Building a SaaS startup in one of the least hospitable places on Earth: Japan(beaconreports.net)
beaconreports.net
Building a SaaS startup in one of the least hospitable places on Earth: Japan
http://beaconreports.net/ichiban-entrepreneur
5 comments
This story is seriously worth your time, both if you have any desire of selling things in Japan (I am in perpetual awe of people who can succeed at that) and for the generic startup-y relentlessly resourceful "Well, if the market is fundamentally irrational about how they buy this product, then let's figure out how to work that to our advantage" rather than just giving up when things seemed difficult. (Disclaimer: they're friends of mine and we work together on stuff occasionally.)
Why "least hospitable"?
A short list:
1) Japanese companies don't buy SaaS.
2) Japanese companies do buy software, but it is overwhelmingly sold through existing commercial relationships they have with individual salesmen, even for packaged software. This is not an easy sales channel to just show up in one day. (I am not exaggerating the following anecdote in the slightest degree: my manager needed to invite a salesman out to drinks for us to procure a license of MS Office at my old day job.)
3) Japanese: occasionally tricky.
4) The problem domain for Japanese invoicing: potentially tricky, if you weren't expecting things like "We need photographic reproductions of the company seal on all our invoices. Naturally." to be hard requirements.
5) There's a sentiment among some members of Japanese society, including occasionally ones who have input in purchasing decisions, that you can only possibly understand Japanese language/culture/business practices if you are Japanese, and therefore, if you are not Japanese, they might not be overwhelmingly predisposed to doing business with you.
1) Japanese companies don't buy SaaS.
2) Japanese companies do buy software, but it is overwhelmingly sold through existing commercial relationships they have with individual salesmen, even for packaged software. This is not an easy sales channel to just show up in one day. (I am not exaggerating the following anecdote in the slightest degree: my manager needed to invite a salesman out to drinks for us to procure a license of MS Office at my old day job.)
3) Japanese: occasionally tricky.
4) The problem domain for Japanese invoicing: potentially tricky, if you weren't expecting things like "We need photographic reproductions of the company seal on all our invoices. Naturally." to be hard requirements.
5) There's a sentiment among some members of Japanese society, including occasionally ones who have input in purchasing decisions, that you can only possibly understand Japanese language/culture/business practices if you are Japanese, and therefore, if you are not Japanese, they might not be overwhelmingly predisposed to doing business with you.
> my manager needed to invite a salesman out to drinks for us to procure a license of MS Office at my old day job
Do you see the Japanese recognizing/fixing the massive inefficiencies in how they do business any time soon? The Japanese economy's been down in the dumps for the last 20+ years, and these sorts of things can't be helping. Peter Drucker must be turning in his grave (he would be positively spinning if he saw もしドラ).
When I see things like faxes still being prevalent because "my feelings and passion come across better"[0], I wonder if the Japanese are really interested in staying relevant in a global economy. I mean, come on, 59 percent[1] of homes still have faxes? How did these people miss the digital revolution?
0: http://www.bbc.co.uk/news/magazine-19045837
1: http://www.washingtonpost.com/world/asia_pacific/in-japan-fa...
Do you see the Japanese recognizing/fixing the massive inefficiencies in how they do business any time soon? The Japanese economy's been down in the dumps for the last 20+ years, and these sorts of things can't be helping. Peter Drucker must be turning in his grave (he would be positively spinning if he saw もしドラ).
When I see things like faxes still being prevalent because "my feelings and passion come across better"[0], I wonder if the Japanese are really interested in staying relevant in a global economy. I mean, come on, 59 percent[1] of homes still have faxes? How did these people miss the digital revolution?
0: http://www.bbc.co.uk/news/magazine-19045837
1: http://www.washingtonpost.com/world/asia_pacific/in-japan-fa...
Funnily enough, Drucker is quite fashionable in Japan ATM (or more exactly was when I was still in Japan 2 years ago): http://www.economist.com/node/16481583
While a lot of those practices are clearly inefficient, let's not forget that they have their plus as well. It is sometimes madening to see consensus building in Japanese meeting, but people are less likely to be blinded by their limited understanding as well. I can't find the reference, but a former colleague of mine knew of some research that showed how Japanese were more likely to know the actual decisions being taken after a meeting compared to their European/American counterparts.
Also, caring about the content of the emails or doing faxes means you are not as likely to answer them with a two letter words, which is just being efficient at doing useless things I suspect the fax thing itself to be more of an artefact of the average age of people in charge in Japan: my gf parents had a fax, but nobody I knew in my own generation in Japan had one. There is also most likely an early adoption paradox.
In the end, Japanese economic woes are mostly demographic I am afraid (GDP growth per capita is closer to the US than most people think), and inefficiencies should be considered with that in mind.
While a lot of those practices are clearly inefficient, let's not forget that they have their plus as well. It is sometimes madening to see consensus building in Japanese meeting, but people are less likely to be blinded by their limited understanding as well. I can't find the reference, but a former colleague of mine knew of some research that showed how Japanese were more likely to know the actual decisions being taken after a meeting compared to their European/American counterparts.
Also, caring about the content of the emails or doing faxes means you are not as likely to answer them with a two letter words, which is just being efficient at doing useless things I suspect the fax thing itself to be more of an artefact of the average age of people in charge in Japan: my gf parents had a fax, but nobody I knew in my own generation in Japan had one. There is also most likely an early adoption paradox.
In the end, Japanese economic woes are mostly demographic I am afraid (GDP growth per capita is closer to the US than most people think), and inefficiencies should be considered with that in mind.
> Funnily enough, Drucker is quite fashionable in Japan ATM
Yeah, that's why I mentioned him and said he'd be spinning in his grave if he saw もしドラ, because it's a quintessentially Japanese situation - everyone's buying this book that discusses grand ideas and talking about it with one another, but no one's actually applying any of those ideas to real life.
Yeah, that's why I mentioned him and said he'd be spinning in his grave if he saw もしドラ, because it's a quintessentially Japanese situation - everyone's buying this book that discusses grand ideas and talking about it with one another, but no one's actually applying any of those ideas to real life.
> Do you see the Japanese recognizing/fixing the massive inefficiencies in how they do business any time soon? The Japanese economy's been down in the dumps for the last 20+ years, and these sorts of things can't be helping.
A lot of those inefficiencies exist for the purpose of maintaining the employment rate. They succeed at that.
A lot of those inefficiencies exist for the purpose of maintaining the employment rate. They succeed at that.
Come on, I think everyone here can agree that refusing to accept the broken window fallacy is not a sustainable economic model.
I don't believe the broken window fallacy has anything to do with this. Their system, since the massive mid-eighties crash, has deliberately focused more on maintaining employment than on growth. They have been demonstrably successful by that measurement. It's not the system I would design, but still.
Much like the faxes you were making fun of, it's a question of differing priorities.
Much like the faxes you were making fun of, it's a question of differing priorities.
Bull.
Japan is the second largest market for salesforce.com.
Japan is the second largest market for salesforce.com.
Salesforce Japan was also a joint venture between Salesforce.com and a Sunbridge (that Salesforce.com eventually bought out). Sunbridge was founded by Allen Miner who already had experience building out Oracle in Japan and the team that helped him there also helped build out Salesforce.com in Japan.
I recently was talking with some folks from that team and they did share with me that the experience was anything but easy but that it was all par for the course for SAAS sales in Japan.
Edit/Addition: I would disagree with points 1 and 5 that patio11 are making though. Past experiences (working at both SAAS and other internet companies) and also current experiences (starting up an Cloud Telephony platform https://www.fullcourt.co ) has me believing that the following from the article is always a great issue.
People were saying, “It’s a really good product. It is reasonably priced. But, who else is using it?” In consensus driven Japan, where nobody budges unless the next guy is doing the same, Winder faced a chicken and egg problem.
I've/we've often been asked about our other customers. Another thing that also often comes up is that we're asked for a comparison study with competitors, this usually happens because our point of contact doesn't have final authority and needs to build a biz case for his/her superiors.
Regarding "1) Japanese companies don't buy SaaS.", this definitely isn't true at all. I dare say that all of my former employers, a number of their partners and customers did use SAAS products from both domestic and foreign companies. It takes a long time to sell but once you get a few key companies that you can reference (for whom the sales process can often take months and sometimes years), then customers will start lining up.
I recently was talking with some folks from that team and they did share with me that the experience was anything but easy but that it was all par for the course for SAAS sales in Japan.
Edit/Addition: I would disagree with points 1 and 5 that patio11 are making though. Past experiences (working at both SAAS and other internet companies) and also current experiences (starting up an Cloud Telephony platform https://www.fullcourt.co ) has me believing that the following from the article is always a great issue.
People were saying, “It’s a really good product. It is reasonably priced. But, who else is using it?” In consensus driven Japan, where nobody budges unless the next guy is doing the same, Winder faced a chicken and egg problem.
I've/we've often been asked about our other customers. Another thing that also often comes up is that we're asked for a comparison study with competitors, this usually happens because our point of contact doesn't have final authority and needs to build a biz case for his/her superiors.
Regarding "1) Japanese companies don't buy SaaS.", this definitely isn't true at all. I dare say that all of my former employers, a number of their partners and customers did use SAAS products from both domestic and foreign companies. It takes a long time to sell but once you get a few key companies that you can reference (for whom the sales process can often take months and sometimes years), then customers will start lining up.
Yeah, my bad -- I was being slightly hyperbolic on my iPhone. A more nuanced comment would have been "It is very difficult to convince a Japanese company to purchase SaaS on the low-touch sign-up-with-your-credit-card-and-go model."
Right - but the article is about building a startup from the ground up.
As opposed to a company that was already enterprise level when it entered Japan.
This makes a huge, huge difference in Japan.
Disclaimer: The article is about me.
As opposed to a company that was already enterprise level when it entered Japan.
This makes a huge, huge difference in Japan.
Disclaimer: The article is about me.
i was replying to the particular comment of patio11 which is simply not true. Japanese companies do buy SaaS. the company i work for just opened offices in japan (after eu and china) and rented out data center space. we already have local clients. we are a start-up by any means, although enterprise focused (little bit over 5 years old).
There's a difference between "least hospitable on earth" and "harder than in the US". I'd rather sell SaaS in Japan than in Ethiopia or Uzbekistan. (This is still a good read though)
This is very interesting, I think it summarizes the story of most first time entrepreneurs trying a saas startup, spotting a great opportunity, building a mvp, knowing your competitors and learn all the basics of business, and there is a crucial factor for a entrepreneurs in a foreign land: Culture, its all about humans.
Its a really nice read, and I think if you apply the same universal strategic rules you are likely to succeed anywhere else
Oh man.. I used to work doing sales & managing inventory using Yayoi Kaikei... It was a world of pain.
What the hell is a "Ichiban Entrepreneur"?
Ichiban means "number one" or "best", but I don't think it quite matches what the author of the article is looking for. Ichiryuu means "top class", maybe that would be better? But my opinion is that they could have conveyed the idea of "successful entrepreneurs in Japan" without the superfluous Japanese :)
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