Opportunity knocks for hard-working entrepreneurs in Japan’s capital city

Gregory Lyon, CEO at Gregory Lyon, Inc

“If you told me 20 years ago that I was going to sell office furniture in Japan, I would’ve told you that you were crazy!” says Gregory Lyon, an American who came to Japan in his youth with no greater expectation than to earn a respectable living. He achieved that and more in Tokyo, a city offering opportunities to hard-working entrepreneurs with realistic expectations.

After attending college in the US, Lyon returned home without a plan. A semester abroad had turned the former pre-law student cool to the idea of becoming a lawyer. “There must be more to life than law?” he thought. Drifting, he considered joining the Marine Corps, coached a girl’s soccer team, and watched as his parents became increasingly alarmed. “They kept lecturing me that I had to have a plan,” he says. “I have a plan, so don’t worry about it!” he told them.

His plan included finding a job in South America (as he spoke some Spanish). Then again, he had never been to Asia. Lyon wound up joining the Japan Exchange and Teaching program in July 1997. He had never dreamed about teaching English in Japan, but the job paid well. “At least I’ll be a responsible person and make some money,” he thought. Lyon says joining the JET program was the best thing he ever did. Leaving it was the second best thing. “I’m not built to be a teacher,” he admits.

Unemployed, Lyon studied Japanese full time at language school while sending out resumes. He hoped to get a more suitable job before his money ran out. Still, he could not find one. “I was washing my clothes in the courtyard of the school. I only had enough money to get through the next couple of days to buy a ticket home,” he explains.

Just in the nick of time, he landed a sales job at the moving company, Santa Fe. It wasn’t a dream job, but he convinced himself it would be a fun learning experience. Eighteen months later he switched jobs, joining the American based furniture manufacturer, Herman Miller. Herman Miller services multinational companies wanting their worldwide offices to look and feel exactly the same. From Tokyo, Lyon serviced Herman Miller clients in Japan and Korea. He joined at the height of the 2001 dot com bubble.

Sales in Japan all but dried up after the bubble burst. Korea, fortunately, was still hopping. What’s more, the firm’s Korea dealer was under performing. Lyon thought he should move to Korea. In Japan, he was competing against 10 other sales guys for non-existent sales projects. In Korea, at least there was a market. “If I move there, it’s going to pay for itself,” Lyon told his boss.

In October 2002, he flew to Korea, found an apartment, and returned to Japan to announce he was moving to Korea in November. “Wait a minute,” his boss said. “I don’t even have approval.” But Lyon argued that it would not be interesting for Herman Miller to employ a salesman in Japan who wasn’t selling projects. Nor was it interesting for him either, if he couldn’t contribute. “We’re either doing this or were not!” cried Lyon. Soon afterwards, he got the sought after approval and moved to Korea. Lyon switched around distributors and significantly grew the subsidiary into the largest importer of office furniture in Korea. He also met his wife to be, an American who was teaching at the military base in Seoul, before returning to Tokyo with the firm a few years later.

His big entrepreneurial break came in 2008, when Herman Miller changed its distribution strategy. Up until then, the $2bn global furniture giant sold direct in Japan. Herman Miller employed an internal staff of salespeople, including architects, designers, project managers, logistics, and so forth—everything needed not only to win projects, but to design, ship, deliver and provide after-sales service. This was hardly efficient or productive.

Why? When you buy a car, you don’t buy from Toyota – you buy it from a dealership. It’s the same thing with furniture. Interior designers and space planners use AutoCAD to determine the right size of furniture to fit into layouts which match building codes. There needs to be enough space for employees to work comfortably and to pass through exits. “There is so much more to the furniture business than just coordinating color, sizes and fabrics,” he explains.

Herman Miller spun off the non-core parts of their business so they could concentrate on furniture design, marketing and distribution. Gregory Lyon, Inc became their first independent agent in Japan.

Today, Lyon employs two salespeople and a general manager who sell furniture to mostly Western clients. “Everybody sells. Even my designer has to be responsive to customers and design firms, to answer the phone and e-mails on time and in the right way.”

The business is competitive. Everyone gets excited about coming here. They look at Japan’s GDP and how much money people spend. They think they should be selling billions of dollars. In reality it’s a difficult market. Gaining and retaining business is hard. Lyon competes with 40 other companies which sell Herman Miller furniture. “We’re one of the biggest. Yet every day, it’s like going into war,” he says.

The furniture industry also suffers from business cycles. When clients expand or relocate in a growing economy, the business does well. In a down market, business ceases. Gregory Lyon assumes the brunt of the cyclical risk, but mitigates the impact by selling other less cyclical and counter cyclical products, like carpets to buildings (which are always under construction), partitions and so forth. “We have months where we’ll do huge amounts of orders and months were we do barely anything,” Lyon laments.

Despite the stresses of running a business, Lyon is happier being a owner business. “At Herman Miller, I didn’t know everything. That made me uncomfortable. I didn’t know the company’s revenue or profitability. I didn’t know what the company’s plans were. Now that I know everything, I’m happier, but it doesn’t mean it’s easy. It’s hard and it’s tiring running a cash flow driven business. You’ve got to pay salaries and rent, while you go out and sell. It’s something I worry about pretty much all of the time,” he says, adding “People underestimate how stressful starting a company is.”

For entrepreneurs like Lyon who can deal with the stress, who are not afraid of hard work and don’t have preconceived notions about success, Japan’s capital city may be an ideal place to start a new business. Almost 38 million consumers equivalent to 30% of the nation’s population live in Greater Tokyo. The city is not only largest in the world, it is also wealthy. Tokyo’s GDP surpasses all others cities worldwide, including New York, London, and Paris, according to The Brookings Institution. Its GDP rivals that of the Netherlands and surpasses others, including Mexico and Korea.

Business customers are within easy reach. About half of the nation’s companies with capital exceeding $9 million (¥ 1bn) are located here. The city also headquarters more Fortune Global 500 companies than any other, except Beijing. Tokyo is clean and safe. Its public transport is fast and efficient. The cost of living is moderate, in part because Japan’s socialized medicine provides excellent and affordable healthcare. The quality of life is high.

Lyon may never get rich selling furniture, but he takes satisfaction knowing his small business provides a decent living for his wife and children, in a country that is different, fun, and a bit off the radar. “We’re a normal family that just happens to live in Japan,” he says.

Gregory Lyon is CEO of Gregory Lyon, Inc and a Governor of the Tokyo American Club.

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