How I Got My Startup Funded By Jason Calacanis

We had a year to work remotely. I had a year to begin a startup fully remotely. Here’s a story about how this Japanese guy came to Silicon Valley five years before COVID-19, began his startup, and got fundraising from Jason Calacanis.

Moved To San Francisco

In April 2015, I decided to quit my job, pack my bags, and move to San Francisco for three months. It wasn’t something I had planned in advance, nor did I have any strong determination. However, I came here as if I were running away from the pressure of being unemployed and not being able to stay in Japan, as well as the faint hope that I would be able to see ‘Silicon Valley.’

Five years before COVID-19, San Francisco was where meetups and pitch events were held every day. How I missed the free pizza and beer! Then, I saw the entrepreneurs and technologies I would meet there, and I began to think that I would like to do the same here. Three months was too short a time for me to make up my mind.

When I returned to Japan, I got an F1 visa even though I had no money and immediately started preparing to leave again. However, the place was San Francisco. It is the most expensive city in the world. It was totally not a realistic option to live there without any income.

At the time, I was writing a blog instead of taking notes. Although I was not a skilled writer, I ended up contributing to several Japanese media because the content of my blog was primary information about San Francisco that was unavailable in Japan.

In addition to my work as a writer, I decided to do a crazy project called “Silicon Valley’s FREERIDER”, where I visited local startups and interviewed them on YouTube to expand my network and find my startup idea that would work in the United States.

Over the course of about six months, I interviewed over 100 startup founders, some of whom are still growing, such as Brian Wong(Kiip), Alyssa Ravasio(HipCamp), and Dawoon Kang(Coffee Meets Bagel). There were also founders who closed their companies but still maintained relationships with each other.

So, I returned to Japan with just my mindset intact. Of course, I had run out of savings, so I decided to try to raise funds in Japan. I couldn’t create a project, the only one in the team who couldn’t speak English. Who wants to invest in me?

As I was 24 years old, I did not have anything, and I experienced my first sense of frustration. If I couldn’t get fundraising, then the only thing I had to do was to earn money. I started working on my writing business on the side, with the sole intention of somehow getting my future off the ground and returning to San Francisco.

50 Failed Products

The first thing I started doing was freelancing. To make money any way I could, I called all the companies I knew and started getting small jobs to make a living. Consulting is not something to do for a general startup. But unfortunately, this was the only way to successfully startup my life.

From 2016 until I incorporated Remotehour, I was a freelancer. I was blessed with clients and never had any trouble with commissioned work. However, there wasn’t a single day when I only worked on commission and kept working for a product. I soon taught myself how to program. From that time on, there was not a day that I did not write a single line of code.

“Quantity Beats Quality” was my motto. I’d continued to launch products and had tried more than 50 by the end of 2019. I used all the money I earned from freelancing, except for living expenses, to pay for my trip to San Francisco. If I had to name a couple of memorable products, they would be “Seatify” and “Highprofile Alert.”

Seatify is an app that allows customers to book seats in cafes or coworking spaces from other customers. I implemented a mobile app in React Native and flew to San Francisco for the launch.

However, I couldn’t find anyone who really needed the app, including myself, and gave up. It was created by trends such as the sharing economy and coworking. Do you remember how popular copies of Airbnb for X or Uber for X were at that time?

Highprofile Alert was a tool that attempted to solve the disadvantages of living outside of Silicon Valley. It was hard to meet Silicon Valley’s VCs or founders when I was in Tokyo, but occasionally they would come to Japan as tourists. So far, I had sent replies to them tweeting that they were coming to Tokyo and meeting them in person. To automate this process, I developed a system that sends notifications when people I follow on Twitter come to Tokyo. Sounds like a stalking app? Or a secret networking tool? I also tried machine learning to improve the accuracy of the notifications, but the use case was too niche to see any prospect of scaling.

I’ve repeatedly built and scrapped products in this way, but most of them have become Parked Domains. I have been following a set of theories and building what I want. And if you ask me if I want or don’t want the products I have closed so far, they were things I wanted.

For example, Seatify was similar to Codi. They rent out empty space in the living room of your house as a coworking space, and I was a heavy user before COVID-19. They’ve been growing their product steadily and raised 7M in funding late last year.

Calendly, Spotify, Buffer, WeWork… I am surrounded by many of the things I wanted, and I am a paid user of them. Of course, I can’t live without them, but if I start these similar products as a startup, will I be able to beat them? No, I will never be able to. I have learned that “Make What You Want” is not enough to find a startup idea.

You Should Be The Best Founder

Building what I want is a prerequisite, but something more is needed. I decided to take another look at startups themselves. Around the time I decided to do so, I had a conversation with Hiro, CEO at RamenHero, at a Blue Bottle Coffee.

He asked me, “Why do you want to run a startup?” and “Why Silicon Valley?” When he asked me these questions, which should have been obvious, I could only answer, “Because I want to.”

Sure, I wanted to start a startup, and I’ve been doing this for a long time. However, “I want to do it” is something that only I want to do. It has nothing to do with other people. To engage the team, customers, and the rest of the world, I’d need to answer Hiro’s questions reasonably.

I couldn’t give him an answer right away. Then, once a week, I holed in a cafe for a few hours and incessantly asked myself what I had come here for and what I could accomplish to die for. In this practice, Hiro asked me questions and mentored me.

When I was able to verbalize these questions, I felt like I got a hunch on how to build a product. It is not just about building a product that you want but also building a future that you can believe in with certainty. And to build this future, you have to attempt it with only you who can take on the world. You should be the best founder for the product that you’re working on.

The fact that you, not anyone else, are the closest and least likely to replicate the idea will be essential to your success as a startup.

Schlep Blindness

Finding a product that only I can build in the world is much easier than vaguely guessing what I want. I just kept looking back at my history and asking myself what I love and what I hate.

I was a freelancer, and I hated unproductive things. How many people can fit into this and build a business, working remotely for most of their career, with multiple clients, and with a 16-hour time zone difference between Japan and California?

As I spent my days being aware of who I am, an issue occurred to me. Freelancing requires constant interaction with the development partners and the clients and chatting, and scheduled meetings would not keep up with the progress. This is even more so when you consider the time zone difference.

The solution to this problem was an office. We needed a place where we could walk up to a person’s desk and ask, “Hey, what’s up?” This is not possible with remote work.

A new idea, it’s an internet office!

First, to solve this problem, I claimed an account on Whereby. I shared with the development partners and clients that during business hours, let them come into the room with “Hey, Shun is here!”.

This was well-received, and everyone walked into the room to talk to me. However, Whereby is only for video conferencing, and there were a few complaints about using it as an internet office. For example, when I was talking to a client, another client would come in, and there was no way to tell when I was away. So I contacted Whereby and asked them to offer me an API, but they flatly refused this request, so I decided to build one myself.

It was January 12, 2020, when I started writing the first line. I was scheduled to attend Product Hunt’s 5th Anniversary Party in L.A. in about two weeks, so I spent every waking moment writing, trying to finish the first version of Remotehour and pitch it to Ryan Hoover. It was the first time I felt like programming was so much fun, and to those around me, I must have looked like a dog chasing a tennis ball.

By the time I left for L.A., I had implemented the ability for registered users to create a room, to be online while they open the URL for any questions, so they could talk to me with a single click while I was online (calling), and to customize their availability status at will when they are away, which was reflected in the production.

At the meetup, I made a pitch to Ryan. During my stay in L.A, I also met up with Stephen, CEO at Flipmass, who introduced me to his girlfriend and other entrepreneurs. We talked about the future of each startup over Russian tea (99% alcohol) until morning. It got me closer and closer to the heart of Silicon Valley.

When I moved back to San Francisco, I started doing things that did not scale. Specifically, I joined remote communities like Nomad List and Remotive and sent out DMs to people to try out the service. Most of them cut me off with a friendly “I’ll try it next time,” but I did meet some who continued to use Remotehour, though Nomad List kicked my account off pretty quickly.

As I confronted the users in this way, I began to understand again what the problem was. In the past, to connect with people remotely, we had to schedule it. But don’t you think it’s ridiculous that we have to schedule just 10 minutes to talk? With Remotehour, you can talk to people online as if we were talking together in real life, as long as they are waiting for us. No need to schedule anymore!

To Pioneer Top Ranker

I learned about Pioneer years ago but did not sign up until February 2020. Pioneer is a fully remote accelerator hosted by former YC partner Daniel Gross. It has the goal of giving anyone in the world access to a Silicon Valley-like environment. Here, founders compete against each other in feedback tournaments, and the top rankers are selected to join in the Pioneer Winner, a top-ranked community with perks.

I liked the weekly evaluations and started the program with a light heart, hoping that it would be a cycle to reflect my progress. Then came the first week’s feedback. It was a disaster. I was confronted with harsher words than I expected, such as “Don’t know what you’re making” and “Your English doesn’t make sense,” which drove me to improve it more.

When you’re building a product, you should only listen to the feedback from active users. This is probably the right answer. But, when it comes to landing pages, not just those who are interested in the product but even those who have never used a computer like your mom should be able to understand it.

So, one by one, I accepted the negative feedback and cleared up what they did not understand. Once they understood what I had built, the next question was, “How is it different from Zoom?” If I prepared a section explaining this, they would ask for use cases, “When can it be used?” This is how I foolishly fixed the ambiguity of the LPs that were thrown at me weekly, and after a month, all I got were comments like “Remotehour sounds awesome!”

The reason I did not lose heart, despite all the abuse, was that I was convinced that Remotehour was different from Zoom and that there were use cases that would continue to be used. And from talking to users who were already using it, I was confident that it was a unique product.

I found myself in the top 50.

Flames at Hacker News

On March 16, 2020, the lockdown began in San Francisco. California’s decision-making process was quick, and we were soon forced to live in quarantine. Originally, it did not interfere with my life at all since I had been fully working from home. However, those who hadn’t been working from home reacted differently. Remote work skyrocketed on Twitter, and Zoom and related services instantly came into the limelight. I was watching all this from the sidelines and became quite impatient. If I missed this opportunity, I would be a failed entrepreneur.

I hurriedly started preparing for the launch, and two days later, on March 19, I posted Remotehour on Hacker News and Product Hunt. A few minutes later, there was a knock on my door at my Remotehour room. “Yo. Now you’re famous.” He called out to me, and the call was cut off.

Within a minute, I was getting calls from people all over the world, in France, India, Hong Kong, New York, saying, “That’s interesting,” or “Congrats on your launch!” All with one click. The phenomenon continued all night long, and of course, I couldn’t sleep a wink; I was so excited.

What woke me up were comments on Hacker News. Upon closer inspection, I saw that it had caused a small firestorm of criticism. The reason was that the headline was “10X More Seamless Than Zoom.”

“What makes it more seamless than Zoom?” or “Only Google authentication is the game over.” I got a lot of comments like those. And I was determined to make Remotehour 100X more seamless than Zoom in the near future.

The Product Hunt received over 300 votes in total, and the website was visited by over 10K overnight. This led to a top 10 ranking on Pioneer and an invitation to join the Pioneer Winner.

The First Place And On To The Next

In exchange for a 1% stake, Pioneer offers 1) $200K worth of Google Cloud and AWS credits, 2) access to the Winner community, 3) live streaming with prominent founders and VCs, and 4) a flight to Silicon Valley.

There are regular mentoring sessions with VC partners, discussions to strengthen ties within the community, and office hours where Daniel Gross is available to discuss your products. AMAs with successful startup founders are also held.

Remotehour had thankfully succeeded in gaining a certain number of enthusiastic users who would continuously be online at least three times a week, even after the buzz was over. However, although they would be online, they would not be on calls very often. If the number of calls is low, the users would eventually see no point in being online and may churn.

Increasing the number of calls was the first challenge I faced when I joined Pioneer. First of all, I started to find out what kind of users were using the system. I searched Google for registered user names, emailed them, and even talked to them directly through Remotehour. As I repeated this process, I gradually began to get an idea of who the users were.

Of course, in some cases, it was used by teams, but many were not. We found that it worked best for 1:N relationships such as freelancers and their clients, doctors and their patients, and university professors and their students.

They shared a link to the room. But the reason it didn’t become a call was that those people had no way of knowing when the user was online.

When I discussed this with Tim, a partner at Pioneer Fund who had been a mentor during the program, he said, “You need to add a feature to let guests know the host availability. Not only to solve it but also to make it more viral. For example, an email list will enable them to know the email online notification, but the people who receive the email may become new users.”

So I added two features. One, as advised, is an email list. Guests can subscribe to their host’s room and receive an email online notification when the host goes online. The other is Twitter integration. Once a day, when they go online, a tweet will automatically be posted about them being online.

Implementing the new feature should not just satisfy existing users. It should also attract new users. This kind of thoughtful UX is something that startups with limited resources need to be aware of.

With this in mind, I have been implementing or withdrawing features at least once a week. As a prolific builder, I am used to this time interval and will continue to pursue convenience endlessly as long as the company continues.

After all this trial and error, I won first place in the Pioneer tournament. I know this is only a ranking because active users and sales are rather important. However, it was the first time in my life that I was able to experience being the best at something, even though I had been a poor athlete and a mediocre student since I was a child.

I also felt that the environment around me had definitely changed: I started to be followed by local founders on Twitter or received pitch responses from prominent angel investors.

First Cheque

Pioneer had a Demo Day at the end of the program, and Remotehour was supposed to pitch at the end of April 2020. We were given two minutes. I had to briefly summarize the problem, how the product solved it, and how big the market was, in English, of course. You have to understand that this makes it 10X more difficult for me!

The week before the Demo Day, the founders gathered on Zoom for a rehearsal, and the feedback I received was, “Good news, Shun. we still have a week before we go live.”

It meant that I had to do as much practice and trial and error as time would allow. That’s how bad it was. However, it was possible to actually get a two-minute pitch down to a certain level of quality in a week. I memorized the script and practiced until I could get the idea across.

I know it wasn’t a 100-point finish, but some investors approached me after seeing this Demo Day. Fundraising in the U.S. is the first challenge for me to go to the next round as a promising startup, but I felt that it was slowly getting closer.

Ramon Recuero was our first investor. I met him in Tokyo in December 2017, when he was visiting Japan as part of the Y Combinator team, and needless to say, I found out about him through Highprofile Alert.

Over the next few years, while I changed the product several times, Ramon encouraged me each time, and if I were asked who my mentor was, he would be the first one I would name.

When I asked him for advice on fundraising, he immediately replied, “I would love to invest.”

Ramon was the first Silicon Valley investor who hadn’t abandoned me when I had nothing, and he was also the first person who believed in Remotehour when it hadn’t gained any traction yet. I really don’t want to be someone who betrays the expectations of people like him.

Meet Jason Calacanis

After Pioneer Demo Day, I immediately wrote a blog. When I shared the blog in Pioneer’s Slack, other members not only read it but also shared it and spread the word. (Thanks again, Pioneer guys!) And Daniel Gross tweeted about it.

Many people started to find Remotehour and me by this tweet. One of them was Jason Calacanis.

He asked me if I had plans to release a mobile app, and if I had a designer, the UI would be easier to understand. As I struggled to respond to his feedback on the product, he sent me a URL that I knew well.

I clicked over and what I saw was Jason Calacanis, who was online at Remotehour. When I knocked, Jason Calacanis, a familiar face from This Week In Startups, was waiting for me!

I was so nervous that I don’t really remember what I said to him. We started with small talk such as, “Did you go to Taisho ken?” During the call, he asked me if I would like to apply for the LAUNCH accelerator. After a while, I was invited to an interview.

After passing the interview, Remotehour was eventually accepted into LAUNCH Cohort 19. Honestly, I thought he was a scary guy until I talked to him. In fact, he is very founder-friendly, and I can always sense the kindness and expectations in his words and actions.

I had been turned down by dozens of VCs who said it was too early. I can’t thank Jason and LAUNCH enough for being the first to take a risk on us when we were still early in the Silicon Valley market.

12 Weeks Pitch

Remotehour became a part of the LAUNCH family, a 12-week accelerator program with a $100K investment. Naturally, it was organized remotely, and only seven companies joined from all over the world, not just the U.S.

Unlike accelerators like Y Combinator and TechStars, LAUNCH has a small number of companies. When it came time for Demo Day, there was absolutely no need for Tech Crunch to cover 200 companies over the course of two days.

And it is placed on fundraising rather than mentoring. Over 400 investors participate in a single cohort. And the investors Jason invites are some of the biggest names in Silicon Valley, including Sequoia, Founders Fund, Greylock, Initialized, and Bessemer. Naturally, we startups will be trying to go fundraising during the cohort.

There are many reasons to recommend LAUNCH, but the most important is the hands-on support from Jason Calacanis. He has invested in several unicorn companies, so getting feedback on your product and pitch is extremely valuable. On the days Remotehour was featured on his show, I received a lot of LinkedIn requests.

At LAUNCH, there’s a 12-week pitch iteration, which is pretty brutal. They invite 10–20 investors to Zoom, we pitch to them, have a Q&A session, and then at the end, each investor votes on their top three favorite startups and ranks them. In other words, the best of the cohort and the worst of the cohort will be determined.

The first pitch came in July 2020. There were nearly 20 investors in the Zoom room that day, but none voted for Remotehour. We were the only one of the seven companies to get zero votes. After the pitches, investors can negotiate in the breakout rooms of the startups they are interested in, but no one came to my room. Of course, I was filled with regret, but I was thrilled to be baptized by Silicon Valley!

Narrative Presentation

I’ve never been good at pitching. Even more so when it comes to doing it in English. I’m a natural creator, and my main job is to speak not with words but with products. When I pitch, I tend to say, “With Remotheour, you can do that,” or “It enables you to earn money if you set up a Remotehour Paid Room.” At the end of the second week, Jason messaged me, “Feature-driven is the worst presentation.”

To get fundraising, the user story, not the product description, is the key. Especially in the case of Seed funding, where there is no significant traction, I had to convince investors why people with significant pains were having those pains and how the product would solve them.

There were things to improve a pitch when I could use what I had learned from building the product. For example, I’ve always tried to build products with a single page/single action, but in the pitch, it was a single slide/single message. And by accepting feedback from Jason and other investors head-on and making minor adjustments, there was always room for improvement in the pitch.

Demo Day

In October 2020, LAUNCH’s Demo Day, which attracted more than 500 people, including Jason’s syndicate members, about 20 VCs, and public viewers. I did the same thing I always do, just set up Zoom.

This 12-week pitch boot camp took me from an outsider to a Silicon Valley entrepreneur! I didn’t make it to the top three places, but after the pitch, I was approached by several prominent VCs and had meetings with them.

There were some tough times, but Remotehour is starting to reach the right customers. For instructors with 50+ students, scheduling with each of them is totally cumbersome. They are setting up office hours on Remotehour to take questions from students, just like they used to do in real life.

Next is sales. One of our main clients is M-A-C. Did you know that since last year, unemployment among makeup artists has become a serious problem? They are offering their customers online counseling with Remotehour. No appointment needed just one click. The people standing at the counter are artists who used to stand in real stores.

And paid consultancy. Stripe interaction is very popular, mainly used as a way to monetize 10 minutes in cases like crypt, financial or legal advice. Some people are making as much as a few thousand dollars a month.

The Future Of Remote

We had a year to work remotely. I had a year to start Remotehour. Every time the vaccinated population increases, the city begins to ease up a bit. Meanwhile, people are asking, “Are we going back to before COVID-19?”

Remote work has enveloped the world as if it were a prescription for COVID-19. But in reality, it is not. Originally, talented people in Silicon Valley who were fed up with the ever-increasing cost of living and land prices began to leave the area, and remote work was adopted as a way to keep them in the company. I had been working remotely for five years before COVID-19, and Remotehour was a product that was born before that.

We have entered the 2nd Remote Century. Until now, the question has been how to replace the real society with a remote one, but from now on, the major theme will be how to build a remote society from scratch. We will be operating remotely, hiring new people, and organizing communities.

In our perception, meeting new people and building relationships with those we meet will be the key. Limited, scheduled meetings and cold, text-only exchanges are not enough.

So what about quick five-minute sync? If Zoom provides an empty conference room, Remotehour provides an internet office staffed by the person you want to talk to. If they are there, you can knock and talk to them with just one click.

We provide internet offices for people all over the world, and will definitely become the social infrastructure for remote work!

Startup In Silicon Valley

I’m still in the middle of my entrepreneurial journey. Nevertheless, through Remotehour, I will devote my life and livelihood to helping people around the world work more productively. To put it simply, I will make software like Microsoft or Dropbox.

And it is with the support of many people that I am able to tackle this challenge.

In the last pre-seed round, LAUNCH, Pioneer, Ramon and UBV, and MIRAISE from Japan supported us.

Also, there are still very few Japanese founders in Silicon Valley. Kiyo (Chomp), Hiro (Ramen Hero), Steve (Anyplace), Yusuke (Ofuro), Kaz (Zypsy), and Sato (Waffle) are helping each other.

And Kay, my co-founder. When I discuss or pair-program with you, it encourages me. I feel that we can do it, that there is no way we can’t do it. I really appreciate it.

5 + 1 years of running hard with a dream, this was not a short time. It was also not a simple straight road, and like San Francisco’s terrain, it was full of hills. From now on, over the next ten to twenty years, we will continue to climb this hill, aiming for the future that we believe in and focus only on that.

Here’s my internet office, so open the door!

Thanks to Ramon Recuero, Teppei Tsutsui, Jacqui Deegan, and Jackson Prince for reading drafts of this.

Also published on: https://shyamady.medium.com/how-this-japanese-guy-got-funded-by-jason-calacanis-after-5-years-of-bootstrapping-8cccc7956f1d