Don’t Be Fooled by TechCrunch
Ryuichi Nishida, a writer at TechCrunch Japan, published this great post (in Japanese) warning the domestic entrepreneurs about taking the words directly out of TechCrunch without understanding fondamental differences between Japan and Silicon Valley.
In his post he mentioned the below points often mistaken by the aspiring entrepreneurs so he gave thoughtful advises to them.
1) Far less acquisition activity in Japan (hence it is not a practical exit option.)
2) Convertible Notes should be treated as debt. They have greater benefits for investors, not for entrepreneurs in general.
3) No need to copy Silicon Valley businesses because you as a domestic entrepreneur don’t have to.
While I agree with all three points, I also saw countless number of domestic entrepreneurs in the past trying to apply the things that are only valid in the Valley. These entrepreneurs almost always have a great vision in the beginning just like ones in the Valley, but they will soon or later realize their businesses won’t go anywhere due to lack of available exits. This is particularly true if the business has no revenue stream.
In the Valley not all startups have revenue stream. Perhaps they still do successful exit mostly through acquisition by the larger business entities or sometimes by their direct/indirect competitors. I often brought up GroupMe as an example of recent startup which did very successful exit without making a dime in revenue. This kind of exit is only applicable to the startups based out of the Valley or by the acquirers based in the same area.
Now taking a look at our startup project Coworkify we are currently building the entire service in English. If we were to incorporate with some exit strategy in short period of time, we will choose the places other than Japan. Why? It’s because of the above points mentioned by Mr. Nishida.
Although we believe our service is unique and definitely needed by the certain amount of people, it doesn’t mean we can follow the same path as those startups in the Valley. If we want to do things like a Valley startup, we have to become a real Valley startup. Otherwise, what you read at TechCrunch has nothing to do with your startup.
Lastly, Mr. Nishida concluded his post by saying the domestic entrepreneurs should focus on the kind of services that solve a real problem instead of producing gourmet, fashion, social apps that already exist. Needless to say, we are focusing on the former.