Time Travel Through Japan's Business Landscape: 1980s to 2020s — with Terrie Lloyd
I seem to have a weird fascination with Japan. But not in a “weird” way of course. (I’ve been around weebs and realized I’m not one of them.)
I find Japan especially interesting from a business person’s perspective. They were the biggest success story after WW2 — not only the second biggest economy in the world after the USA, but also the most technologically advanced, having had bullet trains since the freaking 60s. And all this despite having no natural resources to speak of.
But recently, Japan’s competitiveness has shown signs of wavering, with an aging population, abysmal birth rates, and a general lack of technology proliferation.
To understand what it means for international entrepreneurs, I invited Terrie Lloyd, CEO of Japan Travel (and founder of several other companies), a rare serial entrepreneur based in Japan for over 35 years. Terrie is probably the foremost authority in the world for any foreigner thinking about Japan as a business location.
01:30 – Why Terrie is the #1 voice among all foreign entrepreneurs in Japan
04:17 – A secret office romance, translation company, and selling submarine parts
8:00 – How the US’ jealous move overturned Japanese currency overnight
10:36 – Why Japanese banks can be hard to deal with
14:50 – Hiring foreigners in Japan: then and now
16:39 – The sad state of English teaching in Japan
18:15 – How Tokyo’s skies turned from grey to blue
22:00 – Step one in hiring network engineers: bail your recruiter out of prison?!
27:00 – The bubble pops
34:12 – Why are Japanese business valuations so low?
45:11 – The roots of Masayoshi Son’s “street fighter” mentality
52:00 – Why Japan has so few unicorns
57:00 – The PLUS points of starting a business in Japan
62:00 – The annoying problem of IP theft in China
65:00 – Terrie’s M&A business
Connect with Terrie here:
If you’re interested in doing business in Japan, another resource I can heartily recommend is Tyson Batino’s Scaling Japan Podcast. Here’s Terrie on Tyson’s pod talking about seeking investments in Japan.
Are you a “non-technical” entrepreneur or professional?
It might seem like the biggest success stories today belong to the tech tycoons — while you’re left behind as a second-class business leader.
But there is a way to leapfrog to the head of the race instead.
Become a “Tech Fluent CEO.” Read the book here.
[00:00:00] Aman: Okay. Okay. We are recording. Hello, everybody. Welcome back to a new episode of the eccentric CEO podcast. And today I have a rather interesting, a little different kind of an episode. Uh, my guest here is Terry Lloyd and he has been an entrepreneur he’s from New Zealand and Australia. And he’s been an entrepreneur in Japan since 1983, which is, uh, since before I was born.
And so. In today’s episode, we are going to go on a time machine journey, a time machine ride with Terry as, we’ll walk through how the entire landscape, starting from hiring people, to getting acquired, getting financing, opening a bank account, every single thing, um, about doing business as a foreigner has changed over the years.
And, I have the best guest possible for this purpose because interestingly, Terry has, this is like, this is so impressive. It’s almost mind blowing. Terry has had An online newsletter about being an entrepreneur in Japan since 19 90, 19 91. Like when was that? When did you start it?
[00:01:21] Terrie: Uh, actually, uh,
[00:01:25] Aman: 93. 93.
is when Alibaba had not been founded, Amazon had not been founded all these big tech companies that you, you know, know about. None of them were there in 1990. See, the internet was just in this infancy and my friend Terry was there writing an online newsletter, you know? So, uh, yeah.
You had email, um, I dunno
so he’s been the most. Dominant most established voice , among all the foreigners in Japan in a way , in the business community for almost three decades. Right.
[00:02:00] So Terry, thank you so much for being here with us.
[00:02:04] Terrie: Yeah, thank you. Um, it’s, uh, my pleasure to, um, be part of the podcast.
[00:02:09] Aman: How many companies have you started in Japan so far?
[00:02:13] Terrie: uh, 17, um, not all successful. I have some scars, but, uh, I’ve had eight turnouts and, uh, I’m still running a group of them at the moment. Uh, four companies, which are particularly active.
[00:02:29] Aman: Hmm. So 17 companies were all those like startups that you started from scratch or some of them were acquisitions. Give us a little, like a quick overview
[00:02:39] Terrie: all 17. I dunno if I can even get the, uh, the
[00:02:43] Aman: Okay.
[00:02:44] Terrie: but, um, most of them were startups. Uh, there was one acquisition which, uh, gave me battle scars. Uh, so I, I kind of, I have done an acquisition since then. Actually, I, I, uh, bought into a small, uh, company in Pune, in
[00:03:00] India back in 2019, but, um, yeah, basically, uh, you know, I’m a serial entrepreneur.
I like making companies and, uh, I, I basically sell when I can’t remember the names of my staff because there are too many of them that usually means around a hundred people. And, uh, by a, you know, at a hundred people, you’re usually what, 10, 20, 30 million in business a year. Uh, that is, uh, basically when the job is the founder and CEO starts to change and you become, you become more of a professional manager.
And personally, I don’t like that. So I sell the company and I start a new one. And, uh, I always try to pick a field that I’m interested in. So I’ve actually started companies in probably six or seven different fields so far, uh, ranging from software, uh, to import, uh, to recruiting, uh,
[00:04:00] to travel. Um, it, you know, like systems integration, uh, has been quite a range.
[00:04:08] Aman: So we can have, uh, an even, uh, more broadly applicable conversation than if, you know, than if you’d been just a startup entrepreneur.
[00:04:17] Terrie: Why don’t we start at the start. So, um, how did I get to Japan? Uh, I worked for a small computer company before there were IBM PCs and, uh, I started off as a, uh, TV technician, actually. I, I never went to university, uh, but I learned about computers on my girlfriend’s library card in Australia. And, uh, then, um, you know, I worked in this, uh, Australian data company for about, uh, four years.
And then I came to Japan and I found out that I was one of the few foreigners who knew about computing. And then in the same year, I arrived in Japan. The IBM PC came.
[00:05:00] And, uh, not many people remember or recall, but actually most of the parts for the IBM PC came from Japan. Japan already had its own PCs, uh, made by Fujitsu and toshpa and, uh, NEC and, uh, they were totally incompatible with anything else.
Uh, so if you’re non-Japanese, you couldn’t use them, but in Japan they’d actually been computerized for some years earlier. And, uh, when I first arrived, uh, because I was one of the few foreigners who knew what a laser printer was a hard disc and that kind of thing. Uh, I went to work for a translation company.
I fell in love with the, uh, the deputy manager of the company. Uh, and we, uh, secretly had a relationship called office love. And, uh, from there, uh, we started a company together and got married. So that first company was called link Japan, and it was a small translation. Uh,
[00:06:00] at the same time as doing translation, I also, uh, did some import export and funny enough, the company that I used to work for in Australia, which worked for the defense, uh, the Australian, uh, Navy actually, um, I used to source parts from MACI Haber for them as a, as spare time job.
So they would send me orders for transistors and other semiconductors that had to go into submarine detectors. I would hop on my bicycle, the train, go down with cash to Aquira buy a hundred or 200 of these, uh, high end, uh, devices and send them in the mail to Australia where they get built into submarine, detecting devices.
[00:06:43] Aman: Wow. By the way, for those who are not familiar, uh, the, the little prefecture, he mentioned the it’s not prefecture, it’s like a, uh, like a quarter of Tokyo, right. Akihabara. And today it’s known for like the anime manga kind of stuff. Is that correct?
[00:06:57] Terrie: Yes, but back then,
[00:06:59] Aman: the, the
[00:07:00] cinema, the cinema, uh, side of, of Tokyo.
[00:07:03] Terrie: that’s right. But back then it was the electronics capital and, uh, tiny little alleyways with little men selling, uh, a small array of specialty parts. Um, and yeah, uh, Australia was low down on the export list, so they had to wait for ages. Um, but on the other hand, uh, I could go down and just buy the products, uh, straight off the shelf.
So they were happy. And I I’m sure that, uh, none of the Australian defense, uh, ministry people knew where those parts were coming from. so, uh, from there, uh, with a small translation company, uh, we acquired PCs ourselves, uh, after having started with typewriters, uh, hired staff. And then my, uh, my wife got pregnant, uh, when let’s see in 19 85, 86, and, uh,
[00:08:00] suddenly I didn’t have a partner.
So I, uh, roughly the same time in 86, uh, the us, uh, was really upset at Japan because there were doing so well financially. And there was a meeting of financial ministers called the Plaza accord. And in this Plaza, accord, they decided that the Japanese should revalue the yen. And so literally overnight, like in a few weeks, the yen went from 260 yen to the dollar, to about 130 to the. So literally doubled in value over a period of a few weeks. So needless to see most of my clients who were of a large brand name companies like, uh, Toshiba Hitachi Rico, uh, so those companies decided to move their factories offshore. Now back then in 86, they weren’t going to China. They were going to places like, uh,
[00:09:00] uh, mostly Thailand and Malaysia.
And even today, many of those companies are still operating and, uh, well established there. So suddenly my translation business was looking very sad, uh, and caused by completely external factors. So I was, uh, rather depressed. Uh, we were running out of money. I could see bankruptcy on the horizon. And then I picked up a magazine, uh, that somebody had sent me from Hong Kong because I was interested in PCs.
And it was called Asian sources, which at that time was a, a company that published, uh, componentry, uh, directories. And in, there was an advertisement for one of the world’s first laptop computers that was IBM PC compatible.
[00:09:45] Aman: Mm-hmm
[00:09:46] Terrie: so I went with my very pregnant wife. We went to the bank, uh, the bank manager said, well, you’re a foreigner, probably you’re just gonna run away.
And I had my wife stand up and point to her stomach, her, her, you
[00:10:00] know, very pregnant stomach. And I said, I don’t think I’m running. And he, I think that was the first time he had been confronted in that way. So actually he gave me a $20,000 loan. And with that $20,000, I bought 10 of these laptops, which were about the size of, uh, two large bricks.
And, uh, I went to Hong Kong, uh, picked them up, bought them back, sold seven at 30% profit. Use the money recycled it. And within four years I was importing container loads of PCs from, uh, Hong Kong and China. So
[00:10:36] Aman: let let’s, let’s take, let’s take a back step right there because there’s a lot, there’s a lot to unpack, right?
Um, let’s start with. Something as simple as going into a bank and getting a bank loan. Right. And this was, I think, I guess 85, 86, uh, whenever this was, um, give us a picture of just for, for those who are listening, what was it like to open a bank account?
Like the ease
[00:11:00] of opening a bank account compared to what would happen later.
[00:11:04] Terrie: the mechanics of opening a bank account as a foreigner in Japan are actually not that bad. Um, basically as long as you can prove that you have residency. You can open a bank account. Uh, you simply have to go in with your resident card, which you receive from local city office after registering. And, uh, you prove that you’ve paid some tax.
Uh, you prove that you live somewhere, so you have a utility bill or whatever, and of course your ID. So actually it’s not difficult. What was difficult is getting the loan, which is a completely different matter. And back then, uh, as a foreigner, getting a loan from a bank was, uh, well known impossible. Now it’s much better, but back then it was, it was particularly difficult.
[00:11:52] Aman: there’s also like, uh, what I hear is that today, like getting a bank account for your company
[00:12:00] is kind of like hard, it’s kind hard to find a bank that will say like, yeah, we will, you know, you should bank with us as a foreign company.
[00:12:08] Terrie: Yeah. Yeah. Uh, stepping forward into 2022, um, I would say that after the Americans, uh, introduced the fat car, uh, regulations, which was what, uh, 2015 or 16 or something, uh, that Japanese banks have become very shy. And, uh, they’re absolutely over the top about know your customer. So many even major, uh, us companies, because I do have a consultancy that helps, uh, foreign software companies to come to Japan.
Uh, even some of those major companies worth billions. Uh, they have been refused by Japan’s major banks. Uh, the good thing is that there are a selection of banks to go to. And they operate at different levels. So if you can’t get the preferred ones, which are the banks, uh, so-called city banks, not Citibank with an I, but with a Y
[00:13:00] um, then, uh, you can always drop down to the regional banks and then below that to the community banks.
So at some point somebody sooner or later will say, okay, but I will say that, uh, getting a bank account as a corporation in Japan has become much more difficult. And recently I set up a company in Singapore and I was able to set up a bank account remotely, which is like inconceivable. You would never be able to set up a bank account remotely here in Japan.
You, you have to front up, they need to see you’re a li living, breathing person. And of course all the paperwork that goes with it, which is considerable.
[00:13:38] Aman: And did you have any employees in your first company except for just you and your
[00:13:43] Terrie: Uh, actually I did, I had two part-time employees. Uh, we, we worked out of our home actually, uh, which was a small apartment. Uh, one room was our bedroom and the other room was the office. So, uh, it was very informal.
[00:14:00] Um, I, I can’t believe that those people agreed to come and work for us. And, uh, frankly speaking after my wife did get pregnant or roughly the same time we moved into an office, just so that I could actually recruit, uh, regular people.
Didn’t, weren’t faced by the fact that we were in, uh, an apartment.
[00:14:20] Aman: Was that, so, uh, hiring foreigners, um, and, and your wife, just, just, just for context, she Japanese, is she, uh, is she a foreigner as well?
[00:14:30] Terrie: Well, first of she became my,
[00:14:32] Aman: she was, yeah. Yeah.
[00:14:33] Terrie: is my ex-wife, uh, I I’m now, uh, married second time. So she is Japanese and my current wife is also Japanese. So I have five kids and they’re all half Japanese.
[00:14:45] Aman: I see. I see.
So, uh, so was it hard to recruit people, just even your first people?
[00:14:51] Terrie: Yeah, well, um, you know, the, the first thing to know is that, um, before 1990, uh, it was very, very difficult to
[00:15:00] hire a foreigners in Japan, uh, whether you’re a foreigner or a Japanese CEO. And, uh, the rule was you had to have half a million dollars of revenue for every foreigner that you hired. So for me, that meant I could have one foreigner besides myself, uh, in 1990, that rule changed.
And roughly the same time I started bringing engineers from India into Japan. Actually I was the first person to bring, uh, network and hardware engineers into Japan, from India. Um, so, uh, and then going back to, uh, finding people back in the eighties, there were very few foreign entrepreneurs. I mean, really small number, probably enough to count on one hand or two hands.
And so, uh, those Japanese who had been abroad and learned English, if they really wanted an authentic, uh, you know, foreign, uh, environment working environment, um, there weren’t many companies to choose from. And so actually it wasn’t
[00:16:00] that difficult. It was more difficult though, of course, to tap into people who actually could speak English because
Japan is one of the Asian countries with the worst record for, uh, you know, people learning English.
It’s like, second, last I. And, um, even today that’s still the case. Uh, only about 50,000, uh, young Japanese out of about a million, uh, high school graduates every year, uh, go abroad, uh, to study. And, uh, I would say about half of them to study English and the other half to, uh, already can speak English and to studying, uh, more tertiary subjects.
[00:16:39] Aman: although most of them actually supposedly learn English throughout their schooling. Right. They have these written exams where they, you know, uh, have to, you know, actually even have an oral, like a, like a listening exercise where they listen to something in the test and they have to write down a few phrases.
Like they have that schooling throughout their lives, but they
[00:17:00] just don’t feel confident actually using it, uh, in the real world.
[00:17:04] Terrie: where it’s kind of famous that, uh, English is, uh, taught by Japanese teachers to Japanese curriculum. So they don’t actually learn English, English. They learn Japanese English.
[00:17:15] Aman: I see.
[00:17:16] Terrie: Uh, very pedantic, very old fashioned, very difficult. In fact, uh, many native speakers would be challenged pass the Japanese English tests.
So as a result, um, most young Japanese hate English because it’s so tough. So, uh, they got totally wrong approach in my opinion, to how they teach it. It’s not about communication. It’s about getting the grammar, correct. Which is mistake.
[00:17:42] Aman: on. I mean, Japan in terms of infrastructure has always been a pretty good place, right in general. Um, they’ve have, uh, they’ve had a a very solid regular infrastructure, as well as a financial infrastructure. Like they’ve had, you know, banking and everything in place.
Uh, I, I
[00:18:00] presume at that time as well, it’s not like supposedly whatever you call a third world economy where you can’t find a bank or something. Right. Um, in terms of infrastructure, What were some things that you want to remind us of, or tell us about, that was something, something different
[00:18:19] Terrie: Sure. Um, okay. The probably the most notable thing is transportation. So, uh, transportation has improved dramatically over the last 40 years that I’ve been in Japan. When I first came to Japan, uh, the whole city was gridlocked, uh, tiny roads. No, bypassers no road tunnels. Uh, no flyovers to speak of. There was one expressway servicing the whole, uh, metropolis.
So until around 1990, we couldn’t see the sky. It was. And, uh, in fact, every time I left Japan to go overseas, I was always amazed how blue the
[00:19:00] sky was. Then in 1990, uh, we had a new governor in, uh, Tokyo, governor Suzuki, and although he had some issues, uh, one of the good things he did is that he banned, uh, diesel trucks that, uh, you know, had particulate exhaust, uh, particulate over a certain level.
And then as a result, over a period of six or nine months, the sky became blue. And I remember feeling uneasy that suddenly I could look up and keep seeing out into the distance, whereas before it was kind of like being in a fishbowl, it was kind of comfortable, even though it was obviously bad for your health.
Um, so that was the most notable thing. And, uh, apart from the, uh, diesel regulations, they also finished a number of, uh, ring roads around Tokyo and. Now there are eight major ring, actually. There’s probably about 10 major ring roads around Tokyo, which allowed trucks
[00:20:00] coming from the north to pass to the Southwest without having to go through the city.
And that’s made a huge difference to our pollution index. And now Tokyo is actually a very nice place to live.
[00:20:11] Aman: And, uh, you know, and also 1983, uh, 84, 85, this was the heyday of. Like Sony as a company with the first truly international Japanese company. They had already said they, they started in, I think 19 46, 50 ish.
Right. And then over the next 30 years they had all the set up a lot of the firsts, a lot of the, um, what do you call it?
[00:20:37] Terrie: Um, you know, uh, I, I would say son, but, uh, don’t forget. Toyota is also when they’re in Toyota probably was the first really visible, uh, Japanese company. Everyone was driving their cars, uh, and the same with Nissan, which of course used to be called Datson, uh, back in the sixties and seventies.
[00:20:57] Aman: mm-hmm . And so they had already
[00:21:00] kind of, uh, do you think, do you think that they, them being there had already matured the regulatory infrastructure in a way is what I would call it for you to do imports and exports and, uh, you know, hire people from abroad.
Did you benefit from that?
[00:21:14] Terrie: Well, um, where the Japanese were confident that their industry was. Um, either very well established or vice versa, where there was no industry in that sector. They had actually fairly limited, uh, regulations, and it was quite easy to bring stuff in, but, uh, in terms of, uh, public health and, uh, particularly medicine and that kind of thing, Japanese had a very strict regulatory regime and they still do.
Um, and there were lots of taxes and that sort of thing, but frankly speaking, I, I mean, we just paid the taxes and, uh, you know, passed it on to the customers. Um, I will say that, uh, electronics in general, um,
[00:22:00] was a fairly deregulated space, um, bringing foreigners and yes, that, that, that was difficult, but in terms of the actual electronics itself, um, that was quite easy to do.
It was easy for me to export. Uh, it was easy to, um, import as well, um, to bring in those PCs that I, that I. . Um, but as I say, everything changed in 1990. I’m not sure why it changed, but, uh, I guess, uh, Japan sensed that it was falling behind in the, uh, it race. And they realized that they at least needed some, uh, engineers and, and others.
So, um, in 1989, um, I became the first company in Japan to ever install a local area network. And, uh, actually I installed, uh, Noel 1.0 on the Australian trade commissions servers. And, uh, that, that made me the first Noel installer in, in Tokyo. And Noel actually
[00:23:00] gave me a distributorship for some years before they set up themselves in Japan.
Uh, so that I could service, uh, foreign multinationals who needed networks. So that was great for business, but I needed, uh, local area network engineers. And that’s why I started bringing engineers from India because India at that time was also undergoing a land explosion. And, um, Hey, I was the only foreigner recruiting at that time.
In fact, I have a little story. If I can tell you, I had a representative, his name was, uh, KK Eron, and, uh, he lived in PASI colony, uh, in Mumbai, uh, back then called Bombay. And, uh, we had, uh, the Bombay times, right, which is the main newspaper. And we ran a half page ad, uh, for my local area network, uh, business in Tokyo.
And I got a call from, uh, KK and he told me that he was at the
[00:24:00] police station and Ned detained him. And I said, well, what’s going on? And he said, well, the police can’t believe that a Japanese company is advertising in English and a Bombay times with a half page ad. And they think it’s a scam. Okay. So I had to send the police, uh, remember there’s no email in 1990.
I had to send the police who luckily had a fax machine, uh, a fax of the company registration document, so that, uh, KK get outta jail. So, um, uh, so anyway, he, he got released and then later on that evening, he called me again and said, Hey, I got another problem, said, okay, what now? And he said, well, I got about two meter high stack of resumes from people who would like to work in Japan.
So, you know, I, there’s only me and my wife and, uh, I, I can maybe bring in a couple of freelancers, but it’s gonna take us weeks and you’re coming next week. So I said, look for three letters on a resume, L a N,
[00:25:00] if it doesn’t have those letters, I don’t wanna see that resume. So he picked, he, you know, he went through it and he found 200 applicants.
I, I received all of their resumes by fax, which was a lot of money back then. And, uh, I personally interviewed a hundred, a hundred people over a week. I picked two people. Those two people were absolute brilliant engineers and nowadays, uh, not just them, but in the end, uh, over the following five years, I, I bought about 70 engineers in, uh, they’re all running, uh, banks, uh, around the world.
Um, you know, it operations.
[00:25:42] Aman: Wow. Wow. How much did faxing cost you cuz
[00:25:47] Terrie: Oh, I, I don’t remember. It would’ve been something because we were paying regular phone lines and that sort of thing. No, no data lines back then. But anyway, I, I hired these two and then I started going to India.
[00:26:00] Um, every three to four months, I I’ve been to India. Uh, 30 times I got sick 30 times. I loved, and I love India 30 times.
So, you know, I have a very interesting, uh, deep and, um, somewhat disturbing relationship with India. Um, so, uh, we went into the land business and, uh, you mentioned that the 1980s were a Gogo period, which they were. So there were many foreign companies majors starting to come into Japan. Uh, my biggest clients were most of the foreign banks ranging from Merrill Lynch and Goldman Sachs, uh, to Morgan Stanley, uh, through some of the French banks.
But I also had Dell and Microsoft as clients. And in fact, I set up the regional headquarters for Microsoft and also, uh, my staff were outsourcing for Dell when they first started in Japan. So I got to meet bill gates, uh, and Michael Dell, uh, at
[00:27:00] different times back when their companies were very small and I was one of their vendors.
So that was kind of fun.
[00:27:06] Aman: I see, uh, so this was the boom period. The 1980s, uh, bubble economy
[00:27:14] Terrie: Right?
[00:27:15] Aman: then it all came crashing down in, in the nineties.
[00:27:18] Terrie: Well, I’m sure aware of the fact that, um, the Imperial palace valuation land valuation was worth more than all of, uh, California, the state of California. Uh, this is in 1990. So that was the peak, uh, two years later, uh, completely different. Uh, as you say, the bubble burst, uh, many people went bankrupt. Uh, many companies had, uh, many companies had to merge, uh, a number of banks had to merge.
And so, uh, the, uh, corporate outlook was quite depressing for a while, but, um, be that as it may, uh, I found that it was head to stay. In 1995,
[00:28:00] uh, I was approached, uh, well, first of all, I sold that company that I mentioned, the one that was bringing in the engineers. I sold it to EDS and, uh, EDS, Russ per, um, and of course they got bought out by HP and as that’s HP’s services business today.
Um, and then, uh, roughly the same time I was approached by a fellow out of the us who was doing this new thing on the internet, this new thing called the internet. He was doing recruiting. And when he approached me, I said to him, I don’t know that recruiting on the, Internet’s such a good idea. And he said, why not?
I said, well, because hardly anyone uses the internet, just a few engineers. And he said, how hard is it to hire engineers? And I said, well, it’s pretty tough. He said, there you go. So even though it’s a small market of a few hundred people, we should start. So that convinced me, um, we, in the end didn’t actually align our interests.
I wanted to buy part of his company. He wouldn’t let me, so in the
[00:29:00] end, uh, 1987, uh, 1997, I started, uh, Japan’s first online, uh, mid-career recruiting company, which was called die job.com and, uh, and it went great. So yeah, that was another go go period. In some respect, in this case, although the economy was depressed, uh, there was even then a total shortage of engineers.
And so everybody was looking for engineers, especially bilingual engineers. So I went from using those engineers as an it company to supplying them as a recruiting company.
[00:29:37] Aman: see, and, and of course We haven’t, uh, talked about how the boom and bust periods affected Terry as a, a debter right, as a company, like to get a bank loan. Right. like the financing aspect fundraising in Japan from different types of investors and the history of that particular angle.
[00:29:56] Terrie: Uh, yeah. , in 1994,
[00:30:00] my company was growing at a hundred percent a year and in the it business, we had to buy inventory before we could sell it. Because, uh, clients wanted delivery the next day. And so we were so successful, even though my ex-wife’s parents had mortgaged, their house had taken bank loans.
I’d been to the Japan finance corporation, uh, just everywhere. I could go to find money. I could not keep up. And we were starting to have some really major stresses and strains in the business where managers weren’t getting paid and that kind of thing, I did give them stocks. So that kept them loyal. But nonetheless, you know, you can only skip, uh, salaries certain number of times before people, I start to think of leaving.
So, um, I happened to meet this guy from EDS and I went in because I had a second small company, which was publishing a magazine and I was trying to sell him a magazine page, uh, advertisement.
[00:31:00] And then after my pitch, he said, well, look, Terry, I’m not really interested in the magazine to be honest, but I’m interested in your, it. And I thought to myself, why would everyone be interested in a company that causes nothing but headaches? Even though we, at that time, we were doing about $10 million of business a year. It was just a huge headache for me because I kept, you know, so short of capital and, um, you know, as it turns out, EDS ha has deep pockets.
In fact, they told me out of the last hundred acquisitions, they paid the highest book value for our company and, uh, they wound up paying 10 million. Uh, so they paid one times revenue and it was all cash. Um, so yeah, that was the first time I realized that people actually wanted to buy something that I’d created in Japan.
Otherwise I thought it was just a huge financing headache. So, you know, back then we didn’t have startups. We didn’t have venture funds and all this sort of
[00:32:00] thing, and basically running a company at that speed. Was nothing but a headache and a risk, and nobody really wanted to do it. Um, all the big Japanese companies had already been established after the war when they had to take risks, nobody in the eighties and nineties wanted to take risks.
They just wanted a nice, safe job, especially with the bubble popping. So, um, after I sold the company, uh, which I shared by the way, with my top managers, uh, so they got half and, and I got half, I kept a brick of a hundred thousand dollars in the bottom drawer of my desk for about three months, even though, you know, it was kind of risky.
And every day I would open a draw just to remind myself that somebody somewhere wants to buy something that you think is a headache. And, uh, it taught me, it taught me a huge lesson that every asset has a value. If you can find an appropriate buyer.
[00:32:57] Aman: Yeah, that is so true. I think, uh, like,
[00:33:00] uh, in, it is said, you know, in the, in the business community today that if you can’t find money, you just haven’t looked far enough.
[00:33:09] Terrie: That’s right.
[00:33:09] Aman: who’s willing to invest in whatever you wanna do. And you just have to uplift your like outwork yourself, doubt, you know, in
[00:33:17] Terrie: Well,
[00:33:17] Aman: on knocking on doors.
[00:33:19] Terrie: back then we didn’t have that same kind of feeding frenzy, but I will say I learned a second lesson as well. And that second lesson was to always leave something on the table for the buyer. So in my case, uh, EDS, uh, grew that business to about, uh, 40 or 50 million over the next three years. And so what I left on the table was, um, a really fantastic team.
And today those team members are at the top of companies like Amazon and IBM and other companies. So, um, I’m grateful to those people. Hopefully they’re grateful to me for giving them half of the. And, um, it did set a tone, uh,
[00:34:00] where I became the first recent and certainly the youngest foreign entrepreneur to do an earn out.
Um, and that’s why I started the next company, which was job.com. The recruiting company. Uh,
[00:34:12] Aman: So let’s talk about the acquisition process and, um, of course it, it must have been like fairly simple as you to, for somebody to give you, give you the money to buy a company. But what’s interesting to me is the valuation, which is one X revenue for a, an it business, which is by default, quite scalable, uh, which had been growing a hundred percent year on year.
Uh, and it was still in, in their words, the, the, the largest, um, some that they had, the book value that they had paid for. What do. Was that typical in that Def and by the way, this, which, what year was this?
[00:34:51] Terrie: there was 1995 and the recent,
[00:34:55] Aman: Yeah.
[00:34:55] Terrie: uh, So they, they paid 15 times EBIT, uh, which was
[00:35:00] one times revenue. We, we did about 60 million yen, about $600,000 of re of, uh, EBIT. Why did they pay that much? The reason was because it was so difficult to find bilingual engineers. And at that time I had over a hundred bilingual engineers and, uh, really fantastic who’s who’s list of major blue chip companies.
So they were buying engineers and they were buying customers, uh, nothing to do with EBIT and that kind of thing. Uh, these days just for reference, um, I have an M and a business. I do fundraising and I help sell companies with my friends. And, uh, generally speaking, an it company will get one times EBIT up to maybe three times EBIT, uh, software company versus it.
A software company.
[00:35:47] Aman: is that today?
One times EBIT.
[00:35:50] Terrie: Yes, that’s right. Why? Because, uh, It is, uh, poorly regarded. If you’re in a software business, it’s a different
[00:36:00] Aman: I see.
[00:36:00] Terrie: And excuse me, in the software business. Um, generally speaking, if the company is making some profit and there is a upward curve, uh, I can get seven to 10 times EBIT, uh, for the, for the seller.
So quite a difference. Yeah. Quite a difference. Now, the other influencing factor for increasing your, uh, multiple, uh, is of course the, uh, the profit curve. So if you’ve got flat profit or goes up 10% a year, You’re gonna be on the low end of the curve. And so therefore you get a smaller, multiple, if you’re at the high end, doing a hundred percent increase a year, uh, who knows, maybe you get a hundred times, uh, multiple, uh, you know, same as a stock market listening.
Um, and there are plenty of, uh, strategic buyers here in Japan who are interested in, uh, Japanese startups for sale. So there’s quite a good market for them.
[00:36:56] Aman: That’s interesting. , because you know, maybe, maybe I I’m just,
[00:37:00] uh, a spoiled child of the times, uh, here, uh, because I’ve been in the so-called, whatever they call it, tech industry, right. Of startups and where, you know, the amount of money you’re actually making doesn’t even matter. Um, to many, to many people, it just matters the upside.
Like it’s like startups and private equity, so to speak, uh, in software tech companies, these days has become like, oh, a hundred, uh, Like zero revenue, 30 billion, you know, um, in the case of one self-driving car, which I will not name on my podcast. Uh,
[00:37:37] Terrie: Starting
[00:37:38] Aman: no, it starts with C it starts with C uh, uh, it’s a, it’s a different company it’s already got acquired for a billion dollars in valuation.
Uh, back in 20, uh, 18, uh, 17, I believe, um, uh, by general motors, uh, oh gosh, I named the company. Uh, but, uh, you know,
[00:38:00] looking at, looking at companies like these and a lot of other startups, right. Which go raise huge amounts of money, um, and then buy, like, sell out at decent, pretty decent multiples, right. Even if they’re making a loss. What are the typical motivations you would say of a company buying a startup in Japan versus what you’ve heard?
Uh, why people typically buy, pay top dollar for in, in foreign markets, which usually competition or, uh, something like that.
[00:38:32] Terrie: Well, of course there are some players who are interested in capital gains and, uh, there is roughly about 300 venture capital firms in Japan. Uh, so, uh, many of them are chasing unicorns. And, uh, you know, for those types of people, uh, a unicorn is, uh, the be all end all. And as you say, it’s the thousand bagger or the hundred bagger, uh, versus what used to be a 10 bagger, uh, back in the nineties,
[00:39:00] um, call me a bit conservative, but I think that, um, I prefer playing in a smaller space.
Um, I don’t see myself as a unicorn ever. It’s just not interesting for me. Um, as I say, I like the startup process. So for me, um, a trade sale or an IPO is the way to go. And, uh, generally speaking, I look for investors who are satisfied with a 10 X return and in return, I don’t go bankrupt. Right? So you gotta remember that for every unicorn there’s, uh, 99 companies that went under that’s a lot of people losing their money.
Yeah. And, uh, you know, again, call me conservative or old fashioned, but I’d rather try to deliver something of value than, than negative value to my shareholders. Now, in some cases, um, I’ve had to park a company and the shareholders for a while because I just, uh, don’t have the capacity or the, uh, the timing is not
[00:40:00] right for the business, but I would never consider shutting down a company and, uh, disadvantage the shareholders.
I always think about those shareholders and how I can bring value back to them. And so I would say that probably I’m not the only person who thinks like that here in Japan for that reason, because people don’t like to go outta business. In fact, I had a friend who went bankrupt, he’d committed suicide shortly after.
It’s a shameful thing. And, uh, that is a deep in the, uh, cultural. Mores of the country. And so therefore there are lots of underperforming and slow performing companies here, but people don’t blame them for that because they kind of understand the reason behind it. So yes, we have our unicorns there.
There’s far less than in the us, but people are like less risk takers than they are in other parts of the world. You know, it’s famous, right? They’re Japanese are taking risks. And so
[00:41:00] there’s, there is investment. Um, but mostly the investment that we get and that I recommend for people who are coming to Japan is strategic investment, which means from a major company or for an, an established individual.
And those people generally have two things in mind. One is they wanna create social impact. And the second one is they want that, uh, startup to help them improve their own bottom lines, uh, in their own companies. And so, you know, you’ll often get a company like Toyota, Um, investing in, uh, car parts and car technologies companies, for example.
And now of course, this is not unique to Japan, it’s all over the world, but, but as a percentage, the number of people who are after capital gains versus the number of people who are after strategic benefit, I would say it’s reversed. And so, whereas in the rest of the world, it’s 30 70 here in Japan, it 70 30 here
[00:41:56] Aman: Mm, I see. So, so 70
[00:42:00] in, uh, in the, in the sense that 30% look for capital gains and then 70% looks for strategic value from that, from that company.
[00:42:09] Terrie: in Japan. Yes. Correct?
[00:42:11] Aman: Interesting. And it’s, it’s kind of like, I mean, it reminds me how Sony, uh, companies like Sony and, uh, I think Panasonic, I’m not sure about Panasonic though.
Sony had a policy of due spending 6% of revenue of net revenue on R and D
[00:42:25] Terrie: Yes.
[00:42:27] Aman: back in the day. Uh, do you think there is like a wave effect that, you know, a lot of these companies in Japan keep investing this, this amount for strategic purposes because that cultural, like reputation, so to speak that this is what you do to be competitive.
[00:42:45] Terrie: Hmm. Well, that’s a deep question because, uh, frankly speaking, Japanese companies have not been great at commercializing their IP, but they, they are tremendous producers of IP. And, uh, even today,
[00:43:00] uh, Japanese, uh, top companies are still in the top to, uh, you know, 10 in terms of patents awarded every year, although they are dropping away.
I see that Taiwan has recently overtaken in the semiconductor space for example, but, uh, Japanese companies do invest heavily in, uh, in R and D. Now, you know, uh, what’s interesting is that that R and D often comes from, uh, foreign scientists working inside their organization. Um, I was once told that NTT, I, I dunno how true it is now, but about 10 years ago, I was told that NTTS main research group, the top researchers were all foreign PhDs.
And, uh, they didn’t like people to know about that because, uh, it, it kind of, you know, they tried to make themselves to look like a homegrown telecoms company, but in actual fact, uh, you know, the core, the kernel, uh, for their operating system is fine.
[00:43:59] Aman: Yeah.
[00:44:00] And, uh, that reminds me for any listeners who are not familiar. There’s a company called, uh, Rakuten, which is like the Amazon of Japan, and, uh, whose, uh, CEO was, , he studied in the USA. He went to Harvard or something, and this was one of the first big, large companies in Japan where the working language , the official language of the company is English.
And, uh, they have been on like, the guy has almost been on a crusade to open up Japan to, uh, hiring foreign technical talent, because most of their best engineers as well, like for AI and all these new cutting edge fields, they’re all from Silicon valley. No, uh, paid almost the same salaries that they are paid in the United States.
[00:44:41] Terrie: Uh, yes, that’s right. I, I wouldn’t say they’re all from Silicon valley either. There is a very, very good flow of people directly from India and to R 10. So, uh, yeah, Hirai MC uh, good guy. Uh, I met him back in, uh,
[00:45:00] 1998. Uh, 1998, actually, I met him in 1994 when he was first getting started. Um, yeah, he he’s done well, obviously
[00:45:12] Aman: Yeah, that’s true.
And, and of course the big elephant in the room when we are, because we are wrapping up the talk on financing is the, uh, Maan you know, or the, uh, mahi son is that I think, I believe his name is the founder of SoftBank, which is. Which has, I guess the most polarizing reputation, because while Japan on one hand is considered to be one of these companies, like countries where, you know, like you said, they like to be a little risk averse.
They’re, you know, playing the small game, like Nutanix return, of course they’re VCs, but SoftBank is like the one outlier for the whole world where they are like, they have, like, they have become infamous in a way because they have a very winner takes all
[00:46:00] kind of mindset like,
like they either, they give you a hundred million dollars, a billion dollars and they expect you to take it or they give it to your competitor. Um, what do you, what what’s so what, what I’m curious about, and this is my question to you, what is SoftBank’s reputation besides a company that does like telecoms and, and all that and robotics and stuff, besides being a, a business.
From a financing perspective, way SoftBank’s reputation in the Japanese business community.
[00:46:31] Terrie: Uh, so I, uh, for a number of years, actually, probably about 15 years have given us sort of like a mini MBA course. And I go into the psychology of Japanese entrepreneurs. Uh, in my, uh, view, there are two types of Japanese entrepreneurs. Uh, firstly, there are the so-called street fighters and then there are the so-called MBAs.
So the MBAs generally
[00:47:00] speaking are, uh, bilingual, uh, urban, um, they know math, they know finance and, uh, that’s the Mickey Tanis and of the world. Uh, the other type, the street fighters, they may or may not actually have a, an education, but they basically duke it out on the streets. And so they’re highly competitive, very noisy, uh, very in your face and continually taking risks and strong arming the competition.
And, uh, and son basically falls in that second bracket. Now why he is like, that probably goes back to his family history, right? Because as you know, uh, Japanese, um, are, well, I hate to say it, but they’re xenophobic. And, uh, basically his family hails originally from Korea. And, uh, there are many, many Koreans in Japan and many of them are successful, but, uh, Japanese, uh,
[00:48:00] establishment doesn’t really accept them.
And so just like any foreigner, because even though they may have lived here three generations and speak fluent Japanese, they’re still regarded as foreigners, just like foreigners in Silicon valley, they, they have to become entrepreneurs. Right. They have to survive. So son’s a survivor. Uh, but he’s also not just a street fighter and a survivor.
He’s super smart. And, uh, he realized very early on that the foreign connection was going to, to give him leverage. So actually I, uh, remember very clearly the point at which SoftBank became a force in the market. And that’s when some did something very, very unusual. Um, he invested, uh, in a company in California that had, um, a high speed, uh, internet connectivity over regular telephone wires.
Um, I, I just forget the term now. Uh, I’ll think of it probably as we speak, but in any case, he managed to get their modems and he bought them to
[00:49:00] Japan and he was the first person to offer high speed internet over regular copper wire. Now entity had, uh, claimed that this couldn’t be done and mahi son proved that they were lying.
And then, uh, the establishment tried to shut him down. So he did this amazing thing. He got permission to set up, uh, what we called, uh, Perol stalls in front of stations. He would get a sun umbrella and a, uh, a small desk and some very aggressive sales people and install a sun umbrella in the desk in front of train stations and start selling, uh, the subscriptions to his high speed internet.
And within a year high speed internet was all rage. Now, uh, he then got the chip set, uh, started making modems, uh, started offering, uh, network servers and everything else. And the rest is history, but, uh, 98,
[00:50:00] 99, those were pivotal years for mahi son and getting and pivotal years for a Japanese internet.
And he single handedly made that happen. So, uh,
[00:50:09] Aman: Mm-hmm
[00:50:11] Terrie: no matter what people say about, uh, Uh, here’s the type of person who has changed Japan forever. And, uh, my, you know, I, I have huge respect for the man. Um, now his organization, they’re a bunch of street fighters. I made a presentation to son once, uh, for a new software company using this new thing called the internet.
And, um, I wanted to bring Indian engineers in, uh, he loved the idea. He put it in front of his staff and then they told me after four or five meetings later, they would rather be dead than work with foreigners. And so, uh, there was this high level of, uh, xenophobia within the company and everything was built by them or it wasn’t built.
So I think son is something like, well, Putin and his
[00:51:00] army, right? Uh, what Putin wants, isn’t what the army does was saying that there was a necessarily a major conflict like that. But son was a leader. He was a general and he wanted to go a certain direction. And the other guys. Made up, made it up as they went and they weren’t a hundred percent in sync with him, but be that as it may, uh, son is smart enough that he made investments in companies like Alibaba, which of course, 20 million turned into 20 billion or 30 billion.
I don’t know what he sold it for, but anyway, a lot and, uh, Yahoo and various others. And so he became, uh, freed from the mentality in that company. And so now he’s sort of ascended to God status and other people run the company, you know, in the states they’re chairman, right. Bill gates and whoever, they still own a big chunk of the company, but they don’t have to run it anymore.
And that’s what son’s been able to achieve. So that vision fund, uh, that is something that is pure sign, uh,
[00:52:00] nothing to do with SoftBank or SoftBank. Yeah.
[00:52:03] Aman: So, um, is it that, you know, entrepreneurs in Japan feel like that is the big bank like that you go to, if you wanna, if you want money for your startup, like, is that the, the door that everybody’s crowded, crowded outside, like in the us, you have some VC firms which have the most, the longest line, you know, because they’re known to write the big checks and they’re known to be the most aggressive.
And I would assume that SoftBank of all the SoftBank is a much later stage investor, is it that most entrepreneurs don’t even get to the stage where SoftBank can actually invest in them? Like, because they give out the big checks.
Right. And they give them out all over the world. Or is it more like they’re. Like what’s, what’s going on. Like with SoftBank in Japan, uh, willing to pump money in the most aggressive companies. I’m, what’s interesting to me is that Indian entrepreneurs in India. Right.
[00:53:00] They see that, oh, we should, if we get money from SoftBank, then we are all set.
[00:53:05] Terrie: Uh, right. So you bring up a very good point that actually, uh, there is a huge gap as there are in some other economies, um, between, uh, seed and angel funding and series a and, and later stage funding. And, uh, there, there’s almost an antipathy, uh, a sort of like a reverse bias against, uh, or a bias against, uh, Japanese startups, uh, once they get over a certain size.
So there is a big. That those, uh, companies are struggling with, um, especially as they enter the growth phase, quite hard for them to raise funding. So I’m talking about companies around the 10 to 50 million run rate, uh, not run rate annual annual, uh, income revenue. So, um, I think the main reason there are not so many companies, uh, in
[00:54:00] Asia, let alone in, uh, Japan receiving money from the vision fund.
Uh, sorry, I should say east Asia, uh, is simply that, um, they haven’t got big enough and they just don’t, uh, you know, they don’t don’t don’t represent the value that somebody like SoftBank would need in order to be able to make that investment. Um, so that’s part of it. Uh, another thing is that in Japan, uh, we have a parallel funding system.
Actually. We have like three funding systems here, so, so one is VCs. Uh, one is, um, Uh, banks. And, and one, as I say is strategic strategic relationship. So with a bank, uh, if a company is willing to wait 10 years and grow 10, 20% a year, make profits after three to five years and focus on profit, um, they can borrow several million dollars by the end of 10 years at, uh, 1% interest and not have any equity
So without any equity dilution, why would you need to have a unicorn? If you can do an IPO and your own 90% of the company, you know, you’re get still getting the same value and you don’t have the pressures that you do if you are a unicorn. So, um, you know, those parallel tracks mean that Japanese entrepreneurs have a choice.
And the number of companies that wanna become unicorns in Japan is fairly small. Uh, less than a hundred, want to be unicorns. I think there’s only one, one or two unicorns in all of Japan. So, um, you know, the number who want to be versus the number who became, uh, you know, it, it’s out of sync with what’s, uh, going on in the rest of the world.
And, and again, this really just feeds back to the point that Japanese society is fairly conservative, but conservative doesn’t mean that you don’t get quality of life and you don’t get opportunities. And that sort of thing. In
[00:56:00] fact, just the opposite because it’s conservative society, there are all kinds of gaps and opportunities here for entrepreneurs and especially foreign entrepreneurs.
In fact, one thing that has become very apparent over the last three or four years is the number of accelerators, which are focusing specifically on bringing foreign companies to Japan, to tie them up with Japanese partners who are major companies who are looking for that new blood and that innovation.
So this is something very new and very exciting to see, and another incubators, 500 startups and that sort of thing all over Japan. And, uh, I would say within the next two or three years, every city of over 200,000 people will probably have a startup. So the, the, the ecological system finally is starting to move.
It’s got a lot of foreign involvement. I still see that gap in funding. Maybe some foreign fund will, you know, make big money just focusing on Japan because
[00:57:00] Japanese don’t wanna invest in their own.
[00:57:01] Aman: Mm. Interesting. So let me ask you one like blanket question in a way. I think the overall theme of this, uh, episode looking back on our conversation has been to highlight the, uh, negative points of starting a business in Japan. Like the difficulty of starting a business in Japan and growing a business compared to let’s say the Silicon varies in the Chinas of the world right now.
Let’s let’s flip the question, uh, to end on a slightly more optimistic note. What would you say if any. Are actually the plus points besides just living in Japan, which is a comfortable life. And, you know, it’s beautiful and everything.
[00:57:38] Terrie: Well, the, the number one thing is that because it’s conservative society, there is opportunity. And so there are all these gaps, uh, in technological gaps that are being filled in other countries, which are still wide open here in. So I, I think the number of business opportunities here is significant. Uh, the second thing is
[00:58:00] that, uh, Japanese customers are, um, you know, they’re trustworthy.
So, um, we have very little litigation, uh, people pay their bills. Um, they’re honest, uh, there’s very little rip off of, uh, IP. Um, it’s a great place if you’ve got a technologically advanced, um, uh, company, uh, to get started because, um, you can incubate safely. Uh, so I, I think that’s a huge advantage. Um, the third one is that Japanese major corporates, uh, very much understand that they need to acquire new tech and new innovation.
And so, uh, you know, although it’s possible to get strategic investment elsewhere in the world, generally speaking, it’s a hundred percent buyout. Whereas in Japan, the investment functions, just like a VC investment, 10%, 20%. And then, you
[00:59:00] know, an understanding that two parties will get to know each other better and start collaborating, but not the big guy consuming the little guy.
And so you can run an independent operation. Um, the fourth, uh, attractive point, you mentioned lifestyle. Lifestyle is fantastic here. It is hard to find people in Japan, but it’s very, very attractive for people from, uh, south Asia and Southeast Asia to immigrate to Japan. So actually it’s a huge plus for a company that’s based in Japan in terms of, uh, inviting, uh, technologists across with their families.
And, uh, you know, we have an Indian school, we have a German school, we have a French school, we have an American school. So basically, uh, you can either attend regular schooling, uh, Japanese. Uh, or a hybrid, uh, or go to a completely foreign school. There’s, there’s all, everything for everyone, basically, um,
[01:00:00] cost of living is quite low here.
Uh, Japanese have been stuck in deflation for, uh, the best part of, uh, well now, uh, 20, 30 years. And, uh, you know, a cotton of eggs still costs roughly the same today as it did 30 years ago. So, um, although the city, the, the cities are somewhat expensive. I, if I look at the rents in place like Mumbai or deli, uh, or, you know, an Amsterdam or wherever, um, actually Japan is a, is a steel.
And then if you’re willing to live outside of the city, especially if you’re allowed to work remote and then just come in, you know, a couple of days a week, uh, you can buy a house, a full house in the countryside. On a eighth acre block, you know, with farming space and that sort of thing for 80,000, us dollars, 50,000 us dollars.
Um, actually Japan because of
[01:01:00] depopulation has 8 million empty homes called AIA 8 million. Now, many of them are run down and you couldn’t live in them, but a number of them are not. And, and they’re just sitting there waiting for somebody to come along and rent them. So, you know, $80,000 to buy or the same place you could probably rent it for, I would say two, $300 a month us.
So, you know, with that kind of standard of living, okay, if you’re an entrepreneur, maybe that’s not necessarily a motivator, but if you are the employees of the entrepreneur, it’s a huge motivator. And you know, that plus bringing up families and, and that sort of thing, it’s a great place to do it. Um, so I would say those are the main things.
And of course, right now the Japanese unit is getting way cheap. As you probably know, uh, it’s now like one 30 to the us dollar and it looks like it’s gonna keep going down. Uh, that means it’s gonna be cheaper to hire people here in Japan as well. So,
[01:02:00] uh, in that case, maybe Japanese employees will be easier to find.
[01:02:04] Aman: That is interesting. Well, Terry, uh, of course this is a topic that I think even a six hour podcast would be, uh, too short, you know, and especially I’ll make a comment on the, on what you said about the safety of your, I.
As a business and, uh, you know, not trying to be, not trying to demonize a certain other country, but I’ve, for example, heard, um, this, this might come across like offensive to some people, but whatever. Uh, I have, you know, heard that if you’re shutting a tech company in China, which is kind of based on proprietary tech, it’s almost, uh, often before you even come out with your product, there’s a competitor using your technology, uh, in places like Xen.
It’s very, it’s not unheard of, and it’s not unusual for this to happen because they believe
[01:03:00] in this, uh, kind of, um, that technology or knowhow should not be hidden. Like it should be shared with everybody if you’re doing, if you’re creating something new. And so, and IP laws in China for instance, are not very. Very well enforced, I believe. Right. Uh, even from the government, like they, they want you as a foreign entrepreneur to share your IP with other companies and, uh, with the government themselves. So that alone is a very, very interesting plus point of doing business in Japan.
[01:03:32] Terrie: Yeah, I’ve uh, been involved in two companies in China. I, I would say it’s a much more simple thing than, than wanting to share IP. If you’re a foreigner in China, you have a big target on your back, and you’re a fair game. You’re a fair game, uh, to be attacked at some level. Um, and screwed. Uh, so, uh, unfortunately China doesn’t really have rule of law.
It has law of the jungle and, uh, the
[01:04:00] person who has the highest, uh, relationship in the, uh, in the army or in the political infrastructure or the police is the person who has to make the rules. And if you’re unlucky as a foreign company and you do business with such a person, which is generally the case, um, you’ll quickly find that any lawsuit you bring will fail.
Um, and that, you know, that’s just the reality of that particular country. Uh, China has a lot of plus points and, um, I, I do business with China, but, uh, that’s one of the negative points. Yeah. And one of the plus points for Japan, as you say,
[01:04:38] Aman: Yep. And, uh, how many companies do you run currently again? Okay.
[01:04:43] Terrie: I need to count them, but, uh, actually up and running, uh, and uh, with staff, uh, for that I’m directly directly running and another couple where I’m, uh, a director and a major shareholder, well, a significant shareholder.
[01:05:00] Aman: Okay. And, uh, tell us a little bit about your MNA business and your business of, you know, your services of helping foreign entrepreneurs come to Japan.
[01:05:09] Terrie: Uh, yeah, sure. So, um, for companies which are abroad, uh, I, I, outside of Japan, uh, I, I do market entry. Um, I will serve as a nominee director. Um, I help them with their strategy and their. uh, they’re hiring, uh, I mean, basically whatever it takes to get the company up and running. And so I’ve been involved with some pretty famous companies, um, including, uh, some multibillion dollar companies.
Uh, I won’t name them, but, uh, mostly from the us, uh, on the M and a side, um, I mostly do, uh, sales of companies that are based in Japan, uh, to other Japanese companies or, uh, to foreign firms. Uh, however on occasion, I’ve had a request from a
[01:06:00] foreign firm to find a specific type of company for them to buy. And so I’ gone out and, and, and found such a company. Um, I would also be able to help a company that is trying to sell itself abroad, uh, to a Japanese company. The only requirement is that the sell to the Japanese, generally speaking, they’re looking for customers. So if your company doesn’t already have traction and, uh, profit and, uh, a decent customer base gonna be pretty hard to sell it in Japan, even if it’s got advanced technology.
Um, and then, uh, I also help companies with fundraising. So generally speaking, when I get involved on a fundraising level, I normally take some stock in the company and then, uh, I will help them position and then, uh, you know, go after their preceded and seed rounds. Uh, so I, I will do up to series a, but not beyond that.
[01:07:00] So for that you serve Japanese companies, which are trying, which are trying to raise funds or foreign companies trying to get to Japan, to raise funds from there.
[01:07:07] Terrie: Well, first of all, I actually do fundraising for a variety of companies from other countries. So I’ve helped companies in Australia, New Zealand, uh, S Lanka, uh, not India yet. And, uh, then, uh, secondly, sorry, what was the second question?
[01:07:25] Aman: so, um, Yeah, that was the question. Like, who do you help and where do you get the funding from? Like, is that like in general, you help companies with fundraising or something specific to Japan.
[01:07:37] Terrie: Uh, well, of course I’m in Japan, so I’ll look in Japan first, but I do have a pretty decent network, uh, of international investors. Um, I’m a, uh, I’m the local ambassador for investment, uh, for, uh, deal gateway. Um, I’m also in the EO, uh, I’m entire the endo entrepreneurs.
[01:08:00] Uh, I’m a charter member actually. So, um, I have a fairly decent network of, uh, professional relationships.
And when I get a company for sale or for funding, um, generally I will go after about 20 or 30, uh, prospects. Um, so yeah, uh, basically inside and outside Japan. Um, but you know, if they’re outside Japan, typically those people pass through Japan, which is how I know them. So, especially multinationals, maybe I dealt with the president while he was in Japan 20 years ago, or something like that, you know?
[01:08:36] Aman: I see. I see. Awesome. Well, thank you so much, Terry and WG. What’s the best way
[01:08:42] Terrie: Uh, well, um, I have a, uh, website, uh, which is, uh, TerrieLloyd.com, but I have another one called terrie.com uh, both of them have, uh, contact details. Of course there’s Japan travel.com, uh, which is the main company that I’m running at the moment.
[01:09:00] Uh, so you know, that that’s one way, another way is just go on, uh, LinkedIn and look up Terrie Lloyd.
I, I think I probably come up first and such as.
[01:09:08] Aman: Awesome. Awesome. Well, thank you so much, Terry, for being with us here today and, thank you for the work you’re doing because I, I, I think we need somebody like Terry Lloyd in Japan. Otherwise it would be a headache for, people like me as well. thank you.
[01:09:24] Terrie: Well, you’re, you’re welcome. And, uh, I, I love working with Indian firms, uh, well firms from anywhere to be honest. And, uh, my, my forte is technology. Uh, so, you know, yeah, if you need a guy who’s involved in technology and finance in Japan, that’s probably me.