7 Tips for Starting a Business in Japan

Japanese is a unique, growing market. Here’s what entrepreneurs need to know.

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Arik Akverdian, CEO at VCV
Arik Akverdian, CEO at VCV

As an entrepreneur, the fact my startup VCV, a Tinder-type tool for recruiters, has offices in Moscow and San Francisco is far from unexpected. But when I tell people about the next office we opened, they often react with a bit of surprise. On the heels of a $1.7 million funding round from Japanese venture capital firm Will Group, VCV opened an office in Tokyo.

Japan is unique and appealing place for growing businesses for a relatively simple reason: Its startup scene is nascent (read: full of opportunity) but its economy is well-established and, thanks to Abenomics, has been enjoying its longest economic recovery since the 1980s. Japan’s GDP represents nearly 8 percent of the world economy, tallying $4.87 trillion as of 2017.

Before entrepreneurs jump into the Japanese market, though, there are some specifics worth being aware of. I’ve gathered up some of things I’ve learned—some thanks to the advice of others, some thanks to my own trial and error—thus far in our expansion process so other entrepreneurs will be better equipped to take a similar leap.

1. Got a translator. Japan tends to be relatively conservative towards foreign people and the language is quite difficult to learn. My advice is simple: Get an advisor or partner who is Japanese. In addition to helping you overcome language barriers, this person is sure to have additional market expertise and countless connections. For instance, I worked closely with a man who had opened Indeed’s office in Japan. He helped me organize informal meetups with many people for different industries to learn how they had developed their American businesses there.

2. Always give business cards with two hands. When you meet people, always give and receive business cards with both hands. It’s a sign of respect. Also, make sure no names or logos are covered up when you offer the business card. Another business custom: refer to people by their last names followed by -san.

3. Don’t rely only on LinkedIn. Traditionally, I’ve snowballed my contacts into a network largely using platforms like LinkedIn. In San Francisco, this worked great. But in Japan, LinkedIn is far less popular. Facebook, Twitter, and a tool called Wantedly are all preferred. Keep that in mind as you begin building your network—and try to find people who are active on those platforms.

4. Do your research on visas. I received my visa invitation through our Japanese investor. It’s a three-year visa, though I can only stay for limited time periods during those three years. But there are other options for entrepreneurs, too, such as the business manager visa, which is relatively easy to apply for and will let you work in Japan for one year. In my opinion, it’s getting easier to get access to Japan, perhaps because the Olympic games are right around the corner.

5. Give a deadline. In the U.S., if you meet an investor, you can often close the deal on the same day or during the week, as they’re aware the startup could die or be swooped by another firm if they wait. In Japan, everything is slower. We met our investors in January and didn’t close the deal until May. Be aware of the pace but also, don’t be afraid to push a bit. We told our investors that we at least needed an email or verbal indication of interest by a certain date, and that all the specific documents could follow.

6. Finding talent can be a challenge. Company-employee dynamics are quite different in Japan. When someone is hired, it’s under the assumption that it will be forever; as an employer, you cannot fire them. Instead, employers can simply move their workers to new roles inside the company—and even between cities—whenever they would like, without asking permission. As a result, finding talent can be extremely hard. Recruitment is regulated and people tend to feel quite guilty leaving—a far cry from Silicon Valley.

7. Details are key. Once, I was describing a role to an executive at a large Japanese company. I said I was looking for a sales manager. In the US, UK, and Russia, 99 percent of people know what this means. But he asked: “What do you mean by that?” So I said: “A person who works with clients.” Later, a colleague of mine explained that I needed to give much more detail about the role—that I need to say who the person who be calling, what the would be saying, what they would be offering, and so on. Details are extremely crucial for people in Japan. Thus, make sure job descriptions and tasks are always fully outlined.
In all, the Japanese market is brimming with opportunity for savvy entrepreneurs willing to do their homework. For those who can create a network, learn the culture, and handle the negotiations, targeting this oft-overlooked market is sure to pay off.

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