#Asia The man waging war on Japan’s paperwork problem


Daisuke Sasaki, founder of Freee

Daisuke Sasaki, founder of Freee, onstage at Tech in Asia Tokyo 2016. Photo credit: Michael Holmes.

“I was working as a CFO at a startup. My team was looking after accounting. And there was a person doing accounting, inputing information all day long on his computer. I Just wanted to eliminate that task,” says Daisuke Sasaki, speaking of the origins of his startup.

So he did some research and tried out some accounting applications, but none of them really took away all the drudgery and paperwork.

At the time he wasn’t thinking about starting his own venture.

But that changed when he got a job at Google doing marketing for small businesses.

“When I joined Google I faced the same problem again.”

And that’s when he got the feeling that the kind of online services that Google builds would be super useful for businesses, bringing automation and online syncing to their piles of paperwork.

Only about 10 percent of small businesses in the country use online banking.

So he started Freee. “Even if you don’t have any accounting knowledge, it’s easy to use,” said Daisuke yesterday, speaking onstage at Tech in Asia Tokyo 2016.

Now the online service has 600,000 businesses across Japan using it to automate and save their accounting and HR, no paper needed. It also allows users to set up a new business online in just five minutes.

“We are supporting them all the way from starting the company to managing the company,” he says.

Paper mountain

Japan certainly has a paperwork problem – and it’s an issue that Daisuke is waging war against. The desire to keep everything on paper has helped keep the fax alive long after it has died out in most countries.

“Japan has this Galápagos effect of holding on to some things they’re comfortable with,” said Jonathan Coopersmith, a technology historian who has written extensively about the rise and fall of the fax machine, in 2013 to the New York Times.

Tokyo street at night

Tokyo. Photo credit: Moyan Brenn.

And that culture is causing small and medium-sized businesses across Japan to stick with paper for wages, supplier payments, wire transfers – all kinds of things.

Only about 10 percent of small businesses in the country use online banking, Daisuke points out.

“It’s a very big opportunity loss for society, as there’s this person dedicated to going to the banks and do the wire transfer. It’s a waste of human resources. Right now, labor is insufficient across Japan. So I want to make a change,” says the entrepreneur.

And so, despite Japan being so hooked on physical copies of things, plus accounting being renowned as a conservative practice, Daisuke sees firms coming round to using Freee and other web services because they can’t argue with the logic that they’re more efficient than the old practices.

Startup Japan

“The goal we have is to achieve a society where [small businesses] are cooler than large corporations. Because in Japan the general image of them is that they’re struggling so much, they’re working so hard, but I want to create a society where people recognize [small businesses] are a cool place to work,” adds Daisuke.

The slow but inevitable growth of Japan’s tech startup industry could help accelerate this change in image as well as mindset.

See: How entrepreneurship is now ‘becoming cool in Japan’

That’s something the Freee founder wants to see. “So […] how can we increase the number of entrepreneurs?” he opined during his 30-minute onstage interview. “Because right now we have a very low percentage of entrepreneurs.”

But Daisuke isn’t stopping there. He’s also looking to how his service could be used to bring more government agencies online, especially ones to which people need to submit forms.

“You have to ride on your bike – you have to go to all these local government and municipal governments to submit paper documents,” he says, echoing what he saw at the job before he joined Google.

Daisuke Sasaki, founder of Freee

Daisuke being interviewed by Masaru Ikeda, co-founder of The Bridge. Photo credit: Michael Holmes.

Instead of all that, he wants it to be “one click to submit” these documents.

“So I really hope to promote e-government,” he says. That’s why he’s working with others in Japan’s tech industry to encourage authorities to adopt more online services.

The banks benefit too, he says enthusiastically.

It’s good for banks because, where users choose, Freee can monitor a company’s finances and give data to banks to help build a credit history. This saves banks manpower during the loan application process – and also during the entire life of the loan since banks would normally assign one staffer to each corporate loan worth more than US$10 million. But now this gets partially automated thanks to the startup.

Plus, Freee recently added in the ability to automate money transfers when outgoing payments to suppliers are due, which reduces the queues in bank branches.

No doubt that could also benefit his startup, contributing towards Daisuke’s mission of making Freee a kind of “infrastructure” that’s essential to every business in the nation.

AI ambitions

His startup, which began four years ago, now has 250 employees. It’s one of Japan’s hottest and best-funded startups, raising a total of about US$55 million from investors to fuel its growth. That has also helped keep his startup off the path usually taken by many new Japanese companies – rushing toward the safe embrace of an IPO.

That would really blur the line between automation and sentience.

“I haven’t planned anything specific yet,” says Daisuke on the topic of going public. “Rather, it’s not our target to do an IPO. We should create a business with which we’re always ready to IPO. So if we go public with an unstable state of business, that’s the risky part. So i want to avoid that.”

Daisuke says Freee is already using AI – perhaps the hottest new trend in tech right now – to make basic smart accounting decisions on behalf of users. The startup has its own AI lab to push that even further, which could result in future features – “maybe we can provide some advice for accounting” – that blur the line between automation and sentience.

So could Daisuke’s startup put every accountant out of their jobs?

“When it comes to people who need to enter data, then I think the job or tasks will disappear,” he says.

Later that could extend to the people whose job it is to analyze or manage the finances as AI churns through the data and produces robo-advice on how to deal with clients, suppliers, and cashflow.

“AI is improving, so at the end of the day what humans need to do is something with passion,” he chuckles, imagining a day when more mundane tasks are gone.

So my writing job is safe. Oh wait, no.

Converted from Japanese yen. Rate: US$1 = JPY 101.7.

This is part of the coverage of Tech in Asia Tokyo 2016, our conference that took place on September 6 and 7.

See: The 10 fintech companies in Japan you need to know

This post The man waging war on Japan’s paperwork problem appeared first on Tech in Asia.

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