

A New Tech Generation Defies the Odds in Japan - ojbyrne
http://www.nytimes.com/2012/10/04/technology/a-new-tech-generation-defies-the-odds-in-japan.html?_r=1&pagewanted=all

======
ninjin
I am not sure if it is appreciated but I'll try to be bold and add some
personal experience. I have been based in Tokyo for three years now and I'll
try to fill in a bit on the cultural components affecting the start-up scene
here along with how foreigners fit into the whole picture. The Times hint
towards this but it isn't the main focus of the article. At the core of it all
is the phrase "There is one, and only one, correct way of doing everything".

As mentioned in the article, Japanese society favours stability and
predictability, life-time employment is something that has been the standard
for a long time and your elders and society at large simply won't accept you
if you don't have permanent full-time employment. This means a harder time to
get everything from an apartment to a credit card. You have deviated from the
true path, which is to secure employment in the "job hunting" period, which
lasts for about two years leading up to your graduation as a bachelor or a
master student (Ph.D. is generally a different story, so let's save that for a
different time).

This job hunting involves an initial one year of "getting to know" (the
companies do take attendance) each company at seminars and events. You
register at their websites and attend in your own spare time. Schools try
their best to respect this and are not as hard on the students during these
years. Hordes of students dressed in suits (mind you, there is one kind of
correct suit for this, well, one, depending on your gender) try their best to
learn about the company and their goals, because this step is the preparation
for the second stage. The second stage is filing applications, we are now
somewhere between 1 1/2 and 1 year prior to graduation. A student can apply
for as many as 75 companies, the reason for this will soon become clear, the
failure rate is high and so are the stakes. At this stage the student has some
idea of what he or she wants to do, but they will apply for anything they can
consider okay. Each company has a different time when they accept applications
and then go through three, four, maybe even nine steps of tests, interviews,
group interviews and procedures (public sector jobs usually has an exam with
questions from history and English to IQ-testing, you need to pass to get to
the next stage). Once a student gets past these steps, they get an offer and
are faced with the choice of accepting it or maybe to wait since their dream
job may not even have started accepting applications yet. Once you enter the
company you may very well receive training that is very different from your
educational background, you are now "one of the family", for life, but that is
a different story, let's get back to the start-ups.

Now, how does all this play into the start-up scene? Well, the one correct way
to go through job hunting is when you are about to graduate. Some students
fail to get a job, if you are a bachelor (this I am told holds especially true
in science and engineering), you beg to your parents to fund you through your
master and you then try again once you are done with your master (if they are
rich enough, it isn't cheap and same thing goes for Ph.D.;s). Being outside
the system for a year without a very good reason, such as interning abroad,
will label you as an outcast, making it difficult to reenter the system. The
same, of course, holds for those that try and fail to take part in a start-up.
This creates an enormous disincentive to take risks and I think plays a major
role in why the only successful Japanese start-up that I can think of that has
gone big in the last 20 years or so is Rakuten. I can't blame students for
simply asking, "Why should I take the risk? Why should I build the companies
of the future?".

This is turning into a speech (maybe I am entitled?), but the way foreigners
fit into this whole mess is that we, to a large extent, are exempted from this
honour system. We are not expected to "understand" the correct way and can
more easily jump between companies and most of the smaller start-up;ish
companies I know in Tokyo are at least 50% foreigners (I think I may be a bit
biased here). What I suspect is the attraction for foreigners is the culture
and the challenge, maybe also the good (and diligent) labour. I think it was
Bertrand Russel that said that Japan doesn't move ahead at a continuous pace
but rather by skipping ahead after a major collapse of the foundations of its
society. The Meiji Restoration and the end of WWII springs to mind. Only then
has it been demonstrated that the old ways have failed and there is a climate
where innovation can take place on a grand scale and companies and society can
be resown. On a personal note, I hope that it won't have to be quite so
dramatic, but the whole situation surely is problematic although getting
better and better over the short amount of time I have been here.

If you got all the way to the end, thanks for staying with me. Having been in
Japan for a few years now I tend to reflect upon these things. The above
opinions are of course biased by my own limited understanding of things, I am
an amateur at best, but maybe they can prove useful.

~~~
srunni
How hard is it for foreigners (American, in my case) who aren't already in
Japan to get into the Tokyo startup scene? I'm guessing you'd need a work
visa, something startups would have a tough time providing.

I've studied Japanese and studied abroad in Japan, so I'd definitely like to
return, but it seems to me that the easiest way to do that would be by getting
a job at a big company like Rakuten.

~~~
S4M
I was going to ask the same question (even though I won't have visa problem
because I am married to a Japanese). Also, is it necessary to speak Japanese
to work in a start-up owned by foreigners? And how about the paperwork to
create a company there?

~~~
pwim
It depends on the startup, but there are opportunities at Japanese and non-
Japanese owned startups alike, for people without Japanese skills.

If you have someone who can help you through the paperwork, creating a company
isn't so hard. It took us about 60,000 yen and one month to create at Godo-
Gaisha (similar to a LLC).

~~~
evoxed
Do you have any more info on the paperwork part? I've been putting it off for
a few months now and considering just registering in the US first to make
things easier with US-based clients.

~~~
pwim
We haven't had issues when dealing with US-based clients (granted previous to
this we didn't have any clients, so I don't have much to compare it to).

I didn't actually do the paperwork, so I don't actually know how complicated
it was. We're actually incorporated in Chiba, and at that time (Nov 2008), the
government office responsible for the paperwork wasn't very busy, so they were
happy to help out.

Unless you are fluent in Japanese, you probably will need help from someone
else. If you don't have a Japanese cofounder / spouse, probably the best thing
is to pay someone to help with it.

------
hkmurakami
I don't interpret this information as "defying the odds". I read this as
"Japanese entrepreneurs continue to struggle under their oppressive
conditions, see little hope for improving investment climate or exit options."

Unless these companies can successfully exit (after all, that's what startups
are built for, right?), I would consider them to have *succumbed to the odds".

edit: If the author were actually plugged into the Japanese startup scene,
they should have mentioned the recent acquisition of Crosos (a social media
marketing startup) by Yahoo! Japan[1].

edit2: I just scanned through recent articles by the author, and it looks like
she's not a tech beat writer but just a generalist[2]

[1] <http://pr.yahoo.co.jp/release/2012/0810a.html>

[2]
[http://topics.nytimes.com/top/reference/timestopics/people/t...](http://topics.nytimes.com/top/reference/timestopics/people/t/hiroko_tabuchi/index.html?offset=15&s=newest)

~~~
verisimilidude
For me, the most interesting bit concerns how these newer Japanese start-ups
are filled with ex-employees of major corporations. Leaving a major
corporation was completely unheard of when I left Japan in early 2006. Yet
today, it seems to be happening.

Do you have any insight into what's driving this new class of Japanese
entrepreneur to leave the comfort and safety of Big Corp.? If so, could you
guess how widespread such attitudes might be among young workers in corporate
Japan?

~~~
hkmurakami
For one, the younger employees of such megacorps are no longer guaranteed to
receive the kind of promotions, raises, benefits, and retirement packages of
their predecessors. The more attuned you are to the global tech development at
large and the macroeconomic environment, the more you realize that these
"stable" companies aren't what they used to be 30 years ago. These companies
aren't supposed to have layoffs, yet you see companies from NEC to Sharp
cutting workers in the thousands now. The lifetime earnings of a bigcorp guy
was said to be $3MM before; now, it's estimated as $2MM for the younger guys.

Second, I think that "high tech startups" have gained significant popular
acceptance in Japanese society, which has allowed them to exit bigcorps
without being socially stigmatized. (Before, I think it would have hard to
even find someone to marry as a startup dude. My friend makes as much money
from his website via affiliate ads as he does from his bigcorp job, yet he
can't leave the bigcorp since he needs it as a shield against society judging
him negatively).

That being said, leaving a big corp is still an outlier. Since a startup exit
is so difficult in Japan right now, the "wise" move still may be to stick with
the bigcorp job, especially if you're at one of the globally competitive
places like the big auto companies or materials suppliers like Shinetsu[1].
It's just that the factors against leaving a bigcorp have become slightly
attenuated.

[1] Shinetsu chemical has huge market share for Silicon wafers globally:
<http://en.wikipedia.org/wiki/Shin-Etsu_Chemical>

~~~
jmadsen
If I can oversimplify a bit, as Murakami-san say: You used to put up with the
b.s. that went with working a lifetime in a large, bureaucratic organization.
Now that the security & benefits are no longer assured, you see more mid- to
upper-mid level workers willing to take more chances and start their own
companies.

By no means should you confuse this as being any sort of sea change - the
first post is still completely accurate for the majority of young workers,
especially - but I think more people are starting to recognize "freelancer" &
"self-employed" as something different from "freeter" - a Japanese term that
ostensibly means "free + worker" but is really seen as just some young bum who
bounces from one part-time job to another.

~~~
hkmurakami
Haha, no need to address me like that; there's a reason why I'm working in SV
again now. :P

------
nandemo
> the value of investments by its 50 or so venture capital fund members
> increased to 24.6 billion yen ($316 million) in 2011, 35 percent higher than
> the previous year. But that was a small fraction of the $12.6 billion in
> venture funding raised by Silicon Valley companies that year, according to
> Ernst & Young.

We often see articles critical of VC on HN, and to some extent that criticism
is a healthy thing. But in my experience the relative lack of VC investment is
one of the bottlenecks of the Japanese startup scene.

Startups obviously cannot offer the same degree of stability as a large
company, but if they keep offering the same (or lower) salaries and _no stock
options_ , I don't know how they can expect to hire good people.

------
TazeTSchnitzel
NYTimes, could you please make your included stylesheets load over HTTPS too?
I don't want to have to disable your site in HTTPS Everywhere. Thanks!

~~~
w1ntermute
This is what Readability and/or Pocket are for. I rarely, if ever, read
articles with their sites' native formatting.

