Lessons from Founders: Surviving in Japan (and beyond)
Japan’s consumer market and business culture are starkly unique in the world. Being a founder can be demanding and test your entrepreneurship. Jordan Fisher (CEO of Zehitomo) and Paul Chapman (CEO of MoneyTree) are on their journey several years in and have picked up a few lessons in Japan. Not often do we find foreign founders in the Japanese startup ecosystem.
Having a startup in Japan can seem challenging as a foreigner but the opportunity is wide for one to achieve. The gap between Silicon Valley or the Chinese startup ecosystem and the Japanese ecosystem simply means that there is a greater opportunity for unique innovative disruptors to fill in Japan. While yellow pages transformed to search engines like Yelp or Craigslist and then other verticalized platforms, in Japan, Zehitomo is a big jump from fax machines in a plumber’s office. Similarly, MoneyTree was far advanced in utilizing iOS features amongst other apps in Japan. Both Chapman and Fisher were motivated to maximize the opportunity. But creativity is not enough for a startup to survive in Japan.
Setting up
Although the Japanese culture is an entry barrier to launch, knowing the right methods is crucial. You need to set the foundations right, else you could fall. Key points to remember when laying the stones of your first team:
1. Finding the right mentor:
For Chapman, it was crucial to have a Japanese co-founder or a CFO to land a foot in the Japanese banking sector. You need to overcome the stigma of being a Gaijin. Having the right Advisor with great connections gave him credibility and allowed him to maneuver through the tough banking jargons the Japanese spoke. In Japanese banking, even “a dollar from a really big investor would mean a lot”. Fisher had a different process. Beyond the right mentors and fundraising, recruiting the right people is also integral to the founding blocks of a startup.
2. Building a culture:
In a Japanese startup or a company, the product side could be focused on English first, however, the sales are Japanese focused. As an employer, you should ensure they aren’t “allergic” to English. Regardless, we often mistake culture with language.
Many companies encourage English, but what the change should really be focused on is the Language. A founder must understand the cultural needs and fits for their product. Mere imitation is wrong. “You must ask whether you need language for that culture,” says Fisher. Bilingualism should be encouraged but not enforced to the point where it becomes a hurdle.
3. Finding the right fit:
Finding the right team starts with what you want to do or achieve. The people you attract in the early days are different from later stages. In the beginning, when it is only a dream, it is simply about the will. A creative worker wants to boost your productivity. Fisher believes, “A creative worker would produce 10x, meanwhile a top performer could do 2x of the average worker in data entry for manual labor.” You are looking for who can produce the most value and be a superstar over cost.
Eventually, things evolve, and your role requirement is for specialists from generalists. Thus, you will have to recruit those a lot more talented than you. As a founder, your experience has brought you to where you are, but to drive further, you would need smarter people around you.
4. Presenting yourself:
It takes longer to build your credibility than to have it ruined when people begin talking about you, especially in Japan. Leave a good impression of yourself as an individual, especially when you have many assumptions against you. Even during recruiting, candidate care is really important but often forgotten.
Growing
The process of growing your startup can be arduous, from the early days of product development or going from zero to one. Both, Fisher and Chapman, had quite a contrasting journey as a Web service versus an Application.
To build a successful product, identify your market and product’s value. Chapman and Fisher both agree to “make something that the first hundred people really want and then the other people amongst the 120 million would naturally come. Focusing on people who would value it and need it or find it as a game-changer in their life, is a good entry point.”
As a tech product, you must do a lot of A/B testing and work with Beta testers being your close friends who can give you feedback. Developing a product is a very iterative process and a founder must learn to iterate on the right things. Gathering a lot of data to iterate our product faster. As long as the unit economics are sensible, you could pay a little to accelerate your growth. Ultimately, reflect on the mistakes and feedback quickly, to work better, and grasp the challenges to solve in the market. From here on, focus on user expansion and distribution.
MoneyTree reached out to the App Store and as one of the more advanced applications ready to feature iOS functions, they were a game-changer and featured on the App Store as a banner. This boosted their downloads. Chapman suggests, “If you find a new platform and you are there early, you will reap the benefits.” Apple really wants to showcase how the best examples their platform has to offer. Thus, even today, they try to time their App updates with iOS updates with new features to land them on the App Store banners and expand their consumer base.
Zehitomo used Ad Words on search engines. Initially, Zehitomo had advertisements but realized they were costly compared with the monetization model they had. The hardest struggle was to change consumer behavior for Fisher. Hence, he shifted his focus from a need to be on-demand. Instead of saying “Hey you need photographer now”, the focus shifted to when they needed one, they could search on the engine, and Zehitomo’s link would come up first.
At the end of the day, being a founder, especially as a foreigner, can be challenging. It requires one to wear multiple hats: Engineer, Marketer, Salesman, or Recruiter. As a result, a founder should have a healthy entrepreneurial mindset to be aware, challenge, solve, and reflect.
