HomeInterviewsSony Ventures, Interview With Joe Tou, Managing Director-US

Sony Ventures, Interview With Joe Tou, Managing Director-US

Joe Tou, Managing Director-US, Sony Ventures
Joe Tou, Managing Director-US, Sony Ventures

Joe Tou, Sony Ventures Managing Director-US, participated to our Q/A answering questions about his background, the VC landscape in the USA, their strategy and shared with us some thoughts the future of the tech world.

Hi Joe, can you please tell us a bit about you? What’s your background and your areas of expertise? 

Currently, I hold the position of Managing Director at Sony Ventures and am a co-founder of the platform. With a foundation rooted in engineering and product expertise, my perspective revolves around how technology can enhance and revolutionize entertainment experiences. Leveraging this insight, my primary focus in investments revolves around early- to growth-stage emerging technology and content startups that are shaping the future of entertainment. This encompasses diverse domains such as games, music, video, sports, and beyond.

Prior to nearly 15 years with Sony, my career included senior roles in private equity and venture capital. My professional journey has been significantly influenced by my roots in technology development, product, and operations at notable companies like Intel, Solectron, and Ford.

In terms of expertise, my passion lies in technology as a whole, and I am particularly drawn to innovations addressing societal challenges and experiences. I firmly believe that technology should serve a purpose beyond its own existence, and I leverage this philosophy in my role at Sony Ventures. My primary focus in investments centers around early- to growth-stage emerging technology and content startups, specifically in the domains of games, music, video, sports, and beyond.

My dedication to driving innovation in the entertainment and gaming sectors is deeply personal, rooted in my lifelong interest in technology. This passion traces back to my youth when my father brought home an Apple II computer. This led to countless hours spent in the basement fiddling with hardware and writing code, shaping the fabric of my DNA towards technological advancements and their societal impact. Never in my wildest dreams as a child did I think there could be a career born out of this passion, particularly in the crosshairs of entertainment and technology!

Through all of my professional and personal roles since that time – from gamer, to software engineer and architect, to investor – I bring a unique perspective that enriches my approach to investing and provides key insights into the pulse of the entertainment industry.

What do you think about the US venture capital landscape at the moment?  

The current US venture capital landscape is marked by high activity levels, a focus on innovation, and the growing emphasis on diversity and inclusion. Sustainability and ESG considerations are gaining importance, accelerated by the COVID-19 impact on remote work and digital health. Ongoing policy discussions and increased competition for startups contribute to a dynamic environment, requiring investors to adapt to shifting trends and valuations.

There is also an oversaturation of dollars in the market that drove increased competition and high valuations. Yet, the effect of high interest rates continues to be felt. The abundance of capital and macro environment has made investing challenging. The presence of unicorns is uncertain, influenced by market conditions and the timing of their emergence. The focus is on how investors make profits, considering the potential volatility in unicorn valuations.

Beyond capital, how do you support startups?  

As part of Sony, we bring to the table not only a long history of innovation and creativity, but also deep financial, technical , and business/market expertise in the industry. This background and the resources we can offer help our portfolio companies scale and succeed. Additionally, through our regionally-focused investment teams around the world, we provide local, hands-on support, expertise, and guidance, which helps companies rapidly scale and succeed beyond their regions. 

The entertainment industry, in particular, demands personalized support, and I believe it is crucial to establish genuine connections with founders and key influencers on a personal level. By delving into individual founders’ and company needs through research and meaningful conversations, we better tailor our support to their specific needs.

What do you like to see in startups and their founders?    

Success in our evaluation is often tied to market dynamics, but some key criteria guide our assessments. Firstly, we delve into the core problem or market gap the business aims to address, emphasizing the significance of a compelling justification for its existence, especially for first-time founders. Secondly, since we are often getting involved at an early, potentially pre-revenue stage, a robust team or well-thought-out plans for team development are crucial, exploring the skill sets sought, their strategic utilization and chemistry, and how founders plan to navigate their strengths and weaknesses. Additionally, understanding the detailed technology and business roadmap or milestones for funding use is a critical factor to having a sense of visibility.

Above all, I seek out founders who not only showcase a clear vision for their business but also demonstrate a tangible passion for innovation and the resilience to achieve their goals. This drive goes beyond financial incentives and has consistently proven to be a key indicator of success and groundbreaking innovation.

Please tell us a bit more about trends you are seeing in the portfolio companies you support. Is there anything you would like to highlight about any of the portfolio companies?   

AI’s pervasive influence, particularly in entertainment, is a key trend spanning the last decade and likely the next. Despite widespread mention of AI, uncertainties persist, especially regarding its role in content workflows and the creation of new content. The critical impact of AI takes time to unfold, making it an enduring trend. 

As large companies dominate AI development, small firms face increasing challenges. Amidst this, trends in the gaming industry, such as the creator economy, highlight the evolving landscape where AI subtly supports creators, as seen in companies like Nexus. The influence of AI expands with companies like Community, utilizing AI for creator support through text messaging. The complexity and impact of AI necessitate continuous understanding and adaptation over the long term.

Which sector/s would you bet 2 cents on in the next five years?  

The entertainment and gaming industries will be exciting to watch in the next few years. One interesting trend that is currently unfolding in these realms revolves around expanding and enriching user experiences. Traditionally, experiences tied to movies, games, music, and concerts were confined to specific venues such as movie theaters, game consoles, or concert arenas. However, technological advancements have broken these constraints, enabling entertainment experiences to transcend individual platforms and connect communities and fandoms, fostering a sense of camaraderie.

While transmedia is frequently discussed as a pivotal trend, we also observe a broader entertainment experience seamlessly bridging different mediums. Our portfolio company, Community, exemplifies this trend admirably. They have innovatively created a platform that allows brands, artists (including game studios, musicians, actors, etc.), professional sports teams, and social influencers to directly engage with their fans and audiences through instant messaging, utilizing an enterprise-class, scalable solution. This represents a departure from the historical limitations where such direct connections were mostly restricted to in-person events or one-sided interactions through social media.

VCWire

20/02/2024