From California to Japan. NanoFlowX’s journey.
Interview with Rick Fung Founder/CEO of NanoFlowX
NanoFlowX is a leading company in the waterproofing industry with its versatile solution that is capable of sustainable coating and protecting electronics in any industry, in any application. Their innovative IoT technology led the company into the Japanese market and mesmerized big-name manufacturers in Japan. In our interview with CEO Rick Fung, he talked about his experience in Japan. NanoFlowX is one of the startups which have participated in the accelerator program of Plug and Play Japan’s IoT Batch from December 2019 to March 2020.
Rick Fung, CEO at NanoFlowX
— Why did you decide to enter the Japanese market?
As we were looking for electronic companies as our potential partners, Japanese market seemed to be very appealing because of its high-end innovative electronic technologies. We wanted to work with big brands such as Toshiba, Kyocera, Sony, Hitachi, or NEC since our business focuses on waterproofing electronics and anti-corrosion protection. Therefore we thought Japan would be a great place for us to network with corporates.
— What kind of benefits have you gained since starting a business in Japan?
I learned a lot about how Japanese society works. Before joining the program, I have been in Japan only once when I was a child. Now coming to Japan and seeing how it has changed, it is quite interesting to see where the direction of the country is going, where the industry is going in the electronics and tech field. I think that was a learning experience for me. As the culture in Japan and the US are very different, Plug and Play’s program helps you with international development. I worked with JETRO, which is a different platform. There is also the US trade department that I currently work with. If you utilize your time and resources well, you will find lots of help from various organizations.
— Are you considering expanding your business in Japan in the long run?
We are definitely considering that! Currently, we are talking with the fifth-largest electronics and semiconductor distributor in the world that has a huge interest in distributing our product in Japan. I would like to have an office in Japan to work through some technical adjustments to our coding. Having a distribution partner that can communicate in their native tongue helps payment transactions easier, and faster transfer of products makes everything easier. I am glad we were able to do that.
— We are pleased to hear that and we hope everything goes well with your business in the future!id COVID-19 affect your business?
It slowed down some of the communication with our potential overseas partners. The batch we were in started in December 2019 and was supposed to end in March 2020 which we expected to have lots of term-end meetings and final pitches But the COVID-19 affected the interaction with people and potential networkings. We didn’t have many opportunities to physically meet a lot of people. We used to receive positive responses from the people who have actually seen our product in person, which turned out to be a difficult thing when Japan was shut down. COVID-19 also slowed down R&D progress and affected our communications. We are working with about 20 of the largest companies in Japan, but we have had 3 emails or so throughout this year. It has been that slow. They took a long time to get back to us. Now they are back on track and fully engaged, but the first half of this year was really bad. There were no emails, everyone was trying to figure out what was going on, and how to deal with the pandemic. That was the worst part.
— It has been a tough time for every one of us. Did you have any difficulties with your partners, apart from the COVID-19 situation?
I think COVID-19 has played a big part but our dialogues with partners seem to be better now. We time with Plug and Play as we have participated in 3 different programs. The experience continues to be great and amazing.
— Did you collaborate with local distributors or system integrators in Japan? If so, why and how?
We are working with Japan’s largest distributor but it was introduced to us through the US trade department in Japan. We are still working with new import regulations for our product to finalize the distribution agreement.
— Did you have a local sales representative in Japan? If not, are you planning to hire one? Do you think there is good timing to hire a sales representative?
No, we did not. We are directly dealing with clients in Japan but we may eventually pass all clients on to a local distributor if they prefer one. We have not decided to hire a local representative yet.
— What kind of benefits were there for you by starting a business in Japan?
By starting a business in Japan through Plug and Play, we got to meet top corporates in the industry. We had opportunities to meet with decision-makers, to pitch to various corporate representatives, startups, VCs, and to build relationships through deal flows and events. One piece of advice I could give to startups would be the need to be prepared before joining the Plug and Play’s program. There are items that need to be prepared before joining the program, such as pitch decks, presentations, and marketing materials with a certain number of pages, specific contents, templates, etc. Because once the startups sign up and get selected to the program, they have a very short window to have all the necessary material ready to make a successful pitch. NanoFlowX put a lot of effort into the program by preparing specific pitch decks for each corporate deal flow, and we researched the corporate partner’s potential needs for our product before meetings.
— How was the Plug and Play Japan program for you?
It was really good. I think in Japan we had more personal, more one on one meetings with corporates. We got to choose who we wanted to speak first, and if they had an interest, we got to sit with them. That made a big difference because you get more time getting to know their products and needs, and you get more time to showcase yours. We’ve been to three different locations of Plug and Play globally, and each one of them is run by experienced team members.
— I am really glad to hear that you had a positive experience here. We really do care about each and every individual.
Yes, Plug and Play Japan team were quick with responses and very professional. Some people did say that the deal flow was slow. My suggestion for those people is to network early and figure out who your audience is and what type of collaboration with corporate partners would be possible.
— Was the program the way you expected it to be?
The whole experience with Plug and Play was great. Some startups come into the program expecting Plug and Play to introduce them to all of the corporate partners, but that is not really true. You have to know who you want to reach out to and if you’re able to offer a solution to their problem or have very innovative technology of great value to the corporate partner. Otherwise, startups can easily get overlooked and become frustrated with a lack of progress.
— What did you learn by joining the Plug and Play program?
I feel that coming into such a program, you need to be very open-minded and ready to put in the necessary effort- The effort to prepare your presentation, effort to keep it simple and precise as there is a language barrier. Be specific to the point without too much detail. You have to be ready to make a quick determination whether you are going to expand into Japanese market if there’s an interest in your product and a potential revenue/scalability in Japan.
— What would you say about your journey after the program?
We continue to talk to a lot of corporates, and Plug and Play continue to support us even after the program has ended. We can still reach out to Plug and Play and receive introductions. I don’t know any other accelerator programs that can offer the number of corporate partners, facilities, and global outreach as much as Plug and Play does. It’s not only a great way to learn and network, but also an opportunity to actually meet corporate representatives to show your pitch, product, or service and get their feedback. Their advice or opinion would greatly help you to improve and/or innovate your idea in the future. I highly recommend Plug and Play to all startups.
— What would you recommend to younger startups that aim to start their businesses in Japan?
I think you have to be prepared. Some startups come to Japan expecting a scenario that once they do pitches, they will get all the introductions to potential partners or investors. That kind of mindset needs to be wiped out. Startups need to understand that in order to make use of this opportunity, they need to do their homework. They should make some effort in research in advance to know what a targeted corporate partner would need and how to approach those needs correctly. Some startups wonder why they do not get any further discussions with corporate partners even though they have come all the way to Japan. Speak to Plug and Play alumni, and gather invaluable information about corporate partners. Plug and Play staff can easily help with introductions, advice, or recommendations. The final effort startups have to make is to write a compelling presentation, perform well at meetings or events, and network as much as possible. Also, take some notes to understand Japanese culture, business practices, and etiquette.
— Thank you very much for sharing your frank and straightforward insights. It would be very helpful to all the startups considering to join our future programs!!
NanoFlowX
Founded: 2015
