How You Can Build American Startup Culture in Japan – OpenTable

Selling innovative software to conservative Japanese businesses is never easy, but it’s particularly challenging in the cutthroat and low-margin restaurant industry.

Today, we sit down with Masao “TJ” Tejima and talk about how he brought OpenTable into Japan, and why it took him much longer than he had originally hoped.

It’s a wide-ranging and deep-diving discussion on how to identify which companies are most suitable for Japan market entry and TJ’s rather extreme approach to maintaining a consistent corporate culture between Japan and corporate headquarters.

We also take a look at some of the biggest mistakes Western companies make when hiring a Japan Country Manager and a few simple ways those mistakes can be avoided.

It’s a fascinating discussion, and I think you’ll really enjoy it

Show Notes

Why leave a company after a successful market entry? How to build a product around a human network Why you need to run market entry like a startup OpenTable's real business model and how is was adapted for Japan How to sell new technology to traditional low-margin businesses The danger of over-localization Why the Japanese fast followers ran into problems How to build a global culture at a Japanese subsidiary The one type of Japanese General Manager foreign companies need to beware of

Links

Masao's official bio Sports for Life is Masao's latest project is running the Asia Pacific Corporate Games

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Transcript

Disrupting Japan, episode 88.

Welcome to Disrupting Japan. Straight talk from the CEOs breaking into Japan.

I am Tim Romero and thanks for joining me.

Today, we’re going to be sitting down with Masao Tejima or "TJ" as his friends call him and I have to admit, that this interview did not exactly goes as planned. A few days beforehand, TJ and I agreed to sit down and talk about how he brought Open Table to Japan. And he used that experience as a jumping off point to give advice about how to bring in innovative software company to Japan and then sell to very conservative Japanese companies - and we did that.

And then in the next forty minutes, you’re going to be hearing all about it.

However, Open Table was not TJ’s first Japan market entry. He also brought in Macomedia and before that all this. And our simple talk, meandered him into ninety minutes history of desktop publishing in Japan and how he had to forge strategic alliances and corporate standards that allowed the technology to take route. I walked away with the makings of two amazing stories on tape.

So, here’s what we’re going to do. Today, we’re going to tell you the much more recent story of how Open Table entered the Japanese market. And a bit later, we’ll have TJ on again to give us the blueprint of the right technology can let you disrupt an entire industry in only a few years, even in Japan.

Today, we’re going to learn about how to identify what companies are most suitable for Japan market entry and talk about TJ’s rather extreme approach to maintaining a consistent corporate culture between Japan and corporate headquarters. We’ll talk about effective techniques for selling innovative software to conservative Japanese businesses and we’ll look at some of the biggest mistakes companies make in hiring their Japan Country Managers. But you know, TJ tells that story much better than I can.

So, let’s hear from our sponsor and get right to the interview.

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[Interview]

Tim: So I am sitting here with TJ Tejima of well formerly, Japan CEO of Open Table. So, thanks for sitting down with me.

TJ: Thank you very much.

Tim: So before we get started with the history of this market entry and what went right and what went wrong, can you give us a brief explanation of what Open Table’s business model is?

TJ: It was 2000 or 2002, I was a General Manager of Macomedia which has Aldus, Adobe. I have to be in San Francisco because headquarter is in San Francisco. I have to have a lunch, I have to have a dinner, but I try to make a reservation so sometime, Japanese restos not completely made then I found the system so-called Open Table Reservation System, in the website. And oh, it is great so I tried to use this type of system in Japan in the future and this was a first impression about this service, as a diner.

Tim: Okay, so you approached the Open Table team and said I want to bring this company to Japan?

TJ: I searched executive member of Open Table, fortunately, there are two people whom I know.

Tim: Okay.

TJ: And I send an email to them and I would like to have a meeting with you guys, I’d like to know the back ground of Open Table. It was 2004 and I already left Macomedia. So I would like to find a new type of a technology business after I designed Macomedia and I did several investment and they establish several business.

Tim: Why did you leave both Aldus and Macomedia?

TJ: So I think, it took maybe three years plus two short, but the six years is too long. The technology and marketing innovation is my hobby.

Tim: So, was it, you were feeling that you needed a new challenge or just there’s a bigger opportunity with another technology?

TJ: Everything, everything. I do not want boring so many smart people in the market as a human resource. Very smart people can manage company very well and can grow the company very well. I don’t have this type of capability at all. I established a business, I created the human network first then product has come next – this is what I did. So, I always establish start-up company first then three to six years, I have to find another option.

Tim: I think this is really interesting because I’ve always thought, market entry companies follow the same path as start-up companies. And oftentimes, the person to grow a start-up from zero people to thirty people is very different from the person you want to grow it with thirty to three hundred. And with market entry, it’s very much the same I think.

TJ: Yes, totally agree with you. Especially the first people who must open the door for the market, these people has to have a somewhere clear vision because these people can write the regulation of this market. But after some market is bigger, so many people can write additional writing the regulation or change the regulation, quickly.

Tim: So by regulation, you didn’t mean like government regulation, you mean more of the industry standard, the way things are done in the industry?

TJ: The industry standard of a technology like a baseline, How to consider baseline, How to Write the license, How to Use Ruby and how to transfer the Beta Technology from server to computer or Samson back then.

Tim: But now getting back to OpenTable, it seems to me that now from OpenTables’ perspective, I’m sure they were very happy to be contacted, you could just say, “Look, I brought in Aldus and that was a success, I brought in Macomedia, that was a success.” But from your point of view, it seems OpenTable is a very different kind of company. It was focused on particular service rather than a new technology trend that was going to change the market. So, what attracted you to Open Table? Did you just think it was a fantastic service that you wanted to introduce or what was it?

TJ: In terms of diners, open to provide internet reservation system to the diners – I thought like that. But actually, I understood open to provide reservation taking technology to the customer. Customer management technology to the reservation, they combined these two technologies together, parked in the wrong computer, two provider (to) these to the restaurants. Also, the knowledge of hospitality by (the) technology. This is totally similar to the DTP, totally similar internet.

Tim: Okay. Yeah I see. So, you were viewing it as modernization of restaurants which is another paper-based business.

TJ: That’s right, that’s right. So, OpenTable system for the restaurant is totally same as a Illustrator or Photoshop for designers.

Tim: That makes sense. So, why was OpenTable interested in Japan? Was it they kind of met you and you convinced them that Japan was important or was Japan part of their global strategy before that?

TJ: Well, I contacted OpenTable guy to in 2004. They didn’t consider that they extend their market to Japan at all because the market of a restaurant reservation in US was still enough for them. So, they have to invest a lot of money. So, they thought the timing to be global company must be two years later or three years later. It is the reason why actual establishment of OpenTable Japan was in 2006. It took two years to convince them.

Tim: And when they came into Japan, was it a only on subsidiary? Was it a JV?

TJ: Only subsidiary.

Tim: What did the initial team look like? You’ve been working with them for two years, so you obviously had a good relationship with the founders. In 2006, what kind of team did you put together on the ground?

TJ: I hired the best Product Manager who used to work with me in the Adobe and I picked several guys from them and also I picked the General Manager of restaurant, whom I know very much.

Tim: Okay.

TJ: And also the establishment of a hotel.

Tim: So, very small team – four or five people?

TJ: Yes, four or five people which was in the T&T office like an incubational office in as fast, two years.

Tim: So, what was your approach to the market? ‘Cause the US market and the Japanese market is quite different in this respect. A lot of Japanese restaurants don’t take reservations, it’s not a common thing. What was your approach to getting customers? Did you just start with the high-run more expensive restaurants or did you try to convince people that this type of assistance will be better for them?