The true feelings of an entrepreneur who just sold for $14 million

Naoki Yamada, founder and CEO of Anydoor and Conyac.

“This is my story, it won’t fit someone else. Take the good part from many entrepreneurs and create your own story. It’s very important to survive. I am not sure what is success, but until you lose all the money, you can recover from it. Or at least until about US$80,” laughs Naoki Yamada.

“That’s what I learned since 2009.”

Naoki last month sold his crowd translation service Conyac for US$14 million. The deal with Japan-based Rozetta roughly worked out to 50 percent in cash and 50 percent in a stock swap. Naoki had about a quarter of the company’s stock at deal time. While Japan makes a lot of foreign acquisitions, domestic buyouts are more of a rarity, especially in the tech space. But through bankruptcy scares and continued feelings of uncertainty Naoki managed to pull off the improbable.

Feeling blessed

“I went to India. I was staying at an orphanage and was talking to a boy there. I asked him, ‘What do you want to be in the future?’ He told me he wants to become an engineer.” At the time Naoki was taking a vacation from his job as an engineer and he realized he never really thought why he took up the position. He felt as though the child told him he was blessed to be living in a country like Japan with abundant resources and opportunities, but never taking advantage of them.

I was quite panicked… We almost died there.

Inspired, Naoki came back from vacation and left his job in 2008. Months of bootstrapping later, Conyac still had zero contracts signed and only US$80 left in the bank. Luckily, a small feature on TechCrunch grabbed the attention of investor Kentaro Sakakibara. Naoki says he honestly didn’t know who Kentaro was at the time. After asking around, Naoki agreed to meet.

Kentaro wired the money the next day.

For the first two years the company made barely any revenue. “The price range for [consumer services] is very small. A few hundred yen,” Naoki explains. “Even if we piled up all the requests it was like US$1,000 a month. It was quite hard.” After getting more interest from large companies, Naoki decided to focus on selling to corporates. Sales quickly shot up to over US$50,000 per month and continued to grow.

The team soon expanded from four to 25 people and picked up another US$600,000 investment in 2013.

“I felt like we could increase our sales if we hired more sales and operation people.” But acquisition costs for business customers weren’t the same. The company was bleeding US$150,000 per month.

“I was like oh shit, oh shit! One of my investors told me, ‘decrease the burn rate or die.’” Naoki spoke with every employee individually. “I told them that we need to focus on sales to survive. If you can’t follow our target which is sales, I guess it’s better for your career to move forward or find another job.”

By early 2015 the team was back down to six people.

Gotta make that change

“I was quite panicked,” Naoki says. He blames his inability to properly communicate the future vision with employees for the huge loss of team members. Pointing to the giant dip in the graph he drew for me on the whiteboard he laughs, “We almost died there.”

Don’t look back