Most enterprise technology vendors enter Japan through partners before they have anyone on the ground. The first hires decide whether that partner model works, and how soon the business can stand on its own.

Hiring is where many entries slow down. Foreign companies in Japan consistently name securing talent as one of their main challenges.

Partners carry the credibility at first

A Japanese customer buying from a vendor with no local presence is relying on the reseller or distributor. The partner's reputation, and its word that the product will be properly supported in Japan, is what wins the deal. That support means engineers who speak Japanese, know the product in depth and can resolve technical issues quickly.

The vendors we have seen enter Japan successfully with few people and no entity made full use of that credibility. They gave their partners what they needed to stand behind the product.

Where it breaks down

The model fails when the line between the customer, the partner and the vendor's head office slows down. The partner waits on head office for an answer, a technical issue goes unresolved, and the customer's frustration lands on the partner. At that point the partner starts to reconsider its commitment.

A service-level agreement sets out who supports what, but it does not settle the matter. Japanese customers expect a standard of service and quality that often goes beyond the contract. In the 2010s, global IT services firms and integrators entering Japan found this hard. Candidates who worked for them often described a gap between the service levels the firm planned for and the service levels Japanese customers expected.

What the first leader has to do

The first leader in Japan does far more than run sales. In the first year, the role usually covers the following:

  • The leader builds market awareness and opens conversations with new logos.
  • The leader starts conversations with channel partners before there is a dedicated channel hire.
  • The leader selects the partners.
  • The leader puts the foundations of the entity in place, often including the legal set-up.
  • The leader explains Japan to a head office that may not know the market.

The last of these decides more appointments than any other. Gaining a foothold in Japan takes longer than in many markets, and head offices are often impatient. A leader who sets realistic timelines, and gives head office the context for a slower pipeline than it is used to, keeps the support needed to finish the job. Country managers who cannot do this rarely succeed.

What head office should expect in the first year depends on how strategic Japan is to the business. Vendors often open English-speaking markets such as Australia and Singapore first, because they are easier to operate in, and Japan tends to follow later. We rarely see a company try Japan at Series A or B, and it features more often from Series C onwards. The common pattern is to hire an APAC head before a Japan country head, so the Japan leader often reports through the region, although there are exceptions.

Channel experience, direct selling record

Going in through distributors first is by far the most common pattern we see, so a first leader with no distributor relationships is rare. Even so, most companies hiring a country leader ask for a stronger record in direct selling than in channel sales, along with existing relationships with SIers.

The reason is that partners give access but rarely carry the whole load. The vendor still needs its own people working the largest accounts, even when those deals close through a partner.

A pure distributor model is the exception. Box Japan sold only through partners for most of its first decade, and a vendor taking that route needs a leader whose strength is the channel.

Hire the first engineer at the same time

We recommend hiring the first technical hire alongside the country manager, not after. Even when every sale goes through a partner, an engineer in Japan shortens response times to customers and removes the delay between the partner's engineers and head office. Localisation questions start on the first day, and the sooner someone in Japan can answer them, the less friction the channel has to absorb.

The two most common mistakes

The first mistake is underestimating time. Signing a new logo, seeing revenue and reaching a self-sufficient, profitable office often take longer than head office forecast.

The second is staying tentative for too long. Starting with an employer of record and a co-working space for the first 12 to 18 months is reasonable. Staying there longer tells partners and customers that the vendor may leave. Japanese customers are unlikely to sign a multi-year contract with a company that has not shown it will stay that long. A registered entity, an office and a permanent team are what signal that commitment.

Further reading

Frequently asked questions

Who should a vendor hire first in Japan?

Hire a country leader first, and make the first technical hire at the same time. The engineer shortens response times to partners and customers from the start.

Should the first Japan leader come from channel or direct sales?

Most companies ask for a stronger direct-selling record, with distributor and SIer relationships alongside it. A vendor planning to sell only through distributors needs a channel-led leader instead.

Can we enter Japan without an entity?

Yes. Many vendors start through partners and an employer of record for the first 12 to 18 months. Beyond that, partners and customers read the absence of an entity as a sign the vendor may leave, and multi-year contracts become harder to win.

Why do Japanese partners lose interest in a vendor?

The most common reason is slow support. When the partner cannot get answers or fixes from head office quickly, its customers' frustration falls on the partner, and it starts to reconsider the relationship.

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