What’s next for Physical AI in Japan?

I have a short in-between edition for you today. Last month at Venture Cafe's big global gathering in Tokyo, I had a chance to sit down on stage with two old friends of the podcast, and we talked about where physical AI is heading in Japan. This conversation is with Chiamin Lai, general partner of First Light Capital, and Kaname Hayashi, founder and CEO of GrooveX, the makers of the absolutely adorable Lovet robot. Chiamin is one of the most savvy physical AI investors in Japan, and Kaname has been pushing the boundaries of human-robot interaction for years. It's a fascinating discussion, and there's some wonderful insights about Japan's unique strengths and challenges near the end. But don't skip to the end. The whole conversation is great, and I think you'll enjoy it. Leave a comment Transcript Tim: Okay, thank you so much, and thanks for coming. We're going to be talking about Japan and physical AI today. And it was not that long ago that Japan was the undisputed leader in robotics innovation. And while some people claim it still is, that claim is highly disputed today. So, we're going to talk about where we are and where we're going. And we're going to start with some brief, brief introductions, so you'll know who we are and why you should be listening to us for the next 40 minutes or so. So, my name is Tim Romero. I've been in Japan for about a little over 30 years now. I've started four startups here of my own. I've done a lot of angel investing. I helped TEPCO and JIRA spin up their CVC units. I've taught entrepreneurship and corporate innovation at NYU's Tokyo campus. I ran Google for Startups here for about four years. And I run a podcast called Disrupting Japan, which is just a labor of love. I've been doing it for 12 years. It's interviews with Japanese founders and VCs about innovation and what it's like to be an innovator in a culture that prizes conformity. So please give it a listen. Chiamin: Hi, everybody. My name is Chiamin Lai. I'm a general partner of a VC fund here at First Light Capital. A little bit of introduction about myself. So, my parents are Taiwanese, but I grew up here in Japan and studied here and also work here in Japan. But then I actually, after working in Japan for a few years, I was in Europe and then had the fortune to join venture capital. So, it's about 15 years ago, which I think it's hard for you guys to believe at that time compared to today. And then decide to do startups. I was a startup operator in China and Japan for seven years and came back to the industry five years ago. And right now I'm actually the board member of Japan Venture Capital Association, as well as running up my own fund here in Japan. Quick introduction about the fund. We are running two funds right now in Japan, about 120 million US dollars. And we're focusing on early stage and investment thesis is mainly focusing on Japan's demographic challenge, innovation for startup. And what we believe is, or what I believe is physical AI could be a very, very good potential for Japan, especially under the label shortage. So, I'm very excited to have opportunity to talk to you guys today. Thank you. Kaname: Yeah. My name is Kaname Hayashi. I’m the founder and CEO of GrooveX. GrooveX is a company that develops LOVOT. LOVOT is L-O-V-O-T, which you may see on our website. It’s kind of a small robot. We call it a family-type robot. Currently, around 18,000 units are working. Even though we shipped just a little bit more than 21,000 units, 18,000 are still working. This shows very good user retention, meaning the churn rate of our robot is just 0.4% per month. So, we believe our robot has achieved social implementation. And our aim is to enhance the resilience of people. It’s completely different from other robots that improve productivity. And the reason why I’m chasing this area is, I worked on Pepper before, which was a humanoid robot 10 years ago. And I learned a lot about humanoid robots and conversations between computers and people. So, I thought probably this area is interesting, but we can do something else in the non-verbal area. That was the reason why I founded the company 10 years ago. Before I worked on Pepper, I was working in the automotive industry. So, I worked in aerodynamics or product planning. I worked for Formula One in Germany or product planning for the European market or something like that. That’s all, thank you.  Tim: Excellent. And I want to emphasize, so they brought one of their Lovet robots with them today. And after the session, it's over there in the corner and it is absolutely adorable. I encourage you to go play with this thing. It's just, you'll see what I mean. It's just something different about that. But to kick us off, to make sure we're all on the same page, physical AI is a term that's thrown around a lot these days. It's a little bit of a trendy term, but to make sure we're all talking about the same thing. When you're talking about