Midokura, a leading AI company that chose Barcelona to establish a development center

This piece is a translation of a full interview that appeared in the Nikkei online newspaper in Japan.　

Founded in Tokyo in 2010, Midokura established a development base in Barcelona in 2011, and Barcelona remains the center of the company's development activities. Midokura became part of the Sony Group in 2019, but Takaya Kato, Co-Founder and Chairman of the Board and Representative Director of Midokura Japan, said he chose Barcelona because “the people were there".

There is a famous anecdote about the climber George Mallory who, when asked why he was climbing Everest, replied, "Because it's there." But mountains don't move. People move. The character of Mr. Takaya Kato attracts the world's top-class talented people, and the work-life balance environment of Barcelona attracts the best engineers from all over the world.

Build a Base Because That's Where the People Are

Mr. Kato's career is remarkable. He is best known as a member of Kyoto University’s prestigious American football team, the Gangsters, during its golden era. When he was a member of the team, the team won the number one championship in Japan a total of four times. After graduating from university, he joined a management consulting firm in 1991 to "stretch his muscularized brain", and in 1997, together with Yoshito Hori, a senior student of the Faculty of Engineering at Kyoto University (now Dean of Globis University Graduate School of Management and Representative Partner of Globis Capital Partners), he founded Japan's first management school outside of a university, GLOBIS. In 1991, he joined a management consulting firm.

Later, he was invited by Robert Hori, the founder of mobile content company CYBIRD, whom he had known since junior high school, to participate in the company's management reform as Representative Director and Representative Executive Officer. He was then headhunted to become the Executive Officer in charge of new business development for the CSK Holdings group (the youngest among the members at the time). After retiring from CSK Holdings, he founded Midokura in 2010.

“During my time at GLOBIS, I invested in and provided management support for several IT and technology ventures, including GREE, Optware, and Works Applications, as a venture capitalist. However, my dreams of ‘making Japan a technology-based nation again,’ ‘creating a second Honda or Sony, ‘and ‘fostering global tech ventures from Japan to support them’ has not yet come true. I thought that CSK, with its ability to acquire companies worth 1 trillion yen, should be able to compete with major U.S. tech companies, so I started CSK in 2005 with the idea of developing a company that would be able to compete with the major tech companies in the U.S.", said Kato.

"I reported on the latest technological trends that I expected to emerge in the years to come, such as cloud computing, social media, and blockchain, which were not generally known at the time, and made many proposals based on them. However, many of them did not materialize, and after leaving CSK, I thought that if I was going to start a business in Japan as a Japanese, I might as well form a global team from the beginning and do it according to global standards," Kato recalls.

Dan Mihai Dumitriu, the Romanian American co-founder and CTO of Midokura, is a world-class computer scientist who has served as Chief Technology Officer at Amazon.

“I first met Dan when I was at CSK, but we reconnected when he was a research fellow in cloud computing at the École Polytechnique Fédérale de Lausanne, and we decided to start a company to develop network virtualization technology. We hit it off and launched Midokura. About six months later, Pino de Candia, an Italian American who was Dan's classmate at Cornell University, joined Midokura and has been the chief architect ever since. Pino is a genius who invented and developed Dynamo, a world-famous high-speed distributed database technology, during his time at Amazon. His wife is also an American, but the couple moved to Barcelona to give birth there. Midokura's overseas offices are in Lausanne and Barcelona because that is where Dan and Pino originally lived."

People are there, so build a base there. Simple and logical.

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“We value our employees and their families highly. The city of Barcelona itself is synonymous with a culture that values human connections”

Takaya Kato, Co-Founder of Midokura Japan

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Midokura's Vision for the Future of AI

“Engineers get excited by cutting-edge and unique things, things that will change the world. They are attracted to technology that will change the future, not technology that already exists. I have invited Dan, Pino, and the rest of the core talent to join us under that banner," said Kato. Of course, it was not just a dream, but a vision of the future backed by a wealth of technology knowledge.

Midokura is currently developing an edge AI sensing platform as a member of the Sony Semiconductor Solutions Group in collaboration with its System Solutions Division.

“Computers have a history of evolving by alternating between centralized and decentralized computing. The cloud is centralized computing, but it has the disadvantage of going down once a year. If you run an automated driving system, which is responsible for human lives, on such a centralized system, there is a risk of accidents. Network virtualization is also based on distributed thinking, but edge computing is the idea that data collected by sensors and measuring devices is analyzed within devices placed at the edge (the point where the data is sent out), and only the necessary data (from the edge) is sent to a central computer in a remote location. The idea is to send only the necessary data (from the edge) to a central computer in a remote location. This reduces the burden on the network and improves response speed while protecting privacy," says Kato.

Major U.S. IT giants GAFA companies are starting to develop edge AI semiconductors independently. In Japan, existing semiconductor makers, auto parts makers, and major electronics makers are also participating in development, but they are already half a step behind.

In this respect, "Sony has accumulated image processing technology, along with a mass of intellectual property in the form of CMOS image sensors, and the most value-added aspect of AI is the large amount of factual data such as images and voice. Currently, that data is sent to the cloud for analysis, but Sony's technology will enable image analysis on a chip. Combine that with virtualization technologies such as containers and WASM, and you get tremendous benefits”.

Barcelona for a Better Work-Life Balance

Midokura is developing these cutting-edge technologies mainly at its Barcelona site. “As of the end of April, we had about 60 employees worldwide, about 50 of whom are in Barcelona, including those working remotely. They are from 15 different countries. In Spain, there is a huge telecommunications company called Telefonica, which covers a wide area of the Spanish-speaking world, and it is also an advanced region in computer science. We knew from the moment we entered the country that there were many talented infrastructure engineers in the area of cloud computing and networking," says Kato.

“In 2011, IT giants such as GAFA were not yet taking Barcelona seriously. Today, Barcelona is the birthplace of many tech-centric ventures, but back then, it was also easy to recruit talented people”, Kato said. But recently, Amazon, Google, Microsoft, and others are getting serious about attracting talent in Barcelona. It is already becoming difficult to hire, and Midokura is expanding its recruitment target to include all of Europe.

“The members of Midokura can choose between Tokyo, Lausanne, and Barcelona, but when the name Barcelona is mentioned, people often respond, ‘Great! I like it! ‘There are many very talented engineers in Eastern and Northern Europe, but basically, people who create value place great importance on work-life balance."

"Therefore, if you want to secure excellent human resources, it is not a question of labor costs. Instead, compatibility with the company's culture is actually crucial. If we bring in the rules of Japanese companies as they are, I think we will lose all the excellent human resources. It is essential to have a global and flat culture, not a monoculture. The name of our Barcelona office is Midohouse. We call it “Midohouse’ because we want it to be a ‘home’ where employees can gather to relax and engage in lively discussions. We value our employees and their families highly. The city of Barcelona itself is synonymous with a culture that values human connections”.

Five Reasons Why Midokura Chose Catalonia

1. It was where the core personnel of the business resided
2. Easy to hire advanced IT personnel locally
3. Optimal work-life balance
4. The city attracts talented people and they all say, “I like it!”
5. Global and flat culture

Read the full article in Japanese here.