In my opinion, a lot of Japanese startups fail on a global level because most of those that try aren’t serious enough about going global.
And why should they be, at least initially? Japan has 100 million web/mobile users with high purchasing power, world-class technical infrastructure (mobile/broadband) and enough VC money.
And best of all, Japan is a black box market for foreigners (especially because of the language), limiting competition to local players. In other words, if these startups fail globally, they still have a chance to be successful in their own (big) market.
Those that try to go global, in my opinion, face these challenges:
- understanding that there are vast differences between the web and mobile markets in Japan and elsewhere (user needs and expectations, consumption patterns, competitive landscape, monetization, etc.)
- understanding that there are totally different tastes in terms of web design, usability, user experience etc. (you wouldn’t believe how many local startups think translating text is enough)
- changing their mindset, being more aggressive, really wanting to change the world or get customers worldwide to put it more simply
- doing efficient market research, market analysis, customer development etc. before launch
- taking care of distribution, user acquisition, business development, customer relations etc. after launch
In my view, the biggest challenge for most Japanese startups is the last point. Most of those that did go global failed because they simply didn’t get enough users – no difference to any other startup anywhere, but on a global level.
That being said, there are a handful of Japanese web companies that had/have success overseas.
In recent months, Cyberagent is doing well with its virtual world Ameba Pico (expecting 3 million Non-Japanese users by year-end), there is augmented reality platform Sekai Camera, mobile browser company Access (even though its position has faded), online game maker gpotato, online diagram software Changevision (2x more customers overseas than in Japan), online mall Rakuten (the jury is still out on this one, but they are trying), social gaming company DeNA (ditto), etc. etc.