PHNOM PENH – Even as Japan Inc.’s influence has diminished under a series of internal scandals and international competition, the prevailing image of Japanese business remains tied to massive corporate conglomerates rather than innovative startups.
But behind the scenes a unique mix of entrepreneurs are planting their flags in up-and-coming markets in a wide range of industries, from restaurants to venture capital.
Many of these upstart companies were on full display in late August at the annual Global Venture Forum organized by the World Association of Overseas Japanese Entrepreneurs (WAOJE). Held this year in Phnom Penh, the event featured 400 Japanese entrepreneurs and investors who have made their mark around the world. At the gathering, they discussed the challenges and opportunities that go along with testing their business acumen abroad.
Out of the numerous panel discussions and events, the underlying message from many business owners was straightforward: Set ambitious goals and dare to test your skills in countries off the beaten path.
While exploring the globe may be in the DNA of many of these entrepreneurs, at least part of the reason they’ve set up shop in lower-profile markets is due to the fact that neighboring countries such as China are already extremely competitive to enter.
“When I moved to China 15 years ago it was relatively easy to find a business niche, but now the country is ultracompetitive” said Keiichiro Sako, a successful architect based in Beijing and the former lead representative of WAOJE.
“Businesses may find it easier to establish themselves in newer markets such as Cambodia,” Sako said, explaining that the Southeast Asian country of around 16 million was chosen as the host due to its large economic potential.
While the Tokyo-based organization wasn’t formally founded until December 2016, WAOJE has operated for over a decade as a networking platform for Japanese entrepreneurs abroad.
Unlike the suit-wearing crowds filing through Tokyo’s business districts, many of these entrepreneurs appear to be more comfortable stepping out of line and into frontier markets that may be more difficult to navigate but that hold immense economic potential.
Takeshi Izuka, the current head of the WAOJE, has invested heavily in his belief that Cambodia is ripe for growth.
In 2011 Izuka acquired 10,000 hectares of contiguous land in a rural part of the country with a plan to launch a series of ambitious businesses including a resort, an institution of higher learning and eventually a new community and town. All of the projects are operated under a parent company headed by Izuka known as Vkirirom Pte.
Izuka previously worked as the founder of a successful web analytics company, Digital Forest Inc., which he eventually sold to telecommunications giant NTT Communications Corp. in 2009.
Izuka subsequently went on to try his hand at politics in his home prefecture of Kagawa.
But after failing to break through in the field, Izuka, who expressed concern over Japan’s shrinking population and swelling debt, was convinced that succeeding abroad was another way for him to contribute to his country.
“This year’s theme for the WAOJE Global Venture forum is ‘Plan B for Japan,'” Izuka told The Japan Times on the sidelines of the conference. “When something (adverse) occurs in Japan, the only option for Japanese people is to go out and struggle and fight in the global market.”
The results of Izuka’s own fight have come to fruition over the past few years, starting with the 2013 opening of Vkirirom Pine Resort in Kiriom National Park, about 115 km southwest of Phnom Penh. A year later the inaugural class of students were admitted to his university — the Kirirom Institute of Technology. The curriculum is heavily focused on information technology and English-language instruction — skills Izuka believes are important to develop successful students able to meet the needs of the 21st century economy.
Over the past four years the school has exclusively accepted Cambodian students to study free of charge.
Part of the fees are covered by companies that pay the school to hire its graduates, while some students participate in internships to raise money for their tuition. As of this year the school is slated to add tuition-paying Japanese peers as well.
Izuka said he chose Cambodia because it is at the forefront of growth and is not yet saturated by competition.
“I like to compete in new markets that are yet to have intense competition,” he said during a panel discussion.
Investing in Africa
Many 20-somethings in Japan follow a familiar path into the working world: Rigid interviews during their senior year of university, months of training after they enter the workforce, followed by a slow climb up the ladder of the corporate world.
But rather than become tied to a desk in a high-rise office in Tokyo, Takuma Terakubo decided to enter sub-Saharan Africa in search of promising new business ventures.
And similar to the Cambodia-based Izuka, Terakubo created his company, Leapfrog Ventures Inc., in order to enter an up-and-coming market he believes holds immense latent potential.
“As there are not many Japanese venture capitalists in Africa there are benefits to being a pioneer,” he said in an interview.
Terakubo, who began his career at Tokyo-based investment firm Samurai Capital Co., launched his new company in May and has thus far poured money into eight startups across a number of countries including Kenya, Uganda and Rwanda.
One of the startups that has been on the receiving end of investments from Leapfrog is Rwanda-based Exuus, which operates a mobile banking platform that allows users to create joint accounts and save money as a group.
Terakubo said that he originally invested in the company because of his wish to help farmers get access to credit and savings accounts — a massive subset of Africans are left out of the traditional banking sector.
While the 27-year-old Terakubo said that his passion to enter the African market is driven by a desire to contribute to the prosperity of underdeveloped economies, he added that Japanese businesses could also learn a thing or two from the innovation taking place in these developing fields, particularly in regards to the rapidly expanding mobile payment markets that have a far higher adoption rate in Africa compared to Japan. Terakubo said the popularity of mobile payments has risen rapidly in many African countries because anyone with a phone can now access numerous savings and loan services even if they have been left out of the traditional banking sector.
“I think Japan has a lot to learn from these leapfrog technologies being adopted in Africa,” he said.
Speaking on a panel at the WAOJE conference, he said that he was investing for the long term — 10 years or more — and is aiming to invest in 100 different startups by 2020.
Izakaya in Southeast Asia
Shunya Oshima, who opened izakaya pub Teppen in Bangkok in 2013, didn’t go abroad to simply strike it rich.
“I am different from other people who came to Thailand only seeking a business opportunity,” Oshima said. “I know it might sound overly modest, but I simply wanted to find a way to give back to a country I came to love.”
But despite his humble attitude, Oshima — who also helps other restaurants produce their menus and interiors — has lofty goals and plans to expand to 100 restaurants across Southeast Asia. Instead of getting caught up in Thailand’s economic growth potential or other factors beyond an individual’s control, Oshima said that he concentrates on the most important part of his business: the customers. He and his staff are active on social media and other travel websites and frequently follow up with their customers about meals. Their attentiveness appears to have paid off: The restaurant boasts high ratings online and their Facebook page has 73,000 likes.
Prior to moving to Thailand, the 43-year-old Oshima worked as a chef and a landscape designer, vocations which taught him how to make quality food and create an enjoyable environment — factors that continue to drive customers to his growing business.
Oshima stressed that while his prior work was worthwhile, he wanted to eventually live abroad due to a personal frustration with how change comes slowly in corporate Japan.
“It takes a long time to start a new project in Japan,” noted Oshima, who has enjoyed a faster pace of life in his 40s after spending his younger days backpacking in India and Thailand. But whether it is Japan or Thailand, Oshima said that starting a business is no walk in the park, nor should it be.
“I think being scared of starting a business can be a good thing, I myself had many concerns and was scared,” he said. “The key is (to) not overly worry and to move forward.”