Entrepreneur Association of Tokyo
Seminar Summary - Russell Willis

eigoTown Empire Ruling the Waves
Mr. Russell Willis
May 2004

“We had to make everybody believe that eigoTown was the place to go. If you are Japanese then you, your mother, your brother, your cousin, your aunty − if you are interested in English, then you have to go to eigoTown.”　
Russell Willis, eigoTown Limited President

The future is looking sweet indeed for eigoTown Limited President and Founder Russell Willis. As guest speaker at the May 11 EA-Tokyo seminar, Russell shared how he has wrenched his company out of the ruins of the dot.com bust and transformed it into a powerhouse among English related businesses in Japan.

eigoTown.com is the Japan-based portal site for everything to do with English for Japanese people. The site has over 200,000 unique visitors a month, over 80,000 members and page views in the millions. eigoTown has been recognized by MSN, Yahoo, All About and Nikkei Research, amongst others, as the premier site for English in Japan and is featured in the Japanese press at least once a week on average. eigoTown's advertising clients include Nikkei, Manpower, DHC, Temple University, ALC, Fujistaff, Sony and others. It also operates sites for English teachers in Japan and has recently launched the online teacher / private student matching service, SenseiBank.

“English in Japan is a huge industry,” Russell said. “Advertising agency Hakuhoudo has estimated the English market in Japan is worth $30 billion a year. The combined revenues of say NOVA and ECC language schools are over half a billion dollars and NHK sells $5 million of English language related textbooks every month. One and a half million people took the TOEIC test in 2004, and at any one time, over 13 million Japanese are studying English here in Japan, so you can understand it is a big market and eigoTown is designed to be at the centre of it.”

First Sale Ignited Entrepreneurial Fire
So, how did it all begin?
When he began selling advertising for a tourist booklet in his south England home town of Kent at age 15, Russell was hooked after making his first sale. “That was probably one of the happiest moments of my life and from then on I just had to do business for myself,” he recalled.
Russell continued selling advertising for a number of years until he joined college, started edited the annual student union guide and decided to make money with it − unheard of at the time. He and his colleagues ventured out and sold advertising, making the publication profitable for the first time ever. He then decided to set up his own company − that is until Cupid came knocking, he fell in love and ended up in Japan chasing a girl.

Russell secured a job with the British Council's Cambridge English School and began to get involved in computers producing lesson plans. He soon discovered interactive technologies such as hypercard, and recognized the potential for education and teaching people was huge.
“I began creating little programs at school and decided that if I wanted to become an entrepreneur, why don't I mix my interest in publishing, computers and education and set up an interactive language learning company.” He did just that and called it ‘eigoMedia', which unknown to him at the time, was to be the fore-runner to eigoTown.

By a stroke of luck Russell met a professor who mentioned that his university was about to set up a huge computer-assisted language learning laboratory and spend millions on computers…. “but we have no software.”

Russell replied, “We can create software.”

The resulting substantial deal involved Canon and set them on their way.

eigoTown, he said, ‘was doing alright.'

But something big was approaching that was going to have a meteoric impact.

The internet was coming.

Creating a portal site for everything to do with English
“The spark for eigoTown was the idea that it was difficult to distribute our products throughout Japan, however with a broadband scenario, we would be able to deliver this content over the internet in the future.”
It was at this point he realized that even if they could deliver content through the internet, why would anyone be interested in buying it?
“You would still have to have people who are interested in your product, know your brand name and know who you are − so there was the reason for eigoTown. I thought the best way to do this was to create a portal site for everything to do with English,” he said.

Russell founded eigoTown in December 1999.
“We raised around 200 million Yen initially through private equity and angel investors and decided to make it everything to do with English,” he explained. “We went out with our business plan, got our money and started. The internet was everywhere. We were then approached by a venture capital firm who told us they were going to invest ‘loads of money' in our company. They told us to carry on doing what we were doing and grab market share.”

With a bunch of new staff and the contract ready to be signed, another bombshell hit them.

“It was November 2000 and a time we later realized was the final meltdown of the dot.com bubble,” Russell recalled. “With no warning, the investor pulled out and we quickly discovered we had no money, no revenue and were not very happy.”

They immediately switched to survival mode.
“We changed our thinking from ‘how many people are visiting eigoTown and how many people are signing up for our newsletter,' to ‘how many people are advertising with us and how many people are paying us money?' It took almost two years to get out of it because we had this huge cashflow hangover of things we had spent assuming we were going to get millions of dollars more in investment.”

Only in the last year has eigoTown been able to hold its head up high, having paid off all the consequences of the dot.com implosion. Now they are profitable and very, very successful.

Spreading the word: PR Blitz
“During that time we didn't depart from the idea that we had to make everybody believe that eigoTown was the place to go,” Russell continued. “If you are Japanese then you, your mother, your brother, your cousin, your aunty − if you are interested in English, then you have to go to eigoTown.”

To accomplish this, eigoTown needed a very consistent, very powerful PR strategy. How did they do it?

“We couldn't afford to advertise and pay money for newspaper or internet advertisements,” Russell explained. “The only thing we could afford to do was make up stories. We made press releases for every single article that eigoTown published.”

eigoTown's press blitz was comprehensive, wide-ranging and most notable of all, downright effective.

“What we needed to do was to ensure that we PR'd anything we did in any areas of our business, so we would choose something famous and just send out press releases and we would target and go after people, magazines and encourage them to help us. It has been an extremely successful strategy. eigoTown is in the press once a week on average about stories which are not particularly interesting but they are there and worth probably millions of dollars of advertising budget if we were to pay for it,” he said.

eigoTown is now the largest independent website about English in Japan. They have almost every single player in the English industry advertising with them, from ECC through to NTT DoCoMo, Nikkei Weekly, Japan Times, Daily Yomiuri and countless language schools. They have 80,000 subscribers to their mailing lists and over 200,000 unique visitors to eigoTown each month.

“Now that is a fair number, but it's not enough,” Russell remarked. “What eigoTown is about is increasing that number to at least 1,000,000 unique visitors to the website every month. Once that happens, we will truly be a powerhouse.”

Russell also described eigoTown's new online teacher / private student matching service, SenseiBank.

“SenseiBank is possible because with eigoTown we have all of the people who are interested in learning English, and with ELT News (a website for English teachers in Japan), we are able to find teachers, so we can put these people together. Now prospective students can find exactly the right kind of teacher they want online.”

He believes SenseiBank is going to become a major component of the business. “I think this is going to become very, very big. In the future I believe this will be for any kind of teachers − math teachers, tennis teachers, aerobics teachers, whatever you like.”

And what bodes for eigoTown's future?
“We want eigoTown to become a household name, and we fully expect that it will,” Russell confidently stated. We don't think there are any competitors to eigoTown in this space. We are ‘it' as far as independent portal sites for people interested in English. We've got lots of exciting things lined up, including ‘Mind Your Language', an interpretation and translation service, ‘Phone Pass', a revolutionary tool for assessing spoken English, and the surprises won't stop.”

How many staff work at eigoTown?
“When we first started we had our initial capital investment, and we had around 20 employees. Through natural attrition we went down to about eight, and now have about 15 with a lot of part-timers.”

Have you considered strategic partnerships with Japanese companies?
“Yes, we do partner with various companies. We do various types of work with companies such as Biglobe and BB Wave to provide content with them.”

Do you have plans to take the business outside Japan to other countries where English is being studied?
“Right now, Japan is large enough and we are not where we want to be but we are getting there. I think we should really focus on Japan. Once we have dominated Japan, then the rest of the world had better watch out.”

How are you going to work with or against the other players in the market?
“Our direct competitors are not language schools, in fact they are our customers. Our competitors are websites like Yahoo's education section, E-Size and SPACE ALC (publishing company), but we see most of the people in the English industry as our customers, not our competitors.”

Where are eigoTown's revenues coming from?
“About three quarters of our revenues currently come from advertising. We are selling millions of dollars of advertising on eigoTown every year and I think that is going to continue. We expect to be the number one place for anyone interested in reaching people interested in English or our specific demographic − 70-80% of our audience are women aged between 24-35. I see major revenue continuing to come from advertising but percentage-wise it will go down because of the other services we are offering. The other portion of revenues comes from online sales of products, ie: Time magazine.”

How do you get the press releases actually noticed by different publications?
“We have a four-level strategy.
The first level is sending out a blanket e-mail that you can send to approximately 3,000 media outlets for about 5,000 Yen .
The second level is faxes. Depending on what the press release is about, we'll choose who to send faxes to.
Thirdly we'll send actual letters in envelopes with our press release in it.
The fourth level is actually going to visit the magazine or TV station to get coverage.

It is just a matter of targeting the right kinds of magazines. It is important to gain an understanding of what they are interested in and you might have to create a few different angles of the press release depending on who you are trying to reach.

Whatever you are doing, you have got to be imaginative about what you can talk about. All we are saying is we have got an article about this or that − we are not really saying anything particularly interesting, but a lot of the time we are just sending out angled information about certain types of products and services that we offer. It is just worth it, it is the cheapest way to get press coverage. A lot of the time people believe what they read, not what they see advertised, so constant press coverage for your company or service is a good thing.”
www.eigotown.com

Text: Jonathon Walsh
For comments or inquiries:
businessgrow@hotmail.com

Jonathon Walsh is a professional Editor and Writer based in Tokyo, Japan. He is the Director of Business Grow, an innovative company specializing in providing a wide range of top quality Editorial and Advertising services to Japanese and foreign organizations.