Disrupting Japan

There are no shortage of startup accelerators, innovation spaces and startup community hubs, and sometimes it can be difficult to put your finger on what makes one a success and another a failure. Today, Tim Rowe the CEO of the Cambridge Innovation Center walks us through what he believes will make or break a startup community. The CIC started as a small co-working space for a handful of startups, and now is the biggest facility of its kind on the world. They’ve expanded to several locations and are now int he process of setting up their Tokyo facility. Tim lived in Japan for a few years in the 1990’s and he understands that Japan is different, and that’s a good thing. It’s an interesting interview and I think you’ll enjoy it. Show Notes for Startups What makes one startup space succeed and others fail When you need to turn down the money to support the  mission How NGOs and governments can sponsor innovation A blueprint for a successful innovation space What approaches to innovation might b

Hiking, back-country skiing and mountain climbing are not usually the first things associated with Japan. Japan, however, has some stunning natural beauty and Yoshihio Haruyama of Yamap is trying to get more and more people to appreciate that. Yamap is a mobile app that allows hikers, back-country skiers and other outdoorsmen to know exactly where they are even when they are well outside of areas cell-phone reception, and the platform is also providing Japan’s outdoor enthusiasts with a way of connecting to each other. Yoshi also explains how relatively young Yamap managed to negotiate OEM deals with both Casio and Kyosera, and give practical advice for other startups hoping to partner up with large Japanese firms. It’s a great discussion and I think you’ll enjoy it. Show Notes for Startups Why add gamification to a hiking app Why Yamap had to pursue multiple monitazation strategies What a startup needs to know to work with a large Japanese brand Why going global might require a business model

More than a few people dream of coming to Japan, starting an online business that gives you financial freedom and leaves you with enough free time to study the language travel and just enjoy Japan. I know that sounds like the opening to some terrible multi-level marketing pitch, but today we site down and talk with someone who has done exactly that — twice. Patrick McKenzie came to Japan more than 15 years ago and after enduring the soul-crushing boredom that is the life of a Japanese programer, he took maters into his own hands, left his job and began developing software products that he sold and supported all over the world the world from his home in the Japanese countryside. It turns our that life was not as idillic or as simple as it seems, but there are some important lessons learned and a great story to be told. I think you’ll enjoy this one. Show Notes for Startups What it's like working as a developer at a Japanese company The 30-year career plan Japanese companies have for their employees

Gaming is very different in Japan than it is in America, but PowerCore is introducing technology that could lead to major changes in both of them. Toys to Life technology blurs the distinction between the analog and digital worlds by having digital gameplay react to the presence of physical toys. For example, after buying a figuring, that character would appear in the game. The first generation of this technology is already being used by powerhouses such as Disney and Nintendo, but the real change is yet to come. Today Jia Shen explains what the future holds for Toys to Life, and why he decided to start his company in Japan. It seems that the boundary between analog and digital is about to become a lot less clear. It’s a great conversation, and I think you’ll enjoy it. Show Notes for Startups Why large companies have trouble crossing the toy-game barrier Why it made sense to build a distributed team from Tokyo The special appeal of physical goods in our digital life How Disney just made a big

Selling services in Japan is very different than selling products or software. Everyone knows that relationships are important in Japan, but not many people understand why they are so important, and how you can use that understanding to build a successful business here. Today Sriram Venkataraman explains how he grew InfoSys Japan from a one man operation to over 1,000 employees and how understanding why Japanese enterprises must trust their vendors far more than companies in other developed countries. We talk about hiring strategies and techniques he used to get his initial customers and some of the most common mistakes that western companies make with their senior leadership in Japan. It’s basically a blueprint for how to grow a services company from nothing to thousands of people in Japan, and I think you’ll enjoy it. [shareaholic app="share_buttons" id="7994466"] Leave a comment Links & Resources Follow Sriram on Twitter @japansriram Connect with him on LinkedIn Transcript Disrupting Japan,

Today we are going low-tech. Sledgehammers and paint brushes low tech. Keigo Fukugaki has started his own hotel brand, BnA, which stands for Bed & Art. It’s not a platform. It’s not an online marketplace. There isn’t (yet) even a meaningful e-commerce component. BnA is a new kind of hotel that places travelers not only in hotel rooms with interesting decor, but plugs them into the local artistic community. It’s an incredibly ambitious project, but Keigo and his team have three small prototype hotels up and running, and they are in the process of building a full scale facility in Japan and already in talks about international expansion. With SaaS companies and digital marketplaces  dominating the news, sometimes it's nice to know that some startups are running businesses based on concrete and lumber. It’s a fascinating interview, and I think you’ll enjoy it. Show Notes for Startups Why old office buildings make ideal art spaces The dangers of standardization in Japan and global the hotel industry

Sales is different in Japan. When Fastly entered the Japanese market, they quickly discovered that they had change their technology-driven bottom up sales approach to fit Japan’s top-down enterprise market. Today we sit down with Doug Chuchro, the Japan head of Fastly who explains how he had to chance both the sales strategy and the corporate culture from that of the US, which a highly knowledgeable user base who understood the workings of their technology as well as the sales team to Japan, where they frequently found themselves educating potential customers about what a content deliver network is and how they are used. We also explore the importance of partners in the Japanese market, and how those relationships can be very much a two-edged sword. It’s a fascinating conversation, and I think you’ll enjoy it. [shareaholic app="share_buttons" id="7994466"] Leave a comment Links & Resources Learn more about Fastly here Connect with Doug on LinkedIn Follow Doug and Fastly Japan on Twitter @Fastly

More and more Japanese founders are moving their startups to San Francisco. It’s easy to see why. There is more venture capital, more startup know-how, and more startup energy in that city than anywhere else in the world. In fact, there is a small, close knit Japanese startup community in San Francisco, with Japanese startups, mentors and investors all supporting each other and trying to grow their business there. On my last trip to San Francisco, I had a chance to sit down with one of these startup founders, Keisuke Kajitani, co-founder of Ramen Hero. He moved to Silicon Valley from Japan to start his company because he thought the US market was a better fit. Ramen Hero sells home delivered ramen meal kits. Interestingly, the popularity and ubiquity or ramen in Japan works against them, while the novelty and price of ramen in the US has enabled them to get attention from both VCs and customers there. It’s a fascinating discussion, and I think you’ll enjoy it. Show Notes for Startups Why ramen gives

Ride sharing works differently in Japan. Hailo lost the global market-share war to Uber and Lyft, but Hailo won the battle in Japan. Today, Ryo Umezawa details Hailo’s Japan market entry strategy and explains how they were able to succeed  where Uber has failed. While Uber vowed to disrupt transportation by taking on both government and industry, Hailo worked within the system. They designed and launched a platform that was completely legal and made life better for all major stakeholders, including the taxi companies. This was a battle between Uber’s disruptive innovation and Hailo’s sustaining innovation. On the global battlefield, Uber won. Uber is the world’s most valuable startup and is still growing fast, while Hailo had a cash crunch in 2016 and was acquired by Daimler. In Japan, however, Hailo won. Hailo’s sustaining innovation soundly trounced Uber’s disruptive innovation, and Hailo remains significantly larger than Uber in Japan. Of course, as you probably suspect, both companies had very differe

Cerevo wants to be a “global niche” player. That makes sense for this Internet of Things company. The IoT has become so pervasive and so successful that the terms ha become almost meaningless. Today we simply except and accept that almost everything should naturally be connected to the internet. Of course, it wasn’t always that way, and today Takuma Iwasa, founder and CEO of Cerevo tells us of how he started his career at one of Japan’s big consumer electronics companies trying to force the internet into devices where it really didn’t belong. And how that experience forced him to find a better way and to found his own company. Takuma also explains Cerevo’s innovative business model. In fact, the company is structured less like a hardware manufacturer and more like a hardware startup accelerator. He and Cerevo are aiming for a series of niche-market successes which will be acquired by large mass-market firms. And his strategy seems to be working. It’s a fascinating discussion, and I think you will really e

Stripe’s Japan market entry did not go according to plan. Things worked out worked out well in the end, but they did not go according to plan. Stripe is one of the world’s largest payment processing companies, but they remained flexible and agile enough to take advantage of some of the surprises they faced in Japan. Today we sit down with Daniel Heffernan, the Japan head of Stripe, and he walks us through what happens when a technically sophisticated and streamlined FinTech company comes face-to-face with the very low-tech and slow-moving processes that make up FinTech in Japan, and how they made it all work. They faced complex, lengthy technical specifications delivered in three-ring binders and un-copyable, printed documents, and they dealt with the Japanese aversion to integrating directly with banks and financial institutions. They even planned to support some of Japan’s more unique payment methods until surprises during development made them change course. Stripe’s entry into the Japanese market is b

Startup M&A is changing in Japan. In August, Naoki Yamada sold his startup Conyac to Rozetta for $14 million. It was an unusual journey of alternating cycles of rapid growth and near bankruptcy, and today Naoki explains how he managed to make the deal happen and also how M&A is changing in Japan, and it seems that change might come much sooner than anyone had been expecting. Naoki talks very openly about some of the mistakes he made and give solid advice on how you can avoid making the same ones. And of course, he explains how he handled the negotiations for the acquisition, and why he decided the exit now rather than continue to grow the company. It’s a great story, and I think you’ll enjoy it. Show Notes for Startups How two quick pivots saved Naoki's company The risks for startups hiring (and firing) too quickly The temptation and danger of focusing on investors at the expense of the team Why M&A made more sense than another round of fundraising What Japanese acquiring companies are most wo

Expedia had a hard road to travel when they decided to come into Japan. The Japanese market turned out to be nothing like they had ever experienced before. Not only were consumer attitudes and behaviors towards travel booking completely different than it was in their home market, but they were up against some very powerful and well entrenched companies, including both online giants Rakuten and Yahoo and traditional powerhouses like JTB. Today Hidemaru Sato, or “Maru" as his friends call him, will explain to us how Expedia managed to overcome the odds on a ridiculously tight deadline and how a few tweaks to the core product turned out to be key to their success. Maru also shares some great advice for both western companies looking to hire a Japan country manager and for people who are Japan country managers and want to do their jobs more effectively. It’s a great discussion, and I think you’ll enjoy it. [shareaholic app="share_buttons" id="7994466"] Leave a comment Friend Maru on Facebook Connect w

This is a rather personal episode. We have no guests this time. It’s just you and me. From the outside, it looks like Airbnb is crushing it in Japan. Listings and rentals are both increasing at an unbelievable rate, and Japan is loosening her room-sharing (or minpaku) laws. The future looks bright for Airbnb here, but behind the scenes a resistance is secretly growing. You see, Airbnb has a real problem in Japan. At first glance many of the issues look familiar. They seem to be the same kinds of challenges Airbnb is facing all over the world, but things are different in Japan, and today we're going to take a look at how important these differences can be.  It's worth noting that so far, Airbnb has not taken steps to address their Japan problem, or even publicly acknowledged that it exists. But it's a situation they will be forced to deal with over the next 18 months, and it's something that we can learn a lot from. [shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript from Japan Disr

GitHub entered the Japanese market under enviable conditions. They already had a strong corporate user base, solid brand awareness and product evangelists throughout Japan. They did not so much push their way into the Japanese market, so much as they were pulled into it. Even under the best conditions, however, Japan market entry is not easy and Derek Sorkin explains some of the challenges they faced with their distribution plans and the original go-to-market strategies. Managing to salvage a great ongoing relationship from what could have been a very ugly incident. Derek also explains why even in this age of Skype and go-to-meeting it’s absolutely essential to spend the time and money on airfare in managing international offices and to maintain trust and credibility. It's a great conversation, and I think you'll enjoy it. [shareaholic app="share_buttons" id="7994466"] Leave a comment Links & Resources The GitHub homepage Connect with Derek on GitHub @dsorkin Follow him on twitter @thesorkin C

You don’t usually think of Japan’s geisha as being an industry, but it is. In fact, strictly speaking, it’s a cartel. A cartel that is now being disrupted by internet-based booking agencies and low-cost substitutes. It seems that even geisha are not immune to internet-based disintermediation. In this special interview Sayuki, Japan’s only geisha that holds an MBA, explains the business model behind geisha. We talk about the way things used to be, the current threats that have many geisha concerned that the traditional art form and the lifestyle will not survive, and how some geisha houses are trying to adapt. This is a rare, behind the scenes look at the business of being a geisha and a chance to see how Japan’s geisha might survive and even thrive in the coming digital age. It’s a fascinating discussion, and I think you’ll enjoy it. Show Notes for Startups How Sayuki broke 100 years of tradition to become a geisha How geisha are being challenged by both the entertainment and tourism industries Ch

FinTech is one of the hottest startup sectors right now, but if you've been in the industry for a while, you know that FinTech is always one of the hottest startup sectors. And yet FinTech companies seem strangely local. Very few succeed outside their home markets. A complex web of regulations and local sensibilities almost always results in these firms struggling in overseas markets. PayPal wanted to make sure that did not happen to them in Japan. In this podcast, Jonathan Epstein explains how he brought PayPal into Japan. He talks in detail about how he got the Japanese regulators to sign-off on PayPal's innovative products, and also how he and his team had to throw out the US playbook and cooperate with other overseas divisions to build new retail and online markets from scratch here in Japan. Jonathan and I also talk about the exacting demands of Japanese consumers, and how those sensibilities convinced him to decide to start a project that drastically increased short-term costs, but might have saved t

Spacee has staked out an interesting position in the sharing economy. Spacee enables companies and individuals to rent out unused meeting room space to people who need to hold a meeting. It's an interesting take on applying a sharing economy model to business. I’m generally very skeptical of startups who define themselves as “Uber for X” or “Airbnb for Y”, particularly in the B2B space, but Spaceee has already been in business for several years in Japan, and they are seeing strong traction and increasing revenues. They might really be onto something. Taku has some fascinating insights on why Japan, and Tokyo in particular, might be far more fertile ground for sharing economy startups than almost any other place in the world. It’s a great discussion and I think you’ll enjoy it. Show Notes for Startups Why the basic business case makes sense How large the meeting space market can grow The challenge of expanding outside of Tokyo Why Spacee turned down venture financing to bootstrap for three years

Today is the first episode off our new expanded format. From today, we’ll be covering both disruptive Japanese startups and detailed market entry case studies of global companies that are disrupting Japan from the outside. Oracle first came into Japan more than 25 years ago, but the challenges they faced and overcame then are exactly the same ones firms are facing today in executing their Japan market entry. Allen explains why Oracle needed a unique sales and marketing strategy for Japan, and how he managed to get buy-in from headquarters — even though Oracle already had a sales and marketing program that had proven fantastically successful in other markets. We also talk about how Oracle managed to negotiate a amicable exit out from their exclusive distribution agreements not just once, but twice. That’s an amazing accomplishment considering that many foreign companies have destroyed their Japanese business the first time they attempt it. But Allen, tells the story much better than I do. I think you’ll en

Material Wrld has found a way to innovate in online fashion commerce, and that’s no easy task. It’s a crowded market, with tight margins. Rie Yano and her team, however, have found success by going against common wisdom. While their competitors were focused on building platforms and reducing the amount of work required by their staff, Material Wrld went the other way. They began to take on inventory risk and doing some of the most labor intensive parts of the process in house. This is the kind of move that looks foolish on the spreadsheets, but it turned out to be instrumental in enabling Material Wrld to maintain quality, develop lasting relationships with their customers and ultimately control their own brand. It’s an amazing, and somewhat surprising story, and it’s best if you hear it directly from Rie herself. Show Notes for Startups Why people feel guilty throwing out clothes How a credit card provides a physical anchor for an online brand Why traditional recycle shops need to change The nee