Why I Moved My Humble Start-up From Tokyo
My sweet and exciting love affair with Tokyo has finally come to an end. It was an awesome city. I had a great time. But it's over.
Early summer, I sat down with a trusted and respected person in the Tokyo start-up scene who pretty much advised me to get the hell out of Tokyo, if I was serious about my growing my business.
I followed his advice and within a month, we'd packed it all up, said sayonara, boarded a plane and settled into our new home in the USA.
So here I am, back in the land of the free :). We've chosen a charming little beach town on the Southern California coast where surf, yoga, coffee, sun, and 72 degree weather is in abundance throughout the year. It's not Silicon Valley, it's not Tokyo, and it's precisely where our family wants to be. Plus, it's a place that gives my business a much better chance for success.
Here's why I moved my start-up from Tokyo.
Tokyo isn't start-up friendly. Tokyo has so much bureaucratic red-tape when starting a business that it pisses you off.
Last year, I was a part of the Entrepreneur Mentorship Initiative in Tokyo and there was a panel of business leaders and government officials discussing all of the factors that make it hard for small businesses to thrive in Tokyo. Among the top factors were, bureaucratic red-tape for even registering your company, the hassle of setting up a business banking account, banking fees, the amount of time it takes for things, the high costs of office space, and the cost of professional service fees. It was a sad panel and in the end, the panelists were at a stand-still as to how to fix it.
Tokyo has a start-up stigma. Being an entrepreneur in Tokyo is considered too risky. It's no secret the Japanese are really risk-adverse. Multiply that times ten in the tech start-up world of Tokyo. There's a serious start-up stigma there. I've experienced it first-hand working as a recruiter in the tech-space for five years. Starting your own tech company in Tokyo seems to have an 'untrustworthiness' attachment to it. As a result, the top talent steer clear or start-ups and you're better off saying which big companies you worked at previously instead of which companies you've started.
Tokyo is hard for foreign business owners. Japan is set up for the Japanese. Understandable, yes. However, in order to be a successful business owner in Japan, the odds of success are significantly increased if you are Japanese and greatly reduced if you are not. If you're not Japanese you're starting ten steps behind the start line. If you speak the language, then you're starting eight steps behind instead of ten. That's still a huge gap to cover once you're off and running.
Seriously, you need to have a Japanese 'face' for your company credibility. (Unless you're starting an English teaching school, executive search company, or something that makes being foreign a commodity and not a liability. And even then, having a foreign face is good- but it still helps if you have a Japanese partner, hehehe.)
Tokyo is unbelievably expensive. Starting a company in Tokyo is expensive. People will tell you otherwise but trust me, you don't want to listen to them. Speak with a business lawyer and accountant and understand the 'real big' and expensive picture. The money required to start-up in Tokyo is money better spent on building your actual product or service.
Further you have to be making serious cash in order to have a semi-comfortable standard of living there. Which, was fine when both me and my husband were headhunters and among the top billers in our past company. But ummmm, when you're trying to be a lean start-up and watch you pennies, Tokyo is a major FAIL.
Side note: The seed money Japanese incubators provide is laughable.
Tokyo wasn't my target market. I initially wanted to build Hitch'd up in a market that was missing my target audience, North American men and women getting married. Yeah, call me crazy it's okay. I was trying to make the best out of my situation. I didn't want to leave Tokyo. But alas, the radioactive writing was on the wall. (Joking... kind of.)
Tokyo has a very small pool of talent. Speaking as a tech recruiter for five years, the talent pool in Japan is tiny and hard to access.
Tokyo is the land of the late majority. If you've read Crossing the Chasm, then you know what I'm referring to. The consumer market in Japan is all about having a LOT of traction before anyone takes you seriously. And, given the type of traction needed to prove yourself- you're no longer an early-stage start-up.
Tokyo is seriously lacking women in business and leadership roles. I believe you can tell a lot about a country and a company by understanding the role women play and positions women occupy within them, respectively.
Women simply are not starting companies or pursuing long term careers outside of the home in Japan. Thus, starting a company as a wife and mom there offers no support system or community to call on. Women in tech are few, and women in tech who are married with children are even fewer.
Contrast that with my current location- I just returned from a playgroup where two of the three other women were business owners with kids under three years old.
(Ironically, my Fulbright scholarship brought me to Japan to study the intersection of career, family and education choices of Japanese women.)
Tokyo has a LOT of earthquakes. Which if you live there for as long as we did, earthquakes don't really bother you that much anymore. But after the massive earthquake in March, experiencing how strong it felt in Tokyo, and then riding out the endless aftershocks that were equally scary, it was just too much distraction for me trying to build a company and take care of my home and new baby.
The continuing radiation situation is still a MAJOR concern. This may not be the case to some and that is fine. But we have a 10-month old and the way the radiation situation in Fukushima has been and continues to be (mis)handled is simply disturbing. No thank you. ( ̄へ ̄)
I could go on but, simply put, Tokyo is great place to visit and marvel at, but a lousy place to build a start-up and start a family. The only reason to EVER start or move your company there is if you are targeting Japanese customers, have a lot of cash, and are okay with constant red-tape, foot-dragging, endless ambiguity and earthquakes.
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So Tokyo, because of these reasons, I bid thee farewell. I am forever grateful to you for being the place where I sharpened my sales skills making hundreds of cold calls, I abandoned my need for a car to get around, I found the love of my life, and I gave birth to my first child, my most beautiful blessing and gift yet.
I'll truly miss you, but I'm throwing the deuces.
PEACE!