Autify: Breaking the “Glass Wall” & Going Global
There is an inconvenient truth that is rarely mentioned in the booming Japanese startup scene: the lack of globalization.
With the world’s third largest economy as their home market, Japanese startups often confine their business models to just Japan and pursue growth domestically. Overseas expansion and globalization tend to take a backseat, waiting to be addressed after the startup has captured the domestic market or has gone public and established itself.
On the other hand, Japan is seeing an influx of Silicon Valley’s tech giants. We are inundated with foreign tech services, and as Japan opens up to cloud adoption, the SaaS and software industries could end up being dominated by foreign companies.
The local entry barriers that the Japanese players have been relying on, such as the "uniqueness of Japan" (e.g. cultural and language barriers), are losing their effectiveness in the face of foreign products that are made to be competitive on a global scale. It is becoming impossible for Japanese startups to avoid competing with global leaders in their domestic market.
Our hypothesis for Autify's potential to win in the global market is based on their "Japan-born advantage".
Turning "weaknesses" into "strengths"
If the domestic market opportunity is starting to worsen, companies have to make up their mind and compete in the global market. So, the question then becomes: Can Japanese startups do that?
Autify, a Japanese startup with a no-code software testing automation solution that we recently invested in, has eyed the global market from day one. In fact, our hypothesis for Autify's potential to win in the global market is based on their "Japan-born advantage".
First, many of the software testing automation solutions in the U.S. are so-called "Low Code" tools. While they offer a high degree of freedom and flexibility, these tools still require engineering and coding skills to master. In contrast, Japan is experiencing a serious shortage of engineers, and there is a lack of engineering resources that can be dedicated to the automation of software testing. This is a market in which Autify really comes through for their customers - their "No Code" model allows anyone to automate testing thus allowing companies to deploy their engineering resources much more efficiently. Focusing on Japan first has allowed Autify to validate their solution and achieve product market fit from very early on.
Further, as the pandemic accelerates digital transformation (DX) across industries and geographies, companies worldwide are pushed to rethink and redefine their value proposition as a tech-enabled company. In the future, every company will be developing software, and the need for test automation will spread to every company and industry in the world - think banks, manufacturers, retailers, healthcare providers, etc. What these “non-tech” companies will most likely be looking for is a "no code" solution that anyone can use, i.e., exactly the product that Autify is offering.
In other words, by first focusing on Japan and validating their no code testing automation solution, Autify is in a better position to help companies around the world, not just the tech-savvy ones, but any company in any industry, address their product testing needs and hence capture an even bigger mass market across the globe.
If you ask me what makes Autify truly unique, I would say it’s their determination to go global.
Breaking the “Glass Wall”
Precisely because they were born in Japan, Autify has an advantage in the global market. This may seem paradoxical especially given the history of Japanese startups staying domestic, but with the new generation of Japanese entrepreneurs, it's just another example of geographic boundaries disappearing as technology continues to “flatten” the world.
If you ask me what makes Autify truly unique, I would say it’s their determination to go global. The decision to deliver their services around the world was not a “directive” from any advisor or investor, nor is it the result of some analytical exercise. You may say it’s simply in their team’s DNA to go global.
Because the scope of the problem they are trying to solve is innately global, Autify sees global expansion not as a single steep cliff to climb out of the Japan border, but as a continuous path around the globe to be followed. Put differently, to them globalization is a means to an end, not an end in itself. This philosophical belief and DNA to go global is what makes the team special.
In Japan, we often talk about this invisible “glass wall” in front of Japanese startups called “the limitation of the domestic market”. I hope that Autify will become a pioneer in globalization by breaking through this glass wall, and writing a new page in the history of Japanese startups.