

28:54And 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. And the seed funding stage is so important because if you're a woman, and this is one of the really disheartening things I experienced that this woman went to a Y Combinator and this is not to give Y Combinator a hard time they've they've done a pretty good job she said I went to a Y Combinator mixer where they were trying to you know 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 crustful and 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.

29:42When 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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31:16What a great guest to have. Kathy Matsui is with me. 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. I'm really excited to launch it and spend more time. 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, where I usually do six or seven days in Niseko and then three days here going to eat food. Very important. 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.

31:50How 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. How does that change occur? And is it occurring just organically now? Yeah. 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 put them to right scale, their businesses, they have no choice but to go global from day one.

32:36Japan 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, 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.

33:17I'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. And we've done that already with several of our portcos. 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.

33:55They don't know the enterprises in whatever, 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 these, you know, lots of tactical issues. A lot of tactical issues. And then their strategy, of course, but the tactics are so detailed. 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. When an American company comes here, what is the best practice in your mind?

34:32What do they need to understand? And 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. The cab drivers are wearing suits and have white gloves on. And they're clean. 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.

35:10So, but what should folks know coming here? So I think in that particular example, Rideshare, right, which is heavily regulated, 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, fintech, financial services. There are many industries where regulation is still very, very heavy and very tricky for outsiders to figure out. 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.

35:46Relationships are very, absolutely trust. And you don't get that trust from one meeting, right? 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?

36:21It'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? 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. 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? 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.

36:56It's fascinating. 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? And I just kept seeing these Japanese names come up in my app at the top. I looked at it and I said, there must be something wrong. There's too much powder. It doesn't make any sense. 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. And I said, you know, after having been to a ski resort a couple of times, we're sitting there.

37:26He'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 not it took him four years yeah and it took him four years of just building trust he said and I said well why didn't you just make him a great deal is it nothing to do with money that's right had 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 they really the remaining people really cared and they and I was like did they just string you along for four years or whatever he's like I really don't know but it took me four years to build that trust.

38:31And 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? So I think it's a bit of a test that they're applying as well. 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. 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.

39:08But 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 and the Middle East? And I know India and the Middle East and also Japan. So Japan historically has actually had a pretty strong relationship with the Mideast, largely because of energy. There was a very high degree of actually energy dependence for oil in that part of the world.

39:41So 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 my 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. So for example, Saudi, this is public information.

40:18The 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.

40:55Yeah, pretty good at ports, pretty good at factories. 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. The way they explained it to me is in both of the countries, Saudi and in UAE, that they estimate they have 30 years left on fossil fuels.

41:40And 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.

42:19and 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.

42:57They are really thinking strategically and long-term, just like Japan is. Japan's number three or four economy still in the world. Yeah, four. 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. and then Japan now may be building, you know, may have to build a significant military.

43:41How do you think about all this? 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?

44:22There are question marks now, I will tell you, because I speak 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. You mentioned the Middle East. There's a lot more they can do in the rest of Asia, right? 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 gonna 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?

45:19And 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. It's really important, I think, for Americans to understand this because recently there's been this Monroe Doctrine rehash.

46:03Well, maybe we should just, you know, AIPAC is not strategic for us. Maybe we should let China 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? 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?

46:43Or can there be many winners? Can these two giants coexist or are they just on a collision course over Taiwan? How do you think about it? I hate to ask you these very simple questions. I know, first of all, when it comes to that question, all I can say is I'm an optimist, ultimately, and I believe, you know, what do I know about China? 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.

47:25Yes. 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? Clining 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 from the outside in may seem irrational, but I think a lot of things that countries do are ultimately very rational. They're going to think in the best interest of their citizens. Exactly. 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.

48:09and 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 That's not a scenario the Communist Party wants to see. 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 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 80 something where we were watching TV thinking I wonder if it's gonna be a complete civil war inside of China.

49:05Wild. Kathy, it's amazing to sit down with you for an hour and talk. I'll take two questions from the audience. I'm Yuki Ramaladin. We've been developing the smart trash can can sold garbages into recyclable or not with AI. My question is, So how can I be so unique? So as our startup, we are mixing and we can improve the waste management with technology. So how can I convert and fit our startup? What do you think? 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.

49:53Is that correct? Yeah. I'm assuming your pitch to customers, are your customers enterprises? 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 plastic bottle from the other waste. 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.

50:40I 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. 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 10 minutes or$10 per trash can, 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?

51:21Yeah, we are dealing with the computer vision and with the edge AI. And so we can reduce the memories on the computer resources from the cloud AS. And so, yeah, we can make the AIs with some affordable costs. The trash goes into the can and it sorts it automatically? Yes, yes. I would like that in my home. Because in Japan, you have to, it's a lot of effort to separate your recyclables, non-recyclables, burnables, non-burnables. 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.

52:01We 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 out the consumer side only to have the waste management companies dump stuff into the ocean 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 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 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 uh the founders and they just wanted to make things that help people made their lives better 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 sort it like there's many different places for you to take this mission and it's an incredibly boring mission but it matters to you and that's what's important as a founder because you care about it.

53:30And you wake up every day obsessed with it I think. Yeah? Yeah. My idea is based on where I grew up. So I grew up the land made by 75 % of landfill. So that's why. And I have to solve this problem a lot. Very dedicated to solve this. In America, I got pitched on a couple of desktop units that you keep in your kitchen for composting. And you put the food in it, and it has some sort of heating element or whatever, and it composts it much faster. Paper, you know, food waste, as opposed to putting it down the drain and using a compactor. Do you have compactor? Disposals. Disposals here? We do. It's very, very rare.

54:23Very rare. Most houses, apartments do not have that. Because they don't want to flood the pipes. They don't feel the pipes can keep up with it. New York was like that as well. The density makes it impossible. California, you're very easy to have it. 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 my background is engineering.

55:04So 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 none of that. So there's always constant supplier discovery. There's 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 there is a policy side as well as, I know Japan has a lot of policy that has to go through paperwork.

55:51My mission, I feel like, is I want to help the startup 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? Just generally speaking, those startups that are in 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 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.

56:43For example, Rideshare or some unique biopharmaceutical space. We also have a laser fusion energy company in Fund 2. 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 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. It's also a great change for the country. Yeah. Great question.

57:20I'm Hiroki, founder of DOI. So we do factory automation in the United States. My question is, what's your 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 the government keeps that policy continued in Japan and the United States. But 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 people from Africa will be in Japan and then feel the gap of a lack of a factory work.

58:08So what's your thoughts on the immigration policy we're seeing in the United States, Japan, many places, maybe a more reasonable immigration policy, maybe even point-based system? I think you have a point-based system here. Yes, 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.

58:45This is before Takeichi, 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, what these robots are going to be doing ultimately, I understand, right? It's not all going to be automated. All going to be automated with a human, right? With a human, right? No, humanoid, he's saying. You're of the belief no more humans. We are all in the package, right? So industrial robots, arm robots, AGV, AMO, that, at the end of the day, they need human to monitor and observe, right?

59:23But we're going to put human on top of it. So it's a whole package. Human in the loop. 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 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.

1:00:04But anyway, 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 is going to be taking care of the elderly people? Who is going to be cleaning up the streets? Who is going to be collecting all that trash that you're going to be 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. And it's not just people who are venture capitalists 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.

1:00:47Maybe they will, but as of today, are they going to be able to take care of elderly people for hours? I don't think so. 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. I need to keep my message correct. So my product is that all those incumbents, robots, and on top of it, we have a human audience, right? Yes. So they monitor and observe. And then a question towards Jason, to you as well. What is going to happen in the United States in terms of immigration law? I see it's going to keep people out of the country.

1:01:28Well, I've had a number of conversations with J.D. Vance about it publicly. 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.

1:02:08Pragmatically, 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.

1:02:40So 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 300 ,000 or 400 ,000 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.

1:03:19So 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, 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 and other human robots. 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 your tired, you're hungry, you're poor, masses yearning for freedom.

1:03:59It's a little heartbreaking for me. I'm seventh generation Irish in America, third generation Greek and Swedish, 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.

1:04:40They 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. I'm very embarrassed for America about what we're doing with the ICE agents.

1:05:15You 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 whole, 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 Optimist 3 maybe three weeks ago on Sunday.

1:05:56I went with Elon. He showed me the secret factory, and I saw Optimist 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 5 or 10 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.

1:06:34So it's maybe a third. I think it's going to be in five years, they'll have two or three million robots and maybe the same number of humans. It's a very interesting moment in time. And I think, because I know listening to the pod that you often talk about job displacement. And here in Japan, I would say, like we need AI yesterday because the labor shortages are so acute. And so there's not this massive allergic reaction when people say, oh, yes, we need to embrace AI in the way that I think some places in the West react. It's opportunistic here. It's opportunistic. And the faster, the better. And because we just cannot, the people don't exist, right?

1:07:13And 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, 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. All right, this has been an amazing episode of This Week in Startups with Kathy Matsui from mPower Partners. 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.