[00:00:00 – 00:00:08] Nitin Bajaj

Welcome to the industry show. I’m your host Nitin Bajaj and joining me today is Naoto Mizuguchi. Naoto, welcome on the show.

[00:00:09 – 00:00:11] Naoto Mizuguchi

Hello. So thank you very much for having me here today.

[00:00:12 – 00:00:16] Nitin Bajaj

It’s a pleasure. So let’s start with who is Naoto?

[00:00:17 – 00:01:14] Naoto Mizuguchi

Okay, so this is Naoto Mizuguchi. I am CFO of NEC X which is incubation army of NEC Corporation who is a Japanese tech company with a long history and I have been working for NEC for a long time without changing any company. But my background is quite international because I have three times expatriation outside of Japan working two times in Brazil totally for nine years and now in United States right now here for three and a half and I am engaging with the startup investments right now and in the past I was involved in some M and the activities and some turnaround so that I am quite generous in a corporate world with some international experience.

[00:01:15 – 00:01:41] Nitin Bajaj

Amazing. And with that exposure, with that experience I’m sure comes a lot of interesting things that we’ll learn here in a few minutes. So you touched upon this but tell us a little more about NEC X. What’s the mission, how does it fit into what NEC does and then more so your role and your team and what are your core objectives sitting out here in the U.S. yep, happy to.

[00:01:41 – 00:03:49] Naoto Mizuguchi

Share NEC as I mentioned NEC X is innovation armor. NEC Corporation is correct quite traditional big enterprise in Japan which means as everybody can imagine it’s so conservative, it’s so it’s there is heavy process to do something new so that NEC executive decided to create the NEC X as a hundred percent subsidiary but in Silicon Valley little bit independent from the headquarter to have some authority to do such new things. Origin some technologies coming from the NEC laboratories spread it out all over the world including the Japan, United States, Germany, India, Singapore. So that we are now trying to incubate some startups together with some technologies coming from NEC expertise and in NEC X in a very practical way we have two programs. One is incubation program for the very beginning stage of the startup. We having the two cohorts per year gathering the good promising startups to picking up some of them to support them, to revisit the customer discovery to make sure about their business plans  and business models and helping their development of the product itself and finally the launching of business. And the second problem is pretty much simple which is a seed stage investment together with some synergies like some technologies coming from NEC will be implemented to that startup invested to shorten Their product roadmap or NEC would be their business partner for them like a design partner as a client or NEC would be the sales channel because we have some businesses all over the world, of course market is very obviously big, but we could be the sales channel for them.

[00:03:50 – 00:04:07] Nitin Bajaj

Very nice. A little bit of a clarification question. On the first cohort you mentioned working with very early stage startups, you mentioned innovation. Is there a specific category, domain or industry within that you prefer more than others?

[00:04:08 – 00:05:11] Naoto Mizuguchi

Yeah, that’s very good questions and we always have these questions from the potential candidates. Basically we industry agnostic but our favorite would be four categories like digital healthcare which is obviously big market here in United States and Japan and others. And the second one would be public safety which is little bit niche in a venture backed business world. But NEC has relevant size of the business all over the world in that area and it is quite hard for us to have the good partner for that to expand our business. And the third one would be the climate tech which is a very broad idea but especially we pretty much focusing on Agritech which is also the traditional big market, not digitalized or not automated. That means we see that there’s so huge potential market there.

[00:05:12 – 00:05:12] Nitin Bajaj

True.

[00:05:12 – 00:05:29] Naoto Mizuguchi

And the fourth one which is worth one is marketing tech because it would be one of the hottest industry now and changing by the gen AI. So that is why we cannot escape from that world as well.

[00:05:31 – 00:06:11] Nitin Bajaj

Very interesting and I love how each of these are extremely lucrative and huge markets and a tremendous amount of in some cases there is so much legacy that it’s ripe for innovation and then in some, as you said there’s so much undercurrent and a paradigm shift happening, new things will come up. Yeah, that’s super exciting. Give us a sense of the size and scale of your operations. How many startups in each of the cohorts do you typically support? And then what is some of the maybe even success stories if you have any that you’d like to share.

[00:06:12 – 00:07:34] Naoto Mizuguchi

Yeah, talking about the seed stage funding, this is very ad hoc basis because each startup has each fundraising timing we are engaging one by one. But for the first program incubation program, we have two cohorts per year as I mentioned and so far a very recent cohort we receive around 400 applications and out of that we selecting up the good ones. And that incubation program consists of the three phases. First phase is free of charge program, we just given them some some workshop to help them refining their ideas pretty much more. And phase we support pretty much More and we assigned each mentors to help them like a co founder. And a third phase we put more resources to help them, even the product development. So that for the first phase we pick up normally 30, around 30 startups out of 400. And the second phase we narrow down to 8 to 10 startup out of 30. And phase three we narrow down even more to the half of that, like a three to four startup.

[00:07:36 – 00:07:36] Nitin Bajaj

I love that.

[00:07:37 – 00:07:38] Naoto Mizuguchi

It’s quite competitive.

[00:07:38 – 00:08:09] Nitin Bajaj

Yes. That’s amazing. Now as you have gone around different parts of the world, a lot of different culture and even within nec you are the cool and sexy part and you get to have a lot more fun. As you’ve transitioned through these different identities, different cultures and pace, you’ve obviously faced a lot of challenges. I would love for you to share the one big challenge that you’re facing.

[00:08:11 – 00:08:58] Naoto Mizuguchi

Yeah. Firstly I wanted to share the one factor that there’s no such sexy things. Of course it’s big fun to communicate with so diverse people. But for that actually the biggest challenge is communication to like a language or some other stuff. Some of the people say that, oh, we can just only need to speak English to know each other, but it’s not true. There should be some discount to speak in the second language or third language. And also as you pretty much sure that Japanese people is not so good at English. And when I was in Brazil, Brazilian people is also the same.

[00:08:58 – 00:08:59] Nitin Bajaj

Yeah.

[00:08:59 – 00:09:06] Naoto Mizuguchi

As the Japanese people. So that it is so hard. But I try to learn more about Brazilian Portuguese.

[00:09:06 – 00:09:07] Nitin Bajaj

Yes.

[00:09:07 – 00:09:24] Naoto Mizuguchi

Not the Portuguese or Portugal. Maybe takes one and a half, one year, and a half, two years to get communicated with the Brazilian staff’s colleagues. This is a very huge challenge for me. But during that it’s so sleepy, right?

[00:09:24 – 00:09:25] Nitin Bajaj

Yes.

[00:09:25 – 00:09:50] Naoto Mizuguchi

During the meeting that everybody’s speaking about speaking Portuguese, which I cannot understand. But a big fun is after 5 years there I could speak Portuguese and I work almost 100% Portuguese in emails and meetings. And finally I could make a presentation in front of the old colleagues of NSC Brazil. It is huge progress that I.

[00:09:53 – 00:10:33] Nitin Bajaj

Deep respect to you. Wow, that’s just phenomenal. Amazing. Thank you, thank you. And it’s not just phenomenal because you picked up a language. Not from a tactical perspective, it obviously helps, but it shows how much you respect culture and how much you respect where you are. And that is what people get attracted to. And that is how the team comes along and looks at you as a leader and looks at the effort you’re putting in. Because you could have used a translator, you could have Used all these tools. But yeah, chose to invest that time and put in that effort because it matters a lot to the people you work with.

[00:10:34 – 00:11:39] Naoto Mizuguchi

Yeah, yeah, yeah, that’s a great point. This is very pretty much baseline that we need to respect each other. So when I was in Brazil, I did respect the Brazilian cultures and what Brazilian colleagues is doing. And also here in the United States I really respect the American culture and what the American people do and also how startup works. And also the another important factor is we cannot forget about our identity itself. I cannot be the American people born in the United States, even I could speak English and my measurement of the communication is make the people laugh. In Brazil, when I made the presentations during the presentation, I tried to make the colleagues laughing and smiling with my speech and when that was successful, I’m so satisfied and I could recognize that I can communicate with them.

[00:11:39 – 00:11:52] Nitin Bajaj

Yes. I love that on two levels. One, obviously the effort, the respect that goes into that. But also when you make people smile and laugh, they lower their barriers and yes, you connect. Yeah.

[00:11:52 – 00:12:02] Naoto Mizuguchi

And that is evidence that I got what they thinking and what they think find. Right.

[00:12:02 – 00:12:10] Nitin Bajaj

Yes, yes, I agree. Now on the flip side of challenges come opportunities. What’s the one you’re most excited about?

[00:12:11 – 00:12:52] Naoto Mizuguchi

Obviously recent big change on a market is AI. Right. So everybody cannot forget about AI. So just today we received the notice that OpenAI released ChatGPT 5. Our colleagues is already praying that and it is so exciting and I’m so excited about the how what that kind of gen AI is changing the world and I’m lucky and happy to be here the center of that world changing including generative AI and robotics and how that kind of technology can help the human world. That is some big interest over everybody.

[00:12:52 – 00:13:17] Nitin Bajaj

Yeah. And you’re at the center of this. You’re at the heart of all of this as it’s happening. You get to see and this is what I meant by the cool and sexy I you get to see the latest and greatest as it’s coming at you with all the companies that want to be a part of NEC X. But then also you being in the Silicon Valley, you get to see everything that’s happening around you. Fascinating place to be.

[00:13:18 – 00:13:25] Naoto Mizuguchi

Yeah, yeah, agree. Very fascinating. And I would love to be a witness of that changing of the world.

[00:13:27 – 00:13:57] Nitin Bajaj

Now I would love to pause and reflect and take us back in time. I would love for you to share two moments in you one where things did not work out as you had expected. There was disappointment, failure, lessons and another instance where things worked out and worked out so well that they exceeded your expectations and there was success beyond your imagination.

[00:13:57 – 00:14:58] Naoto Mizuguchi

Okay, so maybe the first one is during my days in Brazil I was involved in MND and I was part of the negotiation team to negotiate with the counterpart and I at that time I was in Japan so that I didn’t expect that I would be back to Brazil so that I negotiated so hard on that counterpart. But after close deal closing my boss said to me that I needed to go to Brazil again to deal with the PMI operations get into that company. So that’s so hard. Right. So I already so fight so hard again against that company that president and CEO of that company and I needed to go there to work together with him. So that’s so hard experience that I had.

[00:14:59 – 00:15:04] Nitin Bajaj

I would love to listen to the rest of that story and how that worked out. I’m sure that will be another show.

[00:15:06 – 00:15:51] Naoto Mizuguchi

It could be that’s so interesting ones and but the opposite side second one is so now I’m now working together with so many startups. It is quite fun that we. We can hardly identify which is the best one their potential itself. It’s. I’m more than happy to see that they’re exceeding our expectations. One portfolio company that we invested as a seed fund loan firstly we just discuss about the technology synergies but during that Our business team NEC’s business team found them as a good candidate to work together with.

[00:15:51 – 00:15:52] Nitin Bajaj

Nice.

[00:15:52 – 00:16:19] Naoto Mizuguchi

We didn’t promote strongly but the business team found them and now before we engage with some technology synergy or partnership they already got engaged and now their deeper discussion about partnership so that it’s amazing experience that and I really thought that wow. That is a value of NEC X for NEC group.

[00:16:20 – 00:16:21] Nitin Bajaj

That’s super cool.

[00:16:21 – 00:16:22] Naoto Mizuguchi

Yeah.

[00:16:22 – 00:16:36] Nitin Bajaj

Thank you for sharing those. Now I want to switch gears a little bit. We talked about work a lot. I want to get a sense for what do you do for fun when you’re not working when you’re not flying across borders and hanging out with cool.

[00:16:36 – 00:17:15] Naoto Mizuguchi

Startups other than work. So here in the west coast I enjoyed some of the golfing and pickleball why I’m not so good at but it is good for my health as well to have some activities outside and during my days here I visited some of the national park together with my son. It’s a little bit hard for my wife and that is why we called boys adventure. I have just one kid and I brought my son to some of the national park to go around. It is so nice as well.

[00:17:15 – 00:17:25] Nitin Bajaj

Yeah that’s amazing. Do you have a podcast or a book that is a favorite and you would like to recommend and share with the audience?

[00:17:26 – 00:18:31] Naoto Mizuguchi

I think my favorite is not interesting. It is very standard still I need to learn about more English to be better and I I hear so many news related podcasts CNN and also the BBC from UK and also some Japanese podcasts from the Japanese ones and also owing podcast because I’m now working in a startup ecosystem so that it is cool and just it is easy to catch up what’s going on. And of course we cannot what about the Y Combinator which is a biggest accelerator they hear Y Combinator podcast as well. I hear about. So it is some of the big accelerators and VCs has some podcasts and it is very easy. Easier than they’re reading their blogs during that drive, during driving or during the biking. Now I’m biking for commute so that just hear the podcast doing that.

[00:18:32 – 00:18:43] Nitin Bajaj

Thank you for sharing that. Now on to my favorite part of the show. We call this the one line life lessons. I would love for you to share a few of your life lessons with us.

[00:18:45 – 00:19:51] Naoto Mizuguchi

Yeah, so I this one line is a little bit difficult but I believe that human can communicate with human so that we can understand each other. This is my belief that of course there’s some hard on a language or some cultures but human is human in any country, any places, with any people. I believe that we can communicate from the heart, not just a superficial text we can understand. And in the Japanese world, Nanuwabushi is Japanese word that this is more on people is dealing with some transaction with emotion other than business. And some of the people say that oh in United States American culture is not there. But I believe that here in the United States this is almost similar things happening. Human is an emotional animal. So that I believe that when we can understand each other we could have another discussion.

[00:19:51 – 00:19:56] Nitin Bajaj

Yes. Are there other life lessons you would want to share with us?

[00:19:59 – 00:21:08] Naoto Mizuguchi

So I think that is the one biggest one that I talked in and another one I could share is that some stories from the very very old Chinese story but nobody knows about what’s next. So that I’m so enjoying my journey here without changing any company. Maybe from the. From some people. Oh my gosh, you didn’t change any company, just a single company. It’s so boring. But you know, with that I could have the lucky opportunities to work in Brazil two times. And here in the United States this is another fun things and I really enjoy that. So that there’s so many options and nobody knows about that. So just maybe everybody can have win when they’re enjoying that.

[00:21:09 – 00:21:26] Nitin Bajaj

True. I agree. Now to thank you so much for sharing your journey and your story and your life lessons. Congratulations on all of your ongoing successes and I know a lot more is yet to come and truly appreciate you being here.

[00:21:26 – 00:21:34] Naoto Mizuguchi

Yeah, thank you very much for having me and appreciated that opportunity here. I enjoyed that conversation with you.