For international startups, Japan offers sophisticated customers, globally competitive corporations and deep technological expertise. But succeeding in Japan requires more than setting up a local entity.
Brian Lim, COO of encognize G.K., has worked with more than 200 startups across innovation ecosystems in Asia. Today, he supports overseas startups entering Japan and Japanese startups expanding internationally.
For Lim, one of the biggest mistakes foreign founders make is assuming that a strategy that worked elsewhere can simply be replicated in Japan.
“The biggest barrier that they face is actually taking their international playbook and applying it directly to Japan.”
He argues that Japan often requires a different value proposition, a different approach to relationship-building and, importantly, a longer-term commitment.
Osaka’s advantage: industries, customers and partners
Lim moved to Osaka in 2022. One of the first things that struck him was how open the local ecosystem was to new ideas and new companies.
Since then, he says, major companies in Kansai have become increasingly experienced in working with startups through pilot projects, PoCs, investment and longer-term commercial relationships.
For Lim, Osaka’s strength is closely tied to the region’s industrial base.
He points to advanced manufacturing, pharmaceuticals, biotechnology, medtech, tourism and mobility as areas where Osaka and Kansai can offer particular opportunities to international startups.
Healthcare is one example. Osaka has a long history as a center of the pharmaceutical industry, particularly around Doshomachi. Lim sees this accumulated expertise, talent and corporate presence as an advantage for overseas startups seeking collaboration in medtech, healthtech, pharma and biotech.
His advice is not to ask simply, “Should we enter Japan?” but rather:
Which Japanese city gives us the best access to the customers and partners we actually need?
Foreign startups often need customers before capital
One of Lim’s most important observations is that foreign startups entering Japan do not always come looking for investment.
“Many foreign startups, when they come to Japan, actually don’t look for funding. They actually need a customer or they need a partner first.”
This is where he sees Osaka and Kansai as particularly relevant.
The region is home to established companies in sectors including real estate, transportation, electrical appliances, pharmaceuticals and biotechnology. Some are actively looking for startups with which they can collaborate.
For founders trying to identify these opportunities, Lim recommends starting with public information: annual reports, sustainability reports, mid-to-long term strategy papers and corporate innovation challenges.
These often reveal the problems companies are trying to solve and the areas in which they want to work with startups.
Rather than asking only, “Which companies invest in startups?”, Lim’s approach suggests a more practical question:
Which Japanese company has a business problem that our technology can solve?
Japan is different—but not necessarily slower
Language, visas and capital requirements are often cited as barriers to entering Japan. Lim acknowledges these issues, but does not see them as the main reason companies fail.
He has seen well-funded companies with teams of lawyers, administrative scriveners and accountants still struggle because they tried to apply their overseas playbook directly to Japan.
Another common concern is the long sales cycle.
Lim says that building trust and completing the pre-contract process can take longer in Japan. But when looking at the total deal cycle—from first discussion through project completion—the difference compared with other Asian markets may be smaller than it appears.
“The only difference is the order of activities.”
In Japan, more relationship-building, internal approval and solution validation often happen before the contract is signed. Once agreement is reached, execution can move quickly.
For founders, the implication is simple: entering Japan requires patience, preparation and long-term commitment.
Three things founders should earn before entering Japan
Lim summarizes his advice in three “rights.”
1. Earn the right to talk
Show that you are credible, that your solution is strong and that you are worth meeting.
2. Earn the right to ask
Do your homework on the Japanese market, potential customers and corporate partners before asking for support.
3. Earn the right to play
Demonstrate that you understand what it takes to serve Japanese customers and partners with your solution.
For Lim, these principles apply whether the startup offers hardware, SaaS or another type of technology.
Looking ahead, he sees opportunities in tourism, AI, sustainability, GX and healthcare, and believes Osaka can strengthen its position as an international startup hub by building on these existing industrial strengths.
For international founders, that may be the clearest reason to consider Osaka: not simply because it has a startup ecosystem, but because it can offer access to the customers, corporate partners and industries needed to build a business in Japan.
