WEBVTT - Former Ambassador to Japan Roos on Launching VC Fund (Audio)

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<v Speaker 1>YEA broadcasting live to New York, Bloomberg eleven, Rio to Washington,

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<v Speaker 1>Bloomberg dot Com. This is taking stock. I'm Kafeene Hayes.

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<v Speaker 1>Along with pim Fox. Japan has an aging population, a

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<v Speaker 1>gigantic budget deficit, deflation and negative interest rates. Why would

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<v Speaker 1>a former ambassador Japan then be starting a fund to

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<v Speaker 1>help American entrepreneurs girl their businesses in Japan? PM, We're

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<v Speaker 1>gonna find out. Yes, we're gonna be speaking with John

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<v Speaker 1>Rousey is the founding partner of the venture capital firm

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<v Speaker 1>Geodesic Capital, and as you mentioned, a former US ambassador

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<v Speaker 1>to Japan. Right now, let's go to Charlie Pellam in

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<v Speaker 1>the Bloomberg news room for a Bloomberg Business flatman. I

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<v Speaker 1>thank you, pim Fox, Thank you, Kathleen Hayes. The Dow Yes,

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<v Speaker 1>I'm be Nazdak. All declining with stocks have paired a

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<v Speaker 1>decline banks and energy producers trimming losses. SMP five hundred index,

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<v Speaker 1>slipping from a ten month high amid speculation equities may

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<v Speaker 1>have run too far, too fast given the lackluster prospects

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<v Speaker 1>for global growth. On top of that, there is the

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<v Speaker 1>Brexit vote, the US political conventions, and the looming of

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<v Speaker 1>Federal Reserve meeting. Josh Shapiro is chief US economist at

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<v Speaker 1>Maria Fiorini Ramarans. I think that it's a it's a

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<v Speaker 1>dangerous thing that's been going on with central banks have

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<v Speaker 1>been doing there. They're they're they're causing distortions and financial

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<v Speaker 1>markets distortions and behavior. They've done everything they pretty much

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<v Speaker 1>can do at this stage with the size of the

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<v Speaker 1>deficits that we have in the amount of debt that's out,

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<v Speaker 1>their fiscal policies kind of handstrung and and and I

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<v Speaker 1>think we're limping along. And when you're in that with

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<v Speaker 1>that type of backdrop, you're downside risks far out where

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<v Speaker 1>you're upside risks. Bill Gross, Bill Gross, manager of the

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<v Speaker 1>one point four billion dollar Janus Global Unconstrain Bond Fund,

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<v Speaker 1>warning central bank policies that pushed trillions of dollars into

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<v Speaker 1>bonds with negative interest rates will eventually backfire violently grows.

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<v Speaker 1>Compares it to a super nova, which is a star

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<v Speaker 1>at the end of its life, and a person familiar

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<v Speaker 1>with the matter, says billionaire investor George Soros has become

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<v Speaker 1>more involved in trading at his family office, concerned about

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<v Speaker 1>the outlook for the global economy and the risk that

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<v Speaker 1>large market ships maybe at hand SMP five hundred index

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<v Speaker 1>down five, a drop of three tenths of one percent,

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<v Speaker 1>Gold up ten to twelve seventy two, eight tenths of

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<v Speaker 1>one percent ten, You're up seven thirty seconds. Zeal there

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<v Speaker 1>one point six seven percent to thirty two on Wall Street. Now,

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<v Speaker 1>let's take a look at other news from around the world.

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<v Speaker 1>Thank you, Charlie from the Bloomberg newsroom. I'm Scarlet Foom.

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<v Speaker 1>President Obama has formally endorsed Hillary Clinton to succeed him

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<v Speaker 1>as next to US president. Today, for more than a

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<v Speaker 1>year now, across thousands of miles in all fifty states,

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<v Speaker 1>tens of millions of Americans have made their boys has

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<v Speaker 1>heard today. I just want to add mine. I want

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<v Speaker 1>to congratulate Hillary Clinton on making history as the presumptive

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<v Speaker 1>Democratic nominee for president of the United States. The President

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<v Speaker 1>offered his endorsement in an online video after meeting at

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<v Speaker 1>the White House earlier today with Clinton's Democratic primary rival,

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<v Speaker 1>Vermont Senator Bernie Sanders. Israel is deploying additional battalions to

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<v Speaker 1>the West Bank and restricting travel for Palestinians during Ramadon

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<v Speaker 1>in the wake of yesterday's shooting in Tel Aviv, two

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<v Speaker 1>Palestinians gunned down four Israeli's and wounded at least five others.

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<v Speaker 1>Here's Prime Minister Benjamin net Yahoo murder. The shooters cousins

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<v Speaker 1>from the West Bank are in custody. A coalition of

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<v Speaker 1>twenty one states is suing Delaware over policies involving unclaimed

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<v Speaker 1>official checks. Texas Attorney General Ken Paxton says, it's a

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<v Speaker 1>clear case Arkansas and Texas are co leading this coalition

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<v Speaker 1>of states to get our money back, and we are

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<v Speaker 1>urging the Supreme Court to enforce federal pax and alleges

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<v Speaker 1>Delaware has been taking the money for unclaimed checks written

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<v Speaker 1>by financial institutions based in Delaware even if those checks

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<v Speaker 1>weren't ordered. Their workers in Times Square are laying down

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<v Speaker 1>paint to mark new boundaries for pedestrians and street performers.

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<v Speaker 1>The new color coded system will regulate where characters can

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<v Speaker 1>interact with tourists. The zones started at West forty seven

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<v Speaker 1>Street and run down to West forty two Street. Global

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<v Speaker 1>News twenty four hours a day, powered by our journalists

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<v Speaker 1>and more than one news burreaus around the world. From

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<v Speaker 1>the Bloomberg News Room, I'm Scarlet Fou and we thank

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<v Speaker 1>you and again recapping stocks lower SMP down five a

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<v Speaker 1>drop of three tenths of one percent. I'm Charlie Peloton.

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<v Speaker 1>That's a Bloomberg Business flash. You're listening to Taking Stock

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<v Speaker 1>with Kathleen Hayes and Pimp Box on Bloomberg Radio. If

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<v Speaker 1>there's a country you're worried about when it comes to

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<v Speaker 1>the economy, at least if you're looking at the direction

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<v Speaker 1>of bondfield, you'd have to say Japan is on that list.

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<v Speaker 1>After all, the j GB, the benchmark tenure Japanese government

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<v Speaker 1>bond is now trade at a minus zero point one

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<v Speaker 1>four percent. That's not stopping John Ruth He's a founding

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<v Speaker 1>partner at Geodesic Capital, former US Ambassador Japan from two

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<v Speaker 1>thousand nine to two two thousand thirteen. He has launched

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<v Speaker 1>a fund more than three hundred million dollars to help

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<v Speaker 1>American growth stage companies entrepreneurs expand into Japan and other

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<v Speaker 1>countries in the region. He's here to tell us all

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<v Speaker 1>about it. John, Welcome to the show. Thanks for having

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<v Speaker 1>me delied to be here. So first tell us about

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<v Speaker 1>the fund. What are you doing, what kind of companies

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<v Speaker 1>you're funding? Well, geodes A Capital, as you said, we've

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<v Speaker 1>raised over three hundred million dollars. Were investing in later stage,

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<v Speaker 1>growth stage companies here in the Silicon Valley and helping

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<v Speaker 1>them go to Japan. Now, what we have found is

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<v Speaker 1>that companies here are going private, staying private for a

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<v Speaker 1>longer period of time, and in the later stages of

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<v Speaker 1>of their growth, they begin to think about going global.

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<v Speaker 1>And obviously the Asia market is incredibly important, and we

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<v Speaker 1>believe um and here and from the companies here that

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<v Speaker 1>Japan is a very important gateway into the Asia economy. Ambassador,

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<v Speaker 1>I was wondering if you could just give people a

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<v Speaker 1>little bit of your background, because I know that you

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<v Speaker 1>in many of your legal capacities before your ambassadorship that

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<v Speaker 1>you helped to represent companies at the time may have

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<v Speaker 1>been unknown to many Americans, such as Google and Pixar.

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<v Speaker 1>With your work with Wilson san Cini good Rich in

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<v Speaker 1>Rosani prior to go into Japan twenty five years here

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<v Speaker 1>in the Silicon Valley where I'm back um and as

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<v Speaker 1>you said, we represented at Wilson Sancini, which is a

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<v Speaker 1>leading tech UH law firm in the country. We represented

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<v Speaker 1>companies all the way from their infancy like Apple and

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<v Speaker 1>Google until many of them obviously became multi billion dollar corporations.

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<v Speaker 1>And then when I went to Japan from two thousand

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<v Speaker 1>nine to two thousand thirteen and the honor of being

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<v Speaker 1>the US ambassador there, I heard an incredible amount of

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<v Speaker 1>interest in UH in Silicon Valley by the Japanese and

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<v Speaker 1>so Prime Minister Abe, for example, came here a year

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<v Speaker 1>ago when he talked about building a bridge between the

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<v Speaker 1>valley and Japan, and Geodesic Capital is helping to build

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<v Speaker 1>that bridge between between Silicon Valley and Japan. Certainly helps

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<v Speaker 1>to have a heavyweight partner in this inaugural fund. You're

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<v Speaker 1>backed by anchor investor and co founder Mitsubishi. Gensic Capitals

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<v Speaker 1>already made successful investments. Of course, one everybody would recognize.

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<v Speaker 1>I think it's Snapchat that was a good one to

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<v Speaker 1>have gotten in on are there particular kinds of technology

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<v Speaker 1>that you're going to be looking for these late stage

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<v Speaker 1>companies is and how do the Japanese field don't they

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<v Speaker 1>have their own startups or do they feel this is

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<v Speaker 1>gonna seed activity and their own sort of homegrown startups

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<v Speaker 1>by having Silicon Valley come to them. We're looking at

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<v Speaker 1>both enterprise companies and consumer companies. So for example, you

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<v Speaker 1>mentioned Snapchat in a social media area, but we're looking

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<v Speaker 1>at areas like security. Taneum as a company that we've

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<v Speaker 1>invested in that the Japanese have a significant interest in

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<v Speaker 1>cybersecurity as an example, are investors there. I've already talked

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<v Speaker 1>about some of the benefits of going into the third

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<v Speaker 1>biggest economy in the world. But for our investors, they

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<v Speaker 1>see the opportunity to have this window into the Valley,

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<v Speaker 1>into the disruptive businesses that are going on here, and

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<v Speaker 1>they also obviously are looking for returns, but also kind

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<v Speaker 1>of a window into the Silicon Valley ecosystem, and the

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<v Speaker 1>benefit to them is not only returns, but potential investment opportunities,

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<v Speaker 1>potential mergers and acquisitions, uh potential partner ships. A good

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<v Speaker 1>example that which is just recently announced is the Toyota

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<v Speaker 1>Uber deal. On the Silicon Valley side, you have this

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<v Speaker 1>cutting edge shared economy technology, and on the Japanese side,

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<v Speaker 1>Toyota you have the biggest car manufacturer in the world.

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<v Speaker 1>So you have these traditional enterprises partnering up with new

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<v Speaker 1>cutting edge technologies and both sides of the equation will benefit.

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<v Speaker 1>And we see more and more of that happening. Ambassador US,

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<v Speaker 1>If an executive or an investor in a startup growth

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<v Speaker 1>company is listening to you and wants to learn more

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<v Speaker 1>about expanding into the Japanese market, what do they do?

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<v Speaker 1>They should give me a call. That's a capital We

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<v Speaker 1>have a team that's on the ground. We have as

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<v Speaker 1>our senior advisor, the person who built Twitter in Japan,

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<v Speaker 1>as are japan lead. We have a person who built

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<v Speaker 1>an enterprise company in Japan as well as was a

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<v Speaker 1>senior executive that Apple. Obviously, I've had tremendous experience with

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<v Speaker 1>the senior leadership on both the public and private side,

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<v Speaker 1>and the important lesson to be learned is it's not

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<v Speaker 1>one size fits all. Many of these incredibly disruptive, successful

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<v Speaker 1>companies here in the Valley have been in the US market,

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<v Speaker 1>but when they begin to go global. They have to

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<v Speaker 1>understand that different cultures at different business practices, and that's

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<v Speaker 1>where companies such as ours can really be a benefit.

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<v Speaker 1>Thank you very much for spending time with this. Ambassador

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<v Speaker 1>John Roucy is the former US Ambassador to Japan. He

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<v Speaker 1>is now the founding partner of Geodesic Capital. They are

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<v Speaker 1>based in San Francisco. You're listening to taking Stock. I'm

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<v Speaker 1>pim Fox, My Coast, Kathleen Hayes, and this is Bloomberg Radio.

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