Beyond Every Foreigner's Complaint

Back to Contents of Issue: June 2005

Is a Million Dollar Business Idea

by Bruce Rutledge

Japanese manufacturing is second to none, and the uninitiated may naturally expect this prowess to extend to the service sector. But those of us who have lived in Japan know this assumption to be dead wrong.

Japanese service is fine, as far as it goes. Japan gets the people part of the service sector perhaps better than most. Gas station attendants make you feel like you're pulling in for a pit stop at the Indy 500 every time you fill up; waiters can be overweening at times but are polite, professional and well-groomed; and McDonald's should force all of its employees in the U.S. to watch a Japanese burger shop in action to learn how fast-food service is supposed to be done. But when you get into the complex, technical aspects of the service sector, it's as if the country as a whole throws up its hands in surrender.

That's why there are so many disconnects in modern Japan: a country known for high-tech gadgetry has some very low-tech corporate offices where workers often share Internet connections and computers; hospitals in the world's second largest economy can be surprisingly shabby and unclean; commuters use smart cards as train tickets, but the trains often stop traffic at busy grade crossings; and back-end operations take up three-quarters of bank offices and leave customers squashed together in the smidgen of leftover space.

These are the things that make expats?Eblood boil. The poorly developed service sector is probably the single biggest frustration in their daily lives in Japan. But what Carl Kay and Tim Clark do in Saying Yes to Japan: How Outsiders Are Reviving a Trillion Dollar Services Market (Vertical Inc., April 2005) is focus on the people who stopped griping and started acting. They show how enterprising businesspeople-both foreign and Japanese-exploit the inefficiencies in the service sector to create businesses that sometimes make them a bundle.

Saying Yes covers four areas of the service sector: finance, real estate, health care and information technology (which features J@pan Inc publisher Terrie Lloyd bungie-jumping his way to a multimillion-dollar deal in Texas). The authors, successful Japan-based businessmen themselves, effectively combine anecdotes about the entrepreneurs with clear-eyed analysis of the problems plaguing Japan's service sector. The result is a real page-turner of a business book that will interest people already eyeing the market, but will also intrigue those who are on the fence about Japan.

In the pages of Saying Yes, you'll meet Steven Gan, an expat who plunges into Japan's debt-collection market in hopes of applying methodologies proven in the US yet still non-existent in Japan. His first visitor? A surly yakuza member who forms a gun with his fingers and points it at Gan's head. And then there's Todd Budge, a former Mormon missionary who becomes the first foreigner to head a Japanese bank. His new mission is to transform a staff long taught to be territorial and suspicious into a modern banking group, and his common-sense touches all seem so obvious when he rolls them out-yet no one at the bank had thought of them. Then there's Neeraj Jhanji, founder of Imahima, who figures out how to take Japan's affinity for groups to the virtual level. His epiphany in a coffee shop after being dumped by his Japanese girlfriend provides inspiration for all those wannabe entrepreneurs out there who haven't quite found their Big Idea yet.

Readers of J@pan Inc will be familiar with many of the characters that appear in Saying Yes. Their ideas are sometimes brilliant and sometimes deceptively simple, but they all seem to share a single trait: tenacity. Achieving success as an entrepreneur in Japan is not easy, and expecting a get-rich-quick scheme to pay off is mere folly. All of these businesspeople were ready to build their businesses over the long haul, and most of them face obstacles even today. The chilling story of Steven Gan's rise and fall is a reminder to all that sometimes even a good idea and tenacity may not be enough.

But then again, the success stories are inspiring, and the service market in Japan is enormous and full of inefficiencies. In Saying Yes, Clark and Kay describe a Japan that is fertile ground for intelligent and driven entrepreneurs. JI


Bruce Rutledge is the founder of Chin Music Press of Seattle and a former editor of J@pan Inc magazine.

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