Effective Startup Strategy for Japan and Anywhere: Q&A with Jay Winder
What can a foreign entrepreneur do to launch a startup in Japan? Should you worry about your startup idea being copied? What does an effective startup strategy for Japan look like?
With 20+ years in the technology industry, Jay Winder is the Tokyo Hacker News Community founder and has established and sold 2 tech companies in Tokyo—Webnet IT and MakeLeaps; MakeLeaps, a business invoicing solution for Japan, won the Good Design Award in 2019.
Australian(ish), currently in Singapore, with business investments in Japan, Jay Winder is an advocate for decentralization and cryptocurrency, an enthusiastic emoji user, and TokyoMate K.K.’s advisor.
Here, Jay Winder answers your questions, drawing from his years as a serial entrepreneur and business owner, with executable insights on effective strategy for startups in Japan—and anywhere.
Q: What can a foreigner with no money do to launch a startup in Japan?
There are two options here:
Type 1—Startup: A high-growth, typically software company, laser-focused on a particular problem. This kind of company needs at least two founders (a builder and a seller) and generous funding to get a prototype off the ground. It demands intense work and a deep understanding of a particular vertical or problem space.
Type 2—A normal business: A freelancer/company that is typically paid in respect of time spent doing work.
If you want to do Type 2, all you need is a single customer to pay you enough money to live. I've done both of these businesses, and Type 2 is much easier to start.
You need to think much more deeply about exactly what you want. Once you've done that, you should go out and meet people who have done this before in Japan and get their advice.
Starting a business in any country is hard. Starting a business in a country where you're not familiar with the language, culture, and customs is much, much, much harder.
Q: How do I avoid telling people the details of my startup when attracting co-founders to prevent my idea from being copied?
Worrying about someone copying your idea is one of the most common mistakes new founders make.
Here's the hidden secret in finding co-founders—the idea is secondary. The relationship between you and your co-founder is what's important. The idea can and must change as you learn more about your customers and make progress.
Stop worrying that someone will steal your idea and start worrying that no one will care. YouTube was originally a failed dating site before pivoting to sharing videos.
Nobody caring about your idea is 1,000 times likelier than your idea being stolen. To make people care about your idea, you have to tell everyone who will listen.
The other huge risk associated with keeping your idea a secret is that you will receive no feedback that will enable you to improve your idea.
Another final reason: let's assume you somehow successfully build your idea, and it's amazing. This is extremely, extremely unlikely with zero external feedback, but let's assume we are in the one possible universe where this is true.
At what point do you start telling people/potential team members/investors/customers about this idea? When you make your first sale? Your tenth sale? Your thousandth sale?
Even after you've made 1,000 sales, anyone COULD still steal your idea and out-execute you. It's not like competition will never exist if you keep your idea secret for as long as possible.
If you don't tell anyone, however, you will DEFINITELY be unable to attract customers/team/investors.
Q: What is the best way to come up with ideas for a startup?
When you're so sick and tired and frustrated and angry with one aspect of the world, and it drives you so crazy that you can't stop thinking about potential solutions to it, that's a potentially great startup idea.
Q: What kind of person should you not bring on board as a startup co-founder?
Two founders having two different viewpoints on an issue is a daily and positive occurrence since the best solution usually involves a combination of those viewpoints.
Given that founder relationship problems are among the most common reasons that startups fall apart, anyone who cannot constructively solve disagreements in good faith should not be a co-founder at a startup.
The best evidence for the ability to do this is when someone can consider a viewpoint that negates their view and can say, "Sorry, I was wrong. You're correct. Let's go with your suggestion."
If you're a leader at a startup, having this view also provides implicit permission for everyone else on your team to do the same thing: admit being wrong and accept a different viewpoint.
This leads to everyone being focused on the most rational and correct answer and removes ego to the extent possible.
Q: What should I do while my co-founder builds the first version of our app?
Go out and talk to 30/50/100 customers and ask them to buy your unreleased product.
You: Would you be interested in this kind of solution to this kind of problem?
Potential Customer: Sure, why not.
You: Great. Would you be prepared to pay $20 a month for it?
Potential Customer: I guess so, sure.
You: Fantastic. Can I sign you up right now?
Potential Customer: <Actionable Information> Wait—I wouldn’t buy it unless it can do X.</Actionable Information>
When you ask someone if they're interested, they'll say yes. It's free to say yes, and they don't want to hurt your feelings. [But when you ask them to sign up now] you get to the heart of whether or not you have a customer when you ask them to buy. You can't validate your idea without getting a bunch of customers to commit to purchasing it.
Q: What is the best advice for a young, first-time startup CEO?
One core idea that will impact every aspect of your startup as you make forward progress: De-link your ego from your startup. To go Fight Club for a moment: You are not your ideas.
"Strong ideas loosely held" is the optimal mode of thinking at a startup (and in life). You are not a perfect oracle, and at any time, you likely have fundamental misunderstandings about many aspects of your startup.
Steve Jobs argued for months against the idea of allowing external developers to make apps for the iPhone. If Steve Jobs can be wrong about something so fundamental, so can you.
The extent that you're able to drop your ego and be open to being wrong is the extent to which you'll be able to resolve your misunderstandings and approach a better understanding of how things actually are.
To illustrate this in a story: Let's say you work part-time at a souvenir shop in a large city somewhere in America. You notice that every day, large groups of Japanese people always purchase chocolates. Day in, day out, you see chocolate is the most popular item for Japanese people.
This gives you an idea! Japanese people clearly must love chocolate. You find a wholesale chocolate manufacturer, purchase $5,000 of chocolate, and you spend 6 months designing your new product: Japan-themed chocolate with pictures of famous Japanese landmarks, like Mount Fuji and Kyoto.
It's a total, unmitigated failure. Not a single Japanese person buys the chocolates. You lose 6 months and all the money you spent. Why?
If you had actively sought views potentially opposing your idea, you would have discovered that traveling Japanese people often purchase souvenirs overseas to gift them to their coworkers, friends, and family at home. Thus, these souvenirs need to be a representation of their trip overseas rather than Japan-themed.
Here's where to go to get the latest on industry-specific statistics, consumer reports, emerging market segments, and market analytics for Japan.
The way you ask these questions then, of course, becomes essential. If you ask some Japanese people, "Do you like chocolate?" this would always result in a yes, giving you a false signal about your idea.
If you asked, "Why are you buying chocolate?" this would have allowed you to understand the buying motivations of your potential future customer.
Be open to always being utterly wrong about everything because, statistically, you probably are.
The more you drop your ego and earnestly seek out views counter to your current perspective, the better you'll be able to understand how things are and the better decisions you'll be able to make about everything in your startup.
Note: Republished and updated from Quora Q&As with permission by Jay Winder.
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