Hello, entrepreneurs! I’m Yu, founder and CEO of Tokyo based one-stop social communication platform service startup, EverConnect. I’d like to share my insights about Japanese internet industry startup situation with you. At first, I have to start my story by explaining the negative side of Japanese startup scene. It is true that situation is rough, but sometimes that can be good precondition for internet entrepreneurship.
1. Getting a better environment for entrepreneurs, End of Lifetime Employment
Japanese economy is rapidly sinking since 1991, which represents the end of the Japanese economy bubble. Internet economy bubble occurred around 2000, but most Japanese economies are sinking again since the 2008 global financial economy shock. Japanese young generations never experienced good economy situation in their lifetime, even if they have won educational challenges and have graduated from famous colleges. Then, one of the famous Japanese traditional company’s image, Lifetime Employment was gone. Starting time of Japanese pension is also moving from 60 years to 65 years, which means that many 60-year old men have to restart their work engagements. Japanese graduated college students are having trouble getting their job.
On the other side, Internet is a big market opportunity in the industry. Currently global business areas can do their internet and frontend web/app product development on cloud cheaper, easier, faster than previous generation’s environments.
Tokyo is actually one of the best cities for entrepreneurs of the world. That’s why lots of young entrepreneurs are starting their own internet business in Japan in last few years.
2. Smartphone with Social instead of Feature Phone
Smartphone and social networking services had shifted paradigm of the internet business. Feature phone structures and networks had a tough job getting many users without much marketing and development costs. “Garake”, which is Japanese shorten word of “Garapagos Keitai”, Japanese early adopters, thought of Feature Phone scornfully laughing, and it didn’t reach global market either.
But Smartphone with SNS changed everything. Currently everybody can launch his/her smartphone app on Apple AppStore or Google Play with $100 or less cost. Laptop is the only required asset and tool that enables unlimited opportunities to show global users what we have at the same time!
In last few years, Japanese social networking services trends are changing, mixi’s user base is decreasing, GREE and DeNA are trying to expand their strong social gaming platforms to global consumer market. Twitter and Facebook are penetrating the Japanese market instead, and LINE just got their 20M+ users in Japan as well.
These huge SNS platforms have an advantage of connecting users easily without big marketing and promotion costs. These shifted trends make good and big business chances for all entrepreneurs in the internet area.
3. Japanese culture and contents business with Time Machine Business
Previously successful Japanese startups started their own business as a “Time Machine Business”, which means to start inspired by US’s new success case studies, focusing on them more than original Japanese business tradition. Japan is a difficult and closed market to reach for foreign people, because most Japanese people cannot speak English or other foreign languages. That is why copying development of foreign counties is much faster and easier than externally localizing a Japanese brand.
But smartphones with social networking services are making the world map smaller. Twitter and Facebook are fastest tools for displaying and sharing world’s breaking news. In fact, “The Time Machine Business” is hard to implement successfully because the true global internet networks are shortening time and crossing the language differentiations via social networking services on smartphones.
On the other side, internet environment changes are making the new Japanese trends easy to export. Anime, Otaku, J-Pop, Kawaii, Gaming are getting more exposure due to the ease of using smartphones as a good O2O marketing and promotion tool, targeting people who follow the cutting-edge technology and trends.
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