Doing business with Japan

Thursday, April 15, 2010


Saturday, February 13, 2010


This is a test post from flickr, a fancy photo sharing thing.

Monday, November 03, 2008





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.


Thursday, September 28, 2006

Relationships and Japanese Business

People often tell me that in order to do business in Japan, relationships are very important. Yes, it is very important but it is so everywhere you conduct business in the world. Japanese people are not that different from Americans or any other westerns. You do not do business with anyone you do not know well, do you?

I think the truth is that most Japanese people (not all of course) are not exposed to non-Japanese very much. On top of it, most of them do not feel comfortable with speaking in English (or any other languages). So if you try to reach and touch some Japanese companies without an introduction or some contacts, you will be not very successful. But wait....This is exactly like America. I often help my clients make contacts for business development or sales. But without a proper introduction or connection, I am ignored. This is very much so in dealing with VCs. But nobody says in conducting business in US, relationships are very important.

I sometimes think Japanese have inferiority complex in their language (It is not English). After Japan's defeat in WW-II, General Macarthur wanted to abolish the Japanese language and replace it with English since he thought Japanese people spent too much time in learning such a complex language and did not have time to understand what was going on, leading to the war. If that was the case, it could have been pretty interesting......

Here's an idea for you to be successful in dealing with Japanese businessmen. Learn conversational Japanese!! It is not possible to master the language in a short time but you could master some words and expressions. Once you do this and go to bars with your business associates, you have established a solid RELATIONSHIP!!


Wednesday, August 30, 2006

How to enter the Japanese market in a cost effective way

When your business is growing in the US, you want to grow it further by extending your business beyond the US. You might consider entering European market first and then to a lucrative market of Japan next. There are basically 3 major approaches you can take. Of course, there are some variations to each approach.

They are:
1. Go to Japan and establish Your_Company K.K. with an office and a complete set of staff, including support and sales.
2. Team up with a distributor to whom you can outsource everything from localization, sales to support.
3. Use a specialized consultant who is well connected and who can provide services in a very cost-effective manner.

Which option is best for you? That really depends upon your situation. The # 1 option is best when you have already established your presence in Japan and when you can justify a large sum of cost (if you are generating more revenue than the cost). But when you are trying to enter the market first time, you are not well known and thus, cannot expect a quick increase of revenue. This approach at the early phase may not be very suitable since you need to explain why your revenue is not growing rapidly to your board and investors.

The #2 option is used often since it is a kind of outsourcing to a local company who is supposed to know the local market. This is a convenient way to enter the market since everything is supposed to be done in Japan on your behalf. However, as in the case of #1, at the very early stage, is there going to be a lot of opportunities for revenue? Those distributors themselves need to justify being your distributor and may require some upfront commitment in terms of monetary compensation. Also, they are the ones to push your products/services and it might become difficult to control your market later when your products/services get good traction and you want to establish your own Your Company K.K.

Both #1 and #2 are excellent ways to enter the Japanese market but at the early stage of your business in Japan, they may not be the best option for you. The #3 makes sense when you are hardly known in the Japanese market. Of course, you need to find a right consultant who has a web of networks in those companies likely to be your customers and partners and who has done this before (thus, knows all the pitfalls to avoid). A well connected consultant could help you to enter the market. He can guide you through the Japanese market to get to right sets of customers and partners in a very cost effective way. At the early stage of the entry, it takes long time to find right sets of customer and partners. In other words, you need to employ an opportunistic approach. This is very cost effective since the consultant does not waste his time (and thus, your money). He only moves and conducts scouting and business development when there is a good opportunity. When critical mass is reached, it is time to consider you’re Your_Company K.K. You should also consider hiring a right consultant who is willingly to make a transition from the early stage to the next stage.

Now, a question is how you find such a good consultant. Typically, you think such a consultant only exists in Japan. Let’s look at a consultant living in the US. You wonder how the consultant living in the US could do business development for you in Japan. If he/she does not know the market or has not met with those who might be your customers/partners, he is required to have face-to-face meetings. What if he/she already knows whom to contact on behalf of you. Often times, simple telephone calls and/or email will do. Besides, many large Japanese corporations have their office in Silicon Valley gathering information on technologies and companies.

Come to think of the merits of a consultant in the US, there are several as below:
1. Time Zone difference: Yes, California and East Coast have 3 hour time difference but it is far easier than dealing with 13-16 hour time difference with Japan.
2. Business culture: A consultant living here tends to understand your way of thinking and easier to discuss with.
3. US dollar: You can deal with the financial matter in US dollar.
4. Face-to-face meetings: If you want to see him/her in person, it is far easier to fly over to California than Japan.

Finally, I would like to add some criteria to choose a good consultant for you regardless where he/she might be:

1. Bilingual between English and Japanese (I mean native level). Talk to a Japanese as a Japanese and an American as an American. This includes understanding in both cultural and business practices in both countries.
2. Both business and technology backgrounds because he/she represents you in Japan.
3. Strong network of contacts at IT companies in Japan.
4. Track records

Do I know someone fits the criteria? Yes, I know a few. Please drop me a line at


Monday, May 15, 2006

English is an international language (in Japan?) -1

English is an international language!! You can use English almost everywhere in the world. Well, not quite so in Japan. The "Love and Hate" relationship with the English language in Japan is very hard for you to understand. Because of the love toward the English language in Japan, you see a lot of English conversation schools all over the place. People spend hundreds of thousands (if not millions) of Yen to become fluent in English (but the sad reality is I have not found anyone who really mastered English this way yet.) If you as an American want to get a job, you can (almost) get a job as an instructor at one of those places.

Besides, English classes start at Junior High and last 8 years or so. So adding the above and this many years of training, people should be able to converse with you in English fluently, right? Unfortunately, not quite so. I hope the contents of English classes at school have changed drastically since my days at school. In my days, focus was placed on reading but not on speaking or writing. I suspect this has not changed too much. As everyone knows, in business dealing, you and your business partner should be able to speak, write and read in the same language.

What about "Speaking Japanese like Japanese"? Unfortunately, I never met anyone who was not born to be a Japanese but whose Japanese was better than mine. Well, with one exception. When I was interviewing for a position, I was interviewed by an American who was based in Tokyo for that company. His Japanese was so good that I felt that I was speaking to Yoshida-san, Ito-san or Yamamoto-san. It was a very strange experience because most interviewers wanted to make sure my English was good enough and never paid any attention to my Japanese.

Such a case was rare and an exception. So the language of choice is usually English to do business with Japan. Americans are very fortunate since their language is universal and international. But because of that, Americans tend to forget that there are people whose native tongue is not English. This becomes a real problem in doing business with Japan. More later........