DJ Selects: How Government Money is Hurting Japanese Startups

Japanese university and government venture funds play a much larger role in Japan than in the West.

I've always considered this difference to be, on balance, neutral, today's guest makes a convincing case that these funds are actually hurting the startup ecosystem here.

Today we sit down and talk with Hiroaki Suga, co-founder of PeptiDream.  PeptiDream is now a $7 billion biotech company, but it started out as a couple of university faculty members funding operations out of their own pockets.

PeptiDream succeeded by using a very different model than that used by either the current generation of university spin-outs or biotech startups in the West. It's an interesting blueprint that other biotech firms might want to copy, but only if they are really sure that their technology will actually work.

It's a great conversation, and I think you will really enjoy it.


Show Notes

Japanese Univstities' problems with applied research
The challenge in moving from academia to startup operations
How to hire a CEO
What most professors don't know they don't know about business
How to land large sales contracts as a small startup
How to sell new technology to Japanese pharmaceutical companies
Why biotech investment is so hard in Japan
Why you want to step away while you are on top
Japan's next biotech unicorn
Why most Japanese government startup money is misused


Links from the Founder

Dr. Suga's Lab
Everything you ever wanted to know about PeptiDream
Hiroaki's new project MiraBiologics

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Transcript
Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.

I’m Tim Romero and thanks for joining me.

Today, I'd like to share some amazing insights about the startups being spun out of Japan's universities, because what's going on here is very different than what's happening in e US or the EU.  This is a special selects show, and I first spoke with Hiroaki Suga co-founder of PeptiDream a few years ago.

The points he made in that conversation, however, have only  become more important since then,  and I'll be back with an update after we talk.

So here we go!

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We’ve talked a lot before about how there are not many life sciences startups in Japan and what can be done to change that. But there are, of course, some and some incredibly successful ones. PeptiDream is one of those startups. Founded by a small team at a university lab, PeptiDream has grown from nothing to a $6 billion company.

Today, we sit down with the founder of PeptiDream and fellow guitarist, Hiroaki Suga, and he’ll explain how they’re working with pharmaceutical companies all over the world to discover new drugs and new treatments. We also talk about the rather unusual business strategy that allow them to scale up with relatively little financing and to land deals with global drug companies a lot sooner than most biotech startups can.

And I’ve got to say, my conversation with Dr. Suga really changed my mind about the role the Japanese universities and the government should play in fostering startups and innovation here.

It’s a fascinating and unique perspective from inside the system, and I guarantee you, it’s not what you think it is.

But you know, Hiroaki tells that story much better than I can, so let’s get right to the interview.
Interview
Tim: I’m sitting here with Hiroaki Suga, the cofounder of PeptiDream. So, thanks for sitting down with me today.

Hiroaki Suga: Sure. Very welcome.

Tim: PeptiDream is a peptide discovery platform but what is that exactly?

Hiroaki: So, the technology started from over 25 years ago. I had idea. Is that okay? I want to develop RNA catalyst. The so-called ribozymes. I did a post doc with Professor Jack Szostak in Harvard Medical School. I run the techniques for the in vitro selections but I didn’t really get major success, but I was fortunate enough that I get an academic position in State Univer...