Japan is a notoriously difficult market to crack. Successful, established businesses entering Japan from overseas that do not bother to tailor their marketing and product for Japan regularly fail here.
Notably however, Japan’s SaaS market is bigger than every other SaaS market in Asia combined. If you put in the time and effort to battle through the adversity, there is a wide range of fantastic opportunities here generated by criminally under-served market segments.
For the last 2 years, we’ve been building MakeLeaps, a tool to help businesses in Japan create, manage and send their invoices and quotes.
We soft-launched 7 months ago, to almost zero fanfare – to our great relief. Unlike our other local competitors that have popped up in the last few months, we made an active decision to not issue press releases or seek media attention until we were confident we both had a deep understanding of our users requirements, and we had a product they would find both useful and compelling.
Sending invoices and business documents in Japan is deeply ingrained with various cultural nuances, and is ruled by a series of business manners and traditions. We had no idea if businesses would actually use an online system to send their invoices, since you cannot get less ‘traditional’ than using an online system to send invoices.
Having said that, 99% of all small/medium sized business in Japan are using Word and Excel to send their invoices. There’s a strong argument that says “Word and Excel” are not exactly traditional Japanese software either, which gave us hope.
In the beginning, I would go to peoples offices, put MakeLeaps in front of them on my laptop, and explain why we thought the software would be so great for them, both to practise my pitch and to garner some feedback. While many of these initial users were friends and acquaintances, I also cold-called a bunch of businesses, including accountants, to get deep level feedback about the system from as many actual potential users as possible.
After countless cycles of listening to these few initial customers I managed to get using the system and iterating on their feedback, things really started to take off around 2 months ago.
I feel like we’re now in a good position to talk about our experiences and what we’ve learned.
You’re a foreigner, and that’s ok.
If you’re a startup/company trying to enter Japan, you are very literally foreign in Japan. The kanji for foreigner literally translates to “outside”. Being an “outsider” in the perspective of Japanese culture comes with drawbacks and benefits.
- You have a degree of freedom, because you’re expected to be different. Japanese are understandably proud of their fantastic traditions and culture. They expect that most foreigners have no clue about the history, nuances and traditions that make up their country, and for the most part, they’re correct.
This means as a person attempting to introduce a product or service to Japan, you’re not expected to be perfect in your knowledge of local customs, although of course, you’re expected to try.
- This ‘foreign-ness’ is typically not a problem if you’re selling a low-risk service, such as say, a social photo-taking application. In fact, it can even be cool for Japanese consumers to use a foreign application or tool. However, if you’re selling a business critical application, such as an invoicing tool, your foreign-ness becomes an issue.
To a Japanese company, there are very real business and reputation risks in using a foreign tool for something as critical as invoicing. It’s a human trait to trust people who are similar to you, and who have shared experiences. It’s important for you to discover whether or not your foreign-ness is an issue.
Here’s how we got around this:
- One strategy we’re using, is the ‘feature what you can’t fix’ idea. On our Q&A page we make it very clear, who we are (essentially, not Japanese!) why we’re in Japan, and why we’re working in this problem space.
Since this is a big issue, I go into further detail on various additional strategies we’ve used to beat this in the section below titled “Japanese consumers make buying decisions in different ways”
It’s really, really hard to get feedback
The concept of social harmony and saving face in Japan is baked into every relationship in Japan, whether they’re personal or business. In fact in Japan, there’s often no difference between these two concepts.
This creates a tricky dichotomy where:
- A user with no personal connection to you will feel no obligation to risk providing you with feedback – preferring to simply close the tab and move on if software doesn’t suit their needs.
- A user with a personal connection to you will rarely provide you with ‘real’ feedback because that could disturb the social harmony in your relationship, and could cause you to lose face. Both terrible outcomes for your thoughtful Japanese friend.
This means that it’s almost impossible to garner feedback in Japan.
Here’s how we got around this:
- We openly ask for comments in our welcome email, our support page, and also on Twitter and Facebook.
- We often email regular users and new users from a ‘real person’, asking how things are going, and politely requesting any feedback or comments that the user might have.
- We do our best to build relationships with our users who are bilingual. The idea of dissenting opinions and openly discussing/disagreeing with people is typically more accepted overseas and in international companies. We find that bilingual users with experience in international companies are often quite open to sharing their feedback and comments.
- When a user does provide us with feedback, we:
- instantly reply to them explaining how grateful we are to receive this feedback,
- explain that we take their feedback and comments very seriously
- we explain that even though we cannot implement every suggestion, we promise to discuss it with the team and get back to them if there’s an update on their issue.
This approach hopefully communicates our willingness to listen to feedback and leaves the door open for future communication.
Japanese consumers make buying decisions in different ways
Japan has a culture based around personal networks and connections, so Japanese consumers typically look for consensus and poll their network while making a buying decision. This can lead to a pleasant snowball effect, where if enough customers start using a product/service, critical mass kicks in and the product/service achieves extraordinary success.
A recent example is Apple. You can’t get on a train and sit down without seeing 20/30+ iPhones, iPads, or white earbuds leading to iPhones/iPads/iPods.
The flip-side of this, is no matter how good your product/service is, people won’t use it unless they see other people using it, or unless their friends introduce them to it.
If it’s a business service, this is doubly true since there’s real risk in using a ‘non-consensus approved’ product/service.
How we got around it:
This is a big one, so we’ve come up with a lot of strategies to battle this.
- Avoid the English/Japanese content problems by creating a separate social media accounts that are 100% Japanese for your potential customers in Japan. Examples:
- We don’t recommend you begin in Japan with blog content posting. We had one very popular article on the MakeLeaps blog that was shared a lot in Japan, and we got about 60,000 views. Grand result: 0 signups. We haven’t given up on blog content and we’ve got a bunch of ideas on how to increase conversion here, but I recommend building up to blog content – don’t start with it.
- When a user talks about us publicly, we feature it on our Facebook page with a public and personal message from us to them, saying “Thank you very much for using the service. We’re really happy you’re getting benefit from it!” Showing Japanese businesses that other Japanese businesses are using our software has been critically important.
- To further reinforce the idea that many companies in Japan are using our service, we printed MakeLeaps stickers, and made them available for free to all our users. When a user is nice enough to send a photo of their PC/Mac/iPad with the MakeLeaps sticker, we upload the photo to Facebook.
- We’ve had a lot of success with our Facebook page in Japan. Facebook is exploding in Japan, and to some degree we’ve managed to ride this wave of growth. Facebook is our primary tool for regular communication with our users.
- We do everything we can to promote our regular users, which benefits us both. We offer many of our regular users the following mini-package:
- Featured quote on the front page
- Featured blog post where we come to their office, ask them some questions, take some photos, publish it on our blog and promote it by FB/Twitter/Blog/Newsletter.
- We treat every customer support ticket with the utmost importance. Not only is it good business practice, the business benefit of one ‘happy tweet’(Japanese) from a satisfied customer far outweighs the effort on our side to ensure they’re extraordinarily happy with the support they receive.
Japanese consumers are extremely sensitive to “Japanese-ness”. And rightfully so.
Ever read something ‘Google Translated’ into your language? In Japanese, it sounds about 10 times worse.
To a Japanese consumer, if you can’t get basics like the language copy right, chances are pretty good you’re not going to get the more fundamental things right either, like the value proposition to Japanese consumers.
How we get around this:
- There is no way around this. You need staff on the ground in Japan who can communicate effectively to your customers through the website copy, and the language in the application itself. Not to mention collecting feedback on the features and the application itself.
- Another tip: Japanese consumers favour websites with very dense content, and little whitespace. This hurts the latte drinking minimalist designer inside us, but we’re not here to argue.
Heres some examples of very popular Japanese sites:
Here’s the more ‘spaced out’ English MakeLeaps Site
Here’s the more dense Japanese MakeLeaps site
‘Insanely great’ Customer Service
First-time visitors to Japan are always amazed at the incredible service they receive here. The service levels are probably the best in the world.
The thing is that your customers will expect a similar level of service from you. Failure to provide this high level of service gives your customer an instant feeling of disconnection from you, and you’re quickly cemented into the ‘outsider’ box, since you don’t get the Japanese customs regarding customer service.
How we get around this:
- We do our best to provide a fantastic level customer service (in both English and Japanese).
- We provide a phone number for people to call. Interestingly, we are currently the only online invoicing tool in Japan that does this. Even more interestingly, we get a lot of phone calls to this number.
- All of our sales/support staff are on Twitter. We tried connecting with our customers through the @MakeLeaps_JP twitter account, with very little success. Once we changed to personal twitter accounts, our customer engagement on Twitter shot up.
- Another avenue where we’ve had a lot of success is having direct founder engagement with users. I’ve had some very pleasant conversations from surprised users when I’ve sent tweets in Japanese from @JasonWinder.
Japanese companies commonly use the concept of campaigns when marketing. We’ve had a lot of success with the following 2 campaigns:
- Our ‘Spring’ campaign
- Offering incentives for: providing us feedback we can use to improve our system, introducing their friends to MakeLeaps, and tweeting about us.
- A 24 Hour signup campaign
- We provide our Facebook followers with a registration code that provides them with 3 free ‘mail points’. A mail point allows users to have one invoice printed and sent by Japan Post by us. We saw a huge spike in signups during and after this 24 hour campaign.
Many of what we’ve learned has only been possible because we’re on the ground and able to directly contact and interact with our customers.
For a SaaS product targeting the Japanese market, you will absolutely need a team on the ground to get you the information you need for your build/measure/learn cycle. Success in Japan is very rarely achieved accidentally.
In our experience, your realistic options are either to build a team in Japan, or to partner with a company in Japan experienced in market entry. Although typically companies that offer market entry services have price tags that are prohibitive for early stage startups.
In any case, I’m always very happy to support more businesses and startups coming to Japan so please feel free to contact me if I can help.
Greetings HN Readers! If you happen to be in Tokyo this Friday, drop by to the HN Tokyo Community meetup. Full details here.
* For historical interest, here is the original link I posted to find a technical co-founder in Japan to HN – http://news.ycombinator.com/item?id=941606. A few weeks after posting this, I was lucky enough to meet my brilliant technical co-founder Paul Oswald. Thanks again to HN enough for building the infrastructure that made this introduction and relationship possible.