Mind if I answer that? Native talent, if you can find any willing to work for you, is incredibly cheap. Years of age times 100k yen, there, that will get you any flavor of engineer you want in Nagoya. (Fully loaded cost multiplies in a fashion similar to the US, so figure on $60k or so all in for a thirty year old after you pay for company contributions to healthcare, pension, taxes, etc.)
Foreigners typically get compensated better unless they're stupid. sheepishly raises hand
Two issues in hiring that are relevant for startups: bilingual engineers are as rare as hen's teeth, and the traditional expectations of Japanese society strongly counsel your best potential hires to ensconse themselves in a secure job at a Japanese megacorp rather than rolling the dice on a startup.
Considering the cost of living in Japan, how does one live on that? Heck, there are several places in the States were a $30k (USD) salary for a thirty year old would put them in a homeless shelter!
Do those places not have McDonalds or Starbuxi? You may be coming from a perspective where particular items you are accustomed to are considered mandatory. I strongly suspect there are people making do without them.
Most relevantly to the "how" question, single Japanese thirty year olds on average consume much less housing than most HNers would tolerate. Many, particularly unmarried women, live with their folks. Others might be in e.g. a one-room rokujo (six tatami mats in area) apartment costing $600 a month, which would not be atypical in Nagoya.
Three million yen is sufficient for a comfortably middle class life for a single man in my town. Trust me.
Programming talent:
The yen is super strong right now, so what looked cheap a year ago ain't so cheap now. But even if you take this into account, Japan dev salaries are lower than the Bay Area. Healthcare/insurance costs are also much lower given Japan's national health system. I know one senior/CTO level developer who was happy to come here and work for a Japanese company for almost 1/2 the salary and one of the reasons why he was happy with it was the healthcare cost reduction for his family.
Fixed costs:
Office rent — You must get used to having a smaller space to move around in than some of the cavernous office spaces that (successful) SFO startups enjoy. But all in all value for money is roughly similar to other big cities. As a guide, we pay about US$3,000/month for a 700sq ft office w/kitchen/bathroom etc.
Travel etc except for cabs is cheaper I think.
Food is, hmm. Well you can eat for really cheap, or you can blow all your dough on one meal. Up to you.
Utilities etc — probably the same as anywhere else.
Hosting, accounting, whatever — As you might have seen (http://hackerne.ws/item?id=2115203) we use a whole bunch of US services for this stuff. We pay about $400/month for our accountant.
Food is, hmm. Well you can eat for really cheap, or you can blow all your dough on one meal. Up to you.
Lunch is usually pretty cheap, dinners are expensive. Also, drinks are very expensive! I drink a lot of water because I refuse to pay ¥600 for my meal and then ¥650 for an iced tea.
For startups, I highly recommend living out of the combini. I would never eat in an American 7-Eleven but here, you can feast.
