Doing business with Japan

Thursday, October 12, 2006

Minimum Requirements for Success in Japan

Ok, what are the requirements for business success in Japan? Of course, each case is very unique and I cannot generalize them. However, based on my experiences, I can say the following.

1. Traction in the US market,
2. Documents in Japanese,
3. Support in Japanese, and/or
4. Credible reference customers in Japan

Actually, #4 may be desirable but not a part of the requirements.

As for #1, some companies are having hard time to get traction in the US market and consider trying out markets outside of US. I cannot say for other countries but in Japan, it would be very difficult to make it there without any traction in the US. Japanese companies tend to be rather cautious about new technologies and new companies. They have experiences in dealing with new technologies and companies in the past and got burned.

Regarding #2, one thing you have to understand is that English is not spoken in Japan. Yes, if you go there like Tokyo, you will see a lot of signs in both Japanese and English. Sometimes, in Chinese and Korean in addition. However, if you grab anyone in the streets of Otemachi (Wall Street equivalent, center of finance in Japan), you will understand what I am talking about here. If you have a product to sell in Japan, it is absolutely necessary to have Japanese documents. And the quality has to be within an acceptable range. Many engineers tend to pass any documents not written in Japanese (of course, as you know engineers hate to read documents, though.)

As to #3, due to progress in the Internet, you could support your remote users on-line with access to email and of course, via telephone calls. For many native English speakers who had not exposure to other languages, this appears to be so hard to understand. It is very very very difficult to ask any questions in English (whether or not written or spoken.)

#4 is a nice to have. The herd mentality plays here but this is not limited to Japanese companies. But if this is your first time to enter the Japanese market, how can you have a set of credible reference customers since you need customer to get new customers?

For each one, let me propose a solution. For #1, I cannot help (maybe I can but….) you get your product(s)’ traction in the US market. This implies if you go outside of US to do business, you probably want to see your domestic traction first. I am sometimes approached by companies who are having hard time to get traction in the US market. All I can say is wait until the right time. #1 is somewhat easy compared to others.

Now I can combine #2 and #3 to answer for them. In order to do this, you need Japanese staff on your payroll. Yes…Well, not necessarily so. What if you obtain a small number of reasonably large companies as your partner? The problem of #3 is far more important than #2. If you have a solution to #3, you can use #3 in place of #2 (to some extent). Having #3 means you somewhat satisfy #4 as well. Reasonably large Japanese companies usually have some number of people who can do English as well as Japanese. They can provide support in Japanese and get your support in English. So your best bet is to acquire a reasonably large company as your partner/user. This will be discussed later……….

Of course, I know that entering into the Japanese market is not this easy. But this strategy always works. And if you want to talk about this further, please drop me a line at and I will be happy to discuss with you more about it.