Building a SaaS startup in one of the least hospitable places on Earth: Japan
beaconreports.net
beaconreports.net
1) Japanese companies don't buy SaaS.
2) Japanese companies do buy software, but it is overwhelmingly sold through existing commercial relationships they have with individual salesmen, even for packaged software. This is not an easy sales channel to just show up in one day. (I am not exaggerating the following anecdote in the slightest degree: my manager needed to invite a salesman out to drinks for us to procure a license of MS Office at my old day job.)
3) Japanese: occasionally tricky.
4) The problem domain for Japanese invoicing: potentially tricky, if you weren't expecting things like "We need photographic reproductions of the company seal on all our invoices. Naturally." to be hard requirements.
5) There's a sentiment among some members of Japanese society, including occasionally ones who have input in purchasing decisions, that you can only possibly understand Japanese language/culture/business practices if you are Japanese, and therefore, if you are not Japanese, they might not be overwhelmingly predisposed to doing business with you.
Japan is the second largest market for salesforce.com.
As opposed to a company that was already enterprise level when it entered Japan.
This makes a huge, huge difference in Japan.
Disclaimer: The article is about me.
I recently was talking with some folks from that team and they did share with me that the experience was anything but easy but that it was all par for the course for SAAS sales in Japan.
Edit/Addition: I would disagree with points 1 and 5 that patio11 are making though. Past experiences (working at both SAAS and other internet companies) and also current experiences (starting up an Cloud Telephony platform https://www.fullcourt.co ) has me believing that the following from the article is always a great issue.
People were saying, “It’s a really good product. It is reasonably priced. But, who else is using it?” In consensus driven Japan, where nobody budges unless the next guy is doing the same, Winder faced a chicken and egg problem.
I've/we've often been asked about our other customers. Another thing that also often comes up is that we're asked for a comparison study with competitors, this usually happens because our point of contact doesn't have final authority and needs to build a biz case for his/her superiors.
Regarding "1) Japanese companies don't buy SaaS.", this definitely isn't true at all. I dare say that all of my former employers, a number of their partners and customers did use SAAS products from both domestic and foreign companies. It takes a long time to sell but once you get a few key companies that you can reference (for whom the sales process can often take months and sometimes years), then customers will start lining up.
Do you see the Japanese recognizing/fixing the massive inefficiencies in how they do business any time soon? The Japanese economy's been down in the dumps for the last 20+ years, and these sorts of things can't be helping. Peter Drucker must be turning in his grave (he would be positively spinning if he saw もしドラ).
When I see things like faxes still being prevalent because "my feelings and passion come across better"[0], I wonder if the Japanese are really interested in staying relevant in a global economy. I mean, come on, 59 percent[1] of homes still have faxes? How did these people miss the digital revolution?
0: http://www.bbc.co.uk/news/magazine-19045837
1: http://www.washingtonpost.com/world/asia_pacific/in-japan-fa...
While a lot of those practices are clearly inefficient, let's not forget that they have their plus as well. It is sometimes madening to see consensus building in Japanese meeting, but people are less likely to be blinded by their limited understanding as well. I can't find the reference, but a former colleague of mine knew of some research that showed how Japanese were more likely to know the actual decisions being taken after a meeting compared to their European/American counterparts.
Also, caring about the content of the emails or doing faxes means you are not as likely to answer them with a two letter words, which is just being efficient at doing useless things I suspect the fax thing itself to be more of an artefact of the average age of people in charge in Japan: my gf parents had a fax, but nobody I knew in my own generation in Japan had one. There is also most likely an early adoption paradox.
In the end, Japanese economic woes are mostly demographic I am afraid (GDP growth per capita is closer to the US than most people think), and inefficiencies should be considered with that in mind.
Yeah, that's why I mentioned him and said he'd be spinning in his grave if he saw もしドラ, because it's a quintessentially Japanese situation - everyone's buying this book that discusses grand ideas and talking about it with one another, but no one's actually applying any of those ideas to real life.
A lot of those inefficiencies exist for the purpose of maintaining the employment rate. They succeed at that.
Much like the faxes you were making fun of, it's a question of differing priorities.
That's debatable. They were able to coast on their post-war success for a while, but things certainly aren't looking up in Japan. High levels of youth unemployment and dissatisfaction has led to astonishing levels of apathy. South Korea is expected to surpass Japan in terms of GDP PPP per capita within the next year, and Taiwan already has.
Japanese advantages in consumer electronics have been largely eroded by more nimble South Korean and Taiwanese rivals, and there are no signs of the Japanese fighting back in an effective manner. A great example of this is the smartphone - a quintessential consumer electronics product market in which the Japanese are nowhere to be found. Sony is flailing around a little with its Xperia phones, but they don't even register on the global level. Samsung and HTC have all the attention, and mainland Chinese competitors, like Huawei and ZTE, are starting to enter the market as well. There were some signs of success in the HDTV industry, but again, rivals like Vizio and Samsung have taken over a large portion of the market.
One of Japan's last remaining strengths in consumer electronics is the camera - companies like Canon and Nikon still reign supreme. But how long will that last? Samsung is continuing its relentless march into the future with the Galaxy Camera, a point-and-shoot which runs a full copy of Jelly Bean with wifi and 3G capabilities. Unless the Japanese firms start changing their ways, they're going to become also-rans (if they haven't already).
Give it time, and I bet Korean car makers like Hyundai and Kia will displace Toyota/Honda as well. The so-called "monozukuri" culture of Japan has turned out to be nothing more than a farce.
I feel like I'd be going beyond my expertise to comment heavily on this but I'm pretty certain all three countries are going to look rather different twenty years from now. Makes predictions hard.