In the ever-evolving technology landscape, Japanese tech giant NEC recognized the need for greater collaboration with entrepreneurs. In 2018, they set up a venture studio in Silicon Valley to bridge the gap between their innovations and the startup ecosystem. By September 2023, this initiative had evolved into Elev X!, a startup accelerator program designed to better support entrepreneurs and commercialize new technologies.
We spoke with NEC X CFO Naoto Mizuguchi to understand more about the shift in the Silicon Valley strategy. Mizuguchi has been with NEC for over 20 years, working in different roles such as product marketing, sales, mergers and acquisitions, and operations.
NEC Transforms its Innovation Strategy
Historically, Japanese companies like NEC focused more on internal R&D, which limited their collaboration with startups and the global market. Even though NEC possessed cutting-edge technology, says Mizuguchi, they found it challenging to successfully commercialize their innovations.
To address this, NEC created the Business Innovation Unit (BIU) in 2013, implementing lean startup principles and rapid development of MVPs (minimum viable products). But NEC’s rigid structures only got in the way.
Recognizing the need for agility, the BIU leadership separated their ventures from NEC’s larger operations and established NEC X in 2018 as a subsidiary and startup incubator in Silicon Valley.
NEC X initially operated the “NEC Corporate Accelerator Program,” showcasing new NEC technologies to potential entrepreneurs and selecting Entrepreneurs-in-Residence (EIRs) based on their skills and interests. NEC X supported the EIRs in customer discovery and validation, helping them identify market needs and develop MVPs.
The creation of NEC X coincided with the spin-out of dotData, a data analytics venture led by CEO Dr. Ryohei Fujimaki. DotData’s success highlighted the potential of bringing NEC’s R&D technology to market. However, NEC soon realized that its “inside-out” model—providing technology from its laboratories to founders for commercialization—was not efficient.
The Launch of Elev X!
Adopting the problem-first mindset, Mizuguchi and NEC X’s CEO and President Shintaro Matsumoto spearheaded the launch of Elev X! in September 2023.
“We wanted to create more startups and use our technologies for multiple startups, not just one,” said Mizuguchi.
NEC’s goal shifted from searching for entrepreneurs to develop their technologies, to partnering with startups and learning how to leverage NEC’s technologies to bring new ventures to market. This change allows NEC to fully utilize its broad applicability of technologies across various contexts and problems.
Elev X! offers two startup accelerator pathways:
- Elev X! Ignite is a nine-month program for early-stage founders, focusing on customer discovery and validation. It offers extensive support resources and up to $200K in funding. Candidates work on new business ideas, developing problem-solution hypotheses, or prototyping an MVP.
- Elev X! Boost is a highly customized program designed for seed-stage startups, preparing them for rapid growth and a successful series A round. It offers strategic partnerships and integrations within NEC X’s global tech ecosystem.
Through Elev X!, NEC X now offers more hands-on mentoring and end-to-end support, acting as co-founders with entrepreneurs at every stage—from ideation to customer discovery, validation, and graduation. According to Mizuguchi, this approach supports the solutions founders pinpoint and finds synergies with NEC technologies to bolster their visions.
NEC Targets Sectors for Technology Growth
NEC X targets specific sectors where NEC has a strong presence or sees significant potential for growth, including public safety, healthcare, agriculture, and climate tech.
“These three [are] quite traditional markets, but very huge markets, and there’s a huge space to be digitalized and automated and supported by AI or some advanced technologies,” said Mizuguchi.
Marketing is the other sector NEC X has its eyes on, specifically utilizing AI technologies to support the growing creator economy.
“[The] creative economy could grow even more than now… getting even bigger 10 years later because every single person can be a creator,” said Mizuguchi. “They should have some support from the AI, because they are not professional, they are not a company, but the individual creator could make their own business with support from the AI and that generates more creators… this is a kind of cycle.”
“These sectors offer vast opportunities for digitalization and automation, areas where NEC’s technologies can make a significant impact,” said Mizuguchi.
Fostering Entrepreneurs and a Global Network
Prior to 2018, NEC had already established a presence in the United States, with innovation offices and R&D laboratories in Princeton, New Jersey, and San Jose, California. However, the creation of NEC X and the launch of Elev X! marked an investment in Silicon Valley innovation, and allows NEC the opportunity to extend its business reach beyond Japan.
In the long-term, NEC has three main goals for Elev X!: 1) Strengthen its community / ecosystem, 2) Expand the global network (aiming to partner with entities in Canada and New York City), and 3) Train professionals with an entrepreneurial mindset.
Mizuguchi emphasizes the challenge NEC faces as it attempts to foster the entrepreneurial spirit. Not only are Japanese companies more conservative, he says, but its younger generations generally take a cautious approach toward startup culture.
“We want to create more professionals who have the capability of working together with startups in this kind of ecosystem, and with a fail fast mindset,” he said. Even if young people aren’t interested in creating a startup, corporations recognize the value of an entrepreneurial mindset and seek out training for their employees. Mizuguchi strongly believes that Elev X! helps upskill workers with an entrepreneurial mindset.
For startups considering joining Elev X!, Mizuguchi offers this advice: “Please be patient. Corporations like NEC, especially the Japanese companies, they are quite slow from the startup point of view, but they are quite serious. And when they decide to collaborate with a startup, they [are a] very trustful partner.”
