A Question of Trust in Japan

Before and after his time in Japan, Mike worked as a computer programmer and systems programmer. He was a consultant and an executive in charge of technology worldwide, traveling all over the United States, Europe and Asia and Latin America. He’s also owned his own businesses. He now lives in the Philippines.

Mike’s story

I first came to Asia as a soldier in Vietnam. Later I became a systems programmer, writing operating systems as a consultant and moving wherever there was a contract. Eventually I developed and sold my own programs. My biggest customer was a Japanese company, and I went to Japan to install my software. At that time, except for the top companies where technology was produced, it wasn’t common for Japanese business, even in banks. I couldn’t get the deal I wanted, a guaranteed contract with a fixed amount of time and a fixed salary, so in 1988 we set up a joint venture built around my software. I got 49% of the company and the Japanese kept 51%.  I moved to Japan.

Adjusting was difficult. In 1990 the taxi drivers didn’t speak English and often wouldn’t pick up foreigners. I learned to carry a business card with a map in Japanese on the back for taxis. I would get on an elevator and the little kids would grab their mothers’ dresses and start crying, “Gaijin! Gaijin!” [Foreigner.] On the packed subway there would be two open seats, one on either side of me. We’re not much liked. It’s unusual for families to allow marriage with an American because it’s a step down.

It’s not a society that’s easy to understand, but I learned to accept. The Japanese had strict rules. The vending machine on the streets sold alcohol, soft drinks, tobacco, lots of things, but they were never vandalized. There was never graffiti on the subways, never a hole in the velour seats. There was almost no crime. Once I left a meeting at three or four in the morning and walked into a dark, narrow alley. A lady left the meeting when I did, and I asked her if she wanted me to wait with her while she got a taxi. She looked at me like I was crazy. It’s totally different from Los Angeles or Manila. Women stroll down the streets laughing and joking. The society is law-abiding, but the police are very, very tough. You do not want to be on the wrong side of Japanese law.

The people at work didn’t like it when I started to learn the language because they didn’t want me to know too much. I was assigned an office lady as my tutor and minder. She was a nice lady who used to sit at my right, and when I did something inappropriate she would pull on my sleeve and say, “No, Mike-san, no.” I would make mistakes at dinner. When you take food out of the shared dishes at the center of the table, you turn your chopsticks around and pick it up with the end that has not gone in your mouth. I used the wrong end. Once I stuck my chopsticks in the rice and let them sit there, which is a sign of death. That caused a big stir.

Before I went Japan I had quit drinking, which made it hard to do business. When we were forming the joint venture, I had my first in-person meeting with the president of the Japanese company. I was offered a drink. I said, “I’ll just have a coke.” The president said, “We stay sober with our enemies and we drink with our friends.” He handed me a drink. I didn’t know what to do. To me this joint venture was the job I expected to grow rich on, my retirement and my dream. I had already put years of work into it. I said, “I have a bad liver problem, and when I drink I throw up. Please don’t embarrass me by making me throw up on you.” He decided I was okay because I had drunk so much alcohol I had a bad liver. People called me gay and all kinds of names for not drinking. You don’t want to be different in Japan.

In the morning my office lady came in with my coffee, bowed and got on her knees to put it on the low table. Then people would come in for the first meeting. Lunch would be brought in, bento boxes and rice bowls. We’d work through lunch. Then at six, seven, eight o’clock we all went to dinner. During the day the meetings were boring, but the Japanese would spend $1,000-$3,000 for a night on the town. My minder would carry around a big sack of yen because people used cash mostly. The men would be pounding down water glasses of Wild Turkey or Jim Beam. How they did this night after night I have no idea. Then they would start work early the next morning. Along the way I would discover that we made a sale or signed a contract—we did something—and often I didn’t know when it was. Some of the problems were due to language. Word-to-word translation from Japanese produces nonsense in English. I had a secretary who spoke English, but she couldn’t translate, so she just did it word-for-word. I could never read the stuff she translated, and she never understood why I was angry at her all the time.

When I’d learned enough to get around by myself, I would leave the bar early, around 11:00 or 11:30.  My girlfriend was a hostess in one of the bars, and I’d meet her at midnight when she got off work. We would go to one of these after-hours places that an American alone could never find. There were a lot of good jazz clubs. I saw the most bizarre behavior, for example, a six-foot-four transvestite in a slinky dress, standing in the middle of the floor, drunk and doing a strip tease and everybody laughing and cheering him on. This wasn’t uncommon. My friend had an $800-a-night budget for going to the bar. That’s where business was done and business intelligence was passed. There were bar hostesses who received money and gifts for telling what people said when they got drunk and what their competitors were doing. Networks of people gathered information on other people. I wasn’t even aware of this a long time.

I hired some other programmers, and I managed technology, and I went on all the sales calls, which were all in Japanese. I saw that we were buying technology at pretty high prices and suggested that we use other sources to save money and get better quality. It was explained to me that we had investors, and some of them had computer companies and supply companies. We bought from them, and they invested in us, and they bought from us. In Japan you go where your friends are, and your friends come where you are. That’s the keystone for business all over Japan. It was hard for me to understand, being a good capitalist. Inside the company, they weren’t looking so much for efficiency and savings as for keeping everybody employed, although I’m sure they have to be more competitive now with global pressures.

As the only American I was the one doing the entertaining and acting as intermediary between the Japanese company and the foreigners who wanted to sell to us. I tried to give the foreigners advice about doing business in Japan, simple things like bringing some small gifts for the people you’re meeting. If you can get your business card printed with Japanese on one side and English on the other, it’s a big plus. One company wanted to bring their lawyer with them. They were hoping to do a deal in one visit. I explained to them that it’s extremely bad manners to bring an attorney to a first meeting, but they brought their attorney anyway. After one day they were just abandoned in their hotel.

That group was from Alaska, three guys and one woman in their forties and fifties. They were from a Mormon group, or Latter Day Saints. They had a magazine which they thought it would be neat to export to Japan. They hadn’t been out of Alaska much, and they’d never been to Asia. Now, nobody in Japan understood what LDS was, and it wasn’t my job to enlighten them. After a long day of talking and going over the magazine, we went to dinner at one of the fancy hotels underneath the Hilton, where there were maybe twenty clubs and bars. This one had hostesses and topless dancers. It was crowded with a lot of drunks, noisy, and smoky. These poor Mormons didn’t know what to do. The hostesses seated on either side of them made the male visitors really nervous and fidgety, and they tried to avoid looking at the topless girls dancing on the tables. I just sat back and let things happen the way they were going to happen, interpreting where I could, while the Japanese were getting drunk and screaming.

The Japanese are tough negotiators, as I saw in meeting after meeting. The foreigners would arrive in Tokyo around noon or two o’clock, check into their hotel and come over to our office in Nakameguro around three or four. We’d talk about business, buy them big dinners and a lot of drinks. We’d keep them out until two or three in the morning, then start the meetings at eight-thirty. We’d do this for several days, so they were getting maybe four or five hours of sleep a night—in a different time zone—after having been up twenty-four hours for the flight over. If they’d been smart they would have had a designated negotiator who would go to bed early and be fresh the next day, but I never saw anybody decline the night life. These were clubs Americans couldn’t get into on their own, even if they could find them. So the visitors would be wowed by the expensive places, the bright lights, the alcohol, the women and the whole scene. The next morning the Japanese would just be grinding them at contract details, over and over the same stuff. The usual negotiating strategy was to get people so tired they were willing to say yes to anything just to get it over with. It was done on purpose and done very well.

In most cases the foreigners were technology people, maybe Mid-Westerners or Chicagoans who weren’t well-traveled. They were more techno-savvy than business-savvy. A lot of them had started small businesses which they were trying to sell on the international market, but they didn’t have the budget to hire somebody who knew international sales. They were babes in the water with sharks. The people on the Japanese side had money, knew what they wanted, knew how to put together a deal, and they pretended to be nice to everybody.

In business and in personal life, the Japanese have a shadow world. They have shadow money—that is, money that they don’t show the government and that they skim off. They have a shadow face which you see and the real face underneath, which you as a foreigner probably never see. Everything was two sides, the real one and the façade. I was there two and a half years. I was in people’s homes, and I did business in a lot of cities in Japan, but with the exception of maybe one guy, I never really got to know people on a personal level. I did, but I didn’t.

I used to do due diligence—investigating—on technology in America, companies that were looking to borrow money or needed money for financing technology projects. Often I’d find brilliant guys who had great technology but who were running out of money. They were almost willing to sell their souls to keep going. The Japanese would invest with real stringent contracts: if you didn’t make this date, this date, this date they could take over your company. After a couple of times, I refused to participate anymore. I felt so bad for one group of young guys. They needed computers, salaries, some lab equipment, a little bit of marketing money, maybe $40,000-$50,000. They had a great product, but within six to eight months they had missed deadlines, like a technology company does. The Japanese kept them going until they had developed the product. Then they took over the company, kicked the owners out and moved the product to Japan. Every example was different, but the results were the same.

I stayed on. We grew from one office to many offices all over Japan. We hired some American programmers and outsourced to America because it was cheaper. In the late 1980s, places you might go to now—the Philippines, Vietnam and India—really weren’t up to speed. So I ran the U.S. office and the Japanese office, and then we got some contracts in Mexico. One month I did three round-trips to LA-Tokyo, Tokyo-Alaska, LA-Mexico City, and I did LA-Tokyo two or three times more. Once on a marketing campaign we bought a business class, round-the-world ticket with stops in Europe and Asia for meetings. The traveling wears on you.

 

In 1990-91 the economic bubble burst in Japan, and money became tight. We closed our U.S. office. I was at a meeting with a large Japanese company which I thought was about selling and licensing technology, and I discovered they were negotiating the sale of our company. I wasn’t included in the discussion, but I heard enough so that when I got back to the office I confronted the president and a few others. They got angry and said they were going to do it for the good of the company, which I’m sure was true. I had only 49% of the company, and I wasn’t Japanese, which meant I wouldn’t be saved when the boat sank. I went through a period where I walked around in a rage because I was being cheated out of my life’s work, life’s savings, my retirement, and everything. Finally they sent me to America to do something, and that was the last I saw of most of them. I had encrypted a lot of software, but I could get at it. I was protecting myself. They came to me and made me a lot of promises, and they stiffed me on almost everything.

So I went from living like a rich man to being very poor. I had a house, but it was rented out, and the renters were making the payments. My ex-wife had give away my Arabian horses. I was living in an apartment in LA in a so-so neighborhood. I had $2.50 in the bank, no food, no nothing. That was when I realized I was in desperate straits. The Japanese had closed the offices, there was no money, and my software had been stolen. The Japanese had merged with another big company. Somebody suggested I sue them, but international lawsuits are very expensive, and an American would never win. It was a huge psychological blow, one of the hardest things I had to go through.

I had a few collectibles which I sold for money to live on. I got a lower-level job with a company I didn’t like. I was there for two weeks and got a better job, then a better one, all within a month. Pretty soon I was in charge of technology for a large disc-drive maker. We had offices in Thailand, Singapore, London, Paris, Munich, Milan, and all over the U.S. I was in charge of technology worldwide and making a six-figure income. But I was so emotionally drained that every morning I had force myself to stick my legs in my pants and go to the office. I was really depressed, I would show up and do the best job I could, but I didn’t do what I could have under normal circumstances. I had lost my retirement, my business, my work, my hope. I had just become a corporate hired gun. I traveled to all the sites, and did all sorts of things, but for the better part of the first year it was very hard for me. I could not think, couldn’t concentrate and almost couldn’t force myself to go to work. But I did what I had to do, and I didn’t drink.

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