Keith Watanabe * NET 2.0

Today, I encountered one of the most difficult situations posed to me in terms of my career.  The situation had nothing to do with coding; that's easy because it's really just a mathematical proof that you're doing in the end.  The situation I encountered though had everything to do with people.  More than that, but attempting to sell a product, which at the moment, has little demand in the market.  Add to that trying to determine ways of helping to create a market and finding many obstacles put forth due to customs of the country.

I can't reveal exactly the product we intend to sell.  However, I would like to say that part of our target audience in the long haul are the TV companies.  My boss and I talked in depth about how TV companies work here.  Apparently, there's a long tradition of how content is sold from the broadcasting companies (who own their content, unlike say American TV stations  which might lease the content) to local stations.  The local stations help monetize old programming and have established strong ties with the studios. 

Obviously, a big trend coming up is moving towards video.  You can see many major players in the US already making their move to avoid Apple and YouTube/Google's domination of the market.  Companies like Hulu, Brightcove, Veoh, Trudeo, Amazon, MySpace etc. have manage to snatch up key partners in securing deals to rebroadcast their shows online, as I had previously mentioned.  But Japan, as I argue, probably won't.

While these "strong ties" that the local stations have with the broadcasting stations, one has to really analyze the implications.  Part of what I heard involved in this has to do with the local government utilizing this relationship for certain means (control?).  Naturally, when you think about relationships that exist like this, especially in entertainment between large studios and smaller ones as well as a huge reluctance to move into new markets, you automatically have to think of the Y guys (and if you don't know whom the Y guys are, good for you). 

I started pondering what these relationships mean.  How are these bonds formed?  Why is it that an obvious movement in the market does not provoke such a rapid reaction in Japan?  Why is it so complex to do the obvious and correct thing and avoid stagnation?

Some things that raced through my mind were first how Japanese conduct business here.  A lot of business is formed through tight relationships.  The whole golfing and hostess club deals are not myths but simply ways people can conduct business.    Part of my guess is that business is personal here to a huge degree.  Making them remember you, doing the initial bribes under the table to secure the deal, etc.  Maybe even pulling a gun out and guaranteeing that the guy's signature or brains would be on a contract a la The Godfather.  And perhaps because of these traditional relationships, it's quite conceivable that people are sensitive to the number of intricacies, the drama of other relationships that might be strained during moves.  Maybe people are not bound by signed contracts, but personal bonds or verbal agreements that date back generations.  I don't know, but I get the feeling this is probably a key factor in complicating matters here.

One other problem is not being a top name brand.  A good analogy is being someone like a Prada, a Goldman Sachs, a Google, etc. where your name is well recognized so people go up to you.  It's like what Bill Gates said in Pirates of Silicon Valley: "You make people need you or you make them think they need you."  Few companies manage to really get to that point where you can create a demand by the myth that surrounds a company.

Doing business here is really tough because quite often it's all about who you know.  So I think when companies in the US attempt to make the move here, they might have problems.  I once spoke to a company that was talking to NTT Docomo about a network security appliance.  They mentioned the traditional stereotypical image of Japanese companies being slow.  My response was that this small company wasn't large enough to warrant NTT Docomo urgently needing their product; not to mention their sales team were not very pro-active in doing further business in the methods proscribed earlier.

That all said, I've come to a point where I'm having a huge problem trying to determine an answer.  The problems are:

1. How does one attract partners in Japan?  I'm not talking about just speaking with a company.  I'm talking about being ready to do serious business.  How does one get to that stage?
2. How does one manage to move markets?  Of course, if you're a monstrous company with tons of money it's easy.  But let's say that you've got potential and want to break out with a killer business model that's gonna do monstrous bank, how can you quickly dive into the Japanese market and secure it?
3. How does one proverbially "seal the deal" here?  In other words, what are some tactics to use to guarantee that the deal will be made?  The key is you cannot be a large massively successful company, you cannot use bribe methods nor brute force methods with a gun.  I'm talking straight out negotiation.  What techniques work here?
4. Finally, how do you make the Japanese react?  Naturally, there's the whole conservative stereotype I described earlier and I think part of it is Japanese's natural sensitivities towards maintaining excellent relationships between each other as partly being a reason for holding them back to move faster.  Well, if a missile is coming in like online video, and you really want to get people to move fast to avoid another Hiroshima, what can you do here to really push people in the right direction?

This is an interesting, delicate and extremely difficult problem.  While I have decent business acumen for the internet and enough sense to see trends coming along, I have little sales expertise or negotiation capabilities.  So I'm very interested to hear other people's opinions on this matter.