GitHub entered the Japanese market under enviable conditions. They already had a strong corporate user base, solid brand awareness and product evangelists throughout Japan. They did not so much push their way into the Japanese market, so much as they were pulled into it.

Even under the best conditions, however, Japan market entry is not easy and Derek Sorkin explains some of the challenges they faced with their distribution plans and the original go-to-market strategies. Managing to salvage a great ongoing relationship from what could have been a very ugly incident.

Derek also explains why even in this age of Skype and go-to-meeting it’s absolutely essential to spend the time and money on airfare in managing international offices and to maintain trust and credibility.

It’s a great conversation, and I think you’ll enjoy it.


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Partial Transcript

 

Disrupting Japan, episode 62.

Welcome to Disrupting Japan – straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for listening.

GitHub entered the Japanese market under enviable conditions. They already had a strong corporate user base, solid brand awareness, and product evangelists throughout Japan. They did not so much push their way into the Japanese market so much as they were pulled into it. Even under the best conditions, however, Japan market entry is not easy, and Derek Sorkin explains some of the challenges they faced with their distribution plans and their original go-to-market strategies. And how they managed to salvage a great ongoing relationship from what could have been a very ugly incident.

Derek also explains, even in this age of Skype and GoToMeeting, it’s absolutely essential to spend the time and money in airfare in managing international offices and to maintain trust and credibility. But Derek explains all of that much better than I can, so let’s hear from our sponsor and then get right to the interview.

 

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[Interview]

Tim: So I’m sitting here with Derek Sorkin, the Asia Pacific for GitHub, who spearheaded GitHub’s entry into Japan and that’s what we’re going to talk about today, so thanks for sitting down with me.

Derek: No problem, Tim. Good to talk to you again.

Tim: Excellent. So listen, you guys have been here a while and you’re doing really well. Let’s step it back a couple of years. What did GitHub see in Japan? What was the motivation for coming here?

Derek: We had quite an interesting background with Japan. Our co-founders had been coming here for some time for different conferences; working with companies like Digital Garage back in the day, talking to them; and open source has always had a strong foothold in Japan, things like many of the contributors to the Ruby Project, which GitHub is obviously built on to a certain extent. In Japan and Japanese.

Tim: Ruby is from Japan.

Derek: Right. So we always had a good core base of those Ruby developers that were interested in open source, that were using GitHub since very early days of GitHub, back in 2009 and 2010. So when we started in the B2B space and working with enterprises—and I think we’ll get into this a little more later, around how decisions are made in Japan—but that really helped us here. There were lots of the forward thinking internet companies. I say “internet companies” broadly, but internet gaming companies like that, that immediately took a hold with organizations on GitHub.com

Tim: Okay, so even before you guys were here, you had brand awareness and you had users here in Japan. That’s a huge leg up in the market.

Derek: Yeah. It makes it very interesting, especially at that time, a little more than three years or so, we didn’t have any staff in Japan. So all of our efforts in Japan to continue to raise that awareness and give back to the community were us coming over from San Francisco, from the U.S., or from wherever we happened to be around the world, for about a week at a time.

Tim: You had one guy out here, Daisuke.

Derek: Yeah, so that’s why I said three-and-a-half years ago. Three-and-a-half years ago, we hired Daisuke—Dice as we affectionately call him—and he was great. And still is great for GitHub.

Tim: So let me ask you, you had brand awareness, you had a user base here from the very beginning, which is fantastic—so what was the trigger that finally made headquarters say now it’s finally time to set up headquarters in Japan for real?

Derek: I think if I can point to one specific event, I was here back in early 2014, with one of the co-founders. We were going around and meeting with some of our existing customers here, and we were also invited to an event that one of the larger trading companies was putting on in Japan, where they had invited lots of other trading companies in and were asking lots of questions and we were on a few panels there. And I think that trip was really the catalyst in the co-founder’s mind that Japan is a very real market opportunity for us, and given that we had the brand recognition here—and that was obvious from the things we were doing like meetups around Tokyo or Yokohama, and that we had now people on the ground with Dice—we made the decision to put more of our investment in Japan and actually get some people on the ground here so we could continue to grow our business. And not just our business, but also the community and our engagement with that community.

Tim: All right. That makes sense. It was a gradual and natural result of what you’ve been doing so far.

Derek: Absolutely. I think just as a natural progression, we were at a point as a company where international expansion was imminent and we were at a point with Japan where Japan seemed like a very logical option for us to move towards.

Tim: So how many users, how many customers did you have here when you pulled that trigger and said, “Let’s go into the market?”

Derek: It’s hard for me to say exactly, but I could ballpark for you that we had around 75 customers on the B2B side, so certainly enough to be able to come out here and establish ourselves a little bit. And tens of thousands of paying users on GitHub.com and close to 750,000 on GitHub.com in general.

Tim: So it sounds like GitHub was really more pulled into the market than trying to force its way into the market.

Derek: Yeah. I would say we were in a very unique position, based on other that I’ve talked to, especially others that have done market entry into Japan, which certainly raised some unique things in our process of opening up the office here and expanding that presence, and working with that community. But we were in a very good position from the beginning.

Tim: Excellent. How did you structure the initial entry? Was it through partnerships, was it a joint venture?

Derek: We originally were intending to open up a small office here that was mainly going to be a sales and marketing arm for GitHub. We quickly realized that in the Japanese market, there is a necessity to have partnerships. Everything is done through partners. Or at least it certainly seems that way, on the surface, when you talk to companies that have recently made a market entry.

Tim: It seems like across the board, most B2B software companies do a much higher percentage of their business through their partners Japan than they do in the rest of the world.

Derek: Certainly, and I can see where that makes sense. Especially if you’re a U.S. based company accustomed to doing direct sales regularly, it almost seems foreign to—no pun intended—to come into a foreign market and work almost exclusively through the channel. That was further complicated by the fact that we had existing customers here but we decided to move forward with the partner approach and eventually we were brought on with a distributor here, and decided that instead of trying to manage 20 or 30 partners individually, we wanted one central distributor that could help us manage those partner relationships and help us drive sales to the enterprise here. Then we could continue to manage directly, the community side, community growth, active user growth on GitHub.com—some of the other metrics that are important to us.

Tim: And is it okay to talk about who the partner was or do you want to—

Derek: Sure, I think that’s public knowledge. We partnered with Macnica Networks to come into Japan.

Tim: So you mentioned you have a lot of customers before your market entry. Were those customers also being handled through Macnica or was Macnica something you did during the market entry?

Derek: It was something we did during the market entry. The customers that we had before—we had maintained and still do maintain relationships with almost all of them, with the exception of ones that had a strong desire to work with Japanese companies directly for things like invoicing, being able to transfer into Japanese bank accounts—lots of things that as we found out, we continued in the process of building out this market.

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Tim: You ended up outgrowing that relationship pretty quickly. Actually—we’ll get back to that story a little later on because there’s a lot that happened between then and now. So the subsidiaries, the GitHub employees here were going to focus on community building and outreach support, and not so much work on the partner sales side. You already had a customer base in Japan, but after your market entry, did you discover anything about the product, or the services lined up around the product, that you needed to change for the Japanese market.

Derek: Absolutely. I think the thing we noticed immediately was an extraordinary need for Japanese language support, which seems like something that would be common sense, but it’s not necessarily something that you’re actively thinking about as you proceed into this market, especially if you already have customers here. There’s not already that Japanese support channel. So this was one of the things that Macnica helped us with. They helped us with some first level Japanese language support and then as we saw the need for that starting to grow, part of our strategy here, especially with the help from Dice, became establishing our own Japanese language support team, so that we could do high level support—tier two, tier three level support in Japanese, which is something we’re still rolling out. It’s a long program to be able to put together.

Tim: Now is the product itself localized?

Derek: No, it’s not. But the interesting thing about GitHub the product is that there are very few words in it and most of the words that do exist in GitHub are words that are common nomenclature for if you’re using it via the command line. So the large majority of users, even in Japan, are familiar with terms like “merge,” “pull.” And that’s a lot of the actual words that are in GitHub.

Tim: Right. It’s almost its own specialized language. But this is really interesting, because that is one of the—usually on the list of “Absolutely have to do to come into the Japanese market,” it’s “Localize the product. And you guys have been very successful without taking that step. Have you had pushback from clients saying, “Look, you’ve got to have this or we’re not coming on board?” Or is it a non-issue?

Derek: I don’t want to say that it’s a non-issue. People have certainly brought it up, but I don’t think it’s ever gotten to the point where a customer has said, “We won’t use your product unless this happens.” And I do think that’s largely because so much of the content inside of GitHub, and what makes GitHub powerful is user-generated. It’s the actual files that are inside of a repo, whether that’s code or whether it’s an HR team collaborating on documentation. So the communication happening in issues and communication happening in pull requests. GitHub is completely language agnostic when it comes to that, so as long as you can write encoded UTF-8—we run into some problems with documentation occasionally that’s in shift JS or in older Japanese encoding format, but we’ve fixed a lot of that as we’ve continued to discover it.

Tim: But that’s really fascinating. I suppose one of the reasons is that your customers, the users, and the people who will ultimately make the buying decision, are engineers.

Derek: Absolutely. That’s a huge part of it. There are no—at least to my knowledge and there may be—most of the popular computer languages today, especially the ones that we work with at GitHub on the engineering side and the ones that really help us build our source community, are all English based. So there’s a certain nomenclature there in people making those decisions they’re already accustomed to.

Tim: That’s awesome. I love finding the exception to any rule I have in my head. So what do you see as you key competitive advantage here in the market? How do you position yourself differently against the source control systems that are out there now?

Derek: I think the first thing is it’s important to identify there’s really two different levels of competitors in the market. There’s legacy competition, which is what some would consider the status quo, but older, centralized version control systems.

Tim: So like subversion, CVS?

Derek: Exactly. And then there’s the newer, more direct competition. So companies like Atlassian, GitLab, that more directly compete with us on the Git front. I think it’s important to say, too, that we welcome that competition. That competition is what helps drive innovation. But what differentiates us, in this market specifically, is performance. I think there’s been, maybe a long a history, but certainly a need in Japan for quality in the products that people are implementing, especially when you look at how larger Japanese companies plan for these system rollouts. They’re making an investment and not in something they might have to change in a year. They’re making a commitment to do something for 5 to 10 years in a lot of cases.

Tim: So when you’re talking about performance, what do you mean by that exactly?

Derek: Sure. So I think there’s a lot of things that performance can mean so to speak about it specifically, I’m talking about things like response times, page load times, knowing that the function you’re performing is always going to work and return the value that you expect it to. So in the case of GitHub, it might be something like a page taking 30 milliseconds to load instead of 500 milliseconds to load. It might be the high availability configuration that we have working and being easy to set up every single time you set up an enterprise instance without having a lot of moving parts. I think the other thing that’s nice and I lump into the performance front is on the administrative side. Because we ship GitHub very differently from our competitors—we ship it as a virtual appliance, so not a physical box, but a virtual appliance, which means we maintain all those dependencies on our side. So we know that everything works together and everything’s been tested. So because there’s not lots of other dependencies and there’s not system engineers required to keep those dependencies up to date, it means that upgrades are very easy, administrative overhead is very low, and that performance still remains extremely high.

Tim: Okay. Coming to the market, you were planning on having Macnica handle most of the partner relationships and focusing on the direct outreach with your internal staff. Did that pretty much go as planned? Were there things that worked better than expected, things that didn’t quite work out as expected?

Derek: I think as with anything at this scale, there is certainly things that don’t go as expected. This case was no different. Macnica Networks has been a wonderful partner for us and they continue to be a great partner for us. But we immediately had people coming to us saying they wanted direct relationships with us and they were interested, not just in the product that we had, but in our knowledge in how to develop software as a company and the knowledge that we have from our other customers about what we’re doing in the digital transformation space. So at that point, that became something that it’s very hard to enable partners to deliver on your behalf.

Tim: Okay. So how did you handle that situation? If you have customers that you would normally consider your partner channels, and you’ve got a master distributor who is supposed to be handling that, that’s a very touchy situation to be in. How did you handle that? How did you get through that?

Derek: Absolutely. We had a lot of conversations internally, I think, thinking about what’s the best strategy. And I think we came back to something that GitHub has been good at for a long time, which is being honest, open, and transparent. So we finally went to Macnica and had a tough conversation and basically said, “You’ve been doing a good job for us but the structure of the arrangement we had in place is a bit limiting, given where we are in the market now.” And you have to keep in mind this is almost a year after we opened the office here, so we had been doing business in this manner for 12 months. It was a little bit of a touchy conversation to get through but I think we were open and honest about the reasons we wanted to make the change and we were also transparent with some of the initiatives we were trying to take on and some of the things we were trying to do directly, and eventually, Macnica was receptive to the conversation.

Tim: So the change is they went from a mass produced distributer status to a regular distributor?

Derek: Yeah, just a distributor. And we still don’t have any other distributors in Japan. But moving away from that exclusivity allows us to work with some of the larger SIs in Japan if they came to us. It gives us the ability to work with some services partners in Japan.

Tim: I think it sounds like GitHub went through a process that normally takes—you guys did in one year what most companies tend to do over several years here in Japan. And it’s great to enter with a partner. And eventually almost all companies want to grow out of that relationship. The challenge, of course, is doing it in a way that everyone is happy and the partner keep selling your product and stays engaged. Is that what happened, is Macnica still bringing on new customers?

Absolutely. They’re incredibly engaged as a partner. I think that some of that goes to the relationships that we have established between the organizations. And I think some of it, as well, goes to the fact that they’re good people and I think they appreciated how we approached the problem. We didn’t try to gloss it over, we didn’t try to find a loophole in our agreement or anything like that. We just had a very direct conversation with them.

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Tim: What would your advice be for someone else coming into Japan? We’re not talking about GitHub and Macnica specifically, but another company maybe coming into Japan, would you advise them to go with an exclusive distributor relationship or would you advise them to just go it alone from the very beginning.

Derek: I think there are so many variables that go into answering that question. What kind of company are we talking about? Are they a software company? Do they sell hardware? Is it a restaurant?

Tim: Let’s say it’s close enough to GitHub. It’s a B2B software company.

Derek: All right. I would still advise—and still do advise when anybody asks me the question—to go with a partner. The advice I would give that’s a little bit different from what we would do is I would not lock myself down to any kind of exclusivity with a single partner. And that’s not because that partner won’t do a good job, but it can be limiting and you don’t know when you’re going to reach that inflection point that you mentioned earlier. So I think trying to structure agreements in such a way, to where you have that flexibility so that when you reach that inflection point, you can move in that direction without having to renegotiate contracts.

Tim: So go with partners, but non-exclusive partners.

Derek: Absolutely.

Tim: Excellent. Looking back on it, was there a particular mistake you made that you wish you hadn’t? That you could have saved yourself a whole lot of trouble if you had done something differently?

Derek: Oh, if I could just name one. I think everybody makes mistakes when they’re entering a market. I think the biggest mistake I personally made was coming in with pre-conceived notions of what the market was like and I think it’s very hard to come into a place with a completely open mind around what that might be, especially when you’ve never worked in that market before.

Tim: So what kind of conceptions did you have of Japan?

Derek: Working for a U.S. based company, a company that has been obviously successful in the United States and done business in a very specific way there, I think that people from the U.S. that haven’t spent much time in Japan—and you may know this even better than I do—have certain pre-conceived notions about how the Japanese market works. It’s very hierarchical, so the decision is that things come from the top. It works quite the opposite here where it’s very consensus-driven decision making process, which goes back to one of the earlier questions. Why I think we’ve been successful in Japan is because of that consensus-driven process. We had people who were using GitHub already and driving that decision up through that management.

Tim: That’s true. You sort of accidentally stumbled into the right strategy there. You had bottom-up consensus already.

Derek: Yes. “Absolutely stumbled into” is an excellent way to put it. But I think there’s a lot of those stereotypes, that as we moved away from working exclusively with internet companies, that that would change somehow, as we started to work with larger enterprises or financial services companies, companies in different verticals. And the experience for me is that is hasn’t. It’s still a very consensus driven decision making process but now we’ve gotten to a point where we don’t necessarily have a user foothold. The kinds of developers that are attracted to something like GitHub aren’t necessarily working for those, lack of a better term, stodgier verticals.

Tim: Right. But your sales process in Japan is still that same bottom-up consensus among the developers? Is that different than the way it is in the States, for example?

Derek: Not always. But I think there’s a point in the States and my limited experience in Europe, and even here to a degree, where there is certainly buy-in that’s necessary from top level management, sometimes up to B, P, and C level management. And it’s important to get that. I think the difference is here, no one will ever come out of a meeting with a C level or VP level manager, having the other person on the other side of the table saying, “Yes, we’ll be doing this.” There is always going to be another meeting that occurs after that, where they discuss with their team whether they should do it or not. In the U.S., certainly, you can come out of that meeting with a very clear direction of where you’re going. So I think that was my biggest mistake and one example of that pre-conceived notion about the market. We touched on the partner piece and that’s all a bit of learning as you go. I think one of the other things that we could have done better was scaling up. We scaled up very quickly here, channel management, direct sales, and relationship management. We could have done a better job working with some of the other teams in GitHub, making sure that we were scaling up other parts of the organization. When I say other parts of the organization, I mean support from the marketing side, support from support. Making sure we were continuing to give our customers here what they needed, as we grew on the sales side. I think we went very aggressive on the sales side at first and that was great. We had some success there. But then we had to let the other teams catch up a little bit, through no fault of their own. Now we’re in a spot that I could consider ready for another inflection point, where we can really start to increase the size of the organization, the complexity of the deals that we’re doing here. But I think looking back on it, there’s so many things that you could have done differently, but I think the important thing in my mind is that we went ahead and did it anyway. I don’t think we ever would have learned those things if we tried to analyze the situation and never proceeded with these things. And sure, it’s resulted in some tough conversations, it’s resulted in some re-strategizing on what we’re doing, but I think it’s much better to move forward and iterate and adjust then it would be to try to analyze everything and enter the market from the beginning.

Tim: Okay. That focus on sales is not at all unusual, because usually the decision to enter Japan or almost any new market is a sales-driven decision. It’s to increase revenue, so sales has the biggest say in it. But in your position, as kind of that bridge between headquarters and Japan, you’re trying to convince them, “Maybe we need to beef up support to a greater degree than we normally would in the U.S.,” what do you think was the biggest source of misunderstandings or misalignments between what the team on the ground in Japan needed and the perception back at headquarters?

Derek: An understanding that Japan is a different market. I think what ends up happening—this is from my own experiences as well as other people I have talked to that have been in similar positions—I think what ends up happening is you get a playbook, whether a sales playbook, a support playbook, an engineering playbook, it’s very driven by what’s happening in the U.S. market. Then you try and apply those same things and you see limited success with that in places like Europe, or other places in North America, even in other places in Asia. It’s relatively easy to take that same kind of playbook—and we have done this to a certain extent—to expand business in Australia, New Zealand, even in Southeast Asia, especially markets like Singapore and Malaysia. That is not the same in Japan. The market functions differently here. Decisions are made differently. There are verticals here that are easier to get into than you would expect them to be and verticals here that are harder to get in than you would expect them to be. So trying to take that playbook, without adjusting it specifically for this market. To be very clear, I have a good relationship with HQ, and I think GitHub Japan also has a very good relationship with HQ.

Tim: Is that what you tried at first? Did you try to run the U.S. playbook here and see what happened?

Derek: In a sense, yes. That was before we opened the office. We had that here. So the question became “How do we expand here?” And the way that we expand the business here is by truly understanding what Japanese companies are expecting on the B2B side and what true support looks like on the community side. It’s different in Japan, not the least of which difference is the language. And I think that’s something that takes a while for people to understand, that haven’t spent a lot of time in Japan. Not a lot of people speak English. I would say less here than in a lot of the other countries in Asia that I’ve visited, or in Europe, or in lots of other places in the world. So being able to have employees on the ground that are native or excellent Japanese speakers is beyond integral to be able to work in the market.

Tim: So this is interesting. It is absolutely essentially that your sales staff is Japanese, that your support staff is Japanese, but not the product. The product can stay in English. That’s really interesting.

Derek: Yep. The product is at the bottom of the list of things I think we need to localize. Continuing to localize things like documentation, collateral support—I think that’s much higher on the list, just because, like I said before, the product is so much user-driven content.

Tim: Right. Now you came out to Japan from HQ. And you worked at GitHub how long before you came out here?

Derek: I’ve been at GitHub almost two-and-a-half years before I came out here.

Tim: So you had the relationships, and you could go to bat for Japan and be taken seriously at headquarters.

Derek: Sure. That’s a lot of the reason that I came here, was because of those relationships.

Tim: That’s great. A lot of times when there’s a local hire, they don’t have that credibility. So have there been times when you’ve had to kind of argue for resources or priorities in Japan against what is over those in the U.S. market, which is the dominant one.

Derek: Often. My focus here is specifically on sales in the entire Asia Pacific region. I happen to live in Japan, so it’s easy for me to interact with the team here. Living here and helping, with Dice, to build out the office here, and build out some of our other presences in Asia Pacific, it’s been very easy to build great relationships in this reason. To be able to use a Japanese term, have a little nominication around some of the issues people are really feeling. This is like my baby. I came out here, I pitched it, so I want it to be incredibly successful and part of that success is me helping to drive some of those conversations in HQ, leveraging the existing relationships I had. So there have certainly been times when I understand that it would be more beneficial to carry out a task or an initiative for the U.S. market or for the European market, but my argument is still going to be for the Japanese market.

Tim: Before, you talked about how sales in Japan was different. Was it difficult to explain that to the sales organization in the U.S., saying, “We’re going to do things differently in Japan,” or did they accept that pretty quickly?

Derek: I think that the sales organization in the U.S. was relatively accepting of it. I think the entire HQ organization was accepting of it, understanding of it. I think they were accepting of it and understand of it from a strategic point of view. I think when it comes to the actual tactical execution of it is where there were disagreements. So even things like having a corporate pitch deck. Certainly, we have one of those for every region that we operate in, but as you’ve seen in your many years in Japan, a Japanese corporate pitch deck looks very different from a deck that you would see from anywhere else. So this is a minute example of one of the differences that we have.

Tim: A change in the pitch deck is not a minute difference. That’s a big deal.

Derek: Sure, I suppose, but going to them and saying, “Hey, we can’t use this. We can use some elements of the story in it, we can use some elements of the design, but in general, we’re going to make it completely differently here.”

Tim: Okay. I think it’s great that headquarters was so accepting of that. A lot of times that’s a struggle. What was the biggest challenge for you personally, kind of being that bridge between Japan and HQ?

Derek: I think the biggest challenge that I had personally was—I had made lots of friends at HQ, lots of people who are still my friends and acquaintances obviously—and I think over the time I was there, I established what I would call some political clout within the organization. Some clout that you can uniquely spend when you need to get things done. And I think out here, I spent a lot of that trying to get some of these initiatives done. The problem is, now being 7,000 miles away and 17 hours ahead from HQ, it’s hard to rebuild a lot of those relationships. Let me pull back; rebuild is the wrong word. It’s hard to regain some of that clout once you’ve spent it.

Tim: Was that just because the company was growing so fast and you don’t have that facetime with the people you used to?

Derek: I think it’s a lot more about the facetime. I think in a world where we’re so connected now, people don’t value that facetime very much. It is easy to have a meeting with somebody in the U.S., via teleconference or something like that, but it’s not the same as running into somebody in the street, having a conversation with them, running into them at the office and going to grab a coffee. And those are the things that you can’t do from this far away, that are very difficult to do from this far away. So in terms of conducting business and being able to do those things, it’s so much different than it was a decade ago. But being able to maintain those relationships that you have to help push the initiatives that I think, and the organization in Japan thinks, we need to take on in order to push this business forward, it’s hard to rebuild some of that clout.

Tim: I know what you mean. Skype and GoToMeeting are wonderful but some things only get done when you’re sitting across the table from somebody.

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Derek: Sure and I think that it’s not even sitting across the table from somebody in a scheduled meeting. It’s a lot of serendipitous interaction, a lot of walking around the office, or even being in the same city as people and seeing them when you’re out, saying, “Hey, I saw that e-mail you got; let me also help push that forward,” or whatever it might be. You just don’t have that same ability when you’re this far away. That same serendipitous interaction doesn’t happen serendipitously.

Tim: That makes a whole lot of sense and even you, who worked at HQ for a couple years before coming out here, are feeling that. So what do you do to keep the Japanese staff plugged in to what is going on globally? How are you keeping Japan from becoming a black box?

Derek: I think there’s a handful of things there. First of all, I don’t think it’s my job directly to make sure that Japan doesn’t become a black box. I think it’s the job of everyone in Japan that’s on our staff. It’s my job only by tangential relationship of being in Tokyo. Certainly, I can help make introductions to people that I know. I can encourage people to come here. I can do whatever I can to help promote that and I can also work with the team to make sure they’re promoting, maintaining relationships with the teams they’re working with at headquarters, and with other cross-functional teams that they work with on a regular basis. But I don’t think that can be driven by one person. That has to be an entire team mentality, that we’re going to maintain these relationships with not just HQ, but all of the other regions we operate in. There’s tons of things you can learn from those people.

Tim: So do you have a lot of travel people from Japan physically going to San Francisco or people from San Francisco coming through Tokyo?

Derek: Yes to both, depending on what’s happening. Any time we make a new hire at GitHub, no matter where they’re at in the world, they go to San Francisco for a week. They get into HQ and do their on-boarding there. We try to send people to HQ at least a few times a year to make sure they’re maintaining those relationships. We try to do it around an event or something that makes sense. Recently, a lot of the Japanese team was there for GitHub Universe, the conference that we put on. We also see a lot of covers come through Japan, because Japan is interesting. Some on vacation, some for work, and we also try to maintain the relationships within the region too. Our support team is amazing at this. They’re basically split between Australia and Japan, and they will typically get together once a quarter or so and have everybody in one location, have these interactions. I think that’s great. That’s not to discount them in the Philippines. That’s something that I like to see but it’s also something that you have to balance out because travel is expensive. You have to understand—and our team at headquarters does understand this, which is—that those interactions have to occur to keep people happy. So I can’t artificially, as an individual, nor can the team artificially say, “We’re going to have one-on-ones with people at headquarters every week to try and maintain and build these relationships.” You have to understand that there’s value in those people getting together on a regular basis and that the cost is worth it a lot of times. We’ve seen some great things come out of smaller summits, and hack houses, and things like that. I can’t imagine a scenario where we will not see great things come out of initiatives like that. So I’m glad to work for a place that recognized the value in that and I’m also glad to have an amazing team of people on the ground in Japan that also recognize that and are willing to participate in that process and learn from other people.

Tim: Okay. Let me ask you, looking back on the last couple of years, even from the time when you were strategizing on how to come into the market and to growing it and hiring staff, what would be the best advice you could give to country managers who are kind of in the same situation you are?

Derek: The best advice that I can give is going to sound a little crazy, but it’s don’t over plan. I’ve seen and made friends with lots of people in Japan that are in similar situations to myself, that are country managers in Japan. A lot of times there is a 3 or 4 or 5-year strategy that becomes the driving force behind that, especially coming out of a North American-based company. We said “U.S.-based” a lot, but I think “North American” is probably better here. As soon as something doesn’t go exactly to that plan, you’re going to have to undo that plan anyway, or at least a large majority of it. So I spent a lot of time working with other groups at headquarters, developing the plan to enter the market in Japan. I worked a lot with Dice to help refine that plan and develop it. Basically, from the moment we got here, things went differently.

Tim: Is it like saying no plan survives the first contact with the enemy?

Derek: Sure. It’s something like that. I think you can spend years and years planning and not knowing what’s going to happen. I’m speaking specifically about Japan, but I think this applies globally, is to take a small force of some of the really good employees that you have, put them there, let them hire a few really good employees, and then start to make your strategy and your decision. I think a year in, it’s completely respectable for a company like GitHub, or any company in our position to have a 36-month plan for what we think this is going to look like.

Tim: Stay flexible, stay agile.

Derek: Right. That plan will change. We have that today but it will change. One of the harder things, going back to an earlier question, is having the support from headquarters to understand that that plan is very flexible.

Tim: It’s almost like going back and being a start-up again.

Derek: It’s exactly like going back and being a start-up again. I think there’s a lot of things that are very similar to doing what we’re doing here as when I came into GitHub. I think when I came into GitHub, it was just 100 people. And the sales team, the team that I joined at the time, I was the 5th person on the sales team. So it was a lot of the same things. Lots of planning, but then lots of iterations to that plan, changing over time, adapting to the market, adapting to who was buying our product and what they were doing. And we’re in the exact same positon here except now the scope is a little broader because it involves sales, support, marketing, HR, all the functions that you need for a company, maybe outside of engineering. And it’s an incredibly difficult prospect to look at from a high enough level to establish the strategies and the tactics that you need to execute on a plan that’s that long.

Tim: All right. That makes sense. Listen, before we wrap up, is there anything you want to talk about? Is there anything I should have asked you about but didn’t?

Derek: There’s one thing that you didn’t ask that I think is a valid question that lots of other people have asked, which is, “Do you need an expat in a market to be successful?”

Tim: That’s a good question. You’re right, I should have asked that. So what’s the answer?

Derek: The answer is yes and no. Do you need one? Should it be a hard and fast rule? Absolutely not. But I think it’s been helpful to be here and to have some of those relationships but I also think that it’s great that we built a Japanese team. It’s not a team of expats here. It’s a Japanese team with a handful of expats sprinkled throughout the region. Seed companies where it’s been all people from overseas establishing an office here, or it’s been no people from overseas, and both can be successful. But I think there’s something, especially from a cultural perspective, about having somebody who has lived that company’s culture for a period of time, coming into an organization to help build that up, especially in a place where corporate culture can be so different, like it is in Japan.

Tim: On the flipside, too, you were mentioning that the clout you had at headquarters allowed you to get a lot of things done for the Japan office that maybe a local hire, without those connections, without that trust, might not have been able to achieve.

Derek: Sure. I think they would have eventually achieved it, but it would have been maybe a little slower. Also, I can only comment on the situation that I’ve been in. It could be very different for other companies. But I think that having an expat is more important for driving the cultural aspects of a company that you want to maintain globally, than it is for success in a region.

Tim: Okay. That makes a lot of sense. Well, listen, thanks so much for sitting down with me. This has been a great conversation.

Derek: Absolutely. Always good to talk to you, Tim.

[Outro]

And we’re back.

You know, part of me is still amazed that GitHub has done as well as they have without localizing their product into Japanese. They are truly the exception that proves the rule, so let’s dive into that a moment. But before we do, let me go on a mini rant about that expression, “the exception that proves the rule.” That does not mean that an exception demonstrates a rule to be true, which is how people try to use it. That’s abject nonsense. “Prove,” in this case, means to test or challenge, as in “a proving ground.” It’s the exception that challenges the rule.

So let’s take a hard look at this: GitHub has been very successful without product localization in Japan because of a wonderful confluence of Japan’s bottom-up decision making process and the fact that their product is used by software developers who usually have no trouble understanding technical language. This has allowed them to make steady sales, but I think it is telling that even in this environment, GitHub found that their documentation and their support had to be in Japanese. So GitHub, as a very successful and popular unlocalized enterprise product in Japan, is truly the exception that proves the rule.

If you’ve got a question about GitHub or their market entry into Japan, Derek and I would love to hear from you. So come by DisruptingJapan.com/show062 and let’s talk about it. When you drop by, you’ll find all the links and sites that Derek and I talked about and much, much more in the resources section of the post. And I also want to tell you about Disrupting Japan Inroads. It’s a subscription service that details real world case studies of Japan market entry. Now, it’s based on the conversations we have in this podcast, but the case studies are condensed, structured, and contain additional information. Inroads is an amazing value and it’s how I plan to keep the Disrupting Japan podcast free forever, for everyone. So please check out DisruptingJapan.com/inroads for information on how to subscribe and more information on what it’s all about.

And most of all, thanks for listening and thank you for letting people interested in Japan know about the show.

I’m Tim Romero and thanks for listening to Disrupting Japan.