FROM ENTREPRENEURS

02 STORY popIn UTEC

Re-inventing “Reading” on the internet,
the challenge of an University of Tokyo spin out venture

popIn, Inc. CEO UTEC Managing Partner

PROLOGUE

popIn provides an article recommendation service “popIn Discover” on the internet web media. The technology adequately shows information on the media page that the reader wanted to either read more of or would be interested in reading. The technology is supported by an original index called “READ” which focuses on the degree of reading completion of a given article. Contrary to the conventional index of page view (PV) number which is the number of pages of articles the user accessed, READ quantifies how the article was read and therefore delivers a more satisfying media experience to the user and maximizes the advertising revenue for the web media manager. popIn was acquired by a major search engine company in May 2015 and became widely publicized. The founder, Mr. Tei, started the company when he was a student at the Graduate School of Information Science and Technology at the University of Tokyo. Mr. Tei and president of UTEC Tomotaka Goji who has been with popIn since its very beginning talk about the evolution of the University of Tokyo spin-out venture which has expanded worldwide.

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SECTION01 : READ, the new way of “reading” on the internet

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SECTION01

READ, the new way of “reading” on the internet

READ, the new index that quantifies how a given article is being read is being adapted by many media companies in Japan, such as YOMIURI ONLINE, Mainichi Shinbun, My Navi News, TechCrunch Japan and Engadget Japan. The adoption of the READ index is estimated to be 90% of major media companies in Japan.

Tei:
For example, articles with high degree of expertise are not written for the general public and therefore with PV numbers, one cannot measure the accurate value of that article. READ makes it possible to visualize and quantify how much time the reader spent reading that article that cannot be captured with the PV number.

READ converts an article’s contents into images and text, and measures how much time the user spent to interact with these to understand the reading completion. Based on this measurement, it can display a report that indicates the attributes of the reader such as “deep reader”, “viewing number” and “glancing reader” to the media operator.

In combining this READ index with their original recommendation engine, popIn is able to recommend information that is within the genre and taste of the reader. In combining this recommendation with “native advertisements”- advertisements which had the same appearance as general articles in the media (i.e. those that do not look like advertisements), popIn is able to realize high profitability and efficiency for the media operators. Native advertising is estimated to be a 100 billion Japanese yen market.
Tei:
READ and our original recommendation widget “popIn Discovery” allows native advertisements to be optimized, bringing about a large merit to the media. They are able to deliver the information in the native advertisements to those that want that specific information the most, in the form that is most adequate. The media are then able to maximize the efficiency and revenue of their advertisements simultaneously.

SECTION02 : Starting with the search for a CEO

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Starting with the search for a CEO

Mr. Tei and UTEC’s Tommy Goji met in 2008, when Mr. Tei was a student at the graduate school of the University of Tokyo, simultaneously around the time when Smartphones were getting started.

Goji:
The first time we met was in April 2008. At the time, I remember you (Mr. Tei) had wanted to start a user interface service then.
Tei:
I was a second year student at the Graduate School of Information Science and Technology at the University of Tokyo. I was doing research on natural language processing and user interface. My first idea was the “Trace search” method. At the time, iPhones had just been released and it was not easy to use. The iPhone has become common place now, but the user uses YouTube and Google search after copy and pasting in words which they extract by tracing their finger on the screen. Back then I was developing a new user interface "popIn" that embeds search results etc. in the displayed article and displays it instead of pop ups that obstructs the surrounding information. This “popIn” became the name of the company.
Goji:
When I first spoke with Mr. Tei the idea was interesting but I vividly remember Mr. Tei stating “My dream is to make a company and then sell it”. At the time, an M&A of a venture that had just been incorporated was a rare event in Japan.


Tommy and Mr. Tei got along and decided to build a business plan for incorporation right there and then. The incorporation location was set in the EIR room at the University of Tokyo Entrepreneur Laboratory. However, there was one issue that they had not imagined.

Goji:
Mr. Tei was an exchange student from China. With a student visa in Japan, we realized that becoming a CEO would not be sufficient to achieve as a status of residence. Mr. Tei wanted to start up a company but could not be its CEO… In the lab where we met at first, we started our search for the CEO.
Tei:
I looked around and saw my Japanese classmate in the room and I thought “hey, you haven’t found a graduate job yet, have you?”
Goji:
When we interviewed the classmate, he turned out to have a job offer starting in 2009. We had asked him on the spot “Hey do you want to be CEO? Just until the start of your employment?”, and the Japanese student became the first CEO of popIn. By the way that CEO: Mr. Hiroshi Terada had completed his role as the “legendary CEO” of popIn and took up his job offer in April of 2009.

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PROBLEM

“popIn” was incorporated in July of 2008 with Mr. Tei, Mr. Terada and UTEC as its founding partners. However, it was far from a perfect start.

SECTION03 : Visualization of “Reading” from the fundamental concept of what it means to recommend.

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Visualization of “Reading” from the fundamental concept of what it means to recommend.

Tei:
We had started by providing “popIn to individual bloggers but we had failed to generate revenue and in the latter half of 2009. We were soon almost out of funding. It was then that the news media giant My Navi had offered us to make an on-website search engine. Now, search engines for new media webpages is something that is taken for granted but back then, even Google had struggled. I was learning natural language processing and the making of search engines as a programmer and so I decided to offer on-website search engines as a service.

This became pivotal to popIn’s business. The development of the on-website search engine led to the development of the recommend engine and popIn had shifted from a BtoC business model to that of a BtoB. In 2013, we were able to generate monthly positive cash flow and our revenues started to grow consistently.

However, the times were shifting to make the for native advertisements an area of increasing interest. The competitive environment for native advertisement recommendation became fierce. From the United States, competitors who provide very high value-added services free of charge had also entered Japan.

Tei:
It was then that I thought to myself what laid at the fundamental core of “recommending” something. The fundamental core of “recommending” was to provide something that satisfies the user. But the satisfaction of the user is subjective. How could we measure user satisfaction? That is when I thought of measuring reading completion which lead to the “READ” index.

FINAL SECTION : Changing how the world “reads”

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FINAL SECTION

FINAL SECTION

Changing how the world “reads”

After 7 years of trial and error, popIn undergoes an M&A with a large search engine corporation. Mr. Tei had achieved his dream, but 7 years in the internet industry is a long time. For example, in 2007 when iPhones were released, smartphones which could connect to the internet were not the norm. Tommy Goji of UTEC comments that he had confidence in popIn from its beginnings to its exit.


Goji:
As a venture capitalist, I don’t just want to invest in good technology, I also want to invest in the passion of the founder. Of course, I value the potential of technology but the realization of the potential is only possible through the passion of the founders who are there with the technology through the thick and thin. When the popIn’s service was not scaling, I felt the struggles of Mr. Tei as they were my own. However, I always believed that Mr. Tei will be able to achieve his goals. I encouraged Mr. Tei when he was struggling due to his inexperience with dealing with growing a business in Japan and I also connected the executives of large search corporations for popIn. I had the pleasure of introducing several senior members of large search engine corporations to Mr. Tei.
Tei:
I feel I was very lucky as a founder. I was able to achieve my dreams thanks to Mr. Goji and UTEC’s support and industrial connections. I was able to realize that if we produce great technology, there will be demand for it. This gave me a lot of self-belief.

How will popIn change the relationship between the media and the user going forwards?


Tei:
It is how one interacts with the information that changes the user experience. By improving further the quality of the recommend engine, the user will be able to access information in less time and have the satisfaction of reaching more valuable information that is of interest to the user. Hence, going forwards, we want to increase our focus on the information interface. I don’t think there is a golden standard format for searching information on the smartphone yet, is there? We want to continue to create services that have a global impact.

Mr. Tei comments that popIn has already been adopted in many of China’s large media corporations and plan to continue to expand in the Asian market. The re-invention of “reading” on the internet is now truly realizing its potential in the global markets.