This edtech startup is using AI to help students with their entrance tests

Daisuke Inada, founder and CEO of Atama Plus

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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.

Daisuke Inada is the founder and CEO of Atama Plus, a Japanese edtech startup leveraging AI. He left an 11-year lucrative career at Mistui to build his own startup. In this interview, Inada and I talk about his journey and his company.

We also talk about jyuku or cram schools. To give you a background, the purpose of these schools is to help students score higher on their college or high school entrance exams. Unlike the regular schools themselves, jyuku are private companies and some are even publicly traded. They compete fiercely for students, and they’re evaluated based on how well their students do on tests. It’s no surprise that they’re willing to try new technology and why most education innovation in Japan focuses on jyuku.

Here’s my conversation with Inada.

nWhat does Atama Plus do?n

We provide an AI program for high school and junior high school students in Japan. We have a personalized curriculum consisting of video lectures, exercises, and tests, which analyze students’ data such as proficiency, running history, consideration level, and so on.

At this moment, we provide math lessons to high school students, but we are also preparing other subjects like English and physics.

Our business model is based on B2B2C—business to jyuku to students.

nWhy did you leave Mitsui to start a startup?n

When I was working in Mitsui, I stayed in Brazil for five years. Then, we founded a joint venture between Mitsui and Benesse, which is a large education company in Japan. Since there was no education business in Mitsui, we tried to bring Japanese education know-how from Japan to Brazil. Unfortunately, the financials weren’t good, so they decided to close the company.

Then, I returned to Japan to start a new education business inside Mitsui, but it was slow and difficult to innovate education in a huge company. That’s why I thought it’s better to start from scratch.

nHow did you meet your co-founders?n

I called my friends from university. Our COO was a CEO at Recruit China, and our CTO was with Microsoft. We’ve been talking about the possibility of starting a new business back in university. But it took me a year to get the CTO’s decision because he has a family with two children.

nHow do you measure success at Atama Plus?n

We improve based on the students’ scores. It’s important for us to observe our users, so we conduct interviews with them to easily understand how they feel about our product. We also look at the raw data of the students’ interaction with our product.

nDo you plan on changing your business model or going purely online in the future?n

Actually, we want to start a new structure of jyuku. Currently, each class has 15 to 20 students and one human coach. But this coach does not teach; they only focus on encouraging the students. Also, one big thing about jyuku is the lack of teachers. So, in the new model we’d like to create, we’d like our AI technology to focus on teaching and to support the coaches.

If we provide just online programs, only top students would benefit the most, as they already know their weaknesses. But the majority of students are not aware which subjects or topics they’re weak at. That’s why a coach has to support them and it’s better to study together with their friends.

nWill Atama Plus expand internationally? Why is it difficult for some edtech startups to move into new markets? n

For now, we want to focus on the Japanese market. But after that, we want to try something outside Japan too.

It’s difficult for edtech startups to go to new markets because education is a local business. The lessons and curricula are different for every market.

nWhat would you want to change to make Japan better for startups?n

There are not a lot of startups in Japan because of the lack of information about markets. I didn’t know about startups in the country when I was with Mistui. Almost everyone doesn’t know about the startup ecosystem—how to create a company, how to recruit people, etc. They think, “Ah, it’s very high-risk. It’s very difficult to leave huge companies to start new businesses.”

The reality is that it’s not so difficult. Maybe sharing real information about what is happening in our startup ecosystem would support these challenges. Maybe taking entrepreneurs to high schools to share something about startups will also help.

Students think the traditional way because they don’t have contacts with adults other than their teachers, parents, and maybe teachers at jyuku. Without more information, they think the same way as their parents and teachers, which is to build their careers in large companies. They have to talk to other guys and be exposed to the startup world.

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AI is one of my favorite topics, but it’s always been very hard to talk about it objectively. It’s hard to define exactly what AI is. On one hand, we have marketers trying to convince us that every use of statistics or adaptive behavior of any kind is some form of AI or machine learning. On the other, we have academics who keep moving the goalposts further away. And some people argue that AI machines don’t really display intelligence.

Intelligence is complicated and abstract, but education is a process that’s right in front of us. Inada’s point that a human being will always be needed in education is an interesting one, as it goes against what other edtech startups are claiming.

The education system is not always improved by greater efficiencies or lower costs. Perhaps—and just perhaps—it is those very inefficiencies and frictions of one-on-one teaching—sitting together in classrooms and complaining to each other about how hard math is—that provide the most value. It is the human interactions.