Blissful Japan

Recently my professor was quoted in an article from Forbes: Starting Up Start-Ups In Japan: Obstacles abound; new U.S. ambassador expected to highlight importance of venture culture. Another interesting article is also linked to on that page: Searching For Entrepreneurship in Japan.

I am not an expert on this subject, but in my 7+ years in Japan I have talked to and worked with many small companies and startups. I don’t want to sound negative but really I think the whole US style of entrepreneurship and venture capital is simply extremely different than Japanese culture, business culture, and customs. There are so many aspects to this it’s hard to know where to start to describe them. Some random thoughts follow. I am not Japan bashing. I’m not convinced that U.S. style venture capitalism is the panacea either, but that is another topic…

• Japan’s group culture is not compatible with America’s culture emphasis on the single individual. Yet this emphasis is needed for single individuals to start companies or make a bold new invention or idea.
• Startup founders have to stand out, stand in the limelight. Japanese people don’t like to stand out and go against the flow or show much too individualism for many different reasons.
• Japanese engineering salaries are pathetic, and often not merit-based in any significant way.
• Japan is still an island and most Japanese shun dealing with foreigners. Even if the management wants to expand overseas, they find that their employees have no idea what that means and interacting with people overseas is a huge challenge (language, culture, expectations, time zone, you name it). But at smaller companies, management probably has no overseas experience either, which is a problem.
• Japanese are risk adverse and nobody wants to be the first to do anything - is this why Japanese VCs only invest in groups of like 10 VCs each putting in very little money, only into ideas that have already been proven? At least that is what I have heard.
• It seems a lot of large players have their hands in every deal - incestuous? CyberAgent for one seems to be involved with tons of startups. Some more diversity would be good. It seems more to me like you get CyberAgent to invest in you, then they introduce you to all their partners, and your business is made. That’s good I guess for business, but the lack of competition and different players seems bad.

I’m sorry for being so negative here. I like Japan and the Japanese people and they have many great qualities as well which I am sure they will somehow use and rise to the occasion. I have met many extremely bright Japanese engineers with passion and great ideas. Unfortunately though they also are working long hours for little pay, often in the R&D lab of a large name brand company like Sony. The ones that don’t work for large companies are often thought of as renegades, and some become freelancers. The new generation of Japanese is definitely going to cause a lot of changes to occur, and I don’t doubt that I will be pleasantly surprised by what happens.

Please feel free to leave your comments…