What 23 AG1 Teams Taught Us About "Why Japan"

If all you need is a startup residency, SF has plenty of them, and honestly, many are awesome. So there is this one question we ask every founder who applies to AG1, and we weigh it more than anything else on the form.

So, why Japan?

Tokyo is calm, safe, and comfortable (and yes, every AI product works here). But if comfort is the whole point, Bali or Chiang Mai will give you roughly the same for less. Ten weeks is a real chunk of an early company's runway, and without a clear idea of what you want from Japan, it can turn into just a long sightseeing trip.

AG1 is a ten-week live-in residency in Tokyo run by Asu Capital Partners, the first full-scale program of its kind in Japan. Over three batches, 23 teams have lived and built with us. Batch 3 is in the house as I write this, with eight teams selected from over 150 applications.

The question, why Japan, has been there since Batch 1, inside a bigger question with "Japan" in bold. From Batch 2 on it got a box of its own, and the answers got even sharper. What we listen for is one link in your company's chain that Japan makes clearly stronger. Looking back at 23 teams, a few of those links come up again and again.

Three links Japan makes stronger

1. Customers are here

Some needs exist everywhere, and still run deep in Japan.

A Seoul team building a multilingual meeting note-taker had tuned its models for less common languages from day one (meetings in Korea switch languages too). Japan was the natural next step, as plenty of companies here run meetings in two or more languages and still expect someone to keep a careful record of everything. They fine-tuned for Japanese in the backend, and one cofounder moved to Tokyo to run GTM.

Another Korean team, running an events business, told us Japan is the most agency-driven events market they have worked in. Almost every event here runs through agencies, which leaves real room for an AI-native model that can take on many more projects at once and make the whole process more efficient.

2. Culture lives here

Anime, manga, games, VTubers, fandom... Japan is still the center of gravity.

A Shanghai founder is turning creators' original characters into AI VTubers that talk, react, and sing. The format was born here, so starting with Japanese creators means building for the people who set the bar.

A solo founder in Tokyo, who used to ship games at a major Japanese studio, is building an AI-native game engine where characters remember and actions have consequences, infusing Japan's TRPG and anime storytelling.

Another Chinese team runs an all-in-one platform for oshikatsu (推し活) fans. In Japan, there is oshikatsu for almost anything (idols, performers, characters from fan works), which is why their largest user base is here.

3. Craft matters here

One Batch 3 founder from Korea, whose team works across Korea and the US, had a strong feeling that they needed to come to Japan. Part of it is distance. Too close to Silicon Valley, he told us, and you inevitably surrender to consensus, while staying in Korea would only trade that for a local one.

The bigger part is craft. He compared Japan to the Elves in Middle-earth, building as if time were endless and caring about quality even when the market does not ask for it (for example, ramen at an onsen). In his view, Silicon Valley is great at scaling distribution, yet struggles to build great game or film studios because it simply cannot underwrite taste. Think Apple, or Notion. They tapped into Japan's lineage of quiet, uncompromising finish.

The hard part

Whatever brings you here, B2B in Japan runs on relationships, and on Japanese. A foreign team selling into Japanese companies has a real hill to climb. The events team above was honest about this. Every Japanese client of theirs so far came through someone who met them in person, and their Japan lead (fluent in Japanese) has been with them for three years.

A few things are worth expecting before you land. Enterprise decisions take a long time. Manners and introductions matter, especially with traditional corporations. People still hand you paper business cards, and a surprising amount of business communication still happens on Facebook Messenger (yes, really).

If you are already in Japan

Ten of our 23 teams were Japan-based. For local founders, the honest answer to "why Japan" is "I live here," which is completely fine. So we flip it around. Why go global from day one, and why spend ten weeks next to founders from Seoul, Shanghai, and New York?

A founder in Batch 3 had a good answer. He first came through Batch 1 with an earlier startup, went off to an MBB firm, and then came back to start his own company in physical AI. His bet is that Japan still has a real edge on the physical side, that is, precision parts, robotics, and manufacturing know-how. Prove it with Japanese manufacturers first, then take it abroad. Living in an international residency, i.e., AG1, keeps his baseline global from the start.

A Tokyo team building a fairer way to shop second-hand luxury had a similar answer. They know Japan runs one of the most mature second-hand markets in the world, where demand remains big and condition grading and authentication are taken very seriously. So they source from other Asian markets, sell into Japan, and prove the model here first. Once it works, they plan to expand and open up buyers in North America.

Taking your answer one step further

Most first answers to "why Japan" are true. Japan is a big market, the culture is unique, and going from Japan to the world is a real path. The answers that help us most go one step further and name the mechanism (who the user is, and why it happens here more than anywhere else). And sometimes, the best answer is the product itself.

How we read your application

We read every application ourselves, top to bottom (no AI filter screening people out, guaranteed). We start with Japan fit, then open whatever you dropped into the upload field, a deck, a demo video, a product link, a one-pager. The format matters much less than what it tells us. Stage matters less than people expect, too.

Beyond Japan fit, we also pay attention to these three aspects.

What you did with what you had. Your last six to twelve months. What have you built and learned with limited time and resources? That velocity is how we picture where you go next.

What happens after you apply. Something changed between your application and the interview? Just tell us. A new user, a shipped feature, a sharper thesis... Whatever you feel is worth sharing.

What you bring to the house. We can never predict who will turn out to be the "entertainer," the "connector," or the one who challenges ideas in a cohort. What we do look for is whether you care about people beyond your own team.

Ten weeks under one roof

That last one matters because living together shapes the experience more than anything we plan.

The residency is a big open-plan apartment near Shibuya and everyone keeps their own rhythm. Once a week, we all sit around the dining table for the feedback session. No weekly diary, please (nobody has the attention for someone else's status log). Bring something the others can use instead, a decision and why you made it, a new trick with AI, a small tool you open-sourced, something you learned about the Japan market. We shuffle the seating so teams do not cluster, and putting an idea-stage founder next to a team with paying customers can feel a bit intense at first. However, seeing the same problem from opposite ends is usually where the good conversations start.

Then there are some side quests nobody planned or could have planned. In Batch 2, more than half the cohort stayed up until 4 a.m. hacking a pair of smart glasses and adding a real-time translating function, and they actually got a rough prototype working. Sometimes, having fun is important too!

Each batch also gets out of Tokyo for the AG1 retreat. Inside Odawara Castle, the castle's priest leads an hour of meditation in English, then simply talks with everyone about whatever is on their mind. After that, a huge Airbnb, a team barbecue, karaoke, and a lot of talking late into the night.

How we work with you

AG1 gives you the environment and the peer group. The company is yours to build. Since every cohort is different, there is no fixed syllabus. We sit down with each team every week, figure out what you actually need right now, and bring in mentors who fit that exact problem.

Case by case, we also try to help in a few other ways. Japan runs on referrals, and with traditional corporates a warm intro is often what gets you a real first meeting, so where it makes sense we try to open those doors. We also bring cohort products to our own events and to sessions we co-host with other VCs, so people can try them on the spot. Our partners sometimes interview teams or write about them, and we invite local media who may want to cover what you are building.

None of these are automatic, and we cannot promise anything upfront. What we ask in return is simple. Ask for help, and ask for a lot of it! We cannot guess every bottleneck from the outside, and the founders who get the most out of AG1 are the ones who know what they are missing and say so, early and often.

Across three batches, teams have raised money, signed their first B2B customers in Japan, moved to Tokyo for good, teamed up with each other, and more.

Possibilities are simply endless.

Applying

Batch 3's Demo Day is on December 14. Batch 4 applications open in early 2027, and the waitlist is already live on the site (for founders in Korea, our new partnership with Korea Investment Accelerator should make the path a little easier).

We wrote this to give you an honest look at how we choose, and to answer some of the doubts that might keep you from applying. If you are building something that Japan makes stronger, we would love to read your answer. If you are an investor, founder, or friend who knows a team like that, please send them our way (many of the best teams in the house found us through a referral). And if this piece just makes you look at Japan a little more closely, that is a good outcome too.

Find out more at ag1residency.com.