Japan fintech startup infographic

September 19, 2017

Eighteen months ago I wrote about how bullish I was for venture investment in Japan’s fintech sector. Since then, a proliferation of new fintech startups have emerged, in parallel with Japanese VCs becoming much more active.

An investor friend of mine even joked that we might now be approaching “peak fintech” here. He said this because today kicks off a two-week period with a plethora of fintech conferences taking place in Tokyo. First up this week is FinSum, organized by Nikkei, the FSA (Japan’s Financial Services Authority), and the FAJ (the Fintech Association of Japan). Then on September 26th, Net Service Ventures is holding the FinTech Forum. Finally, capping off the month will be Rakuten’s Fintech conference on the 28th.

So in the spirit of peak fintech, here is the Rudescape™ of Japan’s fintech startups we’re currently tracking (special thanks to Adelson Goncalves for designing this infographic).

[click for high-resolution version]

The board meeting question that consistently confounds

September 15, 2017
And I don’t know where you wanna go, but I’m willing to take you there.
— Chronixx, Somewhere (Perfect Key riddim)

There is one question that consistently seems to stump startup management teams the first time I ask it in board meetings. I don’t ask it to deliberately throw management off balance. Rather, my goal is to encourage good habits of thinking about this question regularly. The question is this:

What would like to get out of this board meeting?

The first time I ask it in a board meeting usually produces blank stares. In contrast, good entrepreneurs inevitably have a well thought-through answer ready the second time.

It can be very comfortable for a startup CEO to fall into the rut of treating his/her supervisory board as an organ of approval. They dedicate so much effort to the daily grind of building their companies that the periodic board meeting almost comes as a distraction.

They feel obliged to divert time in order to prepare an elaborate deck that reports on company progress. They seek acknowledgement of their efforts and strive to give the impression that they have everything under control. The reality is that in the world of tech startups, the entrepreneur’s realm of control spans only a limited number of factors affecting the business at any given time.

Venture investors and independent boardmembers with an affinity for startups understand this

True, one function of a startup’s supervisory board involves corporate governance: approval of items affecting the company’s debt or equity, approval of certain expenditures above a specified threshold, etc. It is the board’s duty to prevent the company from doing something rash that could imperil the firm’s livelihood.

However, I would contend that an equally if not more important function of a startup’s supervisory board is one of support.

I submit that entrepreneurs will increase their odds of success when view their boards as resources. This requires a level of trust and a commitment to open (and frequent) communication from the entrepreneur. It also requires boardmembers to behave in a genuinely supportive manner, for example by providing constructive not critical feedback, by resisting the urge to micro-manage company operations, and ultimately by giving the entrepreneur the space they need to execute.

So, entrepreneurs, ask yourself regularly: how can your board help you? What do you expect from each board meeting? Consider your boardmembers as allies in your market battles, as sounding boards on your strategy and priorities, as safe places where you can openly share what’s keeping you awake at night. You’ll sleep all the better for it.

Interview from Japan’s Cryptocurrency Conference

September 8, 2017

Here’s the English version of the interview I gave at this week’s Japan Cryptocurrency Conference in Tokyo.

You mentioned that you believe Japan is taking a leadership role in cryptocurrency. What did you mean by that?

I was referring to both the government and the consumer. As another speaker explained, earlier this year the Japanese government defined bitcoin as a means of payment. This is incredibly forward-thinking as it brings legitimacy to the domain, and now over 200 physical retail locations in Japan accept bitcoin already. Furthermore, I understand that Japan-based entities (mostly consumers) now account for 30-50% of bitcoin transaction volume worldwide.

You come from France. How is cryptocurrency viewed there?

Actually I originally come from Silicon Valley, but yes, I lived over 17 years in Europe. The French establishment has been slow to acknowledge crypto. However, there is a niche segment of highly passionate fans of cryptocurrency, with many talented blockchain developers in France. I would say that the European countries demonstrating true leadership in cryptocurrency would be Switzerland, with their Crypto Valley in Zug, and Estonia, who is contemplating issuing their own government-managed crypto token.

When did you first begin investing in cryptocurrency?

Although our fund skipped the first wave, I became a bitcoin investor personally back in 2012 by sheer dumb luck. Somebody on another continent owed me a couple hundred dollars and offered to pay me in bitcoin. I didn’t really know bitcoin at that point but was curious. So I opened a wallet, received his money, and then promptly forgot about it for a few years. It turned out to be the best accidental investment I ever made.

So which cryptocurrencies do you hold today?

I would rather not give specifics, but I will say that I cashed out a chunk of my bitcoin recently because I’ve already lived through two major bubble corrections in the past. I diversified into a basket of tokens too. However, I’m far from being an expert. In fact, it was only recently that I learned the importance of securing cryptocurrency assets off the exchanges. I am prepared to lose my entire crypto portfolio, so any other outcome I view as pure upside.

Do you believe cryptocurrency will disrupt your business as a VC?

I certainly believe that, by granting access and liquidity, ICOs and decentralized funding methods will fundamentally impact our business. The amplitude and sign of the impact will depend on the VC.

What do you mean by “depend on the VC”?

I see 5 types of VCs:

  • First, the true visionaries who developed an early conviction for blockchain and began staking out positions in blockchain infrastructure companies, Union Square Ventures and Andreessen Horowitz probably being the most famous.
  • Second are the new funds dedicated to cryptocurrency, like Panterra or Blockchain Capital.
  • Third are the conventional VC funds who have already amended their LP agreements to allow investment in the asset class and who have been participating in ICO pre-sales.
  • Fourth is the vast majority of VCs: a group who have recently woken up to the potential of cryptocurrency but haven’t yet become active in the asset class. The main hurdle is that their limited partnership agreements require modification to allow for this.
  • The fifth category are those funds who remain blissfully ignorant of the space. This group will probably be the first to be disrupted.
What are your predictions for cryptocurrency?

Reiterating the caveat that I’m no expert, my gut tells me that the potential of cryptocurrency is being overestimated in the short term but dramatically underestimated in the long term.

Secondly, I think we’re going to see more and more non-blockchain companies issue tokens. Many of these projects will not bear fruit. My best guess as of now is that the projects with the greatest chance of success will be those where the token is integrated into their core business activity. For example, next week Kik Messenger will open the crowd-sale of their Kin token which empowers and enriches their active base of millions of users.

Thirdly, I am excited about the potential for portfolio management solutions for cryptocurrency assets. Solutions like ShapeShift’s Prism, which I’ve just started using, have the power to be truly transformative and democratizing in my opinion.

Lastly, I’d like to point out a brilliant prediction my analyst made: insurance companies should consider offering tailored insurance packages which cover crypto assets.

Exciting job opportunities

September 1, 2017

With September marking the return from summer holidays in most countries, it’s a good time to reflect on a new professional challenge. To spur the creative juices, here are some current job openings within my current investment portfolio. There are a ton of incredible opportunities here in exciting locales, so take a look !


  • Front-end developer
  • HTML5 game developer
  • JavaScript SDK developer
  • Medior back-end java developer
  • Multiplayer back-end java developer


  • Community & Social Media Manager – SaaS firm
  • Growth Hacker — Sharing economy marketplace


  • Back-end java developer — AI startup


  • Sales and business developer — Adtech firm


  • Back-end java developer — AI startup
  • Content marketing manager — Consumer app
  • Front-end developer — AI startup
  • Front-end developer — Consumer app
  • Inbound content marketer — AI startup
  • Investment Manager — IoT VC fund (min 3 yrs experience)
  • Web designer — Fintech startup

And of course, internship opportunities abound, particularly in France, Holland, and Japan.

Any interested candidates are welcome to send me your CV by email, and I’ll facilitate an introduction.


Five takeaways from Japan’s AI Tech Leaders Summit

August 26, 2017

Some of the Asia’s leading experts in artificial intelligence mingled yesterday with a small group of corporate acquirers, startups, and investors at the first ever Japan AI Summit. Here are my five takeaways from the interactions:

5. The sovereign gap is widening

In advanced AI research, the U.S. still has the lead, but China has the momentum. Other developed nations need to accelerate or will never close the gap.

4. Data is “misunderestimated”

Perhaps the most controversial statement of the day, but the contention was that with techniques like simulation learning, massive data sets are no longer as critical. So size doesn’t matter so much after all…

3. Hardware is overrated

Robotics folks subscribe religiously to the necessity of hardware for data collection to feed AI systems; however, the consensus yesterday disputed this mindset. The prevalence of data already in existence focuses the question more on “how to use it” rather than “how to collect it.”

2. Analog is back, baby !

Ok, I’m getting ahead of myself, but I’ve been claiming for years that rumours of analog’s death had been greatly exaggerated. Well, it turns out that analog chips or mixed signal ICs will soon play an essential role in AI systems. CPU::Intel. GPU::Nvidia. Neuromorphic::X. If anyone can accurately tell me who X is, I’ll give you a medal.

1. Privacy arbitrage opportunities

The disparity in regulations on data privacy may create opportunities for “privacy arbitrage” across countries. For example, obtain access to medical records in China in order to train an AI system on a health care solution with applications globally.

Special congratulations to Dreamquark and Snips for making the trek over from France !

Yet another signal of how far France’s startup ecosystem has come

August 17, 2017

I recall how when I first moved permanently to Paris over 16 years ago, finding people in the office during the month of August was highly unusual. It seemed that after the long weekend of July 14th, one couldn’t count on scheduling a meeting again before September 1st.

This shutdown extended to the startup sector as well, which back in 2001 was still in its infancy. Even for several years, scheduling a meeting with entrepreneurs in late July and August proved difficult. And if anything, this was the segment of the working population that was most likely to be at their desks.

Inversely, for a diligent entrepreneur hoping to pitch to a French VC in the peak of summer: forget about it. Remember, most French VCs at the time were former commercial bankers investing tax rebate money of their retail clients.

How dramatically things have changed !

It was only back in 2014 when then Innovation Minister Fleur Pellerin suggested the French need to reformat their mental software to become less averse to failure. Now, Ms. Pellerin has moved on from the government into creating a venture fund, while leaving a lasting positive impact on the French government’s attitude toward the startup community.

Over the past few weeks, I detected yet another signal that Ms. Pellerin’s recommended mental software upgrade has taken effect. A privileged opportunity for European AI startups presented itself. Concretely, it is a small private summit that brings together leaders of industrial groups and AI entrepreneurs. But here’s the rub: this summit is taking place on August 25th in Tokyo — i.e. peak French holiday season in a faraway land from the perspective of French entrepreneurs.

Given these logistical hurdles, I figured that interest in such an opportunity would be limited, so I casually mentioned it in a blog post. Boy did I underestimate how much things have changed.

The high demand from French startups in the AI space for this opportunity caught me off guard. Maybe I shouldn’t have been surprised, because France possesses arguably some of the greatest engineering talent conducive to creating innovative companies in AI.

Given the small scale and specific subject matter at this initial event, many of the applicants were regrettably not eligible to attend this time. However, it is very likely that this will be a repeat occurrence sometime in 2018.

I would like to extend my sincere gratitude to all of the impressive, globally-minded entrepreneurs who have contacted me about this opportunity and will do my best to ensure that your candidacy is carefully considered for next year.

Things are looking encouraging for French innovation in AI, and in tech overall.


An inconvenient sequel about startup subsidies

August 6, 2017

inconvenient-sequel-about-startup-subsidiesLast week’s piece about my contention that government subsidies for startups tend to be anti-lean in nature generated two almost diametrically opposed reactions. So here are some final thoughts about Lean Startup and subsidies, and then I’ll put the topic to rest for now.

On one end, a couple readers became defensive, questioning how I could even imply that France is not the best country in Europe to start a company by criticizing its subsidies. This reaction did not surprise me; indeed there is a small but vocal segment inside the French startup ecosystem who is convinced that France is the best place in Europe to start a company thanks to its generous programs of government subsidies.

Ironically, I too believe that France is a fantastic country in Europe for startups — and submit that it has become dramatically more appealing over the past decade — yet for different reasons. I would argue that the components that make France a fertile startup ecosystem are not its subsidy programs, but rather a whole host of other attributes, which I’ve discussed previously at length. Furthermore, I could cite a handful of co-investors with whom I have worked across Europe who could make a compelling case for Belgium, Germany, Holland, the Nordics, Spain, and the UK.

The other end of the spectrum of feedback to my contention that subsidies are anti-lean is probably best summarized by the following tweet from my partner Alex:

I agree with Alex’s line of thinking. Not only are subsidies anti- Lean Startup, but they can also create fatal conditions for entrepreneurs who readily accept government loan advances only to find themselves in dire straights 12 to 24 months later. I’ve actually witnessed this a lot. Entrepreneurs take as much up-front non-dilutive money as they can, develop a product which usually is fairly technology-intensive due to the constraints accompanying such subsidies, and then subsequently discover that there is no market for their product. At this point the startup finds itself in a quandary: it lacks product-market fit and faces a debt repayment schedule. Which VC in their right mind would invest in such a venture now ?

One of the most prolific forms of early-stage startup subsidy in France is something called the CIR, which stands for crédit d’impôt recherche. The CIR works essentially as a tax credit for R&D expenditures. Its intention of course is benign: to encourage companies to allocate time and resources toward innovative, research-intensive efforts. The consequence of the CIR in startups is that it makes it dramatically cheaper to hire personnel with engineering degrees. This phenomenon is not unique to France; Holland offers the WBSO, for example, and many European countries offer similar programs.

Beware the hidden costs of subsidies

For all of its benefits, however, the CIR is not devoid of costs, particularly hidden costs.

First, by reducing the effective cost of hiring engineers or personnel with advanced degrees, startup founders feel less constrained in such people, perhaps more than they actually need at the time. Or they pay them more, resulting in a subtle inflationary pressure across the sector. This is not a bad thing per se, but when you have a lot of engineers on hand you need to give them products to develop. Allocating a disproportionate level of resources toward product development at an early stage before the market need is validated is, by nature, anti-lean.

A second hidden cost involving the CIR pertains to future tax audit risk. Almost every growing company in France finds itself subject to a tax audit at some point. For the French tax authority, the CIR seems to be one of the top items on its audit checklist. The central thrust of assessment often investigates whether the claimed expenditures genuinely reflect actual research expenses. Remember, the CIR stands for crédit d’impôt recherche, in other words the ‘R’ in ‘R&D’.  It’s no secret that most startups in their R&D expenses tend to incline more toward development than research. So in the event of an audit, the startup must produce documentation from previous years clearly demonstrating that all expenses which were deducted under the tax credit do properly reflect research efforts. I’ve sat on boards of a number of companies who have successfully navigated such audits, but never without a cost: the time and distraction alone usually set back the company for months.

Perhaps the most pernicious hidden cost of the CIR  and similar subsidies is its opportunity cost. By spending 12 to 24 months developing a product which in the end the market will not pay for means that those 12 to 24 months were not allocated toward a value-generating activity.

In Chapter 4 of The Lean Startup, entitled “Experiment,” Eric Ries underscores the importance of answering four questions:

  1. Do consumers recognize that they have a problem you are trying to solve?
  2. If there was a solution, would they buy it?
  3. Would they buy it from us?
  4. Can we build a solution for that problem?

Government subsidies often encourage the startup to ignore questions 1-3 and jump straight to #4.

The allure of non-dilutive subsidies can be enticing when you’re a resourceful entrepreneur scrambling for whatever financing you can find. Be careful.


The Lean Startup, Anti-lean subsidies, and other ramblings

July 31, 2017

This year’s RudeVC summer reading list post generated an unexpected mini-debate in the comments section (LinkedIn version, can’t figure out how to link to it). The debate did not center on the 5 novels I recommended but rather focused on an afterthought recommendation I made at the end of the post for Eric Ries’ 2011 book, The Lean Startup.

Some entrepreneurs drew attention to — in some cases even singled out — VCs in France who are allegedly ignorant of The Lean Startup concept. Unnecessary gratuitous finger-pointing aside, I do agree that every investor in tech startups, be it VC or angel, should at minimum possess a passing familiarity with the concept.

My hypothesis for the reason that the Lean Startup methodology is not so deeply integrated into the French investing culture can be encapsulated in one word: subsidies. France’s startup ecosystem boasts a long tradition of funding via government subsidies. Unparalleled by almost every other advanced economy, a whole industry of advisers and “subsidy-raisers” working on a commission basis exists in France.

The intentions behind government subsidies are sincere and well-meaning: promote innovation, try to replicate Silicon Valley in France (which I submit is fallacious thinking but that’s another topic), render modest risk-taking more less daunting, etc.

The problem, however, with government subsidies, at least in France, is that in my opinion they are anti-lean. The Lean Startup methodology is about experimentation. It’s about going to market with an MVP — i.e. before you have a product — the very endeavor which informs the definition of the ultimate product to be developed. Subsidies, on the other hand, are generally only granted to extensive technology development efforts.

Incidentally, for a helpful recent explanation on what an MVP (minimum viable product) is and is not, check out this piece from Nacho Bassino.

Here’s a link to the French translation of Eric Ries’ The Lean Startup. I encourage every investor unfamiliar with it to put it on their August to do list.


Respect to Hakuho

July 26, 2017

Some readers noticed how I omitted writing about sumo over the last two tournaments and wondered if I had something against (consecutive victor) Hakuho.

Not at all ! On the contrary, I admire Hakuho, the yokozuna who won the sumo championship in May and then again this week. I admit, Harumafuji is my preferred sumo wrestler of the four current yokozuna. I’ve been a fan of Harumafuji back from the days when his ring name was Ama, and I’ll never forget his first championship in Tokyo in September 2009.

However, I must confess I’ve been rooting for Hakuho as of late. Now that he has surpassed both Kaio and (my all-time favorite wrestler, the late/great) Chiyonofuji, it is hard to dispute that Hakuho represents one of the greatest rikishi that sumo has ever seen.

Much respect, Hakuho !


Summer reading list 2017

July 21, 2017

Time for the RudeVC summer reading list again. Here are my picks for the summer of ’17.


The Gene: An Intimate History, by Siddhartha Mukherjee. Mukherjee has a talent for crafting an engaging, page-turning narrative out of complex scientific topics. His first book, The Emperor of All Maladies: A Biography of Cancer, won the Pulitzer Prize in 2011. In some ways, The Gene serves as the prequel, recounting the stories of the ancestors of modern hereditary biology like Gregor Mendel, and leading up to the contemporary day of genome mapping and gene editing technologies. The haunting question is: should humans ever go beyond reading our own genomes to actually writing them?




Shibumi by Trevanian. This book was recommended to me by my lawyer, of all people, and I always heed his advice. Shibumi is a spy novel in the classical sense, though it is written like a beautiful piece of literature in the methodical way of Rousseau. The word shibumi in Japanese is so rich in context that it elicited a wide variety of reactions from native speakers whom I queried. If you have any affinity for the Japanese design aesthetic, for France’s Basque country, for the strategic game of Go, or simply for spy thrillers in the most refined sense, you’ll love this book.





The Three Body Problem, by Liu Cixin. I’ve only read books 1 and 2 of this captivating trilogy translated from one of China’s most prolific science fiction writers, and I’m chomping at the bit for the delivery of book 3. There’s a strange contradiction revealed by the naïveté and kindness demonstrated by humanity when faced with the universe: On Earth, humankind can step onto another continent, and without a thought, destroy the kindred civilizations found there through warfare and disease. But when humans gaze up at the stars, they turn sentimental and believe that if extraterrestrial intelligence exists, it must be from civilizations bound by universal, noble, moral constraints, as if cherishing and loving different forms of life are parts of a self-evident universal code of conduct. Mind-blowing !



Finally, for any VCs who are still not familiar with the lean startup concept, Eric Ries should be on top of your beach blanket this summer.

Happy reading !

[previous RudeVC reading list editions: 2013, 2014, 2015, 2016]

AI Startups: You’ll want to read this

July 14, 2017

As this recent opinion piece in the New York Times from Lee Kai-Fu suggests, perhaps the greatest threat of Artificial Intelligence is the devolution into a world AI have- and have-not countries. China, Japan, and the U.S. have taken note, and are dedicating research efforts to the domain. If any European nation possesses the same focused sense of urgency on AI, I am not aware of it.

An effort in Asia is underway to assemble some of the brightest minds working on artificial intelligence, be it from research, corporates, or startups.

Dubbed AI Tech Leaders, this effort will take the form of periodic Summits, starting with the first in Tokyo on August 25th.

At the Tech Leaders Summit, a privileged selection of innovative startups working on artificial intelligence will have an opportunity to mingle with world-renowned AI researchers and corporate innovation departments looking for partners or acquisitions. Corporates include: Denso, IBM, Lite-On, Mitsubishi, Mitsui, Persol, Razer, Samsung, Tencent, and Tepco among others.

A maximum of five European startups (with no more than two from any given country) are welcome at the inaugural event. The registration fee is waived for all selected startup finalists.

This is a unique opportunity for startups interested in developing relationships with potential future acquirers in Asia.

To apply

To apply, send the following information by email to aitl@rude.vc

  • name of your company (in the subject field)
  • a 2-3 sentence description of your ambition
  • how your startup uses AI in fulfilling this ambition
  • stage of your startup (concept / prototype / product / revenue)
  • total amount invested, if any
  • location of headquarters and contact information

Applicants who missed the cut for August will be wait-listed for a future AI Summit.

Incumbent banks: startups are coming for you

July 7, 2017

In my previous post I wrote about the sparsity of financial services and products from incumbent banks for small businesses that act globally. This chasm has grown as the increasing proliferation of globally-minded startups face a retail banking sector that is stagnating for reasons of inflexible business models, obsolete systems, and corporate inertia.

Fortunately for SMEs, a handful of disruptive fintech startups have recently started honing in on this very problem. Given that fintech is one of our fund’s core investment areas, and I write occasionally on this blog about the various European or Japanese startups in fintech, I thought it might be interesting to recount my first-hand experiences as a customer of some of these fintech disruptors.

Of the wide array of fintech startups and alternative money transfer providers, I have direct experience with the following: CurrencyFair, Revolut, TransferWise, and OFX. The first three are pure technology players, whereas OFX, formerly called UK Forex or US Forex, is an Australian-based online international money transfer service.


I’ll start with CurrencyFair, which technically should be excluded from this list because CurrencyFair does not offer business accounts to U.S. legal entities. This is regrettable because CurrencyFair is unique in offering a currency conversion feature which I really appreciate: specifically, the ability to create an open exchange order with your own bid or ask price, even one that is out of the money. I enjoy using CurrencyFair as a consumer and look forward to the day they open up business accounts for U.S. entities.


UK-based Revolut has also just announced a business account, yet similarly does not yet accept U.S. entities. However, I understand that they will do so around the end of this year. Revolut conveniently offers a multi currency debit card, which is very handy when traveling abroad for use at ATMs or point-of-sale locations. Revolut charges a monthly fee ranging from £25.00 – £1,000 for its business account services.


The service I used most frequently over the past two years for international money transfers was OFX. OFX is technically not a fintech startup but a service that offers foreign currency exchange rates which are more transparent and competitive than those of incumbent banks. Unfortunately, OFX’s rules are difficult to navigate, and each transaction typically requires human intervention. Surprisingly, after 20 approved transactions, another OFX employee informed me that her colleague had violated the company’s compliance by approving my transactions based on a spuriously shifting definition of the term “third party transfer.” I no longer feel comfortable using OFX and cannot endorse their service at this time.


Which brings me to my final candidate: TransferWise. Only a few short months ago, TransferWise launched its Borderless Account product for small businesses. It’s still early days, so I will try to control my enthusiasm, but my initial experience with the Borderless Account is nothing short of euphoria! U.S. legal entities are eligible, and the product supports foreign currency transfers to over 60 countries. TransferWise offers its Borderless Account to businesses for free, and generates revenue in the form of a transparent fee upon currency exchange or money transfer. The company did not ask me to sing their praises; I’m merely a delighted customer acting on my own initiative. [For what it’s worth, here is my TransferWise referral link. I understand that using this link would grant you a free transfer up to £500.]

There may well exist other innovative financial services, for startups by startups, which have not yet come onto my radar. I welcome hearing about anything I’ve missed and will gladly try them.


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