Map data: Tokyo, Japan
Google Earth, Google Maxar Technologies
As co-founder of BYG advantage, Brian Burns has played a crucial role in helping SMBs connect with distributors in Asia. He has over 40 years of experience working in Japan and other Asian countries, and has helped countless companies establish roots and flourish in the high barrier-to-entry but high-return Japanese market. We sat down with Brian to learn more about what the challenges are for SMBs looking to expand their businesses to the Japanese market, and what strategies he advises to overcome these difficulties.
When attempting to expand one’s business into Japan, Brian believes that it’s important to be aware that most traditional Japanese companies often purchase newer technology after it has “crossed the chasm” and already proven itself useful in the Japanese market to avoid the risk of adopting expensive technology that is not suitable for the local market. Even if this means potentially losing out on the benefits of early adoption. There are, however, some companies willing and ready to adopt earlier technologies, differentiating themselves from other companies. As a result, a useful strategy is to target these as lighthouse customers.
Finding a lighthouse customer helps to establish reputation and reliability in a country which is often unaware of your success and notoriety in your home or other markets. Brian shares that there are undoubtedly high barriers to entry in the Japanese market, but understanding the role of successful deployment at marquee lighthouse customers is often the first step in building reputation and trust in the Japanese market, one of the hallmarks of successful market penetration in Japan. Additionally, in a country where technology adoption decisions typically require buy-in at all levels, patience plays a crucial role in this process, and it’s important to respect this.
Compared to the North American market, where there is a more linear relationship between sales efforts and sales results, the initial effort and time required to close the first lighthouse customer(s) can be daunting. As a result, some companies give up before reaching this important milestone. Succeeding with your first Japanese customers earns you not only the commitment of a loyal customer but notoriety in the sales channel, which is often the gateway to scaling your business in Japan. At that point, competitors looking to enter the Japanese market will face similar high barriers to entry, and everything that worked against you as a new vendor will now work for you. Brian praises the long-term relationships and attendant business that he has developed as a result.
Brian’s biggest piece of advice for technology companies looking to penetrate the Japanese market is persistence, patience, and focus on identifying and targeting the most viable population of potential lighthouse customers. Modern AI tools allow companies to much more effectively identify targets and even specific and relevant people with organizations. However, as AI lowers the barriers to finding people, it greatly raises the barriers to reaching them. If traditional email and cold call outreach is not working, consider targeting partners who can make the right introductions for you. Consulting groups like BYG, who have a well-established presence and a seasoned team of on-the-ground professionals in Japan, can be helpful at this stage.
While some may see entering the Japanese market as an overwhelming challenge, the country remains the world’s fourth-largest economy and the second-largest addressable IT market worldwide, and investing in establishing successful relationships with end-users and sales channels are long term investments, that can lead to large and enduring returns with a loyal customer base.
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John Fargis is a senior executive with over twenty-five years of general management experience in the China market. He has run Asia for a range of US and European software companies. Google purchased three of these companies. John is the Co-founder and Principal for BYG Advantage, focused on market acceleration with international technology firms across APAC, Latin America, the Middle East and Africa. John’s management experience includes bridging dozens of technology companies into new global market opportunities. Until recently he was also an adjunct professor at the Hult International Business School Shanghai campus where he taught courses on Emerging Markets, Leadership and Chinese History. He is an independent director on the NASDAQ listed technology company, Ispire. (ISPR) and a Board of Managers at the Oakwood Friends School.
John first went to China as a Henry Luce Scholar in 1993 when he worked in Shanghai. He was the first foreigner in the modern era, allowed permission to work in a Chinese reform school. Prior to this assignment he had worked for four years as a New York City, special education schoolteacher in Brownsville, Brooklyn.
John has a B.A. with Honors in Medieval Studies from Wesleyan University, a Masters of Special Education from Hunter College and a Masters of Law and Diplomacy with a focus on international business and Chinese history from the Fletcher School at Tufts University. After resideing for decades in China, John currently lives in New Paltz, New York, not far from where he grew up.