From living in a car to $1.4M in 5 months

Taro Fukuyama and 2 of his friends from Tokyo arrived in San Francisco. They had to sleep in a car. Their English was not good. But they managed to raise $1.4 million in 5 months, $20 million within 3 years, and create the world-class company.


Here's how they managed to do this:


1. In 2011, 3 friends from Tokyo were reading tech blogs, listening to tech podcasts and dreaming about their own company (but they didn't have a product).

2. They decided to come to the U.S. from Tokyo, borrowed a car from a friend and slept there.

3. The team was working in a cafe: 2 guys were building a simple dating website while Taro was cold emailing investors.
Results:
3.1. 100 meetings with investors for 2 months.
3.2. Zero investors gave them money.

4. After 2 months of hustling without any results, they decided to go back to Tokyo.

5. That last day there was a conference, TechCrunch Disrupt. But a ticket price was $2,000 (they didn't have that money). So, they offered their service as Japanese-English translators in exchange for free tickets. The organizers agreed.

6. At the conference, Taro saw Paul Graham (founder of Y Combinator) walking and said: “Hey, Paul. You wrote a blog saying if you’re going to do big things, you’ve got to come to San Francisco. That’s why I came here with my startup.”
Result: Paul invited them to pitch their product in Y Combinator.

7. Taro gathered around 500 questions from Paul's blog that he might ask him and prepared short 1-sentence answers that Paul might like. And because Taro couldn't speak English freely at that time, he just learned all the answers by heart.
Result: they were accepted to YC.

Later they asked: “Why did you guys accept us?”
They answered: “We were not impressed with the idea. But we knew that you guys came all the way down from Tokyo. That means you have the real dedication to do something here. And the number one reason a lot of startups fail is when founders stop working for the idea. And we felt that you guys came here all the way from Tokyo, lived in a car, so we knew that you will never give up until you succeed.”


8. They decided to pivot - find another idea that can show growth to investors in the next 3 months.

9. For a month, they were asking CEOs of other companies: “What’s your biggest problem?”
9.1. Most popular answer: “Hiring people”
9.2. Studies said: 87% of employees are not happy with their companies, every 2 years, people look for new opportunities.
9.3. They did research of the Japanese market and found 2 public companies which were solving this problem by providing employee perks to companies (discounts, free samples, etc). And they were both making $300 million revenue. And in the U.S., there was no public company or market leader yet.
9.4. They decided to make for the U.S. market what was already successful in Japan.

10. For a month, they developed a new product. While Taro cold-emailed partners of Y Combinator, who provided discounts for startups, and asked them to provide the same offer for his non-existent customers (50% agreed).

11. 30 days before demo day they launched the product.

12. Taro emailed the CEOs he previously surveyed and gave them free trial access. The product started to grow.

13. Taro memorized every single word of his pitch for the demo day emphasizing 3 key points:
13.1. There are 2 public companies in Japan, so the model is already successful and proven.
13.2. They are from Tokyo, and they know the key points for how those local companies succeeded.
13.3. They already had some customer traction from companies that were using their perks.

14. During demo day they received several checks and raised $1.4 million.

P.S. Within the next few years they raised $20 million more and became the world's leader in this market.

Source: mixergy.com


Cheers,
Charlie Patel ;)



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