Turtles and the Moon
Three Dangerous Cliches About
Conquering Japanese Tech Markets
INTRODUCTION
The difference between doing business in the U.S. and doing the same business in Japan is like night and day. Or as the Japanese say,
TSUKI TO SUPPON
"Turtles and the Moon"
. ..which can be a real nightmare when you consider what's at stake. Japan is the world's second largest internet economy with over USD $20 BILLION being spent every year by Japanese consumers shopping online. Not a market you can ignore indefinitely. And yet also not a market for the timid. While you are certainly aware of the incredible rewards to be found in the Japanese market, you are probably equally aware of the repercussions of not doing it right. Potentially astronomical costs, unpredictable returns over an indeterminable timeline, and—heaven forbid—the very real possibility of complete, total and utter FAILURE.
Just ask Meg Whitman about her experience at eBay.
Can you say hara-kiri?
Follow the wrong advice, and you'll never eat another piece of makizushi (hand-rolled sushi) again without getting nauseous. Get it right, and hanami (cherry blossom time) will become your favorite holiday. The stakes are higher and the payoff bigger in Japan than anywhere else in the world—including the U.S.
IF—and ONLY if—you can tell the difference between "Turtles and the "Moon"
And not everybody can. Even if they think they can. There is indeed a lot of well-meaning, even reasonably-informed information out there to be had. The problem is, deliberately or not, through incomplete knowledge, inadequate "real world" experience relevant to your business or sadly, even self-serving recommendations, almost all of the "experts" you may rely on to help you grab a chunk of the tasty target that is Japan will leave you with an unmitigated disaster.
In an effort to help you avoid that fate, what follows are at least 3 of the most DANGEROUS clichés you'll hear about conquering Japanese technology-driven markets.
Cliché #1
"THINGS MAY COME TO THOSE WHO WAIT...
. ..but only the things left by those who hustle."
Reportedly said by Abraham Lincoln, though I personally question whether the world "hustle" was part of the common vernacular in the mid 1800s. But if he did indeed say it, ol' Honest Abe was right. In fact, unnecessary delay is not only ill-advised, it can also literally be fatal.
A personal story. Several years ago, my infant son suddenly spiked an extraordinarily high fever. My wife—based on intuition, God bless her—took him straight to the emergency room. After initial examinations, the doctors suggested we just take him home and wait for the fever to break. Almost on a whim, one of the doctors ran another test that determined that my baby boy had bacterial meningitis. As it turned out, they caught it just barely in time. Had we gone on home to wait for him to improve, he would not have survived the night. Ten minutes made the difference.
A personal BUSINESS story. Sitting at the US-based HQ of a company for whom I was International VP, I was informed late on a Friday afternoon (Central time) that the General Manager of my Japanese subsidiary (a native Japanese national) had emptied our bank account, committed the company as a cosigner for a number of his personal debts and literally disappeared. Total damage-- well over USD$1 million. The CFO and I got on the first flight to Tokyo. Bright and early Monday morning we were waiting on the doorstep of our law firm in Japan. We rehearsed the nightmare to our attorney, along with what little additional scraps of information we had been able to glean over the weekend. After a few minutes of silent contemplation and careful consideration, our lawyer gave us his advice as to what course of action we should take.
We should call the embezzler’s parents and tell them what their son had done. If we gave them a little time, they might be able to find him and be able of “offer some sort of settlement.” Any other action would supposedly “damage our reputation” in Japan beyond repair.
We not only didn’t take his advice, we immediately fired the law firm. We aggressively and proactively put together a “recovery plan,” and as a result, 18 months later we had captured over 38% of our TAM (total available market) in Japan (versus the less than 10% we had previous to the “meltdown”).
Failure to act in a timely fashion may not kill your Japanese initiative... but then again, it just might.
Patience is NOT always a virtue.
Those who tell you that you have to wait years before you will realize success in Japan are either:
- ill-informed,
- self-serving, or
- small-minded
" In Japan, it's different..."
Your gut and all of your experience tells you that you need to put an incentive compensation plan into your Japanese operation. Or that at least the basics of your global product positioning and pricing policy are stiill applicable in Japan. That budgets and forecasts are still relevant in the Land of the Rising Sun, just like everywhere else on the planet. So you push back a little on the "Japan experts" your organization is relying on. If their explanation begins with the words, ". ..but in Japan, things are different.. ."
Run.
If that's the best they can do, they're not digging deep enough.
The Truth:
Progressive, growth-minded companies usually find that there are more commonalities than differences between Japan and other markets. Most of what you do elsewhere will indeed work in Japan-- with the correct minor adjustments.
Cliché #2
"WHEN IN ROME (or Tokyo)...”
“The Karate Kid." "Mr. Baseball." "Rising Sun." "Gung Ho." “Lost in Translation.” Most of the roles played by Gedde Watanabe since 1980.
If you've ever seen the plethora of Hollywood movies whose main premises are derived from the seeming absurdities of Japanese business and popular culture—and the inevitable clashes with American sensibilities—then you already know that it's impossible for a gaijin (foreigner) to really understand Japan, right?
And even if you've been to Tokyo dozens of times and had multiple dealings with a variety of Japanese business associates , you're still left with that uncomfortable realization that Japan is "just different," right?
Right. And WRONG.
The Business Model from Planet X...
There's no question that in many ways, Japanese business culture almost seems like it comes from another planet. The working conditions, organizational structures, the decision-making process, the financial ecosystem—all of it. Japan can indeed seem not only impenetrable but actually impervious to non-Japanese influence.
But the reality is that almost every significant advance in Japanese industry and technology would not have happened without the "gaijin" factor .
The "Gaijin Factor"
Forget about the origins and causes of Japanese post-war industrial ascendance (actually reaching back well before the appearance of Perry's "black ship" in Uraga Harbor in 1852) to become the world’s undisputed leader in manufacturing, industrial robotics and quality systems—you’ll find the genesis of that juggernaut outside of Japan as well.
Let' s just look at some of the major innovations in "information technology" over the last 30 years:
Hardware
- mainframe computers
- minicomputers
- PCs
- game consoles
- two-tiered, packaged software distribution
- OEM "bundled" products
- direct sales (telephone, catalog, etc.)
- digital media distribution
- MS Windows
- "Compatible" PC architecture
- internet and eCommerce
- cable/satellite TV
- broadband
- mobile telephones
- VoIP
- Web 2.0
This is not about who invented the underlying technologies and business models. And in truth, Japan has eventually enthusiastically embraced and even dominated many. But I have personally and repeatedly heard each and every one of these trends dismissed and even scoffed at by powerful individuals controlling massive major Japanese enterprises.
The bottom line is that general acceptance of all of these developments was relatively slow in Japan and was never initiated, let alone dominated, by existing "major players" in Japan.
"Gaijin Bandits"
Now, near the other end of the spectrum, there's another tendency you need to resist. In an effort to capture the best of both worlds, you'll be tempted to bring in what I call the "Gaijin Bandit." This is a usually a Japanese tech sales person or business executive who seems unusually confident in a U.S.-style, entrepreneurial business environment. In fact, chances are, he or she went to college in the U.S. and has worked for several U.S. tech companies in the past. He has terrific references both in and out of Japan, with a dazzling array of “connections” you plan to leverage in growing your business.
Watch out.
This kind of person is either your greatest find or your BIGGEST potential mistake. 9 out of 10 times this will be someone who has just learned to manipulate uninformed U.S. companies while obfuscating the real challenges and missing the real opportunities because his or her greatest skill is riding the "culture gap" as long as possible for the greatest personal gain. And all of those glowing references, especially from Japanese sources? You’ll sadly discover that Japanese executives are reluctant to give anyone a negative reference, but that in fact, most of these same Japanese executives would never even consider hiring the person themselves. Often these “in-between”ers are “madogiwazoku” (“window-gazers”) who have essentially been shuffled off to the side of their organizations where they can’t cause too much harm while “saving face” for both the individual and the company. If you aren't careful, you may well one day wake up and find you've been taken to the cleaners to the tune of multiple millions of dollars by someone who has set up a series of self-enriching kickbacks, emptied all of your Japanese bank accounts and literally (and "legally") committed your company to pay off all of his or her personal financial obligations (including gambling debts and failed real estate investments) before actually disappearing-- never to be heard from again.
No joke. As I explained earlier-- I've personally had to unravel that exact scenario.
The Truth:
Smart, contrarian technology businessmen and women (yes, despite what you’ve heard, women can be very successful in Japanese tech industries) who know how to push the envelope by challenging cherished local assumptions can and usually do make the greatest inroads in Japan.
If they know what they're doing.
Cliché #3
BIGGER IS BETTER
Yeah, right. Just ask Goliath. Or the British Empire. Anyone remember the IBM PC? Oh, sorry-- I guess that's the Lenovo PC now...
Sure, there is something to be said for partnering with smart people who can add value and have deep pockets. But you'd think people would have learned by now that there's a difference between working towards "mutual interest" and being assimilated by the Borg. In the case of U.S. technology concerns working with major Japanese enterprises as an entry strategy, it has never turned out favorably for the smaller, "foreign" firm. Nor has it ever yielded enduring, dynamic changes and advancements in the industry or marketplace. (See Cliche #2)
Samurai Envy
Every 20 years or so, Americans seem to develop a case of "Samurai Envy." From "Theory Z" and "Shogun," to Morita's "Made in Japan" and "The Last Samurai," we find ourselves thinking that the Land of the Rising Sun must somehow hold a secret to global industrial domination that we just plain missed somewhere along the line. And when we see an old Samurai flick-- now THOSE guys knew what they were doing!
Whether it's Tom Cruise or Richard Chamberlain, we envision that perfect embodiment of the power of western ingenuity coupled with the strength of Bushido, the "Way of the Warrior." We imagine the brilliantly armored Daimyo and his Samurai sitting on horseback ready to charge into battle, or engaged in vicious hand-to-hand combat, wielding their dual deadly katana swords, mowing down the enemy hordes that surround them on every side. Stoic, unflinching and immovable. Fearless. Who wouldn't want to be a samurai?
And yet there was one thing the samurai feared. And only one opponent that could defeat the samurai in a one-on-one fight with virtual certainty.
The Ninja.
Attack of the Ninja
You’ve heard of “ninjas,” right? The sneaky little assassins always popping up out of nowhere in old Japanese movies. They take their targets (usually samurai) by surprise, do their dirty work and disappear again as quickly and effortlessly as they appear. They often wait until the enemy samurai least expect it-- perhaps the middle of the night. Then they slip through seemingly impenetrable defenses, glide silently right up to the private bedroom of their most powerful enemies, slide open the shoji paper-screened doors, slink across the tatami floor and slit their throats before the poor, helpless samurai has time to even blink. Or maybe during the hanami festival the ninja will hide in a tree 50 yards from his target, the unsuspecting samurai, who is taking a pleasant stroll enjoying the sakura cherry blossoms. The ninja takes a small disc-like blade the size of a coaster from his sleeve and hurls the spinning, razor sharp shuriken chinese throwing star. In less time than it takes to take one last gasp, the enemy falls dead with the blade buried an inch deep, right between the eyes.
He never even had a chance to see it coming.
Shouninjutsu- The Art of Ninja Marketing
So it is with Japanese business development. You can choose to emulate the “big boys”—take the “samurai” route—or follow the simple, fast, effective pattern of a more “ninja-like” approach. But these are not the watered-down “guerrilla marketing” techniques that might have been fresh twenty years ago when people first starting talking about them. And these are certainly not the principles you will learn in the Harvard or Stanford MBA programs. And guess what—these are not even the “flavor of the month” marketing platitudes you’ll get from the latest flock of so-called “new marketing gurus.”
These are easy-to-understand, no-nonsense tactics designed to make best use of your particular strengths while capitalizing on you opponent’s weaknesses.
The Truth:
Not only is it not necessary to be a “kingpin” with massive resources dedicated to your Japanese initiative, it can actually be a detriment. Nimble, decisive action by a small team with laser-like focus and appropriate “ninja marketing” skills will get you farthest, fastest and with the fewest headaches and potentially costly missteps.
TIP OF THE ICEBERG
Okay, one last cliché. But this one happens to be accurate. What we’ve reviewed here is truly, only "the tip of the iceberg" when it comes to Japanese market entry tactical truisms. Just some food for thought (sorry, another cliché) to stimulate your thinking as you approach one of the most important global business initiatives you're likely to face in the next 10 years. No pressure there.
For more insights into how to avoid the typical traps of Japanese market entry, feel free to drop me a line at:
kurt@shurikensystems.com
In any case, now that you’ve got a better sense of what it takes to enter and dominate a Japanese technology market, don’t hesitate. Or as the old Japanese saying goes,
ZEN WA ISOGE
“If it’s GOOD, do it QUICKLY”
Best of Luck!
Kurt Haug
Shuriken Systems
kurt@shurikensystems.com
About the Author
Kurt Haug is a senior technology executive and entrepreneur who has been working in overseas markets for the bulk of his 25+ year career-- with a special emphasis on Japan. He was the first native English-speaking translator hired to translate over 5000 pages of Japanese minicomputer documentation for Fujitsu, and later was the critical link in the very first Japanese-OEMed personal computer brought into the United States.
Based in Tokyo, he was the Chairman of the American Electronics Association (AEA) Software Committee while serving as Chairman, CEO and Representative Director of the Japanese subsidiary of a major U.S.-based software company-- growing Japanese revenues by over 796% in three years and exceeding forecasts by an average of 16% for nine straight quarters. During that time, Japanese corporate revenue contribution grew from less than 5% to over 27% and overall ROI and expense to revenue ratios were the best in the company.
Over the years, he has had P&L responsibility for operations in 16 countries on every continent except Antarctica, and has been on the Board of Directors for five non-U.S. corporations. He currently spends most of his time as an internationally recognized executive trainer, seminar facilitator and business coach.
Among other things, Kurt is founder and principal of Shuriken Systems and author/originator of the “Shouninjutsu” Ninja Marketing methodology. Kurt was an original attendee of Silicon Valley’s legendary Homebrew Computer Club, and has played a key role-- especially internationally-- in development of the PC, software, networking, storage technology, graphics/multimedia, and internet industries.
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