Building a SaaS startup in one of the least hospitable places on Earth: Japan
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Re: Building a SaaS startup in one of the least hospitable places on Earth: Japan
#2This story is seriously worth your time, both if you have any desire of selling things in Japan (I am in perpetual awe of people who can succeed at that) and for the generic startup-y relentlessly resourceful "Well, if the market is fundamentally irrational about how they buy this product, then let's figure out how to work that to our advantage" rather than just giving up when things seemed difficult. (Disclaimer: they're friends of mine and we work together on stuff occasionally.)
Re: Building a SaaS startup in one of the least hospitable places on Earth: Japan
#3Why "least hospitable"?
Re: Building a SaaS startup in one of the least hospitable places on Earth: Japan
#4Why "least hospitable"?
A short list:
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.
Re: Building a SaaS startup in one of the least hospitable places on Earth: Japan
#5Why "least hospitable"?
A short list: 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…
Bull.
Japan is the second largest market for salesforce.com.
Re: Building a SaaS startup in one of the least hospitable places on Earth: Japan
#6Why "least hospitable"?
There's a difference between "least hospitable on earth" and "harder than in the US". I'd rather sell SaaS in Japan than in Ethiopia or Uzbekistan. (This is still a good read though)
Re: Building a SaaS startup in one of the least hospitable places on Earth: Japan
#7Earlier quoted context omitted.
A short list: 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…
Bull. Japan is the second largest market for salesforce.com.
Right - but the article is about building a startup from the ground up.
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.
Re: Building a SaaS startup in one of the least hospitable places on Earth: Japan
#8Earlier quoted context omitted.
Bull. Japan is the second largest market for salesforce.com.
Right - but the article is about building a startup from the ground up. 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 was replying to the particular comment of patio11 which is simply not true. Japanese companies do buy SaaS. the company i work for just opened offices in japan (after eu and china) and rented out data center space. we already have local clients. we are a start-up by any means, although enterprise focused (little bit over 5 years old).
Re: Building a SaaS startup in one of the least hospitable places on Earth: Japan
#9Earlier quoted context omitted.
A short list: 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…
Bull. Japan is the second largest market for salesforce.com.
Salesforce Japan was also a joint venture between Salesforce.com and a Sunbridge (that Salesforce.com eventually bought out). Sunbridge was founded by Allen Miner who already had experience building out Oracle in Japan and the team that helped him there also helped build out Salesforce.com in Japan.
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.
Re: Building a SaaS startup in one of the least hospitable places on Earth: Japan
#10This is very interesting, I think it summarizes the story of most first time entrepreneurs trying a saas startup, spotting a great opportunity, building a mvp, knowing your competitors and learn all the basics of business, and there is a crucial factor for a entrepreneurs in a foreign land: Culture, its all about humans.
Its a really nice read, and I think if you apply the same universal strategic rules you are likely to succeed anywhere else