By Luke Netzley
Los Angeles has become the third-largest startup ecosystem in the United States, according to reports, with a collection of its Westside cities gaining the nickname “Silicon Beach.” Home to companies like Microsoft, Google and YouTube, Playa Vista stands at the heart of this tech-driven, creative explosion. Residents Kenny Lum and Satoshi Miyagawa say the area is ripe with opportunities for entrepreneurs.
“It’s perfect for families, and startups as well,” Lum says. “Once our kids started going to Playa Vista Elementary, we got to know all the parents; the dads and the moms are at places like Google or doing their own startups. That buzz and that energy is fun for us. … We really love Playa Vista.”
Lum and Miyagawa founded their new company, LaunchStarz, to help Japanese entrepreneurs launch their startups in U.S. destinations like Playa Vista. The duo has also partnered with Japan’s Ministry of Economy, Trade and Industry (METI) and the Japan External Trade Organization (JETRO) to kick-start their company’s new Beyond Japan program, which will bring Japanese startups to three U.S. cities to undertake a multi-week guidance course.
“We wished there was an ecosystem willing to support these young Japanese entrepreneurs entering the U.S. market,” Miyagawa explains. “I wanted to build that ecosystem, a community that’s eager to help each other.”
Building the business
Miyagawa was born in Japan and spent much of his early life moving around the world, developing a love for global travel and encountering different cultural environments. After returning to Japan and earning his bachelor’s degree in engineering at Tokyo University, he went on to work for insurance giant Tokio Marine, study management at the Stanford University Graduate School of Business, and enjoy over 17 years of international business experience in Japan.
Miyagawa also served as CEO of the edtech startup Life is Tech! USA and in 2020 moved to LA after agreeing a contract with Disney for the company’s Disney Codeillusion educational program.
Born in Malaysia and raised in Vancouver, Lum shared Miyagawa’s desire for global discovery and spent a year teaching English in Tokyo after graduating from the University of British Columbia.
During his time in Japan, he started his own English school and experienced the difficulties of building and marketing a business in a foreign country.
“After my English school, I started my first official startup with my Japanese co-founder, and we actually became a finalist in TechCrunch in San Francisco in 2009,” Lum says. “That was my first experience in the startup world, and I loved it.
“My Japanese co-founder then came to me and said, ‘Every year Japanese startups have really good ideas, but they can’t communicate and they can’t articulate what they do. … I don’t want that to represent Japan.’”
Lum went on to work for companies like Amazon, Groupon, Jive Software, Zumper and Agoda but still felt passionate about startups. He then met Miyagawa through a mutual friend at a Playa Vista Elementary picnic with their children at Crescent Park, and the spark for LaunchStarz was ignited.
“We started to understand that … we love startups, we both love Japan, we both have international experience living in different countries,” Lum says. “The main goal we established was that we wanted to give back to Japan and to Japanese startups. And this was three years ago.”
With the mission of serving as a “launchpad for founders,” LaunchStarz was born to be a guiding light that suits each individual’s needs, from building their product to selling it. Lum and Miyagawa say their aim is to utilize the wealth of knowledge and experience they gained working for startups in overseas markets to lower the barrier to entry for incoming Japanese entrepreneurs.
“A very old-school way of thinking is the Zuckerberg days where it’s like, ‘I come to America, I open my Delaware corporation, and I take my Series A or my seed money and I put it all into there. I set up an office, I do it all up, and I hire a team,’” Lum said. “Your runway ends up being three months, and you say, ‘Oh, my God, what happened?’ You deal with all these fires and barriers that you had no idea existed.
“You need to understand the market and the product before you set up an office and hire people because the risk is so much higher.”
Miyagawa compared his experience of moving to the United States as a startup CEO during the pandemic to walking into a dark room filled with holes. Today, his aim is to illuminate a path to success for others.
Lum and Miyagawa ask founders questions like, “What stage are you in? What do you really want to accomplish? Have you done market research? You have this great seed money, but how do you use it most efficiently?” They then cater their guidance accordingly, offering support and services that range from creating a product that fits the U.S. market and navigating the visa process to building a sales team and marketing strategy and managing human resources actions like hiring and firing.
“As a CEO, HR alone will take up 80% of our time,” Lum says. “If you’re a startup, you can’t hire an HR director because that will take up all of your budget, so how do you balance that? You can’t really read that from a book; it’s from experience. LaunchStarz can help you. We can introduce you to professional (HR directors).
“The next step is to create a team that’s under LaunchStarz that will be able to help as a part-time salesperson. If you hire a salesperson here and they’re not good, you’ve already invested so much time and money, you’ve probably blown most of your funding. … We know the sales process, we know the hiring process, we hire them for you, and they sell your product on fractional basis. … That’s the hands-on way that we want to help them after we consult with them and find out what they really need.”
Created in partnership with the Japanese government, the Beyond Japan program was born from Lum and Miyagawa’s dream of creating a Japanese startup ecosystem in Playa Vista. The full program consists of a virtual/online course and local programs based in LA, San Diego and Austin that will last up to eight weeks and culminate in a “Shark Tank”-style pitch day. Lum and Miyagawa will have in-person training programs and sessions with the startups to provide them with personalized support.
For the in-person training, Lum and Miyagawa have sent out an open invitation asking founders in the Playa Vista community to volunteer their time and expertise as speakers.
Miyagawa says there will be around 36 startups in LA and that their mission was to cast a wide net for the program’s applicants.
“We wanted to shake things up completely,” Lum says. “(We welcome) any startup, from having an idea to having a POC to having a product to having a great company in Japan that you want to launch in America. … We’re not just going to teach you by opening up a textbook and saying, ‘Follow these chapters.’ If you know Chapter 1, we’ll teach you Chapter 2.”
Lum adds that the program was formed to fill a gap in the Japanese startup world. He explains that there are startup accelerators in Japan that will give “50 of the youngest and brightest startups” a small amount of money in exchange for an approximately 15% share and “cookie-cutter” training and venture capital firms that will give a large amount of money with very little training and tell startups that they need to make the money back within a set amount of years.
“Then, the gap in the middle is … the loneliest place ever,” Lum says. “You have your team, but you can never sit there and ask to your team, ‘How do I do this?’ So you end up making a few CEO friends and you talk about it there. That’s where you learn the most.
“We felt that we tapped into this market where we can actually help people and, as we do this, we’re curating this program where they can either do a self-learning course or they can have one-on-one consultations.”
On Wednesday, October 4, Lum and Miyagawa will invite Japanese startups to a pitch event at Japan House LA. The event will be held in partnership with JETRO and accelerator Plug & Play and will give the entrepreneurs the chance to pitch their ideas to Japanese corporations.
“Plug & Play originally is from Japan, … and they’re one of the biggest accelerators,” Lum says. “They had a pitch day at Meta and they had 15 startups go onstage and they brought in all the VCs, so we want to do something similar for the Japanese startups when they’re ready and once we’ve prepared them.”
The big vision
After bonding over their love for the startup world and creating LaunchStarz to share their experience with others, Lum and Miyagawa say their hope for the future is to introduce budding entrepreneurs from the United States to Japanese markets as well. While nurturing business’ journeys abroad, they also say they want to continue building supportive ecosystems in places like Silicon Beach.
“The big vision for us is to create the ecosystem that kills these gaps (in the market),” Miyagawa says. “I want to integrate this ecosystem with society, like the schools here, because everything matters. We are focusing on startups from Japan, but at the end of the day we want to support anyone eager to learn more about startups and making innovation that’s a positive impact on the society. … This is my life’s mission.”