How to Enter the Japanese Market: Partnering with Japan’s Top Corporations for Startup Success

Jan 23

By Mike Kim, Founder of Gradient Consulting

Elon Musk once said that his interview question for candidates is always the same: “Tell me the story of your life and the decisions you made along the way and why you made them. Also, tell me about some of the most difficult problems you worked on and how you solved them.” Musk elaborated on his comment saying that people that really solved a problem know exactly how they solved it.

In this article, I would like to share “how” a foreign startup can successfully engage in business with Japanese corporations. One year ago, I wrote an article titled “Top 20 Japanese Companies for AI Startups to Watch in 2024.” These companies represent some of the most influential players in Japan’s business landscape and partnering with one of these companies can lend enormous credibility and open doors for your business across the region. I’ve personally conducted hundreds of meetings with companies on this list and have successfully led or facilitated business deals with about half of the Top 20.

Over the past year, the article gained traction, and some readers have expressed, “Yes, I want to sign two or three marquee Japanese companies as customers within the next few quarters.” However, they don’t know how to efficiently go about it with high confidence that success is waiting for them on the other side. Startups have limited resources and need to focus. CEOs, Chief Revenue Officers, and Heads of Sales need shortened sales cycles to more quickly add revenue and customer logos for their board and investors to show traction for their new product.

You may have seen marquee names on the Top 20 list I’ve shared, such as Hitachi and Honda, and concluded, “As a startup, I don’t have a lot of time or resources to waste. I need to efficiently get customers to demonstrate traction to my board.”

Now, in January 2025, I’m sharing the “how” for AI startups and companies interested in engaging with large Japanese corporations. Given Japan’s attractiveness to foreign startups—often the largest buyer of U.S. technology outside the U.S.—this article uses Japan as a case study. My approach highlights six key considerations at a high level rather than providing a step-by-step guide.

1) Target the Right Japanese Companies

The Top 20 list I curated focused on large, forward-thinking companies with a strong track record of openness to new technology and foreign startups. I included companies with budget flexibility, English-language support, and willingness to work with non-Japanese entities without requiring translators. Starting with companies that lack these qualities can lead to inefficiency, frustration, and wasted resources. Instead, focus on high-probability opportunities.

2) Start with Japanese Companies That Support English

Your path to revenue will accelerate if you engage with Japanese companies that have English-speaking representatives. Many bilingual professionals in Japan have worked or studied abroad and are positioned specifically to collaborate with foreign startups. Early-stage startups, with limited resources, should avoid relying on translators or a single Japanese-speaking team member, which can increase miscommunication and costs. Start with companies where communication flows smoothly in English. Once you achieve three to five customers or $500,000 to $1,000,000 USD in annual revenue (for a software SaaS company, hardware numbers would be different), you can expand to Japanese-speaking companies and hire the necessary staff in-country.

3) The Digital and Innovation Teams Are Your Best Friends

Within Japanese corporations, digital and innovation departments are excellent entry points. On one hand, you’ve heard the positive stories of entering the Japan market. On the other hand, you’ve heard the stories that it is incredibly hard due to different geography, language, culture, and business practices. It can be overwhelming to attempt to navigate a major Japanese corporation from another country. Digital and innovation teams oftentimes have the role of scouting and sourcing startup technology while maintaining connections with internal business units. If you have a specific buyer (e.g., the supply chain division), go directly to them. Otherwise, working through a central team is more efficient, especially in companies with over 100,000 employees.

4) Execute Best-in-Class Sales Methodology

Sales and business development expertise is essential for advancing conversations and closing deals. Your team’s ability to navigate and adapt to the unique challenges of selling to Japanese corporations will play a significant role in your success.

5) Conduct Business In-Country According to Local Customs

How can you operate as a U.S.-based startup while respecting Japanese culture and business practices? My executive coach, Craig Tegel (founder of People Make the Difference and Former Adobe President of Japan & Asia Pacific), often emphasized striking the right balance between adapting to local norms and maintaining your identity (an American in my case) and your company’s identity (e.g., an American startup that has large revenue goals with high expectations from investors and the board).

This is a nuanced topic that deserves careful consideration. I recommend having an advisor or consultant who can be your boots-on-the-ground guiding you.

6) Conduct Thorough Japan Market Research

Before targeting Japanese companies, conduct comprehensive market research. Assess the demand for your technology, identify potential industry matches, and analyze competitors. Existing conversations and inbound leads from Japan can provide qualitative evidence of interest. Additionally, consider in-country dynamics that may accelerate your revenue. For example, Japan’s focus on natural disaster management could create opportunities for solutions addressing typhoons, floods, or other challenges.

Conclusion

Breaking into the Japanese market as a foreign startup is challenging but achievable with the right approach. By targeting the right companies, prioritizing English-speaking partners, leveraging innovation teams, mastering sales methodologies, respecting local customs, and conducting thorough market research, you can position your company for success. Stay tuned, as in my next article, I’ll share a specific case study featuring a startup client and how we’re successfully signing Japanese corporations as customers and forging future partnerships.

If you would like tailored advice on navigating Japan, Korea, and the Asia Pacific region—whether it's targeting the right companies, advancing customer relationships, or building revenue-based strategic partnerships—don’t hesitate to reach out.

Mike Kim