Most Westerners come to Japan on short-term assignment. They stay two or three years, then leave. Few make Japan their permanent home. Fewer still start a business. This is the story of a young American, first lured to Japan by his love of judo, who stayed to build a leading healthcare services company.
Mark Colby started learning judo aged 9 years old at Spokane Washington’s first judo school, Seikikan Dojo. In 1978 he came to Japan to play judo with his high school national judo team. A year later, he trained at the Colorado Springs Olympic Training Center as “cannon fodder” against Olympians-in-training for the 1980 games.
Every summer during college Mark returned to Japan to practice with the Koichi riot police, the toughest training available. There, on judo mats and at izakaya, he learned to speak Japanese. It wasn’t formal Japanese, but it was “good enough”.
Stateside, Mark studied to become a dentist. But his big hands got in the way. He failed 4 out of the 7 State Dental Boards. “Judo fingers and dentistry didn’t mix,” he explained. Perhaps it was for the best. He took a job at global pharmaceutical giant, Abbott Laboratories. Shortly afterwards, they reassigned him to Japan, where he continued to practice his beloved sport.
Once settled, Mark began servicing Abbott’s US military clients. US military hospitals used Abbott’s products to conduct medical diagnostic tests on military staff. Most hospitals sent clinical samples of blood and urine to the US for analysis. The results took forever. Half the time samples got lost or spoiled. Mark asked military hospital staff, “Why don’t you send your clinical samples to Japanese laboratories?” They replied, “We can’t because they’re not certified by the College of American Pathologists (CAP).”
Spotting a business opportunity, Mark approached Teijin-SRL Diagnostic, one of Japan’s largest labs. He suggested that they become CAP accredited to win the US military business. SRL was intrigued, but had no idea about how to do that. So they asked Mark to help them. Frankly, he had no idea either. But after offering him $150,000 to figure it out, he decided he could learn. SRL won the US military business after gaining accreditation, becoming the only CAP accredited lab in Japan — indeed the first to be accredited outside the US.
At first Mark thought SRL was a one-off customer. Three months later, he got a call from another laboratory also seeking CAP accreditation. The dribble of inquiries soon turned into a tsunami. “All of a sudden, we were the only game in town to help labs get CAP accredited,” said Mark, adding “All the commercial reference labs in Japan wanted to be certified.”
The firm he founded in 1991, called CGI K.K., now employs 25 employees. CGI serves Japan’s $24 billion clinical diagnostic market. The market is comprised of 8,000 labs — 3,500 big ones — which conduct about 2,000 different kinds of medical tests. CAP accredited labs must follow 2,000 – 3,000 rules. CGI provides the quality management systems which walk labs through the steps needed to become accredited. That process culminates when trained English-speaking CAP inspectors arrive in Japan from around the globe to inspect laboratories. Labs must be recertified yearly, so CGI also offers labs the tools needed to ensure standards are maintained between inspections.
Astonishingly, the Japanese government does not regulate diagnostic labs. Healthcare providers, including hospitals, are self-regulated. Everywhere else, including Korea and China, regulations mandate minimum standards in the laboratory. Recognizing that people live or die by the accuracy of diagnostic results, the Japanese government started reimbursing labs to certify earlier this year (accreditation is still voluntary).
For 25 years CGI earned healthy margins in a niche which big firms had ignored. That gave Mark the chance to expand into related markets. CGI’s proficiency testing business, for example, helps hospitals and labs conduct blind tests on outside samples — a requirement under CAP accreditation. CGI imports samples from the US, relabels them from English into Japanese, before redistributing them to hospitals and laboratories for testing. CGI then reverse translates the sample test results, ships them back to the original provider in the US, which then determines if test results fall within accepted ranges. About 400 labs in Japan use CGI proficiency testing products.
CGI also produces ‘In Vitro Diagnostics Global News’. Launched 10 years ago, the Japanese language journal publishes peer reviewed scientific papers covering the latest in diagnostic technologies, especially molecular diagnostics (DNA analysis). It is printed and distributed to 14,000 labs and manufacturers. Almost all Japanese manufacturers and clinical laboratories now receive a copy.
CGI’s core business has evolved over the the years. The firm once sent staff to client’s premises, guiding them step-by-step through the long accreditation process. CGI’s know-how has since been transferred to software and more recently spun out to the Cloud. Called LEAP, CGI’s Cloud offering guides laboratories all the way through to accreditation without the need for external consulting support. Paths to both CAP and ISO accreditation (a global standard) are available. Today, Roche Diagnostics, the world’s largest diagnostic company, distributes LEAP in Japan under the Roche brand.
Mark has also taken falls. In 2004 he raised $20 million from friends to develop a spin-off hospital accreditation system. The idea was to reduce the number of patients who die from antibiotic-resistant infections acquired in Japanese hospitals. Mark learned the hard way that ‘doctors are always right’. “They refused to admit that they had a problem with infection control,” he said. The entire investment was lost, including most of Mark’s own life’s savings. “I crashed and burned on that one,” he said. A year later, the judoka was back on his feet, ready to fight another day.
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