TT-579 -- Local Foreign Entrepreneurs Earn M&A Windfalls, e-biz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, August 29, 2010 Issue No. 579

+++ INDEX

- What's New
- News
- Candidate Roundup/Vacancies
- Upcoming Events
- Corrections/Feedback
- News Credits

SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at:
http://mailman.japaninc.com/mailman/listinfo/terrie

BACK ISSUES
http://www.japaninc.com/terries_take, or,
http://mailman.japaninc.com/pipermail/terrie/

------------------ PBXL & Salesforce.com ------------------

Increase your Sales Calls by 25%+!

PBXL's CloudCall service integrates Cisco IP Telephony and
Salesforce.com, increasing outbound sales calling volume
by 25%+.

If you are using Salesforce.com and Cisco, or are
interested in finding out more about how PBXL's Cloud
Service offerings will improve your business, visit:

http://en.pbxl.jp/pbxlsalesforcett.php
or call: 03-4550-2557.

------------- PBXL is Business Communications -------------

+++ WHAT'S NEW

It's been a busy week for foreign company owners selling
their businesses. While your average Japanese CEO might
want to turn his company into a lifetime affair, there is
plenty of opportunity in M&A-hungry Japan for enterprising
foreign entrepreneurs to sell locally.

First up, on August 20th, was the announcement that private
equity firm Appreciate, led by Hiroyuki Kurihara, bought the
H&R Consultants and ReloJapan businesses off Oak
Lawn Marketing for an undisclosed sum. Appreciate has
purchased 100% of the operations, and this transaction ends
an 18-year association between H&R and its founders Harry
Hill and Robert Roche. The businesses will still be run by
the very capable Steve Burson, however, and will continue
providing the same high-grade real estate and relocation
services they have done over the last two decades.

We asked Harry why he sold the firm. He responded that
since NTT DoCoMo bought out a majority stake in Oak Lawn
Marketing, one of Japan's largest direct marketing and TV
shopping companies, the compliance environment that came
with DoCoMo, as a public company, has meant that keeping
H&R as a group business has become increasingly expensive
and time-consuming. This is of course understandable, and
we assume represents the natural evolution from small to
big, an evolution which only gets interrupted if the owner
decides to jump out altogether and retire to a deserted
island some where...!

The H&R story is truly one of a bootstrapped start-up, and
should be an inspiration to other young entrepreneurs
thinking about starting a company in Japan. We asked Harry
Hill to give us the start-up story in a nutshell. He
responded:

"H&R Consultants was founded in January of 1991. In
December of 1990, Robert Roche and I met at the inaugural
meeting of the American Business Community of Nagoya
(ABCN), which became the Chubu Chapter of the ACCJ 10
years ago. Robert was one of the organizing members. At the
time he had a company called Robert Business Consulting
(RBC) and I had a company called Hilco International. We
had both just hung a shingle to do business and were pretty
much ready, willing and desperate to create business."

[Continued below...]

----------- Making Web Sites More Affordable --------------

LINC Media's Electronic Commerce team is proud to announce
its "WEB PARTNERS" program, whereby we create fully EC
enabled websites with as much functionality as you need,
plus year-round support, for a flat monthly fee.

Avoid upfront costs and lack of support after the site is
up, with the LINC Media WEB PARTNERS service. Our customers
to date include major international airlines, Social
Network Service sites, and online stores for consumer
products.

Program includes:
- Japanese/English website development
- Configuration of core software (Wordpress or Drupal, etc.)
- Software development (PHP, mySQL, etc.)
- Daily changes to the site
- Hosting, security, and backup

WEB PARTNERS is backed by a solid fully-bilingual team
with strong credentials and a desire to please.

Contact: nana.yamaguchi at lincmedia.co.jp for details.
-----------------------------------------------------------

[...Article continues]

"This was the height of the US Japan Trade Friction years
and there was tremendous pressure on Japan and Japanese
companies to buy US [products and services]. This created a
big rush in joint venture projects between the major
aerospace companies, with Boeing, Raytheon, Pratt and
Whitney, General Dynamics, Lockheed Martin, etc... all
announcing joint development deals that required US
engineers and their families to relocate in Nagoya. The
first meeting of the ABCN essentially was Robert and
myself, representing local, young and hungry entrepreneurs,
hosting a forum for executives from the aerospace industry."

"At the time, the representatives were estimating an influx
of 200 families within an 18 month period. Robert and I
looked at each other and realized we could either hate each
other or become partners. We chose the latter and H&R
Consultants was born. While H&R was never Robert's nor
my primary business, during the first 5-6 years of its
existence it provided both of us with steady supplementary
income that was essential to survive. Robert and I were
very involved in the operations, sales, and day-to-day
business for the first 6 years, but over time an incredible
group of dedicated, hard working and motivated individuals
from Scott Reid, current managing director for brands at
OLM, to Steve Burson, have taken over H&R."

"Over the years, in addition to housing and relocation, H&R
was involved in marketing of international telephone
services and satellite television sales to expats. As well, we
invested in a 2X4 house builder and import construction
materials company...! While humility is one of Robert's and
my more under-stated attributes, the hands-on experience we
gained in the early years by being on 24-hour call taught
us humility and gratitude to all the companies who gave us
a chance at the beginning of our careers. We are indebted
to the ABCN (now the ACCJ Chubu chapter) members who gave
us a chance and this has inspired us to want to mentor and
provide opportunity to this generation of entrepreneurs
coming of age in Japan. Certainly here in Nagoya, I believe
that both OLM and H&R has been open to giving a foreign
entrepreneur a shot."

While the price paid by Appreciate for H&R is not public,
Harry did say:
"The price is not public, but Robert and I founded H&R as
a Yugen Kaisha. H&R pretty much supplemented our incomes
at a nice annual salary per year until 1999 when we sold
H&R to OLM for JPY120m. OLM has steadily received dividends
and sold H&R for a healthy capital gain, so over the years
H&R has certainly generated several hundred million yen off
of an initial investment of JPY3m."

*********************

The next deal is that of Wall Street Associates, owned and
run by Nick Johnston. Nick founded WSA in 2000, and
although in a mature industry without the advantage of a
dotcom model, he has been able to build up his business
over the last 10 years to an impressive level. The main
tools he has had at his disposal are: focusing on growth
segments of the market, leveraging with mass (recruiters
and clients), running the operation at a very personal
level and staying part of the team, bringing his core
management team along for the ride (stock options), and of
course personal leadership qualities.

This mix has served Nick well. The buyer is an online and
Japan-specialist recruitment company called En-Japan, which
is actually the second largest online recruiter in Japan
after Recruit. They paid the well-priced amount of JPY1.7bn
for WSA, making it, as far as we know, the biggest earn-out
amongst the 3 foreign recruiting firms to have been sold so
far in the last 5 years or so.

When we first saw the earn-out amount, we were surprised,
because the En-Japan press release that came out on Friday
said that sales for the last financial year were JPY1.859bn
and more importantly, Ordinary Income was JPY296m. If
correct, that means En-Japan paid 5.7 times last year's
earning for the company. In the current economic
environment, this is a fairly high multiple, so we
contacted Nick to confirm why this price was paid. He
responded that apart from the people and systems, the
business itself is on track for a strong recovery this
year, and that sales are running 25% ahead of last year. So
clearly En-Japan was pricing this performance into their
purchase price.

Why would En-Japan, a Japanese online recruiter with a
remarkably small number of bilingual candidates in their
database, be interested in a foreign-company specialist
like WSA? It seems that for much the same reason as Recruit
was interested in another recruiter, CDS, several years
ago -- to bring more aggressive western-style recruiting
skills into the Japanese operation, and perhaps more
importantly, to take the business abroad. It is no secret
that Japanese firms have given up on their domestic markets
for expansion, and that this philosophy has really hit home
over the last 12 months. Therefore, with WSA, En-Japan gets
a foreign markets-capable platform to do what Recruit has
gone on to do with CDS.

Anyway, we want to congratulate the latest group of foreign
businesspeople for showing that although tough, the
Japanese market for venture companies can also be very
rewarding. Well done, Robert, Harry, Steve, and Nick.

*************

Lastly, next week's prize in the Metropolis Members Club is
one night's accommodation in Okinawa, courtesy of Okinawa
Marriott Resort & Spa. All you need to do to enter is sign
up for the MMC newsletter. It couldn't be easier.

http://blogs.metropolis.co.jp/club/

...The information janitors/

***------------------------****-------------------------***

--------- BIOS - Bilingual IT Systems and Support ---------

BiOS full-service IT solutions has a new service.

Working with our fully licenced temporary dispatch group,
we are now able to provide Japan in-country workers
for companies not yet registered in Japan.

This innovative service is available for companies needing
to hire staff for Japanese customers, but who are unable
to commit to the expense and infrastructure of maintaining
an office in Japan. We take care of all aspects of the
employment, contracting, and dispatch -- including
management of the employee.

For more information on this and other SI and IT services,
in English or Japanese:

Phone: 03-5773-3090, Email: solutions@biosjp.com
Web: www.biosjp.com
-----------------------------------------------------------

+++ NEWS

- Job creation fund to double in size
- Vaccine makers see demand evaporate
- 70% prefer Kan over Ozawa
- Tourism Agency to ask for budget increase
- Google ousts Microsoft as Japan's top brand

-> Job creation fund to double in size

Job training of care givers, subsidies for companies hiring
long-term unemployed youth, and subsidies for new graduates
are all part of the job creation fund that the government
has spent JPY150bn so far this year on. Now the DPJ plans
to extend the program for another year with the same size
budget, with the goal of creating an additional 60,000 jobs
-- mainly in health care and agriculture. (Source: TT
commentary from nikkei.co.jp, Aug 28, 2010)

http://e.nikkei.com/e/ac/tnks/Nni20100827D27JFA15.htm

-> Vaccine makers see demand evaporate

Thanks to a Health Ministry study last year, the government
has made the decision that it only needs half the inventory
of flu vaccine it originally wanted to ward against an H1N1
style epidemic this coming winter. The study concluded that
just one shot of the vaccines made by GSK and Novartis is
enough to create resistance to the flu. Previously a course
of two shots was recommended. Experts say the decision has
chopped the vaccine market size by a massive JPY40bn.
Particularly upsetting for Novartis is the fact that the
company has not been named as one of the favored few to
mass produce the vaccines here in Japan from now on.
(Source: TT comment from nikkei.co.jp, Aug 26, 2010)

http://e.nikkei.com/e/ac/tnks/Nni20100827D26HH581.htm

-> 70% prefer Kan over Ozawa

Although it's not up to the public, a Kyodo News poll of
1,450 voters has found that 69.9% prefer Naoto Kan to
Ichiro Ozawa, in the upcoming DPJ party leadership contest.
Rumors are that Ozawa is making his run because it offers
an opportunity for him as PM to avoid court charges of
political funds irregularities. Although Kan is more
popular, Ozawa is the driving force behind the DPJ and
many of the newly elected MPs owe their success to him and
his election strategies. If Ozawa is successful in ousting
Kan, he will be the DPJ's third leader in a year, and
Japan's third PM in a year as well. (Source: TT commentary
from wsj.com, Aug 28, 2010)

http://online.wsj.com/article/BT-CO-20100828-700190.html

-> Tourism Agency to ask for budget increase

Sensing it is on a roll, with massive increases of tourists
recently, the Japan Tourism Agency will apparently request
a 3% increase in budget for the remainder of fiscal 2010,
and more for FY2011. The Agency says that it wants to hit
15m tourists visiting Japan by 2013 and will need JPY13.1bn
next year to promote Japan as a travel destination. The
Agency plans in particular to target Saudi Arabia, the UAE,
Spain, and Italy for advertisements highlighting Japan.
(Source: TT commentary from ibnlive.in.com, Aug 28, 2010)

http://tinyurl.com/2a7q3gm

-> Google ousts Microsoft as Japan's top brand

A Nikkei survey of 33,033 shoppers and 14,184 executives
has found that Google now has the most respected and
recognized brand in Japan. In being so ranked, Google has
surpassed last year's leader, Microsoft. Sony came in
third, followed by Yahoo, then other famous indigenous
brands in the top 20, such as Canon, Panasonic, Casio, and
Sharp. (Source: TT commentary from warc.com, Aug 27, 2010)

http://www.warc.com/News/TopNews.asp?ID=27164

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.

***------------------------****-------------------------***

***------------------------****-------------------------***

+++ CANDIDATE ROUND UP/VACANCIES

=> BiOS, a Division of the LINC Media group, is actively
marketing the following positions for customers setting up
or expanding in Japan, as well as other employers of
bilinguals.

** HIGHLIGHTED POSITION(S)

BiOS is currently looking for an experienced and highly
successful Software Services Sales Manager to join our
client, specializing in sales of Business Critical Service
sales. The candidate will be responsible for both New and
Renewal BCS quota-carrying opportunities within the region
and to achieve BCS Bookings target. Other
responsibilities include building relationships with field
account teams, demonstrating value propositions to
enterprise customers, handling the entire sales cycle for
their contracts, as well as participating in demand
generating marketing campaigns.

The successful candidate in this role will have more than
4 years experience in IT sales or marketing, be able to
demonstrate proven experience with software services or
solution (including license) sales, will be competent in
program management methods and tools, and will have a solid
track record of delivery in the last 2-5 years. Finally,
given the emphasis on communication, it goes without saying
that excellent written, verbal and presentation skills are
a must to succeed in this demanding role.

Remuneration is up to JPY10.5m depending on your experience
and level

** POSITIONS VACANT

- Data Center Network Engineer, JPY3.5m – JPY5m
- eSourcing Account Manager, JPY4.5m – JPY5.5m
- SAP Helpdesk, central Tokyo JPY3.5m – JPY6m
- Unix Engineer, iBank in Okinawa, JPY4m – JPY5m
- Fixed Income Developer, European iBank, JPY8m – JPY12m

Interested individuals may e-mail resumes to:
stuart.gibson@biosjp.com

** BiOS Job Mail

Every 2 weeks BiOS sends out a regular communication to its
job seeking candidates, called BiOS Job Mail. Every edition
carries a list of BiOS's current and most up-to-date
vacancies, with each entry featuring a short job
description and a direct link to the main entry on the BiOS
home page. Regardless of whether you are unemployed and
searching, thinking about a career change, or just curious
to know if there is something out there that might suit you
better, the BiOS Job Mail newsletter is an easy and
convenient way for you to stay informed. If you would like
to register for the BiOS Job Mail, or to find out more,
please email stuart.gibson@biosjp.com.

Interested individuals may e-mail resumes to:
stuart.gibson@biosjp.com

-----------------------------------------------------------

***------------------------****-------------------------***

+++ UPCOMING EVENTS/ANNOUNCEMENTS

--------------- Entrepreneur Seminar is Back --------------

Start a Company in Japan

Entrepreneur's Handbook Seminar 18th of September, 2010

If you have been considering setting up your own company,
find out what it takes to make it successful. Terrie
Lloyd, founder of over 13 start-up companies in Japan,
will be giving an English-language seminar and Q and A on
starting up a company in Japan.

This is an ideal opportunity to find out what is involved,
and to ask specific questions that are not normally
answered in business books. All materials are in English
and are Japan-focused.

For more details:
http://www.japaninc.com/entrepreneur_handbook_seminar

-----------------------------------------------------------

---------------- ICA Event - September 16 -----------------

Speaker: Naveen Ravindran, CEO-Endeavor Japan
Title: 'ERP: Hard to Implement? Effective?'

Details: Complete event details at http://www.icajapan.jp/
(RSVP Required)

Date: Thursday, September 16, 2010
Time: 6:30 Doors open, Buffet Dinner included and cash bar
Cost: 4,000 yen (members), 6,000 yen (non-members)
Open to all - Venue is The Foreign Correspondents' Club of
Japan

http://www.fccj.or.jp/aboutus/map
-----------------------------------------------------------

---------------- iWine Wine Tasting Event -----------------

http://en.iwine.jp presents one of the largest consumer food
and wine events in Tokyo...

Want to find a favorite type of wine?
Why not do it the way the pros do: by tasting lots of wines
at once! http://en.iwine.jp is proud to present our highly
popular large-format wine tasting event, featuring over 75
wines from California!

The entrance fee to the tasting will include a full-service
dinner buffet. Don’t miss this opportunity to taste the
four-star cuisine of Mandarin Oriental Hotel Tokyo.

Take your time and taste a variety of flavors from the
varietals and styles you enjoy most...or branch off on a
new journey of exploration.
For this tasting, two of http://en.iwine.jp's certified
Sommeliers got together and specifically selected delicious,
yet value-oriented and daily-drinking wines.

As with all http://en.iwine.jp events, we make it easy to
enjoy the evening and to remember the wines you taste.
All participants will receive a catalog of wines to browse.
And friendly wine advice from the pros at http://en.iwine.jp
to help you get the most from your tasting.

- Date & Time: September 8th, 2010 (Wed)6:00pm-9:00pm
- Venue:Mandarin Oriental Hotel Tokyo
(Address: 2-1-1 Muromachi, Nihonbashi, Chuo-Ku, Tokyo)
- Admission : 8,950 yen(food, wine, and tax included)
- Capacity: 100 guests
- Buy Tickets at: http://en.iwine.jp

-----------------------------------------------------------

-------------------- CCH Tax Seminar ----------------------

CCH Japan presents 'Tax Seminar 2010'

Important Changes in Japanese Transfer Pricing
and Corporate Tax in 2010

Transfer Pricing
-NTA clarifies expectations around documentation--the role of
documentation and supporting materials in managing TP risk.
-Advance Pricing Arrangements: a great value for some
taxpayers--what do they accomplish, and what is involved?
-Transfer pricing audits: surviving the ordeal.

Corporate Tax and Supply Chain
-Corporate Tax Update
-Supply Chain Restructurings

Indirect Tax

Date: Thursday, 28th September 1:30pm-5:00pm
Venue: Arcadia Ichigaya: 5F Daisetsu East
Speaker: Professionals from Ernst & Young
Number of Seats: 50seats
Language: English
Fees: 20,000JPY+Tax
Register at: https://www.cch-japan.jp/contents/register/form
For more details, Please Contact us at: support@cch.co.jp,
or 03-3265-1161, www.cch-japan.jp.

-----------------------------------------------------------

***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to editors@terrie.com.

*** No comments this week.

***********************************************************
END

SUBSCRIBERS: 8,940 members as of August 29th, 2010
(We purge our list regularly.)

+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd@japaninc.com)

HELP: E-mail Terrie-request@mailman.japaninc.com
with the word 'help' in the subject or body (don't include
the quotes), and you will get back a message with
instructions.

FEEDBACK
Send letters (Feedback, Inquiries & Information) to the
editor to terrie.lloyd@japaninc.com.

ADVERTISING INFORMATION
For more information on advertising in this newsletter,
Contact ads@japaninc.com.

SUBSCRIBE
Get Terrie's Take by giving your name and email address at
http://www.japaninc.com/newsletters/free_sign_up, or go
straight to Mailman at:
http://mailman.japaninc.com/mailman/listinfo/terrie

BACK ISSUES
http://www.japaninc.com/terries_take
or, http://mailman.japaninc.com/pipermail/terrie/

Copyright 2010 Japan Inc. Communications Inc.

----------------- Japan Inc opens up Japan ----------------

J@pan Inc is Japan's only independently published English-
language business website. Authoritatively chronicling
online the business trends in Japan, each posting brings
you in-depth analysis of business, people and technology in
the world's third largest economy.

Visit www.japaninc.com for the best business insight on
Japan available.
-----------------------------------------------------------

_______________________________________________
Terrie mailing list
Terrie@mailman.japaninc.com
http://mailman.japaninc.com/mailman/listinfo/terrie

Newsletter:

business