Make More Money Giving Away Stuff for Free

If your business is not selling as you wish it would or if you are not getting the page hits or enough people to sign-up for your e-mail magazines, then let me suggest to you that you increase sales by starting to give away stuff for free...

You read correctly. Free.

"What!? Rogers, are you out of your mind? We aren't making any money now as it is... We can't afford to give stuff away for free!" I can almost hear you say it...

Trust me, you do not have to give away the entire store, but I suggest that if you want to get good internet page views and good traction, then start giving things away for free... That not only includes great internet content for free, but also product or services. For a good example of a page that does everything for free, check this... I typed in "free" on a Google Search and this was #1: free.com

How New Companies Can Succeed in Japan - And How They Fail

Many new companies, especially in IT, think that to make it in Japan, all they need to do is release a Japanese language version of their product... They couldn't be further from the truth. Japan is an entirely different animal.

To succeed in Japan, of course a company needs a Japanese version of their product, but just that won't do the trick. They'll need experienced, well-connected PR and Marketing in Japan or the best solution is a Japanese subsidiary. 

On top of that, the new company product/service will probably only have one chance to do their initial product/service release right in the Japanese market. Their first release is their Golden Chance in Japan.... It could also be their only chance in Japan. 

If a company blows their initial release of the product/service in this country, the company will most probably not succeed here. Ever. No matter how much money is spent on PR and advertising. 

Many before who have made this mistake have tried to recover and failed; even ones with multi-million dollar budgets. A good case in point is Pepsi Cola. Pepsi spent tens of millions of dollars and twenty years for terrible results.


Now, they've finally gotten smart and tied up with a Japanese beverage maker so their prospects are better... Why didn't they do that from the start? Disney, Coca-Cola, McDonald's, and many others did. 

Why did Pepsi even bother to try to reinvent the wheel?

How to correctly handle a new product or service release in Japan?

A new company/product/service will need to appoint somebody in Japan to handle PR for them in Japan - or set up a subsidiary - and work with that company to make a plan. 

A necessary part of any good plan of attack would be that the representatives in Japan arrange meetings with major media at least 1 - 2 weeks before Japanese release day, as pre-press release. This is critical.

If this sort of ground-work is not fully prepared by the company and their reps in Japan, I strongly suggest that the company postpone the release of the product/service (or fire their representatives and set up a competent company) and then get properly prepared. If this sort of pre-press release is done correctly, the Japanese media will then follow-up and prepare and study the circumstances of the product/service and company so that they may be able to publish and provide better information for the Japanese audience (don't forget that the Japanese media are competing with each other, too, to provide up-to-date concise information, so this has to be done. No short-cuts here). This is critical for the success of any new company in Japan.  

Even after years of repeated failures by various companies, to this very day, foreign companies come to Japan and repeat the mistakes Pepsi Cola and Seven-Up made decades ago. Some recent examples are Linkedin; E-Bay Japan, Paypal, and a few others. (I strongly suspect Sugarsync is about to make the same mistake too!)

Take, for example, Linked-in. Linked-in came out with a Japanese version quite a while back but no one here in Japan uses it because no one knows about it; they had no local representation; no pre-press release information. 

Kind of shocking, when you think about it; a supposedly forward thinking company coming to Japan and making such an amateurish mistake. 


E-bay is another example of a successful service in the west which came to Japan and completely flopped because of not having experienced people on the ground in Japan. Neither Linked-in nor E-bay Japan will probably ever recover... 


No, not probably... There's no way they will ever recover here.

Sad. Had they thought about what they were doing and not tripped over the half-dollar in order to pick up the penny, they probably could have partnered with a huge Japanese company - or set up a subsidiary - and been worth hundreds of millions of dollars in Japan alone by now. 


The situation today? I only know of one other person besides me who even knows that Linked-in has a Japanese version. People know what E-bay is, but prefer Yahoo Auctions by a laughable margin. 


Oh dear! Linked-in and E-bay blew it... and in the second largest market in the world. I wonder how this will affect their stock price? 

Why won't they recover? Well, because they already launched and flopped... They are not newsworthy, except as failures. If the Japanese want to read about failures, they'll read about their politicians. 

An example of a successful Japan launch recently was Evernote. The PR company which handles that was able to get Evernote into Sony so that Sony scanners come pre-installed with Evernote. 

A Japanese language release might have some sort of plan like this:

1) Setting the Key Concept for Japanese Market 

2) Arranging Press Releases for TV, Internet, Papers and Magazines promoting the URL and product/service

3) Press conference for Japanese Market 

4) Make a presentation to major Japanese companies in order to obtain a major Japanese corporation as partner for the Japan market

In Conclusion

Japan is the #2 market in the world... Being lazy and trying to break into this market without understanding the underlying differences between the Japanese psyche and the west is a sure fire recipe for failure.

Pepsi, along with many others, failed... And they spent tens of millions of dollars... Don't repeat these mistakes. Why not make a little effort and find the people who can help you? You do need Japanese representation here on the ground, in Japan, to make your product/service a success.


Remember that success is 80% preparation.

Many others have already shown you how to fail... Here is written the best way to succeed... Will you learn the lesson?

This article was written in consultation with Koji Kamibayashi (who founded TXBB and 4 years later set up IPO with annual sales of over $70 million USD and Tim Williams who founded Value Commerce (IPO with over $50 in sales annually). Thanks guys!

Happy Thanksgiving! Sony and Panasonic are Junk! Japan Has No Leadership! Mish Shedlock Spells it Out!

Happy Thanksgiving! May the rest of this year see you and yours healthy and prosperous!

My son and daughter along with two friends (Ko & Takashi) visiting us for turkey in 2010

Yesterday, I posted about how messed up the Japanese economy was in "Japan is Collapsing." The response to that article was amazing. Thank you... Too bad the article contents are true.

Interestingly, just two nights ago I had dinner with some high ranking executives from Germany's biggest television network. They were in Japan on a fact-finding mission and had visited several Japanese corporations who told them all sorts of nonsense stories (spin) about Japan.

The most ridiculous one was given to them by a spokesman from either Nissan or Docomo (they couldn't recall which company told them - Jet lag and all). The spokesman told them something along the lines of, 

"The Japanese work so hard because of their samurai ancestors."

I was asked by several of the visiting German delegation if this statement was true. I told them it was "...total and complete bullsh*t!"

Actually, I've heard this "samurai ancestors" romanticist nonsense before. It's not true at all. Folks, there might be only a handful of people in Japan who have "samurai ancestors." 95% of all Japanese have peasant-class ancestors and the other 5% or so have merchant class ancestory. The samurai were low-class paid killers and "worked" (if you call it that) for money killing people or being body guards. Their only dedication, generally speaking, was to whoever paid them the most. 

That certainly doesn't translate into long and hard hours sitting at a desk all through the 50s, 60s, 70s and 80s that most Japanese dedicated during the so-called Japanese economic miracle.

And a big reason that Japan is messed up today is that she doesn't have the people with the leadership qualities like she used to and her people don't work hard and dedicate the long hours like they used to. For more on that subject please refer to: Why Korea Beats Japan:

"...the biggest problem for Japanese companies versus Korean companies in manufacturing may not be simply issues with design and ease of use, but it has a lot to do with corporate culture in Japan.

Frankly speaking, from what I've seen, Korean companies will continue to beat Japanese companies for the long foreseeable future. There's no way out. Why? Because inside a Korean company, there are no factions fighting for position like what goes on at a Japanese company. Also, Japan doesn't have the leadership it once had; there are no more good leaders, definitely in politics and there is a terrible shortage in business in Japan too.

My Samsung friend put it this way, 

"At a Korean company everyone is on the same bus and we are all going the same way. At a Japanese company, the leaders have a very difficult time getting everyone pointed in the same direction."

He's absolutely right. 

At a Japanese company groups are struggling within, and against each other, to gain power. At Korean companies, I think they feel it is "Korea versus the world!"

When I worked as an executive at a major Japanese TV station subsidiary, I saw a consistent in-fighting between three or four factions for power. When faction "A" would come to power, the other factions seemed to not put in their best effort. In fact, I saw times when the other factions would actually drag their feet and become a hindrance to the efforts of the group in power.

It was infuriating to me as a foreigner who wasn't inside of any group to see people protecting their friends and their position as the number one work priority rather than the success of the company business or the project. 

It seems to me that the success of the project would automatically protect one's position. But no! These folks wanted success for sure, but only if their group was the one in power when that success occurred.

I saw this same problem at a Sony subsidiary, another TV network I worked at in the mid 80s ~ early 90s; and you can readily see this same problem in Japanese politics anytime anywhere.

I was, and am still to this day, astounded at the immaturity of some of these people." 

I wrote that article at the end of September. It's been only two months but I only see things getting worse.

Also the other night, the COO of the German television network told me that he still thought Sony was a great corporation. I told him,

"You do know that Sony lost a billion dollars last year?"

He said nothing and drank his wine. Sorry to burst his balloon.

That was a few nights ago.... 

This morning I wake up and the first thing I see is an article that the ratings agency of Fitch has cut Sony and Panasonic's stock ratings to "Junk" (what timing, eh?): 

The agency slapped a speculative rating on each firm, pointing to their weak balance sheets and declining position in the global electronics sector.

Fitch said it cut Panasonic by two notches to BB, while it slashed Sony's rating by three notches to BB-, with both firms given a negative outlook.

"The downgrade reflects Panasonic's weakened competitiveness in its core businesses, particularly in TVs and panels, as well as weak cash generation from operations," Fitch said in a statement.

"It also reflects the agency's view that the company's financial profile is not likely to show a material improvement in the short to medium term."

Fitch also cast doubt on Sony's prospects, saying a "meaningful recovery will be slow, given the company's loss of technology leadership in key products, high competition, weak economic conditions in developed markets and the strong yen".

Panasonic was also downgraded to one level above junk by Moody's earlier this week.

I just wonder what took them so long to downgrade these companies... All they had to do was to go and check out and talk and work with the people I do and they'd have known 5 years ago that Sony was headed for the trash-can. Heck, when Sony unveiled their MP3 player that was to compete with the iPod years ago and called it the "Walkman" you knew they were out of good leadership and good ideas. 

Look for Sony to be emblematic of the rise and fall of Japan's economic miracle.

-------

This morning, I also received a mail from my good friend Mish Shedlock and he wrote that I could reprint his entire blog post about Japan (that I referred to yesterday) in full and I wish to do so here. Mish has the most wonderful insights and I find his blog to be a "Must Read" everyday. I think you should too!

Doorsteps of a Currency Crisis; Economic Illiterates Debate Monetary Policy; Monetarist Mush 

Japan's grand experiment of decades-long QE coupled with Keynesian foolishness is about to take one last gigantic leap forward before it plunges straight off the cliff into a massive currency crisis.

Please consider the New York Times article A Call for Japan to Take Bolder Monetary Action 

 For years, proponents of aggressive monetary policy have offered this unusual piece of advice as a way to end Japan’s deflationary slump and invigorate the economy. Print lots of money, they said. Keep interest rates at zero. Convince the market that Japan will allow inflation for a while.

Japan’s central bankers long scoffed at such recklessness, which they feared would ignite runaway inflation. But now, the bank’s hand could be forced by an unlikely alliance of economists and lawmakers who have argued for Japan to take more monetary action after more than a decade of weak growth and depressed prices.

Championing their cause is the former prime minister Shinzo Abe, who is favored to return to the top job after nationwide elections next month. Otherwise deeply conservative, Mr. Abe surprised even his own supporters by calling for the Bank of Japan to be much bolder in tackling deflation, the damaging fall in prices, profits and wages that has choked Japan’s economy for 15 years.

In escalating remarks over the last week, Mr. Abe has said that he will press the Bank of Japan to act on government orders if his Liberal Democratic Party wins the Dec. 16 election and even rewrite Japanese law to reduce the bank’s independence.

In a speech in Tokyo on Thursday, Mr. Abe said he would call for the Bank of Japan to set an inflation target of 2 to 3 percent, far above its current goal of about 1 percent, with an explicit commitment to “unlimited monetary easing” — an open-endedness that has caused jitters among some economists. The bank’s benchmark interest rate should be brought back to zero percent from 0.1 percent, Mr. Abe added.

He went even further over the weekend, saying in the southern city of Kumamoto that he would consider having the bank buy construction bonds directly from the government to finance public works and force money into the economy, according to local news reports. That raises concerns, however, the bank may be called on to bankroll unrestrained spending on more roads and bridges that Japan does not need.

Economists cite several missteps by the central bank that have entrenched Japan’s deflationary mind-set and made consumers and businesses wary that the bank’s policies will stick. In early 1999, as the country’s economic woes deepened, the bank lowered a benchmark interest rate to virtually zero and said it would keep rates at zero until deflationary concerns disappeared. But an economic uptick in mid-2000 caused the bank to raise that rate to 0.25 percent despite protests from the government that the move was premature.

Monetarist Mush

Anyone who thinks an interest rate hike from 0% to .1% or even .25% has much influence on economic growth has "monetarist mush" for brains. Seriously.

The NYT does not name the economists, but I have no doubt they exist. Highly respected (for no reason) Richard Koo is one of them.

I have written about Koo on numerous occasions. From Japan's decade long experiment resulting in public debt of a 1,000,000,000,000,000 yen (a quadrillion yen), Koo reckons Japan failed to defeat deflation because it did not do enough!

Japan is in a crisis alright, and it was entirely self-made, by politicians listening to clueless economists all begging Japan to do something.

One Thing Worse 

Central banks are bad enough on their own, but history shows that one thing worse than central banks acting on their own is central banks acting under control of politicians.

 Committing to a little inflation will push stock prices higher, while a weaker yen will bolster Japan’s exporters and strengthen corporate balance sheets. Incomes will rise, fueling consumption and raising tax revenue for the government, said Kozo Yamamoto, a lawmaker of Mr. Abe’s Liberal Democratic Party.

“Basically, it’s what the Bank of Japan should have been doing for the past 15 years,” he said. “A few percent of inflation is nothing to be worried about.”

US Populist Position

It's not just Japan loaded up with populist fools. The US has its share of them as well.

For example, Ellen Brown wants to end the Fed and put California politicians (state politicians in general) in charge of printing money to support "growth" as well as union causes.

As I have said, the one thing worse than having a Fed in charge of monetary policy is having politicians in charge of monetary printing!

For a discussion and an absurd video by Ellen Brown, please see Lawmakers Threaten to Take Over Monetary Policy

Economic Nonsense Regarding Inflation, Consumption, Wages

Kozo Yamamoto preaches widely believed economic nonsense.

Inflation will not raise consumption. People do not stop buying things just because prices are falling. Computers are proof enough. Prices of computers and electronic goods have been falling for decades, yet every year the volume of merchandise sold reaches skyward.

History suggests people buy things when they need to or want to not just because prices are rising. Government interference and tax breaks can shift demand forward by a few months (for no real economic benefit of course). There is only so much room to store things.

How much food or clothing can you store? Will you buy a coat you do not need, just because prices are going up?

US QE Example

Take a look at the US.

QE has put a floor (for now) on asset prices but it has not done a damn thing for wages.

I discussed this at length with Lauren Lyster on Capital Account on November 3: Mish on Capital Account: Jobs, Real Wages, Income Distribution, Fiscal Stimulus

I come in at about the 3:00 mark, but the first few minutes of Lauren are entertaining as usual.

Average Hourly Earnings vs. CPI 

Average hourly earnings has been falling for years and lagging CPI inflation since September 2009. Simply put real wages have been declining. Add in increases in state taxes and the average Joe has been hammered pretty badly.

If inflation and QE forces wages and hiring up, then why didn't it?

The fear for Japan should be rising interest rates not deflation. If interest rates rise a mere 2%, interest on the national debt will consume 100% of government revenues.

When that happens a currency crisis awaits. I have long stated a currency crisis would happen far sooner in Japan than the US, and I believe we are about to find that out soon enough.

Mike "Mish" Shedlock

http://globaleconomicanalysis.blogspot.com 


Read more at Mish's Global Economic Trend Analysis: http://globaleconomicanalysis.blogspot.jp/2012/11/doorsteps-of-currency-crisis-economic.html

Why Korea Beats Japan

I was at my son's school the other day and got into a conversation with a friend who is a very high ranking executive at Samsung corporation. His son and my son are in the same class again this year and so it was very nice to see him again. He is chief of their Japan operations and we had a interesting talk. During that talk, we came to the subject of how Samsung is dominating the market in flat screen TVs and moving that direction in hand held computers and cellphones.

In August of this year, the Wall Street Journal ran this article entitled, "How Japan Lost its Electronics Crown"

Sony, Sharp and Panasonic combined to lose about $20 billion in the past fiscal year. That is a contrast with the glory days of the late 1970s and early 1980s, when Japan started to dominate the world of consumer electronics. As the Japanese economy surged, the electronics conglomerates ruled the market for memory chips, color TVs, and videocassette recorders, while their research labs gave birth to gadgets that would define an era: the Walkman, CD and DVD players.

Now, Japan's device makers are an afterthought to Apple Inc., Google Inc. and South Korea's Samsung Electronics Co. 

Or how about this interesting tidbit from Marmot Hole a blog about Korea:

Samsung Now Bigger Than Nine of Japan’s Major Electronics Companies

And you thought Samsung was big enough already since it accounted for more than a fifth of Korea’s GDP.

The Wall Street Journal reports that Samsung Electronics’ operating profit, at $3.14 billion, is more than two times larger than the combined operating profit of nine of Japan’s largest consumer electronic companies.  Samsung now has a $7.4 billion war chest to spend on growth and R&D where many of the Japanese companies are at an operating loss (Sony) or in huge debt (Hitachi).

These articles touch on some very important points, like value of yen and style issues, but both my Samsung friend and I agree that the biggest problem for Japanese companies versus Korean companies in manufacturing may not be simply issues with design and ease of use, but it has a lot to do with corporate culture in Japan.

Frankly speaking, from what I've seen, Korean companies will continue to beat Japanese companies for the long foreseeable future. There's no way out. Why? Because inside a Korean company, there are no factions fighting for position like what goes on at a Japanese company. Also, Japan doesn't have the leadership it once had; there are no more good leaders, definitely in politics and there is a terrible shortage in business in Japan too.

My Samsung friend put it this way, 

"At a Korean company everyone is on the same bus and we are all going the same way. At a Japanese company, the leaders have a very difficult time getting everyone pointed in the same direction."

He's absolutely right. 

At a Japanese company groups are struggling within, and against each other, to gain power. At Korean companies, I think they feel it is "Korea versus the world!"

When I worked as an executive at a major Japanese TV station subsidiary, I saw a consistent in-fighting between three or four factions for power. When faction "A" would come to power, the other factions seemed to not put in their best effort. In fact, I saw times when the other factions would actually drag their feet and become a hindrance to the efforts of the group in power.

It was infuriating to me as a foreigner who wasn't inside of any group to see people protecting their friends and their position as the number one work priority rather than the success of the company business or the project. 

It seems to me that the success of the project would automatically protect one's position. But no! These folks wanted success for sure, but only if their group was the one in power when that success occurred.

I saw this same problem at a Sony subsidiary, another TV network I worked at in the mid 80s ~ early 90s; and you can readily see this same problem in Japanese politics anytime anywhere.

I was, and am still to this day, astounded at the immaturity of some of these people. 

As an aside, at my son's school festival, the Korean families always run their "Korea booth" featuring delicacies from their home. It's a wonderful time for all. I was chairman of the PTA committee one year and was able to witness first hand how the Korean team worked. It surprised me that the ladies worked in the exact same pecking order as their husbands had at work; the wife of the highest ranking executive was the boss of the Korean booth; wives of second tier executives were second in-charge, and so on. There seemed to be no friction; just total teamwork. Everyone was certainly facing the same way and the boss of the Korea Booth proudly told me, "We are striving to sell the most food and give the biggest donation of any country to the school and charity!" She was dead serious about it too.

There goes that "Korea against the world!" again.

Several weeks ago, well before it had "only" 100 million views, I posted the video about Korean sensation PSY on a video countdown well before it exploded on the consciousness of Americans and the Japanese. At that time the video had about three times more views than the entire population of South Korea! I was astounded!

Nevertheless, after posting the video, some small minded people came out and made silly comments like, "Oh, he's just copying the Japanese." Or, a week ago or so, after the song because popular in the USA, I saw an article on Yahoo (America) that said, "Will PSY be a one-hit wonder?"

 

Yeah, I wish I could be even a 1/100th of a one-hit hit wonder. 

My video would then still have over 3 million views!

What the heck! The guy sings in Korean! Probably he will be a one-hit wonder in the USA. But so what? The guy's video, "Gangnam Style" has, as of this moment, 319,052,309 views! That's the most viewed video in history! That more than twice the views of Justin Beiber's "Boyfriend." PSY might possibly be one of the biggest stars in Korea, possibly Asia, in all of history.

Not bad for a guy who "copies" stuff or is a "one hit wonder," eh?

Why are people so jealous of these Korean success stories? I am happy and pleased to see guys like PSY and companies like Samsung doing so well. Competition is healthy and competition makes us all up the quality of our game. Those who chatter and grouse only show their immaturity and lack of self-reflection and professionalism.... We need to learn from them because, well, as they say, "the best revenge is success" and it seems the Koreans are doing quite nicely thank you.

I really hate to say this because I am half-Japanese, but, sometimes I think MacArthur was right when he said, "Japan is a nation of twelve-year-olds."

If the Japanese don't snap out of it and get with the program and start all dedicating their efforts to the success of the project, rather than protection of their position, they're going to become a nation of very poor twelve-year-olds.   

Related post: Korean Artists Really Are Getting Popular in Japan and It's a Good Thing!

Japanese TV? Not Anymore They Don't!

This story makes me go, "Hmmmm?" Several Japanese TV manufacturers have stopped making TVs in Japan. This is truly the decline and fall of Japanese civilization!

I have already written about how high energy costs are going to force many factories to close especially if TEPCO is forced to raise electricity charges for these factories. For more on that, please refer to Japan's Collapse Will be Absolute and it Cannot be Stopped - Here's Why:

All one needs to do to see what that hollowing out has done to the middle class in America is to get on an airplane and fly to, say, Detroit to see what is left of industry there. It's not rocket science, but where's there's no industry, there are no jobs.

That is the future we are heading for in this country and I see no way out. Zerohedge writes in: A New Beginning in Japan: Glimmers of False Hope:

TEPCO, the bailed out owner of the Fukushima nuclear power plant, is trying to shove rate increases of 17% down the throats of its commercial customers—while rationing power at the same time. Power shortages will spread across most of Japan this summer as the last of 54 nuclear power plants will be taken off line in a few weeks. 

... Hitachi, a major Japanese TV manufacturer has already closed doors on TV production in Japan. Now this?

Toshiba drops Japan TV operations amid falling prices, global competition

Toshiba said Thursday it has stopped making televisions in Japan, citing slow domestic demand as falling prices, fierce global competition and a strong yen pressure the country’s electronics makers.

The IT-and-engineering conglomerate shuttered production lines at its last remaining domestic TV plant in Fukaya, near Tokyo, at the end of March, a company spokesman told AFP.

Toshiba, the maker of the Regza brand of televisions, has shifted all of its television production to factories in China, Indonesia, Egypt and Poland, he said, adding: “The fall in domestic demand is the reason.”

The move is the latest development highlighting the plunging fortunes of Japan’s once world-beating electronics firms.

A strong yen, intense global competition—particularly from South Korean firms—and falling retail prices of televisions have left Japanese manufacturers swimming in red ink for the financial year that ended in March.

The industry received a temporary boost from a now-ended government stimulus program aimed at encouraging the purchase of energy-efficient appliances, but demand has slackened in an economy that has been limping along for many years.

Domestic television demand also surged when the nation stopped analogue broadcasting last July, by which time nearly all households and corporations had bought new televisions capable of receiving digital broadcasts.

On top of low demand, I'm absolutely sure that the higher electricity costs played a major role in Toshiba's decision. 


There are two issues at play here. The problem of high energy costs in Japan (and they are going to go higher) and the collapse of the TV viewing audience in Japan. For more on that please refer to "Why the Digital Conversion Will Destroy TV Tokyo and TBS."


TV as a hardware industry and as entertainment vehicle have a poor future in Japan. The other two TV manufacturers in Japan, Sony and Panasonic, haven't thrown in the towel, but are attempting to tie up with South Korean manufacturers...


The time's they are a changing! If you had told people 20 years ago that the Japanese would not be manufacturing TVs today, everyone would have thought you were nuts.... What is Japan? Geisha, samurai, sushi... and TV sets.