TT-866 -- Diversity as a Strategy in Finding Employees as a Start-up, ebiz news from Japan

An Insider's comments on Japan's high tech business world
* * * * * * * * TERRIE'S TAKE - BY TERRIE LLOYD * * * * * *
A weekly roundup of news & information from Terrie Lloyd, a long-term
technology and media entrepreneur living in Japan.

General Edition Sunday, September 25, 2016, Issue No. 866

- What's New -- Diversity as a Strategy in Finding Employees as a Start-up
- News -- Possible anti-trust action against Apple in Tokyo
- Upcoming Events
- Corrections/Feedback
- Travel Picks -- Sendai pink zone, Okazaki fireworks
- News Credits

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If there is one constant in Japan as a new business, it is the
difficulty of finding new staff - especially if you need bilinguals, and
especially now that the unemployment rate is a record low 3%.
Unfortunately the very idea of a start-up is the antithesis of what most
Japanese would consider a desirable opportunity, even if currently they
are underpaid or under-employed. A brand name your mother would know, a
prestigious address, and safety in numbers are all the primary selling
points to recruit fresh candidates - none of which are normal attributes
of a new business still proving out its business model.

One way to cope with start-up recruiting is to become more diverse in
your selection pool. Looking at the Japanese labor market we can carve
it up into roughly seven segments of people willing to join a
cross-border start-up.

1. New graduates of overseas schools who have not yet returned to Japan
(or who have just come back) and who are not yet under the influence of
over-opinionated parents or conservative peers. In our opinion, these
people are most desirable as employees in cross-border start-ups,
because they are practically (not just theoretically) bilingual, have
been exposed to western/international thinking, are fresh from the
experience of having to survive and problem-solve on their own in the
big bad world, and they are not scared of adversity so long as they feel

We have found that the best places to find these people are where they
are still being influenced by foreign values, which means while they are
still at university or while on an F-1 visa (USA) and finishing up their
one year practical work experience. Great places to look for Japanese
graduates include universities in Australia (specifically Victorian
universities), smaller states in the USA, Canada, and the UK. Why
Australia? It attracts the most pragmatic adult Japanese students
because its universities offer great value-for-money education, versus
US schools.

As a start-up, if you don't have the wherewithal to actually travel to
these campuses to recruit, then the next best thing is to offer
internships over email through the institution's career counselors, to
3rd and 4th year students who are back in Japan for the summer holidays.

2. Working mothers. For all the PR put out by the Abe government, the
fact is that this segment of Japanese workers is still one of the most
badly served by regular companies, and therefore the quality of talent
is generally better and experience levels are higher (although that can
be a problem if they learned their previous jobs at very rigid
companies). Working mothers have one particular need, which if you can
satisfy it counts above all other considerations - and that is the need
to have flexible working hours so that they can tend to their children.
This means late starts, early finishes, occasional sick days (for sick
kids), and the ability to work from home regularly.

If this sounds inconvenient and difficult to plan around, it is, so you
need to match your working mother candidates to positions that are
tolerant of time flexibility. This can mean background management and
support positions, sales prospecting that can be handed over to someone
more available for client servicing, engineering or designing where
brain power not hours matter, and leadership where the person has a
trusted right-hand man (or woman) to help them cover their non-present

We generally find working mothers through networking, both online and
also through introductions from existing employees. Recently there are
many web agencies dispatching married and even single moms, and these
can be good initial contact points to meet some potential candidates.
One example is

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[...Article continues]

3. Prime time employees. Almost every foreign company entering Japan
wants "prime time" employees. This means people who are bilingual,
skilled, have strong previously employment records, and who are aged
25-40. Because foreign multinationals in particular want these people,
and because the supply of individuals is so constrained (just 69,869
Japanese studying abroad in FY2013, but a market demand for at least 1-2
million bilinguals - you do the math), the prices those companies are
willing pay means that most of these candidates are out of reach of

A possible exception is where a prime time candidate is having a
personal issue OR is going through a life re-assessment and wants to
learn some specific skill that they are willing to give you their labor
in order to receive it. In our case, this skill is usually education on
how to start up their own company in the future - and so our
responsibility as the direct manager or founder is to be ready to mentor
the person in that area. Our practice in dealing with such people is to
extract a personal promise to stay in the job for two years, in return
for a no-fault termination (at the candidate's request) when they are
ready to move on. For most people, two years is not a big ask. Chances
are, some of these people will decide they like it better working with
you and will stay on longer term.

With this strategy you have to be ready for the possibility that you are
going to breed a competitor, but our take is that future entrepreneurs
look for gaps, not to go head on into competition with a competent
mentor. So, how tight is your operation and how confident are you of the
loyalty of your other staff? OK, there is at least one exception to this
strategy and that is the recruiting industry, where for some reason
cannibalism seems to be the standard procedure.

Where do we find these people if we can afford them? Linked In, personal
networking, and personal introductions are the best methods. In fact,
personal introductions from other staff members is a great way to find
people. We have a standing introduction fee of JPY100,000 for any
employee who introduces a strong candidate to us and where that
candidate makes it past probation. If your company doesn't have this
type of bonus system, you need to start one. Bringing in friends of
current employees creates strong bonds and personal responsibility on
both sides to make the new hire work.

4. Older workers. This group is probably the most discriminated against
segment of employees in Japan, even more so than working mothers. There
are lots of reasons for this but the biggest one is pragmatic, the sheer
cost of retraining someone who is likely to be set in their ways. To be
sure we regularly come across older candidates with young minds, but
generally speaking older workers are more likely to want to follow
established practices and therefore they are probably best suited for
admin jobs where they are dealing with the same bureaucracies they did
in previous jobs. That said, you might find an older candidate who has a
great personal network and you want to plug into it. Just be certain
that their network actually works in practice. Who you know versus who
you can influence are two different things. We always ask such
candidates to give express examples of who they have in their network
and how they have leveraged such relationship recently.

Yes, there are some gems out there. Be prepared to sift hard -
especially if you're sourcing candidates from Hello Work, the
government's employment service and one of the best places to find older
admin staff. BTW, in Japan "older" and "too old" means candidates aged
50-65. That includes us...! :-)

A secondary problem with older workers can be their younger colleagues.
It is socially very challenging for a young Japanese to be telling an
older peer what to do in their job. Respect (or dislike) of one's elders
means that the younger person is feeling mentally pressured and is
probably not acting the way they would with people nearer their own age.
This means less control by the manager and less communication. The worst
outcome of this situation is that the younger person decides they can't
deal with the situation and decides to resign. For this reason, if
you're hiring older staff, monitor your younger manager's interactions
with the new candidate closely.

5. Friends. An interesting fact is that most successful start-ups in
Japan are founded by a small group of friends who planned and dreamed of
a new business while working for a large company, or while they were at
school. The key ingredients are a charismatic leader with the vision, a
group of competent and skilled friends who are working in careers where
they have been able to save some cash and therefore who are willing and
able to take a risk, and of course a business opportunity. If you are
that charismatic leader, then this strategy is only really relevant
before you have started up your business, and you have one key job to do
- to network and inspire.

One such company that we have run across recently that epitomizes this
approach is Soracom, a newish MVNO that does IoT telecommunications
infrastructure that other small (and large) companies can plug into
cheaply and quickly. The CEO/Founder, Tamagawa-san, was at Amazon and
IBM prior to setting up the firm and he brought team members from both
firms, along with some NTT guys through another founding employee. The
company is technically excellent and has a highly cohesive and
disciplined team - which is super important because their sector has a
relatively low barrier to entry and is highly competitive. One huge
advantage of a strong founding team is that investors love them. As a
result Soracom earlier this year scored a decently sized Series B
funding, bringing their 3-year total raised to JPY3.4bn.

6. Fringe workers. By "fringe" we mean people who basically unskilled in
your area of business. In fact, there is a surplus of these people in
the marketplace due to the ongoing contraction of factory jobs in Japan.
According to recent statistics from the government, young men aged 25-44
are the fastest growing long-term unemployed segment. These people, who
would normally be prime time candidates, are instead finding it
difficult to change gears mentally, a function of the education system
in our opinion, and thus they'd rather not try to learn something new
and simply give up working at all. Over time they sink into a black hole
of depression and the question is whether they can pull themselves back
up mentally again or not.

We have tried over the years to help bring fringe workers back into the
mainstream by offering them jobs which have low technical barriers to
success - such as sales, customer support, etc. The biggest challenge is
to find candidates who have gone through the entire process of losing a
skilled job and after a period of depression are now ready to do what it
takes to relaunch their careers. Mental health in a new employee is
difficult to gauge and can be dangerous for a small firm, in that an
unstable employee can become like a cancer and affect an entire team.
Therefore, if you do find a candidate like this, you as the hiring
manager or the founder really need to be on top of the relationship and
be prepared to spend lots of time personally to mentor the candidate and
get them past any emotional issues.

7. Disabled workers. We have employed various disabled workers over the
years. As a start-up there are some practical considerations as to what
kind of disability you can support. For example, as a start-up your old
office may not be wheelchair friendly. A friend's start-up company does
have an elevator in the building, but you nonetheless have to climb a
flight of stairs or descend down a car parking ramp to get to it. In our
firm, we are still stuck with narrow doorways to the bathrooms, and
street access from one of the major subway stations is up a flight of

But one disability that does lend itself to success in a start-up is
being deaf. We had a deaf employee working on our engineering team, and
so long as he could communicate with instant chat he was highly
productive. Engineering and customer service would also be well suited
for blind employees.

Wrapping up, clearly our "seven sources of diverse employees" are a
generalization about a labor market of more than 60m people. Of course
there are many other sources and exceptions to the stereotypes. As a
start-up, it's your job to find those exceptions, people that regular
Japanese companies can't be bothered dealing with, and allow your
candidates to be different. If you get it right, you'll get a grateful
and dedicated team and productivity will go through the roof.

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+++ NEWS

- Global manga contest out of Kitakyushu
- Awesome ping pong robot from Omron
- Possible anti-trust action against Apple in Tokyo
- Q4, 2016 will be warmer than usual
- Sake exports rise and gain credibility

=> Global manga contest out of Kitakyushu

In a great example of local destination promotion, the city of
Kitakyushu in Fukuoka-ken, Kyushu, is promoting an international manga
competition to find promising new artists from abroad. The city has
established a Manga Museum near JR Kokura Station (which is downtown
Kokura), and will focus the contest on this establishment and its
management team. Indeed, the honorary director of the museum, who is one
of Japan's better known manga artists, will also be the lead judge.
Other judges are also established manga-ka related in some way to
Kitakyushu. The contest is open to anyone who can draw, and more
information is available at the URL immediately below this article. The
Grand Prize winner will win JPY500,000. Many of the top applicants will
be invited to travel to Japan for the final judging event. (Source: TT
commentary from, Sep 24, 2016)

=> Awesome ping pong robot from Omron

If you haven't seen Omron's ping pong robot, Forpheus, in action yet,
you need to go to the link below and watch the video. Omron has fitted
its robot with ultra-fast cameras and computing capability, to not only
intercept a ball from a human player, but also to correctly calculate
paddle angle and speed to return the ball to an exact location on the
human player's side of the table. In this way, the robot can return
pretty much any legal serve as an easy to hit/learn shot for its human
opponent. Now, the latest twist is that the Guinness World Records
organization has named Forpheus as the world's first robot table tennis
tutor. (Source: TT commentary from, Sep 8, 2016)

=> Possible anti-trust action against Apple in Tokyo

The Japan Fair Trade Commission (JFTC) and the Ministry of Economy,
Trade, and Industry (METI) are reportedly reviewing whether or not to
pursue an antitrust action against Apple Japan for monopolistic
practices revolving around Apple's pricing rules for reseller channels,
as well as the requirement that in-app purchases only be effected
through Apple's own payment system. The JFTC has been trying to
investigate Apple's pricing rules and tactics but has been met by a wall
of silence by development firms that sell through Apple's ecosystem. As
a result, the Nikkei says that the JFTC may invoke a special power only
used once before, to subpoena documents and witnesses, in order to build
a case. ***Ed: This could get interesting.** (Source: TT commentary from, Sep 17, 2016)

=> Q4, 2016 will be warmer than usual

The Japan Met Office has released its latest long-range weather forecast
and predicts that we will enjoy enjoy average to warmer-than-average
weather through to the end of this year. Eastern Japan, which includes
Tokyo, will have a 40% chance of being warmer than average. On the other
hand, Western Japan and Okinawa will have a 40% chance of December in
particular being colder than usual. ***Ed: Usually winter weather comes
from Siberia via Northern China. If Western and Eastern Japan are to be
at variance in December, this will mean that Pacific warmth will be
pushing further north than usual. Maybe a few more typhoons to come?**
(Source: TT commentary from, Sep 23, 2016)

=> Sake exports rise and gain credibility

This interesting article from the UK's Daily Mail offers up some good
stats on Japan's sake export business. Apparently sake exports have
doubled in the last 10 years, to around 18,180 kilolitres, with about
25% going to the USA. Other major markets are Taiwan, Hong Kong, China,
and South Korea. China has been the fastest growing market, with a 300%
increase in 8 years, but even with this level of growth exports are
still just 3% of domestic consumption - so the industry still has a lot
of potential to improve availability and awareness abroad. ***Ed: The
good news is that Robert Parker's Wine Advocate in its October issue
(just released) published ratings for major sake brands, which will
bring a lot of credibility to the beverage.** (Source: TT commentary
from, Sep 25, 2016)

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


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No events to announce this week.



=> Night Life in Kokubuncho, Sendai
Neon lights, alcohol, fun, repeat

Kokubuncho is the largest entertainment district in Tohoku and is
located in the center of Sendai, in Miyagi Prefecture. About 3,000
restaurants and bars are located there. Many people flock to this area
every day, specifically during the weekend after a long week of work.
The area is composed of various restaurants, Izakaya (Japanese style
pubs), bars, nightclubs, etc . If you are looking to party, you came to
the right place.

Neon lights, animated conversations, and a warm atmosphere are the
characteristics that define the most lively district of Sendai.
Kokubunchô is basically divided into three distinct zones.The first one
with cheap food outlets, and pachinko shops. The next area is mostly
occupied by salarymen (office employees), restaurants and bars are of
better quality, slightly more expensive and generally playing a little
more on the traditional Japanese restaurant side. Finally, there is the
"pink zone" which is the part composed of girls bars, also commonly
called "host or hostess clubs', entry fees are usually recurring and
they push you to consume. Be ready to blaze through your budget in this
type of establishment!

=> Okazaki Fireworks Festival, Aichi-ken
A heartwarming display of designer fireworks

Fireworks festivals or Hanabi-kai are some of the most spectacular
festivals in Japan. Put on mostly during summer time, the multicolor
fireworks light up the sky in many decorative ways. Okazaki is one of
those places, and hosts such a festival every year on the first Saturday
of August.

This old castle town has a remarkable history as the birthplace of the
Shogun Ieyasu Tokugawa. Here, the tradition of making gunpowder for
fireworks has continued for hundreds of years, and every year this
festival produces new designs for spectators. The volume of fireworks is
impressive - with 20,000 different projectiles launched into sky above
the Otogawa River in a single display.

People come from all over Aichi Prefecture to view the fireworks
painting the sky. Usually people reserve their places one day before,
near or on the banks of the Otogawa river, so it becomes very crowded.
Reserved seating is also available and provides the best view, these are
expensive, though.



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