Yuka considers Famarry to be the happiest company in the world, and looking at who her customers are, I think she just might be right.

But behind this happy company is an aggressive plan to disrupt a cartel of photo studios that have dominated the market for decades. Changes in technology and demographics has opened up a small crack in the wall, and Famarry plans on using it to gain a foothold and then to change the entire industry for the better.

We also talk about why so many foreign startups coming into Japan fail and why sometimes a Japanese market that looks ripe for easy disruption turns out to be far more resistant to change than you would ever imagine. Even when that change would benefit almost all players in the market.

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

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Show Notes for Startups

  • Breaking into the wedding business
  • From weddings to lifetime customers
  • What was the first disruption of Japan’s photography market
  • Why freelancers take better photos
  • Why Japan’s photo-studios are going out of business
  • Why rapid growth takes time
  • Why Famarry is the happiest business in the world
  • What foreigners need to know about the Japanese market

Links from the Founder

BTW, you can read a short summery of this interview here.

Transcript from Japan

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

Today we’re going to talk about he evolution and the disruption of the photography market in Japan. Not the photography equipment market mind you. That’s already a familiar story. We’re going to talk about business of taking pictures. Yuka Fugi started Famarry in early 2015 as an online market place to match freelance photographers, with those who want to use their services. Now, at first glance this seems like one of the many me too business models we see far too often in the start up world. But there’s something uniquely Japanese in this story. You see, for the past few decades, a handful of photo studios have created a virtual cartel in portrait and studio photography. Yuka and I talk about how changes in both technology and the demographics of the market have weakened this cartel and left them rip for disruption. But, I don’t want to give too much away. So let’s get right to the interview.

Tim: Okay, so I’m sitting here with Yuka Fuji of Famarry, an e-commerce site matching photographers with customers but, actually Yuka I’m sure you can explain it much better than I can, so why don’t you tell us a bit about Famarry?

Yuka: Okay, so if I make it easier to express then it’s about the crowd sourcing of photographers.

Tim: That’s pretty broad, but you’ve gotten rather specific. You’re dealing with wedding photography right?

Yuka: Yes, now I start with a wedding.

Tim: In Japan, most weddings are sort of a package deal. You’ve got the wedding studio that arranges the food and the venue and the photographer and lock all of that up together. So how do you get around that?

Yuka: About 70,000 couples are getting married every year in Japan.

Tim: Right.

Yuka: Half of the couples, they, most of them they take the actual day wedding photography and half of them, they do the pre-wedding photography, which is like taking photos before a wedding.

Tim: So you’re focusing on this pre-wedding segment.

Yuka: Yes, mostly.

Tim: And so, where do they go, to some romantic spot with a beautiful back drop and take pictures in nice clothes.

Yuka: Yes. Exactly.

Tim: Okay.

Yuka: For the actual wedding, most of the couples they take the photos through the wedding venues.

Tim: Right.

Yuka: For the pre-wedding photography, more than half of them they search by themselves to take photos. So they do internet research or maybe ask their friends.

Tim: One of the most interesting thing about your business, about Famarry is the back drop of the changing nature of the photography industry here. How do people usually look for a photographer? You’re saying their asking friends and recommendations, how are you reaching them I guess?

Yuka: My users are kind of like early adopters and then most of them they find us on the Instagram.

Tim: On Instagram?

Yuka: Yes.

Tim: Really? So do they find a particular photographer, or are you just actively posting, these are the top 10 wedding photos from Okinawa?

Yuka: Yeah, we are posting a lot of photographers photos, but they find us because we do kind of like a promotion. And then many couples, they want to join this campaign so they share it on their Instagram.

Tim: Interesting. So Intagram’s been your main marketing channel?

Yuka: Yeah.

TIm: That makes a lot of sense for what you’re doing.

Yuka: Yeah, we are not like, investing any money to promote, but I get a lot of users like everyday.

Tim: You founded Famarry very recently. Just this year you launched, right?

Yuka: Yes.

Tim: So how has your growth been?

Yuka: I do not want to, nine months before, we didn’t have a lot of users yet. Once we started this promotion,

Tim: The Instagram promotion?

Yuka: Yes. Before that was, I think it was very difficult for the users to find their favorite photographers. And but now I make it like a package, and then the price is the same, and then I recommend 10 photographers, so it’s easier for the users to choose.

Tim: How many customers do you have in an average month for example? Do you have a month.

Yuka: Actually we have like 100’s of bookings in one month so far.

Tim: Okay. One thing that strikes me about this particular model, is it wouldn’t seem like you get a lot of repeat users, because people get married, not very often. Are you planning on offering other types of services, other types of photography?

Yuka: Of course. The wedding is the starting of a family, so when they start their family they want to have the kids, so they can have the pregnancy photos and then after that is a baby photo and like family photos.

Tim: Okay.

Yuka: So I can have the different services, like Famarry for a wedding, Famarry for a baby or something like that. Wedding is kind of like, the photographers should be really professional. But for the family or for the baby, can be like and amateur or semi professional photographers.

Tim: We talked a little bit before about how the photography market is changing, and how something like Famarry probably wouldn’t have existed 10 years ago.

Yuka: In Japan, because like a magazine was published a very long time ago, and also camera or equipment was more expensive before, so most of the photographers were organized by the studio or some kind of agency. People when they want to go for shooting, they come in for shooting, they go to their local photo studio and takes photos. It’s much, much cheaper now, and you can just like take photos with only your own camera.

Tim: So the equipment is running cheaper?

Yuka: Yeah.

Tim: There’s more qualified photographers,

Yuka: Yes.

Tim: But until recently the studio still controlled the business.

Yuka: Yes. But now a days, people start to hire their own photographers, like even the wedding couples. So photographers are now finding it easier for them to be independent.

Tim: So now with the photo studios, with their business declining, right now what is their main business?

Yuka: You know, studio artists is still a big player for maybe your kids photos. people think of the photos they go to Studio Alice.

Tim: Studio Alice is the big one here in Japan, that’s right.

Yuka: Yes. And also for the wedding day, just like go to the big companies now. So still these companies are making money. It’s still growing, the market is still growing, so it’s okay, but I see that there’s a chance that the studio can no longer,

Tim: What I’ve heard from the actually people who are using these is that the quality is just not that high anymore.

Yuka: That’s true.

Tim: The photographers are on like a basic salary, so there’s no incentive for them to really, to excel at their job.

Yuka: Yes, because when all the local photographers have their own photo studio, they’re kind of like craft man. So, they capture their photos and they didn’t know how much they costs, but consumers just paid for it. But because the studio artists take over the place and they make it very cheap and everyone takes all the same photos, even if you’re not a professional you can take photos. You can just have a good background and have a lot of costumes and any part time jobs can take the same photos. That was the revelation, that was the big change. But now, couples want the different kind of photos. Depends on what they want.

Tim: So what is the main thing driving the business away from the studios and into services like Famarry? Is it the desire for more control by the customers? Is it price? Is is the desire to be something a little different?

Yuka: I think we can say both, but most people think it’s quality.

Tim: The quality?

Yuka: Yeah, the quality. So, if I make it only a very cheap price, I can do it also because I have a lot of photographers now and I know when they are available. So if they are available, like 3 days before, then it’s okay to accept a bit cheap price. I can control the price if I have a lot of photographers. I can make it a reasonable price for shipping, for the consumers. But it’s not the best thing I’m doing, the best thing I’m doing is freelance photographers make a lot of effort to have a higher skill and to catch up with trends and try to understand what the couples really want, and,

Tim: So it’s just a better experience overall.

Yuka: Yes, yes.

Tim: So do you think these studios are going to be going out of business?

Yuka: So I can take over the place.

Tim: Okay, good. Yeah, disruption. Well let’s talk about you for minute, because you’ve had kind of a crazy personal history. You’ve lived all over the place, from the Mid East, to South East Asia, do you think living in different places gives you a different way of looking at problems? Do you think it helps you generate new ideas?

Yuka: Yes I do. I really do. Most of the time I spent my life in Japan, but I spent about 3 years in Dubai, and 2 years in Hochimin City and about 2 years in Singapore, so yeah, the experience there was a big influence to me.

Tim: And so you were involved actually with some wedding related businesses both in Vietnam and in Singapore?

Yuka: Yes.

Tim: So this is kind of a theme with you isn’t it?

Yuka: Yes. From the business side, yes. Being in Vietnam and Singapore influenced, my original idea came from this experience in these two countries. I was working for the wedding magazine company in Japan, so I know breifly about that Japanese wedding market and then I was in Ho-Chi-Min City proving wedding information for the wedding couples in Vietnamese couples. Vietnam is a very young country, so there’s so many people getting married and they focus on spending more and more money into the wedding, and so since I had the experience in the wedding market in Japan, I thought, “Oh, this is a very pleasure market in Vietnam.”

Tim: So do it again in Vietnam.

Yuka: Yeah, yeah.

Tim: Is the wedding industry, is it a particularly good business? Is it something you’re particularly attracted to or is it just you know it and you see a lot of opportunity there?

Yuka: Yeah, yeah. I saw a lot of opportunity there in Vietnam.

Tim: And in Japan as well?

Yuka: Japan is if only about the wedding market that the wedding market is not over growing, so of course so many wedding companies want to launch in different countries like Indonesia, because their population is growing, the market is growing.

Tim: So why did you target the wedding market at first then?

Yuka: I was working for the recruit company, you don’t know which section you are going to be, so I was just like coincidentally joined with this wedding magazine section. It’s not like I really like weddings or I want to do some business in weddings, but I had the opportunity to look at this market and when I moved to Vietnam I also thought that because of my experience, this is a very special market. Then I was here and for 10 years I’ve been doing business in the wedding market.

Tim: So even though in Japan it’s a smaller and declining market, you decided to make that the core of the business first because you had good connections in the industry?

Yuka: Yes, that’s true. I mean that it’s not small. It’s declining but it’s a very big market still. So I feel it’s easier for me to start in Japan and then expand it into different countries later on.

Tim: So you have plans on expanding into Asia and into where?

Yuka: So first can be like inbound marketing, which means Japanese people want to like Hawaii or Europe countries for pre-wedding photos as well, so I can also match these photographers living in foreign countries already doing that now, and also because I have a lot of photographers here in Japan, so I can also attract other people in Asian countries because they love to come to Japan. I also have some inquiries already from Hong Kong or Taiwan or Singapore to come to Japan for pre-wedding photos and then if I can understand more about the market in Asian countries, then I can maybe do Asian countries to Asian countries or Asian countries to European photographers as well you know.

Tim: Okay. That will be interesting. You strike me as someone who has always been very independant. Is starting your own company something you always knew you wanted to do?

Yuka: I think so because I was thinking about it was like 10 years ago.

Tim: Really?

Yuka: Yeah. I used to do a very very small business in college time, like I was probably papers and I had to get a lot of of opportunities when I was in college. I was very interested, I read a lot of books, I liked to think about the business structure and all those,

Tim: When you finally did it was your family supportive about it?

Yuka: They were worried but they were supportive as well.

Tim: What were they worried about?

Yuka: They do not understand what I am really doing or what I’m really thinking because it’s kind of crazy sometimes. Like I go to Vietnam or Singapore, but they’re supportive.

Tim: So I’ve been in Japan for more than 20 years now, the change in start ups has just been fantastic. There’s a lot more people starting companies and there’s a whole lot more women starting companies in Japan. Do you think that there are opportunities for women in start ups that don’t exist in large companies or in traditional jobs here?

Yuka: I don’t think so. I don’t think there is like a difference even if you’re in the start up world or in the big companies. Of course you try to take an advantage doing business, right? But even if you’re in Singapore you take advantage as if you are Japanese right? So it’s the same thing, if you’re women and if you can take advantage then take advantage.

Tim: So how would you take advantage? How would you use that as an advantage?

Yuka: It depends on the situation. So usually you don’t have any chance for taking advantage, but sometimes if you’re featured in the media or I don’t know, if you can make stronger impressions to the investors you use, I don’t know

Tim: So you feel it makes it more unique?

Yuka: Yeah, that’s one of the things. Of course because I’m doing the wedding business, so women take control in wedding, so of course I can understand more about the users.

Tim: So most of your customers are women then?

Yuka: Yeah.

Tim: Okay. Well I guess that does make sense. Because women, like you say they are taking control of this process.

Yuka: Yeah, even if you’re taking the kids photos, mostly the women decide the photographers, so.

Tim: Yeah, I hadn’t thought about it, but yeah, I’m sure you’re right about that.

Yuka: Yeah.

Tim: Running a company is something that you’ve wanted to do for a very long time and it’s something you’ve been inerating on for a while, now that you’re running Famarry it’s running strong. What surprised you the most about running your own company.

Yuka: I knew that it was hard, it’s hard, but knowing and experiencing is a different thing. It takes more time than I expected. I expected more fast growth. I feel I can make it faster but I know it takes time.

Tim: Yeah.

Yuka: So it takes time means that it costs more than you expect, so of course,

Tim: I know what you mean, even if mentally you know that the current growth is probably about right, it’s very frustrating to have to wait for it.

Yuka: Yeah.

Tim: What do you enjoy most about it?

Yuka: I enjoy most of the time. I really enjoy it, but the very, very good thing is it’s a very happy business. So I can listen to this users voice and they’re all happy with my service. This is a really encouraging thing, I have all the comments everyday and I read it.

Tim: Actually that would be nice because you are working with people in some of the happiest times of their life and they like your service, so yeah, I could see that that would be wonderful.

Yuka: Photographers, the personality of the photographer is they’re really nice, because if you’re the photographer you don’t think about only about yourself, you want to really make someone happy, so that’s why they’re doing this job. So everyone is really very nice and I really want to help them. I think that I’m doing a very good thing.

Tim: Yeah. And just a much nicer experience than working in investment banking or something. In becoming a CEO of this new company, what was the most important thing you had to learn?

Yuka: I’m still learning every day. I have a lot of things to improve. Working with other people is the most important thing, so I want to make a company where everyday you feel very excited. If you feel excitement to come to the office everyday, because they think that they are doing something good or they feel that they are contributing something to other people, so I have to make the business professional of course, otherwise you cannot continue this thing.

Tim: You’ve started companies in several different countries, so I think you’ll have a unique perspective on this, but what advice do you have for foreigners coming into Japan to start companies?

Yuka: I think it’s really difficult for a foreigner, especially to come to Japan, because Japan is a very special unique market I think because I know that many markets in many countries, but japan is the only one country that has a different customs and different business structure.

Tim: What kind of cultural things do you think that companies coming into Japan should be aware of? What advice do you have?

Yuka: They have to think that Japan is really different from the other Asian countries. If you think about Asian countries, they think the same thing, but actually Japan is like a really different country and they should know about it.

Tim: So you would say that they would have to really study and understand not just the local market, but the customs and the traditions behind that.

Yuka: Yeah, it’s totally different.

Tim: Well what do you think that Westerners misunderstand about Japan?

Yuka: They have different rules, I think.

Tim: They have different rules?

Yuka: Mm hmm. They do business with a connection. For example, in the wedding market, wedding venue controls everything, but they always charge when you want to bring in your own wedding gowns, because they have the connection already with this wedding dress shop, or wedding photography company already, so,

Tim: So you think a lot of foreign companies don’t understand these connections are there and that’s it’s not easy to sell into them.

Yuka: Yeah, because if you think very simple, you can just propose them with this efficient way of thinking, that actually, that doesn’t work because it’s different and they do not follow something logical.

Tim: I have seen this, I have seen so many foreign countries will come into Japan and they’ll go and they’ll have great meetings with Japanese companies who love their technology and seem very excited,

Yuka: They say that it’s good, it’s good and then they refuse at last, right?

Tim: Oh, and they mean it too. They obviously think it’s great technology, but they’re not going to buy it.

Yuka: Because it’s kind of they’re already in the system or already have the different rules already. It’s better to fix it, but actually it doesn’t fix very, very easily. Yeah, it’s very difficult.

Tim: They won’t be fixed, no. Yeah, I think that’s really good advice. A lot of great business models in the US and Europe look great on paper in Japan, but they can’t execute it because of these tight knit groups.

Yuka: Yeah, they make but Singapore, no. It’s more easy I think.

Tim: The other side of that, is usually those tight knit groups, if you can disrupt that market, there’s a tremendous amount of money to be made.

Yuka: Yes.

Tim: But, the foreign firms, or Japanese firms,

Yuka: They just think very easy right?

Tim: Well, they should know what they’re getting into. And if there’s a big reward it might take many, many years to crack into the market.

Yuka: Yes, so you’re not really enough to do that, if you come from the outside. You think it’s easy you know to start doing it in a very easy way, but you find out oh, it’s not easy.

Tim: Let me ask you my magic wand question, and that’s if I gave you a magic wand and you could change anything about Japan, the education system, people’s attitudes, legal system, anything at all to make it better for start ups in Japan, what would you change?

Yuka: I think education. In elementary school or when the kids are smaller, way of thinking would be kind of fixed if you’re 10 years old, so kind of like mindset, education is very important.

Tim: So what would you change? Is there too much memorization now?

Yuka: Yeah, that’s one of course. Discipline is also of course a good thing, but too much discipline.

Tim: Too much discipline? So what should they loosen up about? What parts of discipline should Japan make a little more free?

Yuka: They shouldn’t have rules which is not reasonable. They just say no without any reason sometimes, like teachers. If teachers say this, then you should do that. You don’t tell them the reasons.

Tim: Oh, yeah . people can think about the reasons behind why we do things. Yeah, I think all of Japan would certainly benefit by starting to think about the reasons why we do things. Excellent. Well listen Yuka, thanks so much for sitting down with me, I appreciate it.

Yuka: Thank you! Nice.

Tim: And we’re back.

I love that Yuka considers Famarry to be the happiest business in the world. And considering who her customers are, I think she just might right about that. Yuka’s advice for foreign companies coming into japan was excellent. Most of the time when you see a market that looks like low hanging fruit, when you think you’re about to cake walk your way into major market share and industry disruption, you’re in for a surprise. You are almost certainly about to run head on into some kind of cartel or invisible barrier. You’ll have great meetings, prospects will be impressed by your offerings, and give you sincere praise, but you’ll struggle for a long time to gain meaningful traction. It’s not impossible of course. You can do exactly what she was up against, and it took her longer than expected for the cracks in the wall to begin to show, and for her business to gain traction. But now, it looks like things are about to take off for her and Famarry.

If you have an experience trying to sell into a locked up market in Japan, come by Disrupting Japan’s.com slash show zero 36 and tell us about it, or drop by the Disrupting Japan’s Facebook page. We’d love to hear from you. And when you drop by the site, you’ll see all the links and site that Yuka and I talked about and much much more in the resources section of the post. And I know you’ve been really meaning to go over to Itunes and give us an honest review for sometime now, and now is the perfect time to do it. It’s really the best way you can support the show and really help us get the word out.

But most of all, thanks for listening and thank you for letting people interested in Japanese start ups know about the show. I’m Tim Romero, and thanks for listening to Disruppting Japan.