Why this Japanese startup brought a unique ramen business to Silicon Valley

This article is part of Tech in Asia’s partnership with Disrupting Japan where we publish the revised transcripts from the show’s podcast interviews with Japanese entrepreneurs. This is heavily revised from the original transcripts. For the full interview, go here.

More and more Japanese startup founders are looking at or even moving to Silicon Valley. It’s easy to see the appeal. San Francisco is home to the largest and most competitive startups in the world. In fact, there’s a small Japanese startup community there, with founders, mentors, and investors all supporting each other.

On my last trip to San Francisco, I had a chance to sit down and talk with Keisuke Kajitani, co-founder of Ramen Hero, which sells home delivery ramen meal kits. He and his co-founder moved there from Japan because they thought the US would be a better market for their product because ramen is already too popular in Japan.

Here’s the rest of the story.

Why did you choose to build a startup in the highly competitive food industry?

I’ve seen a lot of Japanese entrepreneurs try to figure out how to make a big company in Silicon Valley, but I often find that they don’t have strengths in their expertise. Ramen is something the Japanese are an expert on. That’s why we chose it for our first entrance into the food business.

I’m the COO of Ramen Hero and I have a co-founder, Hiro, who is the CEO and chef. We had the same mentor, Kiyo Kobayashi, who’s very famous in the Japanese startup industry. I always wanted to start a business in Silicon Valley, which was like a holy place for entrepreneurs, but I didn’t have the chance to do it by myself. I was seeking for an opportunity and that’s how Kiyo introduced me to Hiro.

How big is your market?

The market research estimated US$1.5 billion for the meal kit market, but it’s not as big as you think. It’s going to grow to around US$4 billion to US$5 billion in maybe the next 10 years—that’s what the research is saying.

But what’s more interesting is, I think, the meal kit business or the restaurant without the physical restaurant model is much more scalable than other restaurant business types because you can basically own a restaurant without paying a lot for rent. That’s why we thought of starting in San Francisco, where the rent is most expensive. We believe the business model with meal kits is more suitable than actually opening a ramen restaurant.

Do you plan to expand beyond ramen?

Of the US$1.5 billion meal kit market, I think the ramen ratio is going to be very small. But you can also look at the number of servings of instant noodles, which is I think over billions in the United States.

We definitely want to improve the business. You can look at the market in two—maybe three—different perspectives. One is the meal kit service I mentioned. Two is instant noodles. And the third one is a ramen shop. It is estimated that we have 12,000 ramen shops in the United States and it is growing by 17.5 percent every year. At this rate, the number of ramen shops will double in five years. In the food industry, doubling the number of restaurants is a huge change, and we think that’s the trend we are chasing.

How did you get the word out about Ramen Hero?

We have two strong channels for marketing. One is called Kitchen Town, located in San Mateo. It’s a shared kitchen with maybe 20 to 30 food startups. We use the space to conduct popup events and serve ramen. In that community, there are tons of subscribed foodies who are looking for a new food culture. These people always come to our events and talk about our brand.

The second channel is called Feastly and EatWith, like an Airbnb for restaurants, where chefs can have a restaurant without actually having a physical shop and licenses. They can do it at home. You just have to post your menu and the platform will gather the customers for you. These channels are really good for us to gather customers without any marketing cost.

Do you plan to enter the Japanese market?

Probably not Japan, but the rest of the world. There are a lot of good ramen shops in Japan, so the competition there is much higher than elsewhere.

Tell us a bit about your story

What’s good about being in San Francisco?

When should Japanese startups enter overseas markets?

Any advice for young Japanese entrepreneurs dreaming of building a startup in San Francisco?

What would you change to make things better for startups in Japan?

Final thoughts