Tim Romero knows a lot about successes and failures. He’s built companies, seen others go bankrupt, tried to have a music career, lived in his car for awhile, built more startups, sold them and invested in others during a topsy-turvy 25 years, most of which were spent in Japan or LA. But he has never stopped having fun, describing his life as “rinse, wash and repeat.”
Originally from Washington, DC, the affable Romero (no relation to Cesar “The Joker” Romero, in case you were wondering) is one of the most well-known members of Tokyo’s startup community. He still invests in start-ups and also works as a senior advisor on market entry for SunBridge Corp, a company that assists companies entering the Japanese market (salesforce is one example). In addition, Romero finds time to write a blog and host a podcast, Disrupting Japan, twice a month, in which he interviews entrepreneurs about how the startup ecosystem can shake up Japan’s business world and what the future holds for Japan.
Japan Today hears more from Romero.
What first brought you to Japan?
I first came as a professional musician in the late 1980s but my music career didn’t work out. So I spent my days writing speeches for Japanese businessmen, my evenings playing music, and my nights dancing at Julianna’s until the first train. After two years, I returned to LA to try and revive my music career, but that went nowhere and I was living in my car for awhile. I was then hired by a Japanese import/export company, which brought me back to Japan. I stayed with them and paid off my debts. That was around 1998. After that, I quit and started Vanguard, an Internet company, doing web designing and programming. I sold it to Digital Garage just before the dot.com bubble burst. For the next five years, I was involved in at least a dozen projects and started two companies.
Do you think it is easier today to launch a startup in Japan compared to, say, 10 or 15 years ago?
Definitely much easier. Back in 1998, when I started Vanguard, people didn’t start companies like that. I had a really hard time recruiting employees. One Waseda graduate wanted to join as a computer programmer but his mother was concerned. So I had to go and meet her a few times. To her, the whole idea sounded like a scam. But he finally joined. That component has changed.
You still hear some talk about cultural factors, but it is really all about risk and reward. Back in the 1990s, the smart move for graduates was to join a big company. The pay was better and there was no downside. Starting your own company, even if you were successful, was all risk. That’s changed now. Guys graduating from college know there is no lifetime employment, unless you go into the government.
Another difference I notice today is that while there have always been lots of foreign entrepreneurs, now there are more Japanese, especially women. At some startup events in Tokyo, 25-30% of the participants are women. Entrepreneurship is a really good avenue for women in Japan. It lets them bypass biases and traditional culture.
How do you think startups will change the corporate world in Japan?
Startups will put pressure on the big companies to change. Of course, Japan will still need the big companies, but the innovation, pace of change and breaking of hierarchy are what start-ups are doing from the bottom up. M&As are becoming more common within the startup community. Before, if a company in Japan bought another company, it was generally because the company being acquired had problems. Now, we see companies with CEOs in their 20s or 30s and they, in turn, are investing in the next generation of startups. With that financial power comes a lot of social changes and these entrepreneurs have the resources and credibility to do it.
What do you think are the most common mistakes that sink startups?
The most common mistake is probably not getting outside validation of your idea soon enough. People come up with brilliant ideas and they’ll work on it, refine the product, get it polished, and then they’ll show it to a potential customer who might say, “That’s good, but if it could do this instead, that would be better.” So they end up going down this blind alley.
What would you suggest then?
If you think you’ve got a good idea for a product, talk to the people who would be the customers. Find out if they would use your product or service. If they say yes, then you are on the right track. After that, you have to make a decision. You can either go to an incubator which may give you about 5 million yen for 5-10% of your company. That can be good for first-time startups. Or you could get some customers first and then take it to a regular venture capitalist who will bring in a lot more money for a lot less.
You had some failures in your early days. How did you bounce back?
I had a lot of ups and downs. It’s not easy going through it, especially when you have friends who no longer return your phone calls and you have to lay off employees. For me, it’s being able to look back and know that there was always a way to turn my life around.
What are you working on these days?
There are 4-5 startups that I am invested in. I am also working with SunBridge Corp as a senior adviser on market entry, consulting with foreign companies trying to come into the Japanese market. That takes up most of my time. I go to San Francisco where a lot of our clients are based.
Tell us about your podcast.
It’s called Disrupting Japan, and I came up with the idea last summer. There is this overseas image of Japanese entrepreneurs being salarymen. But the truth is there is very little difference between startup founders in Tokyo, San Francisco, New York, London or wherever. They are birds of a feather. The other thing I saw going on in Japan is that entrepreneurial companies of the past like Honda, Sony, Rakuten, SoftBank were founded by true entrepreneurs, certainly. But there is this “great man” mythology that they were able to succeed because of their superior business acumen and that it’s not something that can be taught. People think they pulled the ladder up after them. That’s just not true.
So I thought a podcast would be a good medium to discuss this and to hear Japanese entrepreneurs explain in their own words how they decided to take a few chances. I try to make sure each topic is different, find a real story behind each one and bring out the subject’s unique insight. I do it every fortnight and it has become so popular that I am actually turning people down. Coming up are Hiro Maeda of Beenos on the topic of what makes a good or bad incubator, and Brandon Hill of btrax, talking about why Japanese and Western design are different.
Are you optimistic about the Japanese economy? What do you think of Abenomics?
I think Abenomics itself is overhyped. It is just a loose monetary policy. We’re seeing asset inflation and the market goes up but you have to pay the piper one day. However, I am optimistic because I see this avenue for disruptive change taking root in Japan. Today’s generation of entrepreneurs is very different from 10 years ago and they are willing to take chances.
Japan has gone through two economic miracles in the past 100 years – the Meiji Restoration and the postwar reconstruction, both times effectively starting from zero. Japanese are very resilient and have a great ability to persevere. We saw that after the Lehman Shock and the earthquake. I still remember on the night of the earthquake how remarkable it was to see 5 million people walking home. There was no chaos, nobody looted shops. That would not have happened anywhere else on the planet. Everyone was polite and orderly. I have a lot of faith in this country.
How do you like to relax when you are not working?
I can’t lie on a beach for three days. I play a little bit of music and I go to the gym. My hobbies are weird side projects I am tinkering with, even though most don’t lead to any companies but it’s fun. My wife is very tolerant of the strange tangents I go off on.
What gives you the most satisfaction from your work?
I’m never bored because every new startup I get involved with is very different and that’s exciting. Any time I feel like I have been a part of a winning team working with a group of committed people, I feel great. That’s what keeps me going.
For more information on Romero’s podcast, visit www.disruptingjapan.com or read his blog at www.t3.org.© Japan Today