Jun 18 2019 7 Myths About Working At A StartUp in Japan
For foreigners who are looking to work for a startup in Japan, you have probably stumbled upon different negative connotations about working at a startup whenever you search about it online.
Japan, being a country where tradition is kept alive and sticking to tradition is the norm, can come a bit conservative when the topic of careers are discussed. Most people think of startups as “Plan B” or they have this stigma of failure attached to it. But times are changing and it’s good news for the StartUp scene in Japan. StartUp funding are more than doubling and in 2018 it even reached around $3.5 billion. This just goes to show that investors are taking the risks and investing their money probably for the hopes of finding the next unicorn, such as Mercari, in Japan.
So StartUps are NOT dead, definitely not in Japan. Now let’s dive into each myth that people often attach to working at a startup.
7 Myths about working at a startup in Japan
1.) Most startups vanish after 3 years
Stability is one of the biggest concerns when it comes to working at a StartUp not only in Japan but everywhere in the world. That is probably why this myth even exists.
The dreaded question about whether StartUps in Japan survives or not is best explained using the graph from Eurostat and Office of National Statistics. One look and immediately you can compare Japan from other western countries such as USA, UK, France and Germany. Japan is actually doing very well in terms of survival rate. Pass the 3 year mark 91.5% of StartUps still survive. Even after the 5 year mark Japan is strong at 81.7% while other western countries in comparison are below 50%. So in reality, Most startups DO NOT vanish after 3 years. Majority of them actually survives.
2.) Working at a startup is disorganized and unstructured
If you compare large corporations that have been present for more than 20 years and a startup, it would be quick to judge and say that startups are disorganized and unstructured. The reality however is different. Startups thrive in a trial and error environment. Depending on the type and need of the business to function, starting these businesses usually they begin with 5 members and gradually grow into a bigger team with different departments. They actually use structures that cater to their business’ needs and whatever works best for the phase they are currently in.
These are some structures that are commonly used by startups:
A.) Flat Organizational Structure – Just as the name suggests, this organizational structure is constructed with few or no levels of management between the staff and the managers of the company. This promotes higher accountability and decision-making rights within the company.
B.) Agile Organizational Structure – This model is widely used not just by startups but even by large companies like Apple. Most Tech startups adopt this model because they focus their improvements and decision making to a more customer based approach and they pay extra attention to the hottest tech trends that is constantly updated. In an agile organization, the company is quick to respond to changes or alterations by making fast decision cycles and keeping on top of new tech innovations.
C.) Teal Organizational Structure – This is probably one of the newest structures some people might not be aware of but is a trend when it comes to startups. In this type of organizational structure, the hierarchical aspect is removed from the company. In this organization structure, people are given empowerment and is expected to work towards a shared purpose(of the company as well) that goes beyond profit making. The philosophy revolves around self-management, wholeness and drive for purpose.
D.) Holacracy (Decentralized Management) – Holacracy is more of a management structure that revolves around flexibility and distribution of power contrary to the conventional top-to-bottom operation management. This gives individuals an opportunity to self-manage and promote autonomy. Innovative meetings are conducted based on the need and urgency for a quicker execution and delegation of tasks or improvements. This type of structure thrives in a transparent environment and evolves as the organization evolves.
E.) Objectives and Key Results Framework – OKR Frameworks is a popular management strategy for a goal oriented environment. The aim of this framework is to be able to convert the goals into measurable targets and results. This aims for the team to work in a unified direction and by using this framework, there is a check and balance if the goals are being achieved, the targets are being met and each progress is moving to a unified direction.
Yes, you can mostly tell the difference between the structures of large companies and startups but this does not mean that there is no structure at all in startups. Startups just tend to shy away from traditional and conventional methods because other simpler structures works well for them. They are often times more flexible and evolves to what their company needs in each state they are in. Startups have structures, you might just be used to traditional ones but that doesn’t invalidate modern and innovative organizational structures and management methods.
3.) You won’t earn much working at a startup
The biggest concern for people who want to join startups besides stability status is if the pay is good. People often have this mindset that large corporations pay well and offer good benefits. This isn’t wrong but if we take a look at all the aspects involved, you will understand that in general startups offer a reasonable salary and greater opportunity to advance quickly depending on your skills. These are the 3 factors you should consider when it comes to overall compensation.
A.) How much is the actual offer?
In corporations and big companies, they often still base your salary on your previous salary and sadly, your age. This is not the case all the time but it still happens, most especially here in Japan. What’s good about startups is since they start small, they focus on getting their candidates based on their skills, expertise and experience. They also understand how competitive the job market is so they do not skimp on the salary.
|Sample of Companies who participated in the Survey|
|DMM. Com Inc.|
|Fringe 81 Ltd.|
In a research conducted on June 2017, they surveyed 63 VC companies and it came out that the average salary they offered for fresh graduates are around ¥290,000/month and ¥3, 820, 000/year. This might be even higher than what listed companies offer new graduates. So it doesn’t mean just because it’s a startup, the salary will be low.
B.) What else can you get besides the monthly salary?
The good thing with startups is that they sometimes offer their employees a chance to buy stock options before initial public offerings. This gives the employees not only another source of income but as well as a sense of ownership of the company. The employees are more motivated to keep up the good work and bring up the overall market value of the company. This is more difficult to avail for bigger companies and much more expensive.
C.) How does my chances of advancing my career look like at a startup?
In larger companies, the opportunity of promotion is present but is set by traditional methods which usually takes a little bit longer than in smaller companies. At startups you can greatly feel the impact of your work. Since the team is smaller and the responsibility is bigger, your ideas and efforts directly impact the status of the company, their products and services. This opens up doors for immediate promotions or faster pace of career growth which might be difficult to do in large companies. There are also bigger opportunities of shaping your career path within a startup if you are motivated and willing to show the company that the role you desire is relevant and you are capable to take on the job. This of course leads to a better pay and position.
At one glance you might think that you won’t earn much at a startup. The reality is that investing in startups is an upward trend, as you can see from the first graph of this article. This means startups have money and they are willing to spend it on quality candidates. They are better opportunities for advancement and even possibilities of stock options. You can earn as much at startups, maybe even more.
4.) Everyone who works at a startup is under 25
It’s understandable how some people are concerned with the age of the people they are working with. The rationality behind it might be because they would like a more serious work atmosphere or that they feel a sense of security when working with senior employees that have years of experience.
|MONEY FORWARD, INC.||218||32.6||614|
|EXCSITE JAPAN CO., LTD.||219||36||584|
|MINNA NO WEDDING||110||34||549|
According to this 2017 finding, It shows that the average age of employees at startups in Japan is actually around 30.3 years old. This is an average so yes there might be young employees but that is not to say that startups do not have senior level employees.
|Company||Number of Employees||Average Age||Average Annual Income
|Digital Garage Company||450||35.8||6,160|
|RareJob , Inc.||109||35||5,890|
Source: Yahoo Japan Finance as of January 2019
If we take a look at the data from Yahoo Japan Finance, January 2019 record shows that the average age among these startups are actually 30 years old or higher.
To summarize it, the connotation about startups mostly having employees who are under 25, is not true. Startups are not just about growing their company in member numbers but being meticulous in finding the right member of their team.
5.) There is no work-life balance at a startup
When you join a startup, you will most likely be doing multitasking and handling a lot of projects but this does not mean that you will be overworked and burnt out. Startups in Japan are actually finding more ways to implement work-life balance. They are becoming more and more innovative when it comes to figuring out solutions that are far from conventional methods of big companies.
Some of the well known efforts made by startups to promote work-life balance:
A very good example is a company called Castor in Japan, wherein 90% of people do remote work.
Travelience, a startup company, encourages their employees to take a 1 month (unpaid) travel leave.
Another StartUp called Crazy Wedding, has a benefit of having unlimited travel leave called “Great Journey Leave.”
A VC company called Cybozu, Inc. has up to 6 years maternity/paternity (which in average people take 2 years leave)
-Encourage Side Projects/Side Works
And many more…
These efforts are not entirely new in the western work culture, but in a conservative country like Japan this are definitely and exciting improvement. Startups are known for their flexibility and constant work environment improvement. Since they start small, they do take effort and ensure that they take care of their employees well being.
6.) All startups are in the tech sector
Popular startups are usually tech startups so it’s easy to judge that all startups are on the tech sector. In reality this is not the truth. There are various sectors startups are involved with. We have human capital, travel, healthcare and many more. Although technological innovations are incorporated and applies, StartUps doesn’t necessarily equate to the tech sector.
7.) You need excellent Japanese language skills to join a startup
If you want to work and live in Japan, there is no denying the gravity of the need for Japanese language skills. Before you move in Japan, above anything else you should be aware that there is a cultural difference and a language barrier. This doesn’t mean that it is impossible. Depending on your skills and expertise, you could actually work for a startup in Japan. Here at Active Connector we also curate job positions that are perfect for skilled foreigners. They usually require 0-Beginner Japanese language skill level.
Click IKIGAI to browse NO Japanese Required Jobs.
If you want to watch our webinar wherein we go into further details about the 7 Myths about working at a StartUp in Japan click the YouTube video below.
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