“It takes a longer time to do business in Japan,” states Hiroshi Nishikawa, Program Director of Solve AI Challenge, highlighting a fundamental difference foreign startups often overlook when approaching the Japanese market. With a distinguished career at Orange, the renowned French telecom operator, Nishikawa’s insights are deeply rooted in years of facilitating international business connections and navigating cultural nuances.
His professional journey took a significant turn when, after nearly a decade at Orange managing startup accelerator programs across Japan and Asia, the company shut down its Japanese office at the end of 2022. “I suddenly found myself out of a job,” Nishikawa recalls. Interestingly, this unexpected shift became a pivotal opportunity when he met the CEO of Mobego, an AI startup he had previously supported.
“Mobego had been attempting to enter the Japanese market for nearly eight years, securing occasional short-term projects with major corporations like Honda, Canon, and Nissan, but never achieving sustainable growth,” Nishikawa shares. Recognizing the critical role of local representation, Mobego’s CEO urged Nishikawa to join them, emphasizing the importance of local expertise in navigating Japan‘s complex market.
Cultural nuances: The key to success in Japan
Discussing the broader AI landscape, Nishikawa notes, “The AI market here isn’t drastically different from other developed countries. The difference lies in how business relationships are cultivated.” He emphasizes Japan’s deeply ingrained cultural preference for trust and long-term relationships. “Japanese companies are generally conservative. They value long-standing trust and relationships, which leads to slower decision-making processes.”
This conservative nature can create significant barriers for startups eager to quickly establish their footprint. “The language barrier also remains a considerable challenge for foreign startups,” Nishikawa adds. However, he stresses that finding a reliable local partner often bridges this gap effectively. “B2B IT service companies that collaborate with established local system integrators or agencies typically see more success.”
A mature yet challenging AI ecosystem
Nishikawa paints a cautiously optimistic picture of Japan’s AI startup ecosystem, describing it as mature with significant opportunities for growth. “We have several AI startups successfully listed on the Tokyo Stock Exchange,” he points out. Notably, several startups he personally assisted during his tenure at Orange achieved IPO status within recent years, indicating a robust environment despite its inherent complexities.
Yet, Nishikawa reiterates that patience and cultural adaptation remain critical. “Foreign companies often underestimate the time investment required. Building trust doesn’t happen overnight here; it’s a meticulous, deliberate process.”
Embracing change and navigating future opportunities
Reflecting on his own experiences transitioning from a multinational corporation to a pioneering AI startup, Nishikawa embodies adaptability—a trait he suggests is essential for startups eyeing the Japanese market. His journey underscores the importance of resilience, local understanding, and cultural intelligence.
In closing, Nishikawa emphasizes a fundamental lesson: “To truly succeed in Japan, foreign companies need to understand and respect local business culture deeply. Those willing to invest the necessary time and effort to build genuine, lasting relationships will find rewarding opportunities awaiting them.”
Through Nishikawa’s insights, it becomes clear that success in Japan’s AI sector requires more than innovative technology; it demands a profound appreciation for cultural subtleties and a strategic approach grounded in patience and relationship-building.
