Disrupting Japan

Sales is different in Japan.

When Fastly entered the Japanese market, they quickly discovered that they had change their technology-driven bottom up sales approach to fit Japan’s top-down enterprise market.

Today we sit down with Doug Chuchro, the Japan head of Fastly who explains how he had to chance both the sales strategy and the corporate culture from that of the US, which a highly knowledgeable user base who understood the workings of their technology as well as the sales team to Japan, where they frequently found themselves educating potential customers about what a content deliver network is and how they are used.

We also explore the importance of partners in the Japanese market, and how those relationships can be very much a two-edged sword.

It’s a fascinating conversation, and I think you’ll enjoy it.

 Leave a comment

Links & Resources

Learn more about Fastly here

Connect with Doug on LinkedIn

Follow Doug and Fastly Japan on Twitter @FastlyJapan (Japanese) or @fastly (English)

Contact  [email protected] or the Tokyo team  [email protected] (English or Japanese)

Read about Fastly’s partnership with Nifty Cloud (Japanese)

Read about Fastly’s partnership with SoftBank (Japanese)

Learn about Fastly’s Cloud Accelerator with Google Cloud Platform (English)

Sign up for a free Fastly trial account

Find out how to do stuff on Fastly from posts on Qiita (Japanese)

Transcript

 

Disrupting Japan, episode 70.

Welcome to Disrupting Japan, straight talk from the CEOs breaking into Japan. I'm Tim Romero and thanks for listening.

Today we’re going to talk about content delivery networks or CDMs, those services that cache your website locally around the world so that users can access it extremely quickly. Or more accurately, we’re going to talk about how Fastly has managed to sell them in Japan. We sit down today with Doug Chuchro, the Japan head of Fastly to talk, not so much about the company, but how you sell innovative technology to large Japanese enterprises.

We’ll explore why partners are all but essential in entering the Japanese market, but how those relationships can be very much a two-edged sword, you need to know what to expect going in and to try to manage the expectations of everyone involved. When you’re trying to convert a proven, bottom-up, technical sales process into one that is Japanese style top-down, and governed by long-term relationships and unseen alliances.

Even when done perfectly, your Japanese partner won’t always do what you want, but sometimes they’ll do what you need. But, you know, Doug tells this story much better than I can, so let’s hear from our sponsors and get right to the interview.

[Interview]

Tim: I’m sitting here with Doug Chuchro, the representative director of Fastly KK and thanks for sitting down with me.

Doug: It’s my pleasure.

Tim: Before we get into all the details of how you brought the company into Japan and how you grew it here, I want to take a step back. Can you explain what Fastly does?

Doug: Sure. We are a content delivery network. There are a number of content delivery networks out there. Many of them have been around for years and years. In fact, the space is close to 2 decades old. We are, essentially a content delivery network brings content closer to end users and increases the performance for those end users, and decreases the amount of workload that the customer’s origin has to do. So it essentially is a global caching network that the two major benefits are increasing the end user performance and decreasing the origin offload.

Tim: So just every individual around the world would, instead of accessing the original source homepage, they would be accessing the cache that is closest to them and having the fastest experience possible.

Doug: Exactly. For example, for a news media site, I go to the New York Times webpage every morning to see what’s going on.

More and more Japanese founders are moving their startups to San Francisco. It’s easy to see why. There is more venture capital, more startup know-how, and more startup energy in that city than anywhere else in the world.

In fact, there is a small, close knit Japanese startup community in San Francisco, with Japanese startups, mentors and investors all supporting each other and trying to grow their business there.

On my last trip to San Francisco, I had a chance to sit down with one of these startup founders, Keisuke Kajitani, co-founder of Ramen Hero. He moved to Silicon Valley from Japan to start his company because he thought the US market was a better fit.

Ramen Hero sells home delivered ramen meal kits. Interestingly, the popularity and ubiquity or ramen in Japan works against them, while the novelty and price of ramen in the US has enabled them to get attention from both VCs and customers there.

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

More and more Japanese founders are moving their startups to San Francisco. It’s easy to see why. There is more venture capital, more startup know-how, and more startup energy in that city than anywhere else in the world.

In fact, there is a small, close knit Japanese startup community in San Francisco, with Japanese startups, mentors and investors all supporting each other and trying to grow their business there.

On my last trip to San Francisco, I had a chance to sit down with one of these startup founders, Keisuke Kajitani, co-founder of Ramen Hero. He moved to Silicon Valley from Japan to start his company because he thought the US market was a better fit.

Ramen Hero sells home delivered ramen meal kits. Interestingly, the popularity and ubiquity or ramen in Japan works against them, while the novelty and price of ramen in the US has enabled them to get attention from both VCs and customers there.

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

Show Notes for Startups

Why ramen gives them a competitive advantage in the US

Previous failures in the ramen business and why it's different this time

Why Ramen Hero had to pivot from B2B to home delivery

What's great about the Japanese startup scene in San Francisco

How many companies can the market sustain?

When Japanese companies should move to Japan

 

Links from the Founder

Learn more about Ramen Hero at their home page

Follow Ramen Hero on Instagram

 Leave a comment

Transcript from Japan

Disrupting Japan, episode 69.

Welcome to Disrupting Japan, straight talk from the Japan’s most successful entrepreneurs. I'm Tim Romero and thanks for joining me.

More and more, Japanese startup founders are looking at, or even moving to Silicon Valley. It’s easy to see the appeal. San Francisco is home to the largest and most competitive startup ecosystem in the world. In fact, there’s a small Japanese startup community in San Francisco, with Japanese startups, mentors, and investors all supporting each other and trying to make it work.

Of course, the founders that come from Japan—well, it’s a mixed group. Some successful companies view San Francisco as their logical first step towards global expansion; some are new founders that have an idea they feel is more suited to the American market than the Japanese market; and some, well, some are kind of startup tourists, visiting the offices of famous startups and going through the motions, as if they were in some sort of startup role playing game.

On my last trip to San Francisco, I had a chance to sit down and talk with Keisuke Kajitani, co-founder of Ramen Hero. He and his co-founder moved to San Francisco from Japan because they thought the US would be a better market for their product, oddly, because ramen is already too popular in Japan. Now, Ramen Hero sells home delivery ramen meal kits and it’s a business that makes much more sense to launch in the US than it does in Japan. But, you know, Keisuke explains all that much better than I can.

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

[Interview]

Tim: I’m sitting here with Keisuke Kajitani of Ramen Hero and we’re sitting here in beautiful San Francisco. So thanks for sitting down with us.

Keisuke: Thanks for having me.

Tim: I’ve got to say, San Francisco is not so beautiful today.

Keisuke: Yeah, it’s raining hard.

Tim: I don’t think I’ve ever seen this much rain in San Francisco.

Keisuke: Yeah, it’s unfortunate.

Tim: But we’re inside and dry, so that’s good. Listen, to get things started, why don’t you tell me a bit about Ramen Hero?

Keisuke: Sure. So Ramen Hero is a meal kit service specifically focused on delivering authentic ramen to your house. So what we deliver inside of the meal kit is fresh noodles, and soup, and toppings, and of course the recipe cards. So you can become a ramen chef at your house.

Tim: Okay.

Ride sharing works differently in Japan. Hailo lost the global market-share war to Uber and Lyft, but Hailo won the battle in Japan. Today, Ryo Umezawa details Hailo’s Japan market entry strategy and explains how they were able to succeed where Uber has failed.

While Uber vowed to disrupt transportation by taking on both government and industry, Hailo worked within the system. They designed and launched a platform that was completely legal and made life better for all major stakeholders, including the taxi companies.

This was a battle between Uber’s disruptive innovation and Hailo’s sustaining innovation. On the global battlefield, Uber won. Uber is the world’s most valuable startup and is still growing fast, while Hailo had a cash crunch in 2016 and was acquired by Daimler.

In Japan, however, Hailo won. Hailo’s sustaining innovation soundly trounced Uber’s disruptive innovation, and Hailo remains significantly larger than Uber in Japan.

Of course, as you probably suspect, both companies had very different strategies in Japan than they did in the rest of the world, any Ryo explains it all in the interview.

Ride sharing works differently in Japan. Hailo lost the global market-share war to Uber and Lyft, but Hailo won the battle in Japan. Today, Ryo Umezawa details Hailo’s Japan market entry strategy and explains how they were able to succeed  where Uber has failed.

While Uber vowed to disrupt transportation by taking on both government and industry, Hailo worked within the system. They designed and launched a platform that was completely legal and made life better for all major stakeholders, including the taxi companies.

This was a battle between Uber’s disruptive innovation and Hailo’s sustaining innovation. On the global battlefield, Uber won. Uber is the world’s most valuable startup and is still growing fast, while Hailo had a cash crunch in 2016 and was acquired by Daimler.

In Japan, however, Hailo won. Hailo’s sustaining innovation soundly trounced Uber’s disruptive innovation, and Hailo remains significantly larger than Uber in Japan.

Of course, as you probably suspect, both companies had very different strategies in Japan than they did in the rest of the world, any Ryo explains it all in the interview.

 Leave a comment

Links & Resources

Check out Ryo's blog

Follow him on twitter @umemac

Transcript

Disrupting Japan, episode 68. Welcome to Disrupting Japan, straight talk from the CEOs breaking into Japan.

I'm Tim Romero and thanks for listening.

Today we once again turn our attention to ride sharing, but surprisingly, we won’t be talking about Uber—at least not very much. No, today we get a chance to sit down and talk with my old friend Ryo Umezawa, who is responsible for Hailo’s market entry. Now, listeners not familiar with Hailo, let me explain. Hailo is, in a way, Uber’s quiet and somewhat neglected little brother. Hailo did not make the same impact as Uber worldwide, because they followed a very different strategy. While Uber vowed to disrupt transportation by taking on all-comers, both government and industry, Hailo had a different approach. Hailo wanted to work within the system. They wanted to design a platform that was completely legal and that would make life better for all stakeholders, including the governments and taxi cab companies.

In fact, their model involved working with taxi companies directly. This was very much a batter between Uber’s disruptive innovation versus Hailo’s sustaining incremental innovation. And on the global battlefield, Uber won. Uber is the world’s most valuable startup and is still growing fast, while Hailo ran into a cash crunch in 2016 and was acquired—for quite a healthy sum, mind you—and it’s still an ongoing concern.

In Japan, however, Hailo won. Hailo’s sustaining innovation soundly trounced Uber’s disruptive innovation and Hailo remains significantly larger than Uber in Japan. Of course, as you probably suspect, both companies had very different strategies in Japan than they did the rest of the world. But Ryo Umezawa tells that story much better than I can. So let’s hear from our sponsor and get right to the interview.

[Interview]

Tim: I’m sitting here with Ryo, the former country manager of Hailo. You’ve since moved on from Hailo, but we’re going to back up a couple of years because I think your experience with Hailo is something that a lot of people who are coming into Japan now can learn a lot from. Thanks for sitting down with us.

Ryo: Thanks for inviting me to speak.

Tim: Hailo is very popular in Europe and it made a good run in Japan, but I think a lot of people in the U.S. aren’t familiar with it. So can you just give a brief overview of what it does?

Ryo: Okay, sure. Hailo is a British company started up in 2012. It’s a smartphone hailing app. So we basically connect drivers and users who want to ride a taxi through the app and we also help drivers basically raise revenue by utilizing our unique algorithm to efficiently connect users to the driver. And then for the consumer side of the experience,

Cerevo wants to be a “global niche” player.

That makes sense for this Internet of Things company. The IoT has become so pervasive and so successful that the terms ha become almost meaningless. Today we simply except and accept that almost everything should naturally be connected to the internet.

Of course, it wasn’t always that way, and today Takuma Iwasa, founder and CEO of Cerevo tells us of how he started his career at one of Japan’s big consumer electronics companies trying to force the internet into devices where it really didn’t belong. And how that experience forced him to find a better way and to found his own company.

Takuma also explains Cerevo’s innovative business model. In fact, the company is structured less like a hardware manufacturer and more like a hardware startup accelerator. He and Cerevo are aiming for a series of niche-market successes which will be acquired by large mass-market firms. And his strategy seems to be working.

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

Cerevo wants to be a “global niche” player.

That makes sense for this Internet of Things company. The IoT has become so pervasive and so successful that the terms ha become almost meaningless. Today we simply except and accept that almost everything should naturally be connected to the internet.

Of course, it wasn’t always that way, and today Takuma Iwasa, founder and CEO of Cerevo tells us of how he started his career at one of Japan’s big consumer electronics companies trying to force the internet into devices where it really didn’t belong. And how that experience forced him to find a better way and to found his own company.

Takuma also explains Cerevo’s innovative business model. In fact, the company is structured less like a hardware manufacturer and more like a hardware startup accelerator. He and Cerevo are aiming for a series of niche-market successes which will be acquired by large mass-market firms. And his strategy seems to be working.

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

Show Notes for Startups

Why Japan's first "smart devices" failed

The foundations of the "global-niche" IoT strategy

Why startups should build rather than license

How to get media attention for cool, new IoT devices

How IoT startups really should be using crowdfunding

Will Japan ever regain the lead in robotics?

Why Japanese companies were afraid of the Roomba

Links from the Founder

Learn more about Cerevo at their home page

 Leave a comment

Transcript from Japan

Disrupting Japan, episode 67.

Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I'm Tim Romero and thanks for listening.

The internet of things is unstoppable. It’s so broadly defined these days, connectivity is cheap, and they can be added to just about anything. Of course, whether it should be added or not is another matter entirely. That question is near and dear the heart of Takuma, founder and CEO of Cerevo, one of the most innovative and connected device makers in Japan. Takuma started his career at Panasonic and he had high hopes of creating all manner of consumer devices that could take advantage of internet connectivity.

What he found, however, was that his job consisted mostly of finding ways of trying to force internet connectivity into existing products. Genuinely new products and innovations were being dismissed out of hand. Well, Takuma did what everyone should do, but very few people actually do in that situation, he quit his job, took some of the best engineers with him, and he started his own company.

Now, there are a lot of gadgets and IOT devices being built in Japan, but Cerevo has a genuinely interesting and methodological approach to it. During the interview, you’ll hear Takuma try to downplay that strategy as just gut instinct, but as you listen, you’ll understand the very rational method of what, from the outside, might look like madness. We’ll talk about plenty of cool devices, but I think you’ll find the strategy that underlines Cerevo’s success to be at least as interesting. But, you know, Takuma tells that story much better than I can. So let’s hear from our sponsors and get right to the interview.

[Interview]

Tim: So I’m hitting here with Takuma Iwasa of Cerevo. Now, Cerevo, I’m tempted to call it a gadget company, but that’s not really fair because you guys do a lot more than just make little gadgets. So can you tell us a little bit about what Cerevo does?

Takuma: Okay, so my company’s name is Cerevo and we say Cerevo is a consumer electronics start up company, not gadget, right. We are really focusing to the connected consumer electronics devices—connected robot, or connected camera, or connected, of course, gadgets. Sometimes we try connected toys, connected sports equipment.

Tim: You guys make so many different kinds of internet of things products, we could spend the whole podcast just listing them all....

Stripe’s Japan market entry did not go according to plan.

Things worked out worked out well in the end, but they did not go according to plan. Stripe is one of the world’s largest payment processing companies, but they remained flexible and agile enough to take advantage of some of the surprises they faced in Japan.

Today we sit down with Daniel Heffernan, the Japan head of Stripe, and he walks us through what happens when a technically sophisticated and streamlined FinTech company comes face-to-face with the very low-tech and slow-moving processes that make up FinTech in Japan, and how they made it all work.

They faced complex, lengthy technical specifications delivered in three-ring binders and un-copyable, printed documents, and they dealt with the Japanese aversion to integrating directly with banks and financial institutions. They even planned to support some of Japan’s more unique payment methods until surprises during development made them change course.

Stripe’s entry into the Japanese market is both an essential case study for any FinTech company considering coming into Japan and an entertaining story for those of us with an interest in business in Japan.

It’s a great discussion, and I think you’ll enjoy it.

Stripe’s Japan market entry did not go according to plan.

Things worked out worked out well in the end, but they did not go according to plan. Stripe is one of the world’s largest payment processing companies, but they remained flexible and agile enough to take advantage of some of the surprises they faced in Japan.

Today we sit down with Daniel Heffernan, the Japan head of Stripe, and he walks us through what happens when a technically sophisticated and streamlined FinTech company comes face-to-face with the very low-tech and slow-moving processes that make up FinTech in Japan, and how they made it all work.

They faced complex, lengthy technical specifications delivered in three-ring binders and un-copyable, printed documents, and they dealt with the Japanese aversion to integrating directly with banks and financial institutions. They even planned to support some of Japan’s more unique payment methods until surprises during development made them change course.

Stripe’s entry into the Japanese market is both an essential case study for any FinTech company considering coming into Japan and an entertaining story for those of us with an interest in business in Japan.

It’s a great discussion, and I think you’ll enjoy it.

 Leave a comment

Links & Resources

Check out Daniel's blog

Follow him on twitter @danielshi

Find out more about Stripe

Transcript

Welcome to Disrupting Japan, straight talk from the CEOs breaking into Japan’s. I'm Tim Romero and thanks for listening.

Stripe is one of the largest credit card payment processing companies in the world and their Japan market entry did not go according to plan. It went well, mind you, but it just did not go according to plan. Stripe was agile enough to take the changes and surprises in stride.

Today, we sit down with Daniel Heffernan, the Japan head of Stripe, and he walks us through the process where one of the most technically sophisticated and streamlined fintech companies in the world came face-to-face with a very low tech and manual nature of fintech in Japan, and he explains how they made it all work. From detailed, extensive technical specifications that were delivered as uncopiable, printed documents in three-ring binders, to the Japanese aversion to interacting directly with banks and financial institutions, to trying to support some of Japan’s more unique payments, and some of the surprised they discovered once they began work. Stripe’s entry into the Japanese market is both an essential case study, for any fintech company looking at Japan, and an entertaining story for those of us with an interest in business in Japan.

But you know, Daniel tells that story much better than I can. So let’s hear from out sponsor and get right to the interview.

[Interview]

Tim: I’m sitting here with Daniel Heffernan of Stripe and we’re going to talk about Stripe’s market entry into Japan. And you guys have just officially launched officially but let’s back it up and talk about when you first came in. What was Stripe’s main motivation of coming into Japan in the first place?

Daniel: Well, when we started looking at Japan, we looked at it kind of like we do every other market that we considered. There are a few things we look at when we’re trying to decide whether to go into a market. One of them is the size of the e-commerce economy. Japan is pretty big. Last year it was about $130 billion, which is significant. That’s actually number 4 in the world. So you have China and U.S., are giants at the top, then it’s kind of a big jump down, and you have the U.K., and Japan is actually just behind the U.K. If you think about it from a population point of view, it’s really weird because the population of U.K. is like half of Japan.

Tim: Yeah, I find that surprising from both a population and an economy point of view.

Daniel: Right. If you think about why that is, it’s because of the number of online transactions that are happening ...

Startup M&A is changing in Japan. In August, Naoki Yamada sold his startup Conyac to Rozetta for $14 million.

It was an unusual journey of alternating cycles of rapid growth and near bankruptcy, and today Naoki explains how he managed to make the deal happen and also how M&A is changing in Japan, and it seems that change might come much sooner than anyone had been expecting.

Naoki talks very openly about some of the mistakes he made and give solid advice on how you can avoid making the same ones. And of course, he explains how he handled the negotiations for the acquisition, and why he decided the exit now rather than continue to grow the company.

It’s a great story, and I think you’ll enjoy it.