Entrepreneur Association of Tokyo
"Pitfalls of the Western Entrepreneur in Japan"

The Bubble years
As an introduction Chuck spoke about his first few years in Japan when he studied Judo and worked as an instructor at one of Tokyo’s first fitness centers. From the very beginning Chuck believed that for a business to succeed it must have a genuine concern for its clients. In this sense, the idea of responsibility, commitment and placing his client’s well being and time above his own has always been rewarding personally and financially.

After a year as an instructor Chuck became a partner in the fitness centre by investing $60,000 he was loaned by a close friend. During the early 70’s, the gym was one of the only places for Westerners to gather and interact. It was a great time and by growing his business by being nice to people Chuck proved that nice guys can come out in front. In 1977 he was thrown into the deep-end of business when his partner suddenly announced that he was leaving Japan. Chuck managed to stay afloat and after six months of 20 hours days Chuck had figured things out and membership had doubled

Chuck then entered the world of Television. For Chuck the whole TV experience was a means to an end as becoming popular would open many doors in business. Chuck wanted to create a health and fitness show for television as they had in other countries, but just because this concept worked abroad didn’t guarantee a good response here. This is known as a senyukan (pre-conceived notion of success) which Chuck interated can be a large pitfall of doing business in Japan. Many successful business owners make similar mistakes by believing that because they make money in one area they can make money in another.

In a very short time Chuck was appearing on TV up to three times a day and giving as many as 150 speeches annually about health and fitness. With all this success Chuck decided to start building fitness centers and in three years he built, marketed, staffed and managed 25 successful fitness centers.

After the Bubble
When the Bubble burst, it burst incredibly quickly and within the span of one month Chuck $125 million of contracted work vanish as clients began canceling their orders. Prior to the bursting of the Bubble, Chuck's business was helping other people build, market and manage fitness centers. Since he did not own the property or the fitness centers themselves he had relatively little capital risk. Chuck believed that the more expertise you give someone and the more money you make for them then the more they will want your services. Not necessarily! In Chuck’s experience once your expertise has been garnered and your skills acquired then you may not be needed anymore. So although Chuck's advisory business had incurred few expenses and seemed risk free during the Bubble, he hadn’t created a safety net or alternative way of making money for when the Bubble burst. After finding positions at other companies for his staff and faced with the decision of shutting down his company and letting his remaining staff go, Chuck was contacted by a medical distribution company in Nagoya who needed someone to help to handle exercise machines. He jumped at the opportunity as it allowed him to keep the business going.

Again Chuck excelled at advising the company on how to make money and he took the company from $1.5 million sales to $8 million. After five years the company had built its sales force up and didn’t need Chuck anymore, so he was back to where he was in the beginning because he still hadn’t created an alternative way to make money. To break this cycle Chuck built his own preventative health facility, which he ran until 2000 before taking a back seat and leaving a trusted employee in charge of the business. This was a mistake and the business suffered which brought Chuck to one of his main points: Don’t assume that your employees are as devoted to your business as you are because they don’t have a stake in it! If you maintain a hands-off approach there is a chance your employees will take away your business. Be careful who you trust and how much you delegate to others. Japanese staff are like anyone else, they have the same desires, same hang-ups and same problems that everyone does, they want success and everybody works their own agenda.

So in 2000 after trying his hand at all types businesses Chuck went back to basics and started personal training again. Chuck believes that being aware that you aren’t good at something is tremendous plus because you can leave it and not worry about it anymore. Currently Chuck’s business is returning people to health which is extremely rewarding and its something you can’t get from watching your bank balance grow.

Chuck’s Key Points for Business:
1. Success in one business doesn’t have anything to do with success in other businesses.

2. You don’t determine whether your successful, your customers do. In other countries your customers will tell you this, but in Japan your customers will just leave.

3. Be careful of the pre-conception trap (senyukan). This is difficult because it’s a pre-conception so you don’t know that you are thinking something wrong.

4. Take you customer’s perspective about what they would do and what they want, then try to do this.

5. Have a clear plan and strategy for making your business ideas a reality.

Some other points:
Stick with the basics and be careful who you take advice from. People aren’t necessarily out there to help you and a lot of people will want to pull you down. You have to learn the difference between people who are genuinely concerned about you, and people who don’t want you to succeed. Experience teaches you this. When you are young you probably haven’t been burnt enough to understand this.

As Westerners we are out on a limb because we don’t have deep networks within society, and to the extent that you can network and speak Japanese and be culturally familiarized, it will certainly assist you in the fact that you can minimize your westerness.

Overall, one of the only reasons Chuck is still solvent is because he is genuinely concerned about his fellow man. At age 61 he can look back and say yes, “I have done everything I’ve wanted to do and more.” Although it doesn’t always translate into business, Chuck knows how much he makes everyday, who he has helped and what he has contributed to society which are things you can’t touch or measure. Through this he can wake up everyday and look back at his life and say, “not too bad.”

Q and A
You mentioned that you experienced a lot of the ‘dog eat dog’ business environment over the years. Has there been any change to this recently?
Quite simply, No! Large corporations have downsized in order to become lean and mean. Furthermore M and A’s are just a reasonable excuse to get rid of people. If anything the competition has gotten more severe than ever. There is only a very limited market and amount of money. Also corporations have downsized, but still have the same amount of work which leads to overtime becoming a social problem and junior employees are expected to work 12 to 15 hours a day to help the company out.

You mentioned that when the Bubble burst you lost business that you had already been contracted to do, could you expand on this? And do you think there is a bias against foreigners doing business in Japan?
On my business level there are several steps for a contract, first there is an iraisho - letter of intent, then there is the seiyaksho- a kind of semi contract that is not totally binding and then there is the keiyaksho – the final contract. Just before the Bubble I had a combination of iraisho and seiyaksho, but not a final contract. I could have taken it to court, but it was too much hassle to pursue and by pursuing it you may get a reputation as someone who is difficult to do business with and broadcast your own stupidity. For individual entrepreneurs it may be safest to get a situational contract because the other party will have more to loose should they renege on the contract. I don’t think there is a bias against foreigners doing business in Japan but there is a bias against people who don’t know how to do business in Japan, and these people will be taken advantage of.

How important have mentors been in your career?
My adversaries have been my greatest mentors. Mentors and friends tend to take your side whereas you probably need some one to tell you what’s wrong with you. I have learned more from a tough Japanese businessman in five years than I ever could have at a business school. Adversaries and competitors will try and take your business away and dealing with that can make you stronger.

Text by Timothy Coghlan


April 03 , 2007 (Tuesday)

Chuck Wilson
Managing Director and Founder of Chuck Wilson Enterprises Inc.