Live & Unleashed – How to Run a Startup as a Foreigner in Japan

Disrupting Japan is four years old, so we decided to invite a few hundred movers and shakers from Tokyo’s startup community over to have few drinks and to hear three of Japan’s most successful foreign startup CEOs talk about what it takes to succeed in Japanese when you are not Japanese.

Our panel included some of the most influential foreign startup founders in Japan.

Tim Romero (@timoth3y) - Moderator Paul Chapman (@pchap10k) - CEO, Moneytree Jay Winder (@itsjaydesu) - CEO, Make Leaps Casey Wahl (@caseydai2asa9sa ) - CEO, Wahl & Case

We talk about strategies for growth, how to leverage your "foreignness" to your advantage, how to best manage multi-cultural teams, and what the future looks like for foreigners in Japan.

It's a great conversation, and I think you'll enjoy it.

On a personal note, thank you for reading and listening and for being a part of Disrupting Japan. When I started this project ago, I never imagined how large and influential the show would become, or how large and passionate the worldwide interest in Japanese innovation truly is.

I want to offer a sincere thank you to everyone who has pitched in to help make Disrupting Japan a success. There is no way I could have done this alone. But the best is yet to come. There is an amazing amount of innovation going on right now in Japan, and I look forward to bringing it to you.

Thanks for listening!

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A Special Note For those of you who listened to the podcast know that the recording equipment cut out about half-way through the show. Fortunately, Jason Ball from Business In Japan was live streaming the show. Although the audio quality wasn't high enough for the podcast, you can watch the whole show (minus a bit of Q&A) online. Also, the transcript below represents the full show.

Transcript Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for coming out tonight. Now, you guys are awesome!

[applause]

You know, actually, that’s exactly what I hear in my head every time I say that line. Now, for our listeners at home or wherever you may be in the podcast land, we got a special show for you tonight. To celebrate Disrupting Japan’s 4th anniversary, we are podcasting live from Super Deluxe in Roppongi with some of the most innovative people on the face of the planet, that is Japan’s startup ecosystem.

So, let’s everyone get their drinks together for a kampai, and listeners at home, feel free to drink along with us.

Over the last four years, Disrupting Japan has become bigger and more influential than I ever imagined it could be. Thank you so much for everything you’ve done to support the show. Thank you for listening. It’s been an amazing four years, and the next four years are going to be even better. So, kampai!

Audience: Kampai!

[applause]

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Tim: For these anniversary shows every year, we have a theme and this year, it is foreign founders in Japan, and on stage tonight, we have three – well, I guess four fearless foreign founders who have taken very different roads to developing their companies here in Japan.

So, with introductions, on my far left is Jay Winder who has established MakeLeaps which is Japan’s leading SaaS invoicing system, and before that, you had another company, but I think a lot of you know Jay for running the Hacker News meetup here in Japan.

[applause]

In the middle, we’ve got Paul Chapman, co-founder and CEO of Moneytree which is one of Japan’s fastest-rising fintech startups, and a true B2C SaaS success story in Japan.

Paul Chapman: Thanks, Tim.

Tim: And on my immediate left is Casey Wahl, CEO and founder of Wahl & Case which is a recruiting company which doesn’t sound that startup-y to begin with, but Casey’s also founded Red Brick Ventures which was an accelerator that spun out several startups. His company is deeply involved in artificial intelligence projects. And, you are now on the long hard march towards IPO. So, you’re doing something right.

Casey Wahl: That’s correct. Thank you.

[applause]

Tim: Okay, I want to start this out on a positive note. So, I don’t know, I’m someone who’s on the firm belief there’s not real fundamental advantages or disadvantages; it’s just differences that you can take advantage of. So, what I’d like to lead with is, let’s talk about what advantages foreign founders have in Japan.

Jay, you want to lead that off?

Jay: Yeah, I think that’s a really good point you just made, Tim, where there’s good things and there’s bad things, and at the end of the day, you just have to figure out how to make something work, right? Actually, I think one of my favorite quotes about entrepreneurship that I think is really interesting is, “Entrepreneurship is the pursuit of a goal without regard to currently held resources,” right? And so, that means how much money you have in your bank account, it even means how much are in your current skillset, right? It even means how society is kind of currently configured right now. You’ll have advantages, perhaps, in some areas, and you won’t have advantages in other areas, and you have to understand those things and move forward the best way that you can at the end of the day. So, yeah, there’s good things and bad things and it’s your job to figure out the bad things and compensate or offset them.

Tim: So, what are the good things you got working for you as a foreigner?

Jay: Novelty, right? Like, if you turn up to a meeting, it’s like, “Oh, that foreigner, yeah, what’s he doing here?” It’s like, “Oh, he’s raising money.” It’s like, “Oh, hey, for what?” It’s like, “Oh, an invoicing company to help Japanese companies send invoices.” It’s like, “But, he’s a foreigner.” Honestly, that’s kind of a fair point, right? I am foreign, right? And so, for a Japanese person who doesn’t understand much about me or MakeLeaps, to think that somebody could come to Japan, understand all the intricacies of how Japanese companies communicate with each other to the depth where companies would trust that company to putting all their financial details, that’s a fair point. So, that’s something that we need to offset, right, by having a really solid team full of people that are really competent and have a lot of expertise and experience.

Tim: So, kind of just generates that curiosity and makes it easier to start the conversation?

Jay: Yeah, that’s right.

Casey: So, Jay, how did you get there? How did you get there where you can get between the Japanese companies where they, as a foreign founder?

Jay: Well, that’s a good question, Casey, I’m glad you asked.

Casey: Where they actually trust you well enough to do it, like what’s the advantage to get to that point? It’s a lot of discipline, I just know.

Jay: Sure. So, essentially, it is momentum, right? Because I remember, when you’re first starting out, you’re like, “Hey, I’ve got this idea,” like in Japan, people tend to use Microsoft Excel for managing their invoicing, and Microsoft Excel was released in 1982. So it’s not really like Microsoft Excel is like, traditional Japanese business software, right? Like, people just kind of adopted that and started using it for all sorts of different things in Japan. So, we’re like, “Hey, we’ve got a new way of doing things. How about this?” and people were like, “How about no? How about we just keep doing things the same way we’ve always done things?” like, “Well, I don’t know, okay, fair point,” right? So, from that point, you have to kind of go out and just get a first customer, right? Just get somebody to use the software, and at that point, you’re not even worried about how much money you’re making. It’s like, “Will you use this? Will this be interesting for you?”

Tim: While you were doing that, did you ever kind of play on your foreignness? Did you ever kind of say, “Oh, well, this is how they do it in San Francisco, and you should take a look at it for that reason.”

Jay: Not so much. I found what’s much more convincing is if you get some customers, get some momentum, get some user testimonials from them, and then say, “Hey, whatever you want to do is fine, but your competitor is doing things now with MakeLeaps, and they say it’s pretty good,” or you don’t need to be that direct necessarily, but, “Other companies are starting to adopt this and it’s giving them these benefits, so if you’d like to consider it, we’re very happy to give you a demo at your office,” kind of thing, and then once you got enough of that, it’s easy to kind of build off that momentum.

Tim: Casey, what about you? I mean, obviously, it’s an advantage when you’re selling to foreign companies, but when you’re selling directly to Japanese companies, does being a foreigner come with any advantages?

Casey: I think the novelty part there and the willingness that you can break rules and you don’t mind skipping out some of the processes that a usual Japanese salesperson would go through, you can go straight to the top a lot. Even when I was 25, 24, I can meet big company CEOs. I don’t think you could do that anywhere else, having been a foreigner here in Japan, but I think ultimately, kind of where we are with our SaaS products, is we need a Japanese sales team to kind of take it through. We’re kind of feeling that at some point, we have to hire this Japanese team to work through the Japanese processes, and being a foreigner is a disadvantage to go through large enterprise sales.

Tim: Paul?

Paul Chapman: I agree with Jay that novelty is useful. You speak Japanese pretty well, right?

Jay: Yeah. I think you speak Japanese pretty well.

Paul: I think I’m speaking English now, but sometimes, I can’t tell. No, but that helps, of course, if you could speak to people in their own language and even having a face like this,