Help for U.S. Entrepreneurs in Japan
Few things are less certain than bringing your start-up overseas. I managed to do it thanks to a very special network of friends and business associates in Japan, but not everyone has that network on tap.
A new incubator called Venture Generation is an attempt to make the transition a bit easier for companies that are looking to do business in Japan. Venture Generation nurtures domestic Japanese companies as well as overseas companies looking to get a foothold.
“Venture Generation is not your typical incubator, in the style seen in the U.S.,” says founder and Chief Mentor Jeff Char. No equity stakes are taken in the companies, and companies don’t enter and exit with a class. This means you don’t get booted before you are ready, but rather are self-paced.
Venture Generation is not typical of Japanese incubators, either, which usually focus on simply providing physical space. Going beyond space, and focusing on building an ecosystem, is the critical dimension that sets Venture Generation apart, according to Professor Richard Dasher, Director of Stanford’s US-Asia Technology Management Center.
Venture Generation now boasts 80 advisors, including investors and veteran entrepreneurs, who are tied into its ecosystem and show up regularly at the incubator. It also has founder Jeff Char, a successful serial entrepreneur and attorney from Silicon Valley, who is now working in Japan. While most of Venture Generation’s companies are tech and software-focused, the incubator also hosts Kameido Factory, which delivers donuts to offices much the way medicine used to be delivered in Japan.
Venture Generation provides lots of services to entrepreneurs, but as someone who’s been a foreigner entering the Japanese market, these are the ones I see as the most crucial:
Introductions. In Japan, as in most places, introductions are everything. This is especially true if you’re an unknown foreigner. I was hitting a wall before Jeff Char made a key introduction to someone who understood the value of my company’s technology. Japan is highly networked, especially in the technology field, and I quickly learned that an introduction to one person often cascaded into many others that were extremely helpful.
Cultural understanding. You’ve got to learn the basics of introductions and meeting etiquette, as well as how to get through a meal without totally embarrassing yourself. There are books and seminars, which are great if you have time, or you can get a short tutorial from someone who knows the common gaffes foreigners often make. There is nothing worse than watching someone on your team do something terribly insulting to the person you are trying to build bridges with, like dog-earing their business card (ouch!) or even writing on it.
Advice on local business practices. Beyond the basic cultural differences, there are differences in business practices. You may find them completely baffling without a good local mentor. Your prospective customers may find you equally baffling. I learned this when trying to explain a standard Silicon Valley term sheet for equity investment to Japanese investors. Guess what? It wasn’t standard in Japan! Be prepared to explain things and to work through creative solutions if you expect to get a deal done.
Venture Generation goes well beyond these three services, by providing a landing pad and the company of fellow entrepreneurs. For foreigners coming into Japan to set up shop, this is a wonderful opportunity to participate in an entrepreneurial ecosystem. I hope the model will be replicated elsewhere around the globe.
LAURA SMOLIAR | CEO, Peppertree Engineering
Armed with over 17 years in Silicon Valley’s technology sector and a Ph.D. in Physical Chemistry, Laura co-founded Global Innovation Foundry, LLC in 2014 to bridge innovation and market opportunity between the U.S. and Asia. Her own start-up experience building strategic partnerships and raising funds from Asia inform her approach to solving complex problems across different cultures and economies, harnessing the best assets of large corporations and small companies.