Startup Culture Divide: United States and Japan

I am a Korean.

I don't think describing one as risk-averse is fair when risk is different. When A and B are given the same risk, and A takes the risk and B doesn't, it is fair to describe B as more risk-averse than A. When A and B are given the different risk, and A takes the risk and B doesn't, it doesn't tell much about B's risk-averseness.

I think it is not that Japanese culture is risk-averse, but that doing startup in Japan is actually more risky. These two are not the same statement.

I also call bullshit on "lack of disruptive ideas". How can one even imagine such thing is true is beyond me.

This was one of the better articles on the subject of the entrepreneurship problem in Japan, probably because it is one of the rare cases where the piece was written by someone who personally wet his feet in the scene there (as opposed to journalists or bloggers, who are complete outsiders).

That being said, the discussion is largely a repetition of what we've heard many times before (Though the parts about long sales cycles and the non-entrepreneurial VC was interesting, since these are the only two parts that came from the author's own personal experiences). There's a limit to how much astute insight can be drawn from Japanese Americans (which he must be) like the author or myself, because in the end, we are outsiders and will never be completely immersed or invested in understanding the intricacies of the socio-cultural issues that pervade the scene there.

I've of course thought about these issues in Japan myself, and my current assessment is that the best talent in the country have so much to lose and so little to gain by leaving their larger company posts and creating their own thing. The incentives and rewards are completely different than just 40 years ago, where there was very little to lose by being brash and taking outsized risks, both inside and outside large companies.

Japan isn't the only country where developing a startup culture is difficult. Many Asian countries have a much more heirarchical culture where simply following what your boss or political leader says to do without question is strongly ingrained. I was part of a team under John Roese at Huawei that was trying to help Huawei learn how to be innovative. Their executive leaders understood the need, but there turned out to be too big a cultural divide across the bulk of the company to get the support and engagement needed, so the effort collapsed after a couple of years and most of us moved on to more productive efforts. It was however a very insightful period in my career since I learned a lot about where China (in general) has advantages over the US and where the US (in particular Silicon Valley) has advantages over China. The willingness to openly share and "give before you get" is definitely some much more common in the US and leads to much more effective collective efforts here. On the other hand I have never seen more effective "manufacturing-like engineering" at scale than I saw at Huawei. In an ironic way we are often able to leverage the power of numbers (i.e crowd sourcing, open source, cross-collaboration, etc) more effectively than the country that has the numbers but not yet the understanding of how to best leverage them.

An outstanding anime on the topic of overcoming the culture of risk aversion in Japan is Whisper of the Heart. (耳をすませば is the Japanese title.)

http://en.wikipedia.org/wiki/Whisper_of_the_Heart

A teenage girl spends much of her time reading books that interest her and is drawn toward writing fantasy fiction on her own. This runs against the grain of the cultural norm of devoting herself to studying for university entrance exams.

She is inspired by a boy her age devoted to making and playing violins, who goes to Italy for a year to pursue this dream. His family supports and encourages him in this endeavor.

Her parents are understandably worried about her choice to pursue this risky dream, but decide to support her choice in the end.

The movie really drew me in emotionally to what it must be like to choose a more creative path in a society with a strong norm of conformity. It made me think of how the animators must have felt telling this story, as it must have mirrored their own past.

It also makes me wonder how so many creative people have managed to flourish in Japan, and what path they took to arrive there. There is so much creativity in manga, anime, video games, and all the other cultural artifacts of Japan so popular throughout the world.

And what about the Japanese who do manage to successfully start new businesses? How do they manage it?

One thing that perhaps Americans always miss out or under rate in their own startup culture is the support ecosystem, especially the media

I see that in US, there is a media circle that continually builds itself around entrepreneurs and celebrates local innovation (like how TC began as such an idea), as the old ones grow bigger, younger ones come in and keep even the fringe entrepreneur in the lime light

In addition to the Tech industry you can also see this in the US sports industry. No other country perhaps has made sports such a successful business endeavor as in US. A great part of credit goes to its media.

Another big plus for US startups is 'local adoption', I consider this a huge advantage for all of them. Perhaps you have never felt it as you have never seen the other side of it. For e.g. you can never take it for granted in India, in fact being local startup has a good chance to work against you with customers. The positive news is that there is a sea of change in enterprises here, I have had recently a large corporation go for our product vs that of IBM/SAP. This alone can be a start of good times for Indian startups.

I agree with sanxiyn's take, especially regarding disruptive ideas. There have been some incredible Japanese inventors, and groups that are willing to take huge risks. The multiple innovations in both the Prius and Wii are two high-profile examples.

Three other points I would like to share come from discussions with Japanese friends over the years:

- For men in certain industries, there is a strong social encouragement of working for large companies for decades, and the expectation at many (but not all) corporations is that once you are hired, you are in for life. The companies make it easy to do so -- I have a friend at a large electronics company who said they took care of housing, relocation, even a company hospital ("hospital" was the term he used, although I suppose it could have been a clinic).

- Entrepreneurs are seen as somehow tricky or ethically lacking. This was expressed to me by middle-aged salarymen at giant multinationals a few years ago, so I don't know if the attitude has changed.

- Large companies have extensive and deep supplier relationships that discourage taking a chance on an upstart.

I'd like to hear the observations of other HNers who are Japanese or have long experience in the country.

Interesting.. I didn't know that the Palo Alto Research Centre still existed!