How many Japanese does it take to replace a broken US-made electric bulb (or more precisely, deal) with a good Japanese one at an Israeli high-tech company?
Triangle Technologies thinks it takes only one Japanese, if he is Dr. Tsutomu (Tom) Kobayashi, former vice president and deputy general manager of Sharp Corporation's R&D, who recently joined its ranks. The Japanese-Israeli investment company chalking up this recruitment to its credit believes one person of Tsutomu’s caliber is tens of times more effective than recruiting a dozen other employees, as Yazam.com did.
Kobayashi held a series of senior positions in Sharp and other companies. He was in charge of Digital Equipment Corporation's and later of Apple Corporation's R&D in Japan. “In fact, Kobayashi recruited Triangle Technologies, not the other way round,” founding president and CEO Daniel Isenberg says.
In the thirteen years before Kobayashi joined Triangle Technologies, the company proudly achieved 70 deals for an overall $250 million for its Israeli customers. The company operates in three areas (hence the name): business connections, investment banks and the setting up of joint ventures.
Commenting on this model, Isenberg says he knows of no other company in the world operating in such a wide range of fields as Triangle Technologies. He says the model was developed over several years, during which numerous changes were made. At first, the connections were strategic but as time went on, investment banks joined in. Isenberg has no plans to enlarge his team as the company grows. “Look at how many people Yazam.com had, and it didn’t help them. I prefer to expand our operations, while leaving my team small.”
The comparison to Yazam’s operations vis-a-vis the size of the team was perhaps not incidental. Triangle Technologies’ sole competitor (which hardly exists now) is Todo, acquired by Yazam six months ago. Todo set up several ventures in Japan with start-ups from the RAD group. I haven’t yet understood why Yazam acquired Todo, even before it fell. From our viewpoint, our only competitor no longer exists.”
Isenberg, who is also a partner in the Jerusalem Venture Partners fund, does not consider venture capital funds with Japanese companies as investors that are connected to Triangle Technologies as competitors. “The funds want to work with us and are pleased to know an entity exists to help their portfolio companies grow,” Isenberg says, explaining why he thinks Triangle Technologies has no competitors.
In 1983, Isenberg worked as a consultant for Stef Wertheimer in setting up the Tefen Industrial Park. Together they organized an entrepreneurs course, during which he tried to combine entrepreneurship and Japan. He says that Japan either enchants you or it doesn’t, and he got enchanted.
Isenberg: “It’s amazing, one of the things I studied once is Japanese trading companies, like Mitsubishi, Tomitomo, Mitsui, and so on, which have enormous influence on both the Japanese and global economies. To illustrate this, the six largest trading companies operate with $1 trillion. Each of these companies has only 10,000 employees.”
Isenberg saw that they had a great deal of money, logistics, and good marketing set-ups, but no technology. This is not a printing mistake, Isenberg claims the Japanese lack technology. He also claims that in Israel, the situation is reversed. We have no marketing or logistics but we do have technology.
He first approached Mitsubishi and persuaded them the importance of connections with Israel. Isenberg had no problem reaching the right places at Mitsubishi due to his circle of friends, but surprisingly, he found a problem on the Israeli side. He had to convince Israeli entrepreneurs that it was worth their while looking at Japan, despite all the cultural and language barriers. “Everyone has an uncle in the US and it’s very easy to sell products when you have a relative in the US.”
Isenberg says Israel has a good reputation in Japan, a lot of it thanks to Triangle Technologies. Just as Israel is identified with political and security problems, it is also identified with technology. “The average Japanese in the IT field has the feeling that Israel means high-tech”.
Having known Japan for many years, Isenberg says that business-wise Japan is undergoing tremendous change. Up until a few years ago, the Internet penetration rate in Japan was particularly low. However, the current rate is massive, with a focus on cellular, in which it leads the world in use, content, services and applications, infrastructures and profits. Isenberg says that 25 million Japanese currently spend the day hooked up to the Internet through their cellular phones. He says that this stems from the low penetration rate of regular Internet. The Japanese were ripe for something in Internet. “The Japanese do not spend much time at home – their houses are very small, so it’s very convenient to take something small with you to serve as a personal computer.”
Isenberg sees another field on the Japanese horizon – broadband as fast as an unstoppable high-speed train. The Japanese already have devices with 64Kbps.
When in Japan, act like the Japanese
Isenberg listened to a friend’s advice years ago on the matter of how to behave with Japanese businessmen. The first tip was “First of all, be with them.” The Japanese greatly appreciate a person who radiates inner truth and no hypocrisy. The second tip was “Start getting used to silence in conversations”. Israelis find it very hard to get used to 30 second silent pauses in a meeting and are always interested in filling the void. Isenberg demonstrates the rather embarrassing moments by pausing ten seconds, then says, “It is not a void. It’s a time for discovering a person’s qualities.”
Other examples are the friendly slap-on-the-back that Israelis like – it won’t go down well with the Japanese and giving respect means ending a meeting with a slight bow. Speech should be clear and slow and it is vital not to say anything you don’t mean. “If a Japanese businessman asks you when, and you say tomorrow, it has to be tomorrow. If you can’t say tomorrow, don’t say anything, or think about it and give your reply later.” There are many more rules to learn about the seating arrangement around the table, the tone of voice for each management level, how to sit and so on (just like in Arab countries, the most insulting way of sitting is to show the sole of your shoe).
On a final note, Isenberg says, “One company held a lengthy investment process with Israelis and Japanese. After three months of negotiations, the Israeli investor agreed to sign the investment agreement. The entrepreneur approached us demanding that the Japanese investor sign at the same opportunity. I told him that it takes the Japanese longer and when a large company with bureaucracy is involved, it will take even longer, but it will take place, since agreement in principle was given after going through the regular corporate channels.”
Published by Israel's Business Arena on 7 February, 2001