osaka

by Joshua Flannery | Manager, Student Entrepreneur Development & Co-founder at FounderLab

If we discount the DJ business I ran with my brother during my high school and university years, the first major tastes of ‘learning by doing’ entrepreneurship for me were via a spin-out venture and then a small business I founded in Japan. In retrospect, you could say I was an accidental intrapreneur turned entrepreneur.

A few years into a role with a Sydney based software company, I joined the dots to my time previously working in the education space in Japan and recognised a potentially a huge opportunity for the same style of software and online marketing services in the Japanese higher education market. Our products were built for universities and other education providers that are facing the challenges of fielding applications for their programs globally and Japan had over 700 universities at the time and a new government supported initiative focused on attracting international students.

I pitched the new business idea successfully to the Australian company and was over the moon when they agreed to fund me setting up the new venture, StudyLink株式会社. Soon after that I closed my first Japanese B2B sale for A$50k, which gave me a little runway before being accepted into a government-backed incubator program in Osaka city.

How did I come to the conclusion that I wanted to be an entrepreneur in Japan?

To be honest, at the time I wasn’t using the vocabulary or terminology commonly used in the startup ecosystem these days like ‘intrapreneur’, ‘entrepreneur’, ‘startup’ and ‘incubators’. I just knew I was passionate about what the products and services were playing a part in – education – where I wanted to do it – my favourite city, Osaka – and when I wanted to do it – as soon as I could!

During the three year stint as a ‘salary man’ for this edtech venture, selling software applications and online advertising into Asia based education providers, I had a few wins accompanied by many failures and some realisations. The wins I learned most from were:

  • securing a Joint Venture with a local publishing company then developing and launching a new pocket magazine product which ended up having a circulation of 480,000 – the largest distribution of any study abroad magazine nationally. This was my first real experience of new product development and then the product management that follows. It was really like operating a whole new and very different company with different stakeholders and goals. It amazed me even then how print was still so relevant in certain niche markets.
  • closing a B2B sale larger than any the mother company had previously achieved within the first 3 months of operation. I learned the sales cycle in Japan is much longer than what I was used to in Australia. But each sale was potentially worth more and the likelihood of renewing partnerships was actually higher than in Australia (assuming you are nurturing the relationships).
  • pitching for entry into an incubation program including 6 months rent free office space and support. I learned how to pitch the business and its value proposition to a new ecosystem as opposed to the sales style pitches I had become used to in Sydney. I also learnt the potential value of incubators, their services and their networks. Government led introductions were new to me too – what a weapon they can be!
  • coordinating a successful tech transfer mission with a group of Japanese startup founders for a series of sandpit workshops with Australian incubator and tech transfer offices in Sydney. This project was quite far from our core business but saying yes to the offer was important in building reputation and relationships with the local government, who introduced us to the project, and the Shimaya Business Incubator and all the companies it hosted. At the time I had no way of guessing how relevant this experience would be to my current role.
  • securing Prefectural government grants based on a lot of paperwork and patience. There was a relatively large number of grants available from local, prefectural, and national government bodies in Japan for new ventures, depending on the sector and nature of your business. The amount of paper work involved for some of these seemed ridiculous but considering how long it typically takes to close a sale in that market, applying for every grant possible is more than worth it.

It was actually the failures during this stint, however, that helped shape my most important learnings about entrepreneurship, about doing business in Japan (and some other parts of Asia), and about myself. Fortunately, one of the failures with the software and advertising venture led to the establishment of a second company which is still running today, though I am no longer involved with it. This time it was a boutique agency focused on localisation, translation, web development, and marketing across country borders, languages, and cultures. I knew first hand how important these services are after needing so much for the previous startup.

I was lucky to have support of some very seasoned business people in the education space, but ‘lean startup’ wasn’t a thing I’d heard about back then (yes, we’re talking circa 2005-2008) and if I could do it again many of the cold calling, sales visits, and targeted networking would happen during the validation process, not post-funding.

I could have saved a lot of time at the beginning of this journey if I had an easy-to-use guide before I went over that covered things from visa issues to important players and other startups – my competition in the space.

In the spirit of this (and partly inspired by some similar work for Singapore by Arnaud Bonzom), one of the brilliant students I have had the pleasure of working with, Saki Yanagihara, has put in many hours to create this navigation tool for those new to Nippon, “Japan’s Startup Ecosystem & Entrepreneur Toolbox”.

Our hope is that it will enable anyone who might be in the same shoes I found myself in 12 years ago – taking on the many challenges of starting up in Japan.

Image: Osaka, Japan. Source: Wikipedia Commons.

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