For Love, Money and Space
Sitting at a Denny’s in Nagoya at four a.m. one morning, two weary young foreign day traders took stock and decided they wanted to do something completely different—like help Japan’s foreign residents find jobs, living space, and potential life partners online. Along the way, Erik Gain and Peter Wilson brought an international element to the country’s dotcom surge and social media phenomenon.
Gain and Wilson now run GPlusMedia, and their online offerings include GaijinPot.com, TokyoApartment.com, JapanKeibai.com and the recently acquired Japan Today news and discussion site. GPlus also partners with the American Chamber of Commerce in Japan on its Ecentral.jp jobs site.
“I believe GaijinPot is sitting at around two or three million unique users per month, and Japan Today is about the same,” Gain reports. “Along with our real estate sites and Ecentral.jp, we’re looking at over five million page views every month.”
As Gain readily acknowledges, that translates into an impressive level of exposure to eyeballs.
“If we wanted to let all the foreigners in Japan know something, whether it’s a hot news flash or about some new product, our combination of GaijinPot and Japan Today could probably reach more foreigners faster than any other media, unless we hit all the TV networks.”
Gain GPlus has a foothold in China as well, with a jobs site called ChinaSplash.com and another jobs network, CareerEngine.org, run in cooperation with the American chambers of commerce in Shanghai and Hong Kong, ShanghaiExpat.com, and the Canada China Business Council.
All this has kept the company thriving. In fact, GPlus has enjoyed solid double-digit growth since it was established in 2001. By the end of the current fiscal year this spring, revenues at GPlus are expected to have grown by nearly 200 percent over the past three years.
The Entrepreneurial Urge
Wilson is Australian and Gain is from the U.S., and both are in their thirties. The two met and worked together briefly at the English-language school Bilingual before that company’s spectacular 1994 failure—a prequel to Nova’s 2007 meltdown. While other unpaid Bilingual teachers were walking off with video decks and TVs in lieu of salary, the two consulted the school’s files for student contact info, got in touch, and offered to continue teaching them.
“That was our first business,” says Gain. “It developed into a gaijin haken or foreign temp staff agency. Rather than assess a monthly fee, however, we just charged introduction fees so we wouldn’t need the haken license. I think ours was one of the first businesses to charge fees to introduce foreign staff.”
Even as they were pursuing that opportunity, Gain and Wilson were spending their nights day trading online on the New York Stock Exchange.
“That was back at the beginning of Japan’s dotcom boom,” Gain relates, “and we thought, there are a lot of issues facing gaijin (foreigners) here, so what do they really need?”
Their answer: an information portal to make it easier for foreign residents to find work, true love and living space in Japan.
“I think Peter actually came up with the name,” Gain says. “There are so many different types of gaijin here, he said, kind of a melting pot, so let’s call it GaijinPot. GaijinPot.com had a social corner and a jobs section. We were probably the first in the social networking industry to target Japan’s international community.”
Peter Wilson gave some other reasons for the choice. “Besides being catchy, ‘GaijinPot’ helped us embrace the fear Japanese have of gaijin and educate them about the many contributions foreigners make to the Japanese community.”
GaijinPot.com quickly earned a loyal following, Wilson reports.
“The jobs section filled up with job-seekers. We launched JobMail, sending out new job listings as emails, and people flocked to the site to register for that. Many of the same people registered for the social corner, and sent us their profiles and pictures. We used lots of spam—it was okay back then—to get people to check us out and sign up for our services.”
Wilson acknowledges that the GaijinPot name is a frequent point of debate internally, and the company has gone so far as to purchase another potent URL as an alternate.
“When it comes right down to it, though, GaijinPot is such a well-recognized brand that we hesitate to make the changeover,” he says. “It’s become an effective, quirky contrast to the level of service we provide, which is similar to that of Yahoo! and Google, although obviously not on that scale.”
The Nova Effect
How much did Nova’s disintegration last year affect GPlus, particularly GaijinPot.com?
“A lot,” Gain replies. “Nova was Japan’s single largest employer of English-speaking foreigners. When they went belly up, we really had to focus, to see what potential repercussions that would have on our market and our business.
“It was bad for us in the short term,” he continues. “Thousands of English teachers were suddenly out of work and proactively searching for jobs. Suddenly the thousand or so customers we had looking to hire foreigners were getting resumes sent directly to them.”
In the long term, however, Nova’s failure benefited GPlus, since the chain did over 90 percent of its hiring through overseas agencies.
“Nova didn’t need GaijinPot.com, but since the other schools in the industry tend to be less efficient in the hiring process, they do, so it’s been a windfall,” Gain notes. “The Japanese aren’t going to stop studying English because Nova failed. They’re going to find new places to study, and these other schools need us and use us on a regular basis.”
Upgrades and Stratagems
GPlus made a major acquisition in September 2007, purchasing the Japan Today news and discussion site outright from Crisscross K.K.
Japan Today “It was a no-brainer,” Gain states. “Next to GaijinPot, Japan Today is probably the best-known English website in Japan, and we needed it to stay number one in the English-speaking gaijin online media market.”
The company has already integrated its other services into Japan Today, including the jobs and real estate listings and other information offered through its network of websites.
“We retained the team that’s required to run Japan Today as a news site, but felt it was more efficient to use our internal resources on the IT side,” Gain adds. “We’ve since moved the site over to our own technology and put our internal production team in charge.”
While GPlus currently has 22 people in Tokyo and another four at its representative office in Shanghai, Gain indicates that that scenario is likely to change.
“Initially we were looking at a three-pronged attack to sell our websites and related services, so about five years ago we established the office in Shanghai,” says Gain. “Now, however, we’re considering shutting it down and pooling all sales, marketing and production in Tokyo, figuring that managing everything from a central location would be more efficient.”
In terms of setting up shop and getting a return on investment early on, Gain and Wilson see Japan as an easier market. But for long-term opportunities, they’re looking at China.
“China is a long-term commitment for us,” says Gain, who was in Shanghai for a year and a half before returning to Tokyo. “You’ve got the Olympics in Beijing in 2008 and the World Expo in Shanghai in 2010 adding to the buzz and excitement. The scale’s bigger, and the markets for us are closely tied. We have Japanese-speaking Chinese candidates looking for jobs here, Japanese-speaking candidates in China, Chinese-speaking foreigners in China, and Chinese English-speaking foreigners in Japan.”
Gain points out that one issue everyone deals with when moving into China is in deciding which type of corporate entity to establish.
“China is not yet really set up for entrepreneurs and start-ups coming in from the outside,” he observes. “As foreigners or foreign investors, basically we have a choice between setting up a representative office, which has a lot of limitations—including not being able to invoice in China—or a WFOE, meaning a Wholly Foreign Owned Enterprise, which has its own set of limitations, as well as a pretty hefty initial capital requirement.”
In addition to China, Gain and Wilson are plotting an expansion of the GPlus network of job sites into other areas of Asia, and adding other Asian languages such as Korean and Thai.
(Article from Ascendant’s View)