The Japanese startup market is fairly young. Even though there isn’t as much capital for startups in Japan as in some other countries, it is a great country with amazing business potential. The fact that there is currently less capital only means that there is less competition in this market, which makes it a perfect opportunity for foreigners with the ambition of starting a business in Japan.
However, compared to Western countries, Japan is different in many ways. Although certain laws and regulations are important, a lot of people forget about the cultural differences that can greatly affect how well you will do in Japan.
Today we are going to talk about some important things you must be aware of when starting a business in this country to make your entrepreneurship successful.
Startups Are Speeding Up in Japan
During 2015 the total amount of investments in Japanese startups was around $1.5 billion, and in 2017 that number passed $2.5 billion. At the same time, the invested median also doubled during this period and set the record for the whole country. Each month there are more venture capitalist, accelerators and office spaces.
The majority of the startups in Japan are located in Osaka and Tokyo and these cities have also seen the most increase. However, the Japanese government has been eager to start up their Fukuoka economic zone and encourage companies to invest there by reducing the corporate tax significantly.
During 2015 the total amount of investments in Japanese startups was around $1.5 billion, and in 2017 that number passed $2.5 billion.
The government has also created startup visas, which are available to foreigners who want to invest in Fukuoka and Tokyo, but is looking to create another, one-year startup visa program that will be nationwide. All foreign investors can get help from JETRO, the Japanese External Trade Organization.
Business Relationships Are Vital
If you have lots of money ready to invest in any Western country, it will be easy to find partners and get the business opportunities you are looking for. In Japan, business relationships and mutual trust are often more important than the financial strength of an investor. You can have it all on paper but you won’t be able to make vital partnerships if people don’t trust you.
At the same time, consumers are very mindful of how companies behave towards them. In the beginning, it’s essential to leave a good first impression and build good relationships with your customers or your startup will forever be stuck in the grey zone.
Consumers in Japan have their opinions tied to traditional media and articles, through them they will determine whether a certain organization can be trusted or not. Japanese customers are also very aware of the privacy laws in their country and they won’t allow you to use customer data so easily without giving them a fair reason.
Language Is Very Important
Although there are people running businesses in Japan that don’t speak any Japanese, there are many of those that are facing obstacles because of this. There are two reasons for this.
The first one is quite practical – the Japanese people don’t speak English very well, even in the business world, and you will need to learn Japanese if you want to communicate with people properly on a business level.
The second reason is purely cultural. The Japanese are a proud nation and they love their country. This means that they expect the same from foreigners that want to start business in Japan. They want to see foreigners try and become a part of their society and respect their country by learning the language.
Earlier we talked about business relationships and how trust is very important. If you want to find big and important partners in Japan, you won’t need a lot of money, you will need to learn the culture and do things the way they are done here. This includes at least trying to speak Japanese and learning it for basic conversations.
Entrepreneurship Is Expanding In Japan
Although Japan is one of the strongest economies in the world, it’s falling behind greatly with its number of entrepreneurs.
There is a very small number of people that earn their money this way and a lot of people are still reluctant to do business this way. Startups might even have issues convincing young people to join them, as they are still unaware of the career opportunities that can be opened up this way.
The Japanese have strong values that they’ve built for centuries and this new kind of approach to business might be unfamiliar to people but things are getting better and better each day. However, since there is a small number of entrepreneurs and startups this means that the market is very open and ready to grow.
The language barriers and cultural values have made most of the Japanese startups focus their efforts on the domestic market. There are a lot of opportunities, given the fact that this country has the third largest economy in the world.
Every year there are more and more startup opportunities in Japan and more investments. The biggest boundary for Western entrepreneurs in Japan is the culture. You need to learn Japanese business culture and learn how to behave, communicate, and deal with people on a regular basis if you want to get the business trust you need and establish valuable connections.
There are more and more young bilingual Japanese people who are hungry for international companies making a mark in their country and they believe that these companies are vital to the future success of their homeland.
Japanese business culture is deep-rooted in their society, by starting to learn this culture you will start to gain momentum in running a business
