The leadership in the new digital age carved by the fourth industrial revolution of io t and ai for aizu

© 2016 NTT DOCOMO, INC. All rights reserved.
Mick Etoh
2/10/2017
Leadership in the new digital age
carved by
the fourth industrial revolution
of IoT and AI
All night stars & Galaxy pictures are courtesy of Nori Yuasa except this sunset from Oakland(taken by Lynn Shi)

Head of Innovation Management Dept. SVP, NTT DOCOMO
Guet Professor, Cyber Media Center, Osaka Univ.
Former CEO of NTT DOCOMO Ventures
CEO of Mirai Translate, Inc.
Research Supervisor of CREST “AI” Area
of Japan Science & Technology Agency
Mick Etoh’s Affiliation

Part 1

Let’s deﬁne and identify
Fourth Industrial Revolution.

AI

AI(Artificial Intelligence)

Symbol Grounding (Stevan Harnad,1990）

Medical Dignose
Cyber Security
HR Management
NL Agents
Active Learning
Robotics

https://www.youtube.com/watch?v=w7NgejZMSsA

Orbital Insight, Inc. Proprietary Information
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ORBIRAL INSIGHTS
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Orbital Insight, Inc. Proprietary Information
B/&C#&'
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Uber

https://www.youtube.com/watch?v=U9A86Nh75xQ

The Power of 1%

McKinsey Global Institute
NTT DOCOMO, INC. All rights reserved.
The Internet of Things: Mapping the Value beyond the Hype (June 2015)
Peomising?

http://seekingalpha.com/article/3387605-assessing-ges-software-opportunity?page=2

IoT = ICT + OT (Operational Technology)
Revolutional Impact: ICT+OT＋AI

the fourth
industrial revolution
ICT+OT+AI

Cloud

Hardware v.s. Software
Which is your perception about “Cloud?”

Simple
Web Service
Speech Agent（Cloud-native）
Programmable, Copyable and Commodiﬁable
Data Analytics Platform
（On premise-hybrid）

Mid 15th Century

Early 21st CenturyMid 15th Century

=
Power of Software

layers of the full stack
Server, Network, and Hosting Environment.
Data Modeling
Business Logic
API layer / Action Layer / MVC
User Interface
User Experience
Understanding what the customer and the business need.
Server, Network, and Hosting Environment.

Startups

Empathy
smart risk taking
Seeing the big picture.
Hunger to achieve.
Entrepreneurs 0->1

Empathy
smart risk taking
Seeing the big picture.
Hunger to achieve.
Entrepreneurs 0->1
MAXIMIZES STAFF UTILIZATION
PURSUES THE FINANCIAL PERFORMANCE
Managers Elite 100->110

• Want to increase
innovation?
• Lower the cost of
failure.

AWS Re:Invent 2014
Keywords
•Institution No vs.
Individual Yes.
•Speed
•Make organization “nimble”
•Experimental test w/
lowering the cost

2015.7 米国ボストンにAI研究所を設置
2015.11 Prediction.io(Personalizedレコメンド)
2015.12 Minhash(法人営業向けデータ収集AI)
2016.4 Metamind(Marketing Automation)を買収
2015.1 Wit.ai(AI型音声対話)を買収
2014.1 DeepMind(DeepLearning技術)を買収
先日のAlphaGOは、GoogleDeepMindによるもの。
2016.4 Orbeus(画像認識)を買収
2015.９ AI技術者を大量採用していることが記事に
2005年頃から、積極的にAI型レコメンドを採用
2015.7 Seed Scientific(データ分析)を買収。
AI型Personalizationを強化
2015.7 米国ボストンにAI研究所を設置
日本企業も続々と米国に体制強化中
2015.11 シリコンバレーにAI研究所設置。
TOPは元Google Research出身TOPは元Google Research出身
2016.1 シリコンバレーにAI研究所設置。
出資金1200億円

$50K – $200K
e.g., Ron Conway
Keith Rabois
Reid Hoffman
$1M – $10M
Accel Partners
Benchmark Capital
Sequoia Capital
$100K – $500K
SoftTech SV Angel
$10K – $100K
e.g.,：500 Startups
Y Combinator
Plug & Play
Startups and Financial Supporters

1B Valuation
Years from Birth
1 2 3 4 5 6
AirBnB
Series C
(3Y8M)
Evernote
Series D
$1B (6Y2M)
Series B
Series A Series A
Series A
Series B
Series C
4Y7M
AirBnB
Dropbox
Evernote

Top Venture Capital

I

Hustler
Hacker Designer
Innovator Trinity
I

Airbnb

– National Innovation Initiative(NII)
(2004)
Innovation = invention x insight,
leading to the creation of social and economic value

Two Type of Insights:
Technology Social & Biz Value

–Prof. Henry Chesbrough
Innovation = Invention + Business Model

Mark ZuckerbergMark ZuckerbergJack Dorsey
Elon Musk
Garrett Camp
Travis Lalanick
Drew Houston Jeff Lawson Marc Andreessen
Empathy- and Greed-driven.

Technology
Insights
Leadership
Business
Insights
What we need is ‘Unicorn’.

Tech. Startup = Team with
Research Expertise + Business Insight

Insights about the future → Monopoly position
Here are the seven questions Thiel writes “Every business must
answer:"
1. Can you create breakthrough technology instead of incremental
improvements?
2. Is now the right time to start your particular business?
3. Are you starting with a big share of a small market?
4. Do you have the right team?
5. Do you have a way to not just create but deliver your product?
6. Will your market position be defensible 10 and 20 years into the
future?
7. Have you identified a unique opportunity that others don’t see?
Zero to One by Peter Thiel (Founder of PayPal)

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Part 2

team building
&
Culture

© 2016 NTT DOCOMO, INC. All rights reserved. www.bonkersworld.net/organizational-charts/
Organizational Charts (6/2011)

Micro Services

5?H
I9J K<H HL
MD9 INK <@&/38<!
O O O
Micro Services

https://vimeo.com/85490944https://vimeo.com/85490944

https://labs.spotify.com/2014/03/27/spotify-engineering-culture-part-1/
Spotify’s History of Development Style

Companies led by
Captains or Majors
BrigateDivision
Being Automous

Companies led by
Captains or Majors
BrigateDivision Squad Leaders
Being Automous

Learn
Data
Nimble
Investment
Decision
Flexible
Budget
Raise
Advisors
Voice of
Customers
Learn InvestmentAdvisors build
Product
Idea
BudgetData Product
measure
Investment
Decision
Flexible
Budget
Investment
Budget
Advisors
Voice of
Advisors
Lean Startup Model

Importance of Team Building
• Most of predetermined plan may fail. Thus, nimble
and well-focused team building must come first.
• The team must identify ROLES which make team
well-focused and nimble.
• Big managers must trust the team, encourage
them, and dedicate the power to them. DON’T be
a control freak.

Innovation Ecosystem

50 : 5 : 1
US Annual ﬁnancing to VC-backed companies(start-ups) = $57 and $72B in 2014 and 2015
while Japanese VC’s ﬁnancing still remained about $1B(2015).

In Million of US$
Amount of VC investment
Amount of VC investment
ratio to GDP
US Fr
a
nc
e
UK Ger
man
y
Jap
an
A
u
st
ra
li
a
Can
ada
Swit
zerl
and
Swe
den
Isra
el
Bel
giu
m
Sou
th
Kor
ea
Nor
way
Holl
and
Spa
in
Den
mar
k
Finl
and
Irela
nd
Aus
tria
Itali
a
Port
ugal
Cze
ch
Rep
ubli
c
Gre
ek
Est
onia
Lux
emb
our
g
Slov
akia
Pol
and
Hun
gary
VC Investments by Country

Innovation Ecosystem in EU
International Journal of Technology Management vol. 66, num. 2/3
key individuals are in blue, companies in red and
ﬁnancial ﬁrms in green.

Can Tokyo become Japan’s Silicon Valley?

No.

Startups in Tokyo has two options:
•Come to the Bay Area, or
•Stay in Tokyo but focus the unique product.
No.

Market
VC
Ecosystem
Talent
Source:2016 Silicon Valley Index
Interlock of investment, talent, and market creates
an unsurmountable barrier for others.

Market
VC
Ecosystem
Talent
Market
VC
Ecosystem
Talent

Market
VC
Ecosystem
Talent
Ecosystem
Market
VC
Ecosystem
Talent

https://www.cbinsights.com/blog/increasingly-crowded-unicorn-club/
The Crowded Unicorn($1B+) Club (as of August, 2016)
171

Source: SparkLabs Global Ventures
1. Funding & Exits
2. Engineering Talent
3. Active Mentoring
4. Tech Infrastructure
5. Startup Culture
6. Legal & Policy Infrastructure
7. Economic Foundation
8. Government Policy & Program
Start-up/VC Ecosystem

6. Boston
7. LA
8. Beijing
9. London
10. Berlin
Source: SparkLabs Global Ventures
1. Silicon Valley
2. Stockholm
3. Tel Aviv
4. NY
5. Seoul
10 Hottest start-up Ecosystem

India China Japan Israel Bay Area
Market size " ◎ " " ◎
Language " △ " △ ◎
Regulation/
Market fairness
△ △ △ △ "
Excellence or
Uniqueness of
Talent
" " △ " "
Life/Weather* " " △ △？ ◎
Overall △ △ ! △ ◎
*Don’t laugh. It DOES matter.
India and China receive large amounts of VC money due to their market size. However, there are only a few
companies in those countries that succeed globally.
Which countries are best for startups?
Can Tokyo become Japan’s Silicon Valley?

Startup Nation
Advantage
Strong relationship to Military and Defense
Industry (AI, Communication, Security, Devices)
Famous Startups
Waze, Viber, Fiverr
VC circumstances
20-30 VCs, 4000-5000 startups, 6B exit in 2015,
Chinese-backed VCs(40%?)

London as Gateway
Advantage
London as Gateway to EU and US，Fin Tech demands
Famous Startups
Shazam, Powa, Skyscanner
VC circumstances
>1000 Fin Tech companies with GBP20B size revenue
3200-5400 start ups in UK
Tech City in London

The Nordic countries
Advantage
Social Demands by Low Carbon, Medical Care,
Digital Government.
Famous Startups
Spotify, Supercell
VC circumstances
Stockholm Innovation & Growth(STING),
Governmental Agency for Innovation Systems
- VINNOVA

Tokyo & Japan
Advantage
Animation, Media Contents(e.g., PockemonGo),
Gaming, Bio & Devices
Famous Startups
Gumi, Mercari, Cyberdyne, Euglena
VC circumstances
Rising CVC money into AI, IoT, Robotics, etc.
$1B (2015) -> $1.6B (2016)

Gaming/Net Media
Biotechnology, Device

Way Forward

Talent
Market
VC
Ecosystem
Innovation Engine of Bay Area

Manufacturing
Market
Manufacturing
Production
Ecosystem
suggested by H.Tamura@Re:Public
Innovation Engine of China

Shenzhen Tianjin

Society
Citizen Experiments
Innovation Engine of the Nordic Countries

credit to H.Tamura@Re:Public
IKEA@Denmark

Hungry
Drought Resilience
Innovation Engine of Israel(Joking Version)

M&AIPO &
Partnership
Tokyo Stock Exchange:the Mothers
(Market of the high-growth and
emerging stocks) section for high-
growth startup companies. See also
JASDAQ.
Market Capitalization > $10 Milion
average: $26.5M

Skill
Urban
Infra-
structure
Quality
Conscious
Market
Innovation Engine of Tokyo

https://www.youtube.com/watch?v=VgSPGB_q7tg

https://www.youtube.com/watch?v=FVAkuBSkaw0

Take Aways
• The Fourth Industrial Revolution = ICT+OT+AI
• Startups: Innovation Driver
• Innovations = Invention + Business Model
• Successful Startups = Tech Insights +
Business Insights + Leadership
• Autonomous Organization
• Unique Innovation Engines in Each Region
All night stars & Galaxy pictures are courtesy to Nori Yuasa

The leadership in the new digital age carved by the fourth industrial revolution of io t and ai for aizu

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