Why is Tokyo an Awesome Place to Run Your Startup From?

How the Japanese megalopolis is underestimated; and why this could be your chance.

What do you know of the Japanese startup landscape? How many young companies are there? What are they doing? Are they successful? The reasons why many of the answers to these questions might be unknown or uncertain is that the environment is very fragmented, clustered, not bilingual, not accessible and definitely not structured; but such an environment most certainly exists.

Despite the call for action by Taylor Beck, what if I were to tell you that there are hundreds of successful startups and dozens upon dozens of venture capital firms, incubators and related networks; that there was an increasing number of meetups, supporting institutions, workshops and co-working spaces. And yet no one really knows about Tokyo — the hidden startup capital of Japan, of Asia…

Resources are few and if it were not for those we might as well live in the dark — Tech in Asia, TechCrunch and The Bridge to name the ones I use on a daily basis. Tokyo is a enormous city, filled with proven and emerging talent, a lot of capital and great infrastructure. Great longstanding events likeMobile Mondays, Tokyo Startup Weekend and PechaKucha are boosting the creative community and rounding up the best there is in Tokyo. Perhaps, the intensity and frequency of events is lower than in other hubs of the world but that might also be a side effect of the non-exposure culture predominant in Japan.

Just to see a few curious examples: Hachimenroppi is an app that provides a fish delivery service for restaurants. Of course it’s an awesome idea just if you consider thousands of sushi restaurants in Tokyo. Streamlining and simplifying processes like this is always a win-win: for a service provider and the users, in this case fish restaurants. Origami, an app on a mission to redesign commerce, which allows you to follow your favorite brands and designers and easily purchase what you like. Or there is Monoco — a designer e-commerce site collaborating with hundreds of designers around the world.Rinkak, a service ran by the startup Kabuku, which helps its users with printing and marketing their 3D designs. Then there is of course Tokyo Otaku Mode, which sells Japanese pop culture related products (mostly related to manga, anime but also music and fashion) to its 15 million Facebook fan base — vast majority of them outside of Japan. We could easily continue withMoneyTree, a comprehensive personal finance app, and Gengo, the global people-powered translation service and the list goes on up to the several hundreds.

Examples like this are not restricted to fashion, design, translation or fish delivery; successful Japan-based apps and services range from accounting, across food, health, language-learning, business, all the way to crowd-funding and video production.

How come there are so many successful startups? If the climate is so favorable to startups why doesn’t the world know that? The Japanese world of business is still dominated by the big traditional corporations, by the culture of salary men and of non-exposure, non-individualism, and the international tech-giants, although present, do not usurp too much the existing set-up. Some would argue that this is not favorable to startups but entrepreneurs on the ground have their opinions and reasons.

ClassDo is a successful Tokyo-based startup that connects teachers and students across 90 countries for one-to-one lessons. Its co-founder and CEO Chiew Farn Chung says he is loving running his company from Tokyo. Chiew told me how satisfied is he with the fact that the talent is plentiful. Unlike Silicon Valley, many creative and talented Japanese engineers are still working for very large corporates with slow-moving-top-down decision making processes. Without the empowerment, they are not even coming close to realizing their full potential. There remains a large pool of talent which have not made the transition into fast-moving startups yet.

Lars Cosh-Ishii, director at Mobikyo, has his take on the Japan startup ecosystem and its future: ‘From my perspective Tokyo has two major advantages for building and running a startup: product design and market environment.’ Lars is convinced that the attention to detail pushes players in Japan to produce an offering, across all segments of the business, at a higher caliber. ‘It takes the pixel perfect approach from white board through after sale service and considers carefully, good enough is not best, merit over marketing as the rule.’ While adjusting course once underway is standard practice worldwide, and speed to market vs. quality of initial product is a typical trade-off, startups here are laser focused on the value proposition to earn customers. The advantage: while more difficult, this approach is likely to ensure a viable and sustaining enterprise.

A 2014 UN report listing people by population placed Tokyo #1 with 38M people, and Business Insider ranked Tokyo as the best city in the worldoverall (using a scale including 50 indicators along 10 different dimensions). Talking to Lars, he has put it as simply as one can: ‘It’s a massive marketplace at and a great place to live! We are at the early stages of the startup story in Japan, as I had posted late last year, we expect to see some amazing activity in this space over the coming years. The advantage: self-contained at large scale combined with quality of life and foreseeable growth curve in the coming transitional phase from the old guard to next generation.’

Like with everything else, the Japanese startup ecosystem has different perspectives and points of view on it; the fact is that there is something more than just raw potential happening in Japan; the wheels are in motion and its repercussions can and will affect the Japanese working culture, way of life and, potentially, way of thinking. The environment in Tokyo is shifting and if it tips it will be a great place to be — exchange of ideas, positive atmosphere, and success stories all around. Still sceptical?

by Nik Pavesic, Project Manager @justajapan / living by a few ideas: crouch, bind, set: disrupt, change, improve, innovate.

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