By Barrett Ishida
Shake up industries. Challenge existing norms. Go from underdog to owning the game. Startups and much of today's wave of tech companies strive to change the world as we know it, and many of us are eager to get in on the next big thing.
We're waiting for that next Craigslist, Netflix, Yelp, Twitter, Linkedin, Uber, Airbnb to come in and rattle their industry or create a new one altogether. Once they start to make some noise, ears begin to tune in and soon enough, global domination is the next stop.
Well here's a newsflash: With the exception of Twitter, the typical Japanese person has no idea what any of those supposed household names are.
So why is Japan so difficult to disrupt?
One of the biggest, most obvious walls between Silicon Valley and Tokyo is the difference between Japanese and English. Sorry Google, but there is no automated translation embed that can bring the UX or UI of a site or app to anywhere near seamless. It's nearly impossible to create a trustworthy voice there or on any social network by using English. Furthermore, businesses will also face fierce competition from already established Japanese services. For example, there needs to be a clear benefit given in order to make a switch to, say, a Yelp from a Tabelog or Gurunavi.
Let's break this big one down into a couple sections.
Privacy. While most will contend that they value their privacy, Japanese really really do. One of the reasons the barrier for Facebook was higher than Twitter's was that Facebook asks for your real information to be put online whereas Twitter doesn't. Prior to Japan's mixi eventually being put on life support, uploading face photos to online profiles and using real names was almost non-existent. Take that into account and it's easy to see why Linkedin is still trying to populate their virtual ghost town. Some Japanese have asserted that the public can view them as someone job hunting while not being dedicated to their current one - a perception that can be career suicide in Japanese work culture.
Safety and security. It's probably not a coincidence that 2 of the top 3 safest cities in the world are in Japan (Tokyo - 1st, Osaka - 3rd), according to The Economist Intelligence Unit's 2015 report. Japanese people themselves like to play things safe. This generally risk-averse nature leads to skepticism of some popular trends out west. Purchases by credit cards remains relatively low as Japan is still a cash-based society, so firing away payments on an app like Venmo may be seen as a bit "scary." A few years in, even PayPal is still learning how to leap over the challenges of educating and persuading potential users in the country. A line can be drawn on over to the cross-cultural lessons that Airbnb is receiving as well. Tokyo, the biggest city in the world with almost 38 million people in the greater area, has less than 1/15th the listings as there are in Paris. Opening the family's doors to random strangers coming from across the ocean is not exactly typical amongst a population who prefers to live cautiously.
3. Laws, rules & regulations
As with any foreign country, Japan has different sets of protocols to abide by. Uber, while technically in Tokyo, is only able to call official cabs. After a month of launching in their second city, Fukuoka, the service was halted due to allowing payments to drivers with no taxi licenses in cars registered for personal use, as well as potential insurance violations. And while unclear, there are speculations that Spotify and Rdio have been unable to get in rhythm with Japan's infamously ironclad record labels for the past few years, preventing their launches.
As challenging as it is for many startups to expand their presence in the world's third largest economy, many have entered and planted their flag. Facebook managed to overcome its hurdles and is now heavily used after beating out its domestic competitors. Japan crashed Twitter, forcing them to rework their systems. After that, they set a tweets per second record. Instagram has had huge success as well, becoming a top 10 app in a mere 14 days in the country. So who's next to disrupt this place that's not looking to be disrupted? For the Yelp's and Airbnb's, it's still too early to tell but like Netflix who will be making a push this fall, they know that you can't truly own the game until you disrupt Japan too.