Why quantum has been "10 years away" for 30 years | E2316

0:00All right, everybody, welcome back. It's This Week in Startups from Tokyo. Yes, we're at Founder University. I'm back in Tokyo. I go twice a year. I go in the summer. It's 96 degrees and 100 % humidity. It's the exact opposite of what happens in January when I come here to do Founder University and ski for a week. But I love coming to Japan. If you're a founder or an investor and you're in the This Week in Startups or the Launch or Syndicate family, you can join us for Angel University. You can apply for that. We do that twice a year here in Tokyo. If you're a founder, you can apply for founder.university website.

0:38You'll see Japan. You'll see Riyadh in Saudi Arabia, and then you'll see the U.S. edition. You can come to any of those editions. You can apply. It's a bit competitive to get in. We like to look for teams of two or three founders. for Founder University, you don't even have to be incorporated yet, but you should have a project, a product in market, maybe one customer, a pilot. And then for our launch accelerator, you need to have a couple of customers and that's where we invest in companies. And finally, we have thesyndicate.com, where if you're an angel investor, you can join. And twice a month or so, we share one of the deals we're investing in it and with you.

1:16And as an angel investor, you can put as little as$5 ,000 or$10 ,000 into a deal, well below the cap or the minimum that most founders charge. So, you know, join us for any of those programs and make sure you subscribe to This Week in Startups as well on your podcast player. When I'm in Japan, my team looks for the most successful, the most inspiring founders for me to meet while I'm here and we're very lucky today. We have Kazu Nakashogi. Nakashogi? Yeah, absolutely. Oh, I got it. This Week in Startups is brought to you by Rippling. Don't settle for AI, that's all talk. Head to rippling.ai slash twist and get the only AI built to give you full visibility across your startup and take complex actions across your entire organization.

2:09That's r-i-p-p-l-i-n-g.ai sign up for exclusive access today. DigitalOcean. Want to see what building on a true AI native platform looks like? Head to do.co slash twist to start building on DigitalOcean's AI native cloud today and cut your AI workload costs by up to 50%. And PayPal. Built for payments, growth, and agentic. PayPal Open. Built for all business. Visit paypalopen.com to get started. And you're with a company, Yakumo. Yakumo. Yakumo, which is spelled Y-A-Q-U-M-A. And you're building quantum computers. Hardware. Yes, hardware. And hardware is? Hard. Hard, yeah. Hardware is very hard.

2:53Quantum computing has been five to 10 years away for the past 30 years. Why is it taking so long? That's a really good question. And more so of the Cut Leaper is coming from hardware itself. Ah. Yes. So we try to generate very special caricature units, QPU, quantum processing units. Quantum processing units? Yeah, that's why you call it QPU instead of CPU. Got it. Right. But it's really hard to create those kind of things as a hardware. And we have to make it a bunch of number of QPU to do very useful caricature. And from my understanding of qubits, this is instead of one or zero, you get to have one, zero, or neither, one or zero.

3:47At the same time. At the same time. Yes, super positions. So you could have each of those positions simultaneously. Technically, yes. Technically, yes. So explain to founders in technology who use GPUs and CPUs all day long, why is this the white whale? Why is this the holy grail of computing? Why is this the next paradigm? Why is it so powerful? Thank you very much. So first of all, I think there is some big misconception about quantum computers. Once we use corner computers, maybe people believe that, oh, maybe we can do more nice, very fast caricature compared to CPU or GPU. But this is, first of all, it's not correct.

4:36Yes, we can apply corner computers for particular questions or problems. For example, combinations or like RSA, Clipdoor. Yes. Those kind of difficult questions. We can only apply those kinds of problems to quantum computer or quantum caricatures. And we saw Google and Microsoft and some other quantum computer companies went public over the last maybe two or three years. Exactly. Lots of excitement. Of course. And we had the same wave of excitement five or ten years ago. but it seems like it's getting closer and closer to having an application in the real world. When will we see a company, a startup, that uses a quantum computer to solve a problem in the world, as opposed to all these companies spending billions of dollars trying to get a quantum computer to work?

5:35Yes. So when do they have enough power and enough software and maybe the compilers and the tools have to be built as well, I understand, to actually make it accessible to founders at startup university? Yes. Or startups at founder university. Of course, of course. So that is a really, really important question. Yeah. So there's two ways to understand these circumstances at the same time. So first of all, if you're looking at question or some kind of programs that Corner Computer is going to solve. In the past, for example, five years ago, people believing that we need 1 million qubit to solve some certain problems.

6:22But recently, that number is drastically decreased. Oh, okay. Yeah, cruised to, for example, 10 ,000 qubits. Got it. just 1 % of what we expected 10 years ago, for example. Since we updated some software's algorithms or some other schemes, for example. Besides, in terms of the hardware, looking back, for example, 10 years ago, we only have maybe 1 to 10 qubits. Wow. It's super tiny. That's it. Super tiny, but recently... It's less than a punch card from an old computer. Exactly. But actually, for example, one of the United States universities demonstrated 6 ,000 physical incubators. Wow. It's amazing.

7:09So what I mean is like the number we need for doing actual allocation is decreasing. The number of the physical incubators is close to that number. So we believe that we reach to like two of them meet each other close to 2030, for example, in next four to five years. Got it. So we'll be sitting here in five years, and there'll be companies who have quantum computers in their data center using them? Of course, we can imagine that. And some of the quantum computers are already installed into data center already. Yes. For example, in Japan, Toyosu Obare. Yeah. There's one there. Yeah, of course. Got it.

7:45And it's being used for what? Just doing simple math calculations now and just trying to make it work? Because my other understanding is it's not consistent yet. it's maybe fragile or brittle? Yes. So why is it fragile or brittle? Yes. Thank you very much for the question. So once we do quantum calculations, they made a lot of error. For example, every thousand times, every hundred times, they make error. Oh. Yeah, it's a problem. It's a problem, right? Yeah. And this is a big problem. So we have to correct this error. so-called we call it quantum error collections. Quantum error corrections. Exactly.

8:28So we call it QEC. And by doing so, we have to protect the information that qubit has. So by doing so, we can create very scalable, very robust quantum computer. So this is recent approach the human being try to take. Got it. Did you ever notice how you spend hours shopping online? Then pause before you actually hit buy now. that tiny hesitation where you wonder if this is trustworthy can make or break a sale. And with AI changing how we discover and compare things, that split-second trust question matters more than ever. That's exactly where PayPal comes in. For more than 25 years, PayPal has been a leader in online payments, and now they're at the forefront of agentic commerce, making it work for businesses while letting them maintain control of their brand and their customer relationship.

9:17So even as the way we shop changes, the moment that matters most feels familiar and deeply dependable. Built for payments, growth, and agentic. PayPal Open, built for all business. Visit paypalopen.com to get started. And we had these in the early days of computers, the hard drive or a floppy disk, the memory tape, or the memory in the computer would go bad. Or it would, you know, have to be rebooted and you'd have to clear all the memory out and start over. Yes. And you maybe sometimes I'll have somebody who's having a problem with their laptop and I say, when's the last time you rebooted? And they're like, I've never rebooted my computer.

9:57I've had it for a year. And I say, oh, I'm from the 1980s. In the 1980s, you would reboot your computer every two hours to make sure you didn't have memory leaks or problems and the hard drive was working okay because you wanted the software to the operating system to be fresh and it would run faster. and then by the end of the day, your computer will be sluggish, memory leaks, and you have to unload one program to run the other. It reminds me of what you're going through right now. Yeah, that's true. That's definitely right. So probably what we expected, experienced like 60 or 50 years ago for classical computer.

10:34Yes. We experienced in the quantum computer at this moment. Now you're doing something different at Yakuma. Yes. with the chemicals or the material science, yeah? So you're talking about application or hardware? No, the hardware itself is slightly different. Yes. Or it's advanced and they're using different materials now, I understand. Yeah, thank you very much for asking that. So I think there's a couple of methodologies to do quantum calculations. For example, if you're looking back at the history of classical computers, Let's say if you're using this kind of CPU, this is like most of the CPUs created by silicon, right?

11:17But maybe 60 or 50 years ago, I don't know, we try to use vacuum chamber to do calculations, isn't it? For classical computations. Same. So at this moment, quantum computer market tried to test which kind of QPU is the best for quantum calculations. The quantum processing unit. It's QPU, exactly. So, for example, Google or IBM, this kind of large, amazing company tried to create QPU by using superconducting qubit. Superconducting qubit. Yeah, that's why they have to put those kind of chips into huge refrigerators to make it super, super chill. It has to be super chill. Absolutely. Yeah. And some people try to use ions, which have a charge, like plasma.

12:03Ions, yeah. Ions. Like plasma. Yeah. Yeah. they have charge and we use atoms neutral atoms we don't have any charge we try to configurate or try to create array of the atoms in the vacuum chamber to use one atom an atom as a qubit and some people try to use buttons or semiconductors to do quantum verification at the same time but there's so many very severe like you know company landscape happen at this moment. So let's talk about, this is your first startup, company building. Yes. We have some hardware startups here. Hardware is hard. Congratulations. You've picked the hardest of the hardware because you have a five-year window to commercialization maybe.

12:51And you came out of a university. Yes. And your company is based in Kyoto. Yes. So you get to have a beautiful life, a beautiful city. Thanks. Yes. And all that talent from Kyoto University, yeah? Some of them, yes. Yeah. So you came out of the university. Explain to us how technology in a university, how they do the IP transfer into a commercial organization, not just at Kyoto, not just your company, but just generally how that happens. Because some venture capitalists, and Stanford does this, and some venture capitalists specialize, or investors specialize in going to universities and saying, what are the students working on?

13:33What are the professors working on? Is there anything we can spin out? I think they will generally say a spin out, yeah? Yeah, of course. Or is there a term for taking IP out of the university, like a technical term or a term of art? Do you know one? Probably. I'm not super familiar with the situation in the United States. Got it. But compared to overseas, Japan or Japanese universities have not so much experience to use IP as a startup, as a spin-off. Got it. Yeah. So it's pretty new here. I would say. So normally we call it deep tech startup. Deep tech startup, sure. Yeah, in Japan, which is used in the IP coming out from university.

14:13Right. And at this moment, there's not very solid methodology how to use IP from university to startup. Yep. Some people choose stock options, pay for university. So the university can get some equity. Exactly. Or in the United States, sometimes we hear about a royalty for some number of years. And yeah, this is, or maybe even a cash payment, I guess people could pay to take it out. But the university wants, the university's motivation is to recoup some money that they invested, yeah, in the research. So you were there for some number of years. They spent some money on you and maybe gave you some resources.

14:57And then also maybe they could make a profit, some kind of profit, that then helps the university invest in the next set of - Green investment. Yeah. So it becomes evergreen, yeah? I hope so. Yeah. And this is a negotiation that occurs between the university and the founder yourself? Exactly. Yeah. Tough negotiation, to be honest. Oh, is it tough negotiation? Sometimes it's not easy. Yeah. Yeah. So they want to make sure they get a good deal and you have to get a good deal or you can just leave and not take the IP. Of course. Yeah, so let's talk a little bit about how you've raised over$10 million, I think, for the company.

15:30You've got some grants. You have some venture capital. You've done a seed round. How do you think about runway? Most companies here, if they're building software or maybe consumer hardware, they can think about 12 months of runway, 18 months of runway, maybe getting to their first dollar of revenue in six months, three months, nine months, depending on the company type. But how do you think about runway and when you have to make money and how you keep pushing the team to get to revenue, even though it might take you years to commercialize? Thank you very much. So that's pretty subject to the type of the startup, of course, hardware startup, software startup.

16:14But for our case, we expected, for example, 18 months runway after we just completed. our seed extension round. Oh, congratulations. Just last month, we have been invested by Alunai Ventures for the United States. Which one? Alunai Ventures. Oh, great. Yeah, yeah, yeah. And that was, to be honest, that was their first investment to Japan. Oh, wow. Yeah. How did you meet an American VC and convince them to invest in a company in Japan? Tell us the story. Thank you very much. So, we spread the round into two pieces, seed round and seed extension round. So C-Land, this company is now from Kyoto University.

16:54So that's why we have been invested by Kyoto ICAP. It's sort of CBC coming from Kyoto University. And they have a bunch of networking, like EU or United States. So they nicely connected me to online ventures. Oh, so there was a group that was able to put you in touch with them, and that venture firm had shown interest already? Yes. Or they cold called them? Oh, yeah. They have a soft connection to the online ventures. And they kindly connected me to the online ventures. Are you a Japanese company, or do you file as an American company, or both, for the venture capitalists in America to invest?

17:36Usually they have to be a Delaware company or something. Yeah, yeah, yeah. So we're based in Japan. Based in Japan? Based in Japan. There's no launching overseas. So you don't have a corporate entity in the United States? Yes. Or you do? No. No, okay. So you have to be here. So that wasn't a blocker for the venture firm? They figured out how to do it? Oh, I don't think so. It's cannot be a super, super big deal. Ah, got it. Yeah, I guess. And we also have an investment from the VC named Coin Nation. As you can see from the name of this VC, this is a top VC for corner computer hardware from World War.

18:11So they came from France. That was their first investment to Japan at the same time. Got it. And did the venture capitalists come visit you for the board meetings and they get to come to Japan a couple of times a year? No, no, no, no. It's like we talk online business. Oh, OK. Online business. See, that's the opposite of me. When Jetro and Japan said we want to do founder university with you, I said, oh, I get to come to Japan twice a year? I'll do it. That's why I'm doing it. Also to meet great founders. But I was coming anyway for skiing in January. So every time we see a revolution in how software is built and used, one company ends up owning the infrastructure that everyone else depends on.

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19:29That's do.co.twist. Start building on the DigitalOcean AI native cloud today and cut your AI workload cost by up to 50%. That's do.co slash TWIST. You went to Niseko, for example? I go to Niseko. Oh, that's beautiful. I like to go cat skiing. Okay. You know the tractor that goes up the mountain? Oh, yeah. So there's an abandoned ski resort. I won't say the name anymore because when I say the name on the podcast, they sell out all the seats. Okay, got it. And then people get disappointed. There's an abandoned ski resort. Really? Maybe 40. There's many. Oh, really? Wow. There used to be 1 ,000 ski resorts.

20:09Now there's maybe 300 or 400 active ones. Wow. Because there was many more children and a bigger population. And so it's come down a little bit. So a lot of those small resorts, and people moved to the city. So in those local resorts, some of them shut down. So an American fell in love with this resort outside of Niseko. It's a good story. And he asked them every year, can I have this resort? Why don't you make businesses there? I might need to. And he said it took him four years. Every year he went to the city council, to the elders, and said, hey, I would like to do this. They said, oh, tell us your plan.

20:45They said, okay, yeah, maybe next season. And then he came back. I'd like to do this. I'd like to. And when I went to see the ski resort, half of the lifts were broken down. The cables were down. The ski lifts were down. And he cleaned it up, and he left one run perfect. and all the local people get to have a ski ticket for maybe$50 for the season if they live there, and they ski that one run, and then they make very good katsu curry and nice ramen, and then they have two cats with eight seats in each, so 16 people come from around the world, and they drive you up the other eight runs. So one run for the locals.

21:33The other runs are broken down. They drive you up. It takes 15 minutes to go up. And then it takes 10 minutes to go down. And you do eight runs in one day. Oh, wow. $1 ,000 a day. $100 a run, maybe. Okay. But it's worth it. Because every run is fresh powder. J-POW. Japanese powder. J-POW. Is it so? It's beautiful. Do you ski or snowboard or neither? No, I was born in Bangkok. I was raised up in Malaysia. so maybe I'm not super super familiar which does kind of yeah anyway it's a dream and then unfortunately years ago I talked about it on the podcast and then other people talked about it on social media and just like Tokyo all the great restaurants have too many Americans coming to take pictures and if you really like the ramen at this place somebody puts it on TikTok and then no locals get to go anymore so now some of the locals are not putting them they don't put an English name on the restaurant.

22:34Just for... And they hide the address more. So only locals. Okay, okay. And some of them have signs now, only local. But in Japan, in Niseko, there's now at Niseko, the actual resort is too many. I see. Too crowded. Oh, yeah. You know, Japan more than me, I guess. Yeah. So talk about this hiring of talent here. and the work expectation and then building a company and building talent and culture in Kyoto where it's very beautiful. Thanks. But maybe do people work hard and do they want to be in the office for 10, 12 hours a day grinding? How do you build a culture here in Japan and even in Kyoto?

23:24Yeah. So that is a really important question as a startup. At this moment, the size of the company is close to 70. 7-0. 7-0. Oh, big. We just launched this company 15 months ago. Whoa. So 2025, April. And most of them are tech side. I mean, engineers, scientists. We also hire mathematicians who is very capable of. So one to two hires per week. Oh, yeah, sort of. Yeah. That's the biggest job for me, to be honest, hiring people. Got it. And how many of the 70 are Japanese or recruited to come to Japan? Yeah. So I think there is close to 50, 5-0 tech people. And I guess 20 to 30 % of them is non-Japanese.

24:14Non-Japanese. Non-Japanese. Oh. And interesting point is that there's three divisions under the CTO, who is managed, and of course, tech side. Two of them. Two head of three divisions, non-Japanese. Got it. Yeah, so one of them is coming from Sydney. From Sydney? Yeah. Oh, beautiful. Yeah, he's very talented. I really want to work with him. I've been to Sydney. I need good excuses to go into that beautiful city. That's great. Yeah, yeah. Sydney is one of my favorite cities. Yeah, so beautiful. So beautiful. And another guy is coming from Turkey. In Turkey? Turkey, yeah. So it's a very international organization.

24:50I would say. What's the selling pitch to say, leave Turkey, leave Sydney, beautiful city, and come live in Kyoto? another beautiful city but this is a culture change for them yeah yeah we do scissors scissors rock paper scissors yes no no yeah it's just joking but um i think um kioto have a very great advantages um in terms of the beauty of the city yeah very chill and we had a spin night from kioti university and kioti university have a very profound research background the history, we use neutral atoms, but one of the professors coming from Kyoto University, his name is Yoshiro Takahashi. He studied neutral atoms, for example, Itorubium, YB, that's one of the species in neutral atoms, by the way.

25:39He studied that species more than 30 years and he discovered, I'd say 60 to 70 % of the fundamental scientific study of Itorubium. So that professor is very famous. And at the same time, an interesting point, a selling point about this company is that we try to integrate two entities' research output. One is Kyoto University. One is coming from IMS. IMS stands for Institutional Mercure Science in the IT Prefecture, whose name is Kenji Omori. He's the head of that institute. and two professors, two top, try to create independent startup, similar startup. But if you're thinking about the competitive landscape over the world, oh, why don't we make one startup?

26:32These two extraordinary... Professors, researchers, scientists. Yes, exactly. So now you've incorporated them into the startup there. Advisors, board members. Advisors, advisors. Got it. Yeah. So this is one of the great history behind this company. And many people know that these two professors co-worked together. So they're rock stars. And it draws talent. Yeah, yeah, yeah. Very talented two professors. So we closely work with two entities, Kyoto University and IMS. And I would say this company is spin-off from Kyoto University and IMS. Yeah, so this is not a good selling point since from DZERO, So we have a large scale of research entities as a startup.

27:18That is not a good point. And so is your intent to build the entire computer or be part of working with other companies building computers and empower them as a provider to them? Very, very good. Very, very good question. Very, very good question. So I believe that our neutral item corner computer is something like car, automotive car. And we tried to become the quantum computer company, something like Toyota. So if you're thinking about Toyota, they don't create tire. They don't create engines. They design everything, integrate everything to one, and sell that car into the market. So we are the quantum computer company.

28:08try to assemble the lasers, vacuum chambers, millimeters, whatever. So there are many people building these components now? Exactly. Co-op together. Where are they all based? Are they also centered around universities? You're always asking a very, very good question. So we use neutral atoms. And most important device for this quantum computer is laser. Very high-power laser. Very less noise lasers. so high fidelity exactly I like that high fidelity lasers and this is coming from Hamamatsu Botonics in the Hamamatsu Japanese company and they also have an amazing subsidiary company in Copenhagen in Denmark in Denmark in Denmark of all places yeah but it's like no wonder since Nilsboer one of the like an amazing scientists from Denmark And DINMARK is very, very strong capability in terms of physics.

29:13And that company name is Indicative Photonics. They're creating amazing high power lasers. And recently, Yokremo, our company, and Hamamatsu Photonics and Indicative Photonics did nice MOU in between DINMARK and Japan, tried to create special devices for neutral atom-based quantum computers. I mean, this kind of supply chain is very crucial for industrialization of quantum computers. Most AI tools can give you business insights, but they can't actually do anything about it. That's the difference between AI that talks and AI that acts. But Rippling AI is built differently. It's the only AI built on your live global workforce data.