6 Japanese trends you should know about!
Recent news about Softbank acquisitions overseas are not the only innovative facts coming from the Land of the Rising Sun.
As a Foreigner living in Japan for almost two years and working for a startup, I find intriguing when visitors get impressed by all creative inventions like the "high-tech" toilet seats or the vending machines you can find everywhere in the country.
Back in the 90s, during my childhood in São Paulo, Japanese medical devices were already trendy, with Kyoto-based Omron as the main leader in the Brazilian market — its blood pressure devices were found in most of local drugstores.
Considering the fact that I've been here for a while, the most surprising things I find about Japan aren't so easy to see on the streets when you stay in the country for a short-stay— some insights require a little bit of research and connecting the dots.
Innovation wears different outfits depending on where you are. Some things going on in Japan are very unique compared to certain countries, as some facts considered disrupting overseas (as selling IoT devices in any drugstore) aren’t a big thing here anymore.
When it comes to doing business in Japan, some stereotypes can bring a negative impression and misconceptions that won't help at all. If you wish to understand how the system works and how to partner with local players, you must rethink your paradigmas.
One of the main Japanese global players investing everywhere is Softbank — having acquired the British chip maker ARM, it’s now selling 25% of its shares. This amount should be used to extend new deals with startups all over the world, as it was the case for UK-based VR Improbable.
“For ARM, Improbable, and many of their peers, whether in London (where Improbable has offices) or in the little cluster that makes its home in Cambridge’s Silicon Fen, SoftBank is probably their best option. It’s proven willing to give the companies in which it invests a lot of love, and it doesn’t interfere too much in their development if things go well.” (The Indepent)
Earlier last week, Softbank acquisition of two startups from Alphabet (Google) wasn’t surprising for the ones who’ve been following Son’s path as one of the main entrepreneurs from Japan.
“With Masayoshi Son at the helm and $93bn in commitments, the size of the SoftBank Vision Fund is unprecedented and its stated ambitions are limitless.” (The Financial Times)
Masatoshi’s brother Taizo Son, Mistletoe leader, announced he’s moving to Singapore to raise his kid there, but at the same time he’s also expanding his support for both local and global entrepreneurs, as the recent announced Hardware Club new Fund also kept a promise to deeper a SF-Paris-Tokyo bridge.
Some of the voices point out that the two unique entrepreneurs are getting involved in different ecosystem but still keep a strong connection to the ecosystem where they come from — Japan has been innovative in many ways, as the monozukuri culture spread by Toyota modus operandi can prove.
Against all odds, entrepreneurship has been working in Japan for longer than one could imagine, and some role models have become famous for its innovation achievements and not the traditional way of doing things — Son’s brother aren’t the only ones.
As for Foreigners trying to see the entire picture, it's a daily effort: entrepreneurs should consider the glass half-full and take advantages of the opportunities in the pipeline.
I wrote down a few examples I read over the last weeks to illustrate how Japanese players have shown their moves towards innovation:
1.Low-Cost Peach Airlines has adopted cryptocurrency in order to follow consumer’s needs and new emerging technologies. The decision was done to keep up with the growing number of Asian tourists — Chinese specially, who use alternative ways of payment. For a country considered so “traditional”, it’s impressing to see some challenging policies recently approved by the Japanese government. (Japanese banks, including Japan Post Office, one of the most tradition institutions in the country, have also adopted the technology).
2. Japanese Fund Cool Japan announced it will back 500 Startups, a SF-based venture firm specialising in early-stage investments. The partnership aims to help startups in the archipelago expand abroad by leveraging the venture firm’s global network in about 60 countries.
3.SMEs are the entrepreneurs behind the scenes driving innovation in Japan, with 54% of the workforce involved in new projects (no matter what!) and 48% of all corporate revenue in Japan. Some of them, like KSN, have been the “back-bone of large corporations without becoming famous”, as posted today by Tim Romero on his Disrupting Japan podcast. (The Iphone Supply Chain is a clear case presented on his arguments).
“SMEs are NOT low-cost manufacturers, they’re high-top innovators” (Tim Romero) - about the main difference between SMEs in Japan and elsewhere in Asia.
4.Some other Japanese companies have adopted English as the main language (English-only — lingua franca) led by UNIQLO (Fast Retailing), to Bridgestone, Rakuten and even Honda has also adopted the new policy.
5. Traditional companies like Sharp and Panasonic are adopting modern standards and achieving results, as merit-based rewards policies, also using English skills as part of their promotion policy. Whenever we take groups of IoT startups to meet Panasonic teams, all Foreigners get impressed by their knowledge about both global and local markets — all meetings in English.
6. Other ones, as Kyocera, are partnering with Foreigner startups like SIGFOX, a French unicorn that will help providing a new LPWA in Tokyo, Kawasaki, Yokohama and Osaka, urban hubs for innovation in the country.
Startups should consider a few points before entering the Japanese market — as a good starting point to reach Asia, but cultural differences might be mistaken as a statement against innovation — including ageing, as some brilliant entrepreneurs I met are over 50s.
As Make Leaps highlights on its advises for Foreigners coming to Japan,
“Japan has a culture based around personal networks and connections, so Japanese consumers typically look for consensus and poll their network while making a buying decision. This can lead to a pleasant snowball effect, where if enough customers start using a product/service, critical mass kicks in and the product/service achieves extraordinary success.
A recent example is Apple. You can’t get on a train and sit down without seeing 20/30+ iPhones, iPads, or white earbuds leading to iPhones/iPads/iPods.
The flip-side of this, is no matter how good your product/service is, people won’t use it unless they see other people using it, or unless their friends introduce them to it.”
Considering its unique business and consumer’s culture, finding local players who can introduce you to potential clients or partners are key points for those who wish to explore the range of possibilities in Japan.