💡Bail - Ep #6

While we've only been in Chicago 5 days... the question you still likely have is how did we realize that we couldn't sustain life in Japan...
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How did we know that our entrepreneurial plane over Tokyo was crashing and it that was time to "bail" to Chicago?
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I think many entrepreneurs fail to realize when it's time to bail, holding on to hope as their "ventures" burn and plummet from the sky.
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Today's "Sunday Sip" is inspired by Paul, an old friend and retired JNJ'er who just subscribed:

• I've always appreciated the conversations I've had with Paul, as his business development mindset always seemed to be operating at a higher level than the engineers on the ground. While the engineers were fretting over what they should make next, it was as if Paul was asking "why" should a given innovation exist in the first place. As I explore the collapse of my first round of Tokyo Entrepreneurship I write with Paul's "why" top of mind.

"Make a Shit-ton of money"
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While it's not the best reason to enter entrepreneurship, this was an expression that Felicia and I held onto during the early stages of our ventures consulting startups, building a paid community on Skool, and doing high ticket brand management. We leveraged this expression not out of a desire to be wealthy, but rather out of a deep understanding of what it would take to continue expat life in Japan beyond JNJ's expat package. Anything we put our hands to had to be excellent, provide massive value to our clients and scale quickly.
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Otherwise we would fail... and failure in Japan with four kids wasn't an option.
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So let's break down this 120 day entrepreneurial journey into 4 key stages:

1. Assumptions
2. Risks
3. NUDs (New, Unknown, or Different)
4. Bail Decision

Engineers leverage assumptions all the time as the world does not operate on a perfect "frictionless" plane. That said it's normally a faulty assumption such as "aerodynamics" that leads to catastrophic failure such as the Tacoma Narrows Bridge Collapse.
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Here are some of the assumptions that propelled us forward despite ever-present risks.

• That I could be an entrepreneur and a stay at home dad to take care of baby Akio.
• That Felicia could land a job at our kid's international school to deeply subsidize our children's tuition (~18k per kid).
• That my deep expertise across Innovation, Marketing, and Commercial strategy would make me incredibly valuable in the Tokyo Startup Scene.
• That I could launch a mid-ticket community on Skool for Engineers, Entrepreneurs, and Global Leaders by creating supply/demand tension using waitlists.
• That we could efficiently land high ticket clients for brand management while delivering on client expectations in parallel.

As we took the jump and decided to continue life in Japan, these were our known risks that we triaged in parallel to getting our ventures off the ground.

• No financial cushion, we pulled a 75k personal loan to cover a year of tuition for the 3 kids and housing/expenses for four months.
• No medical insurance for the family, and unknown costs associated with joining Japanese Health Insurance.
• No existing network beyond JNJ in Japan... limited lead time to become a "Key Person of Influence" in the Tokyo Startup Scene to secure highly qualified leads.
• Visa Sponsorship Uncertainty with 3 potential pathways:
  • Felicia lands a job teaching full time to gain sponsorship
  • I secure a Shibuya Startup Visa to start my own company focused on fatherhood
  • I generate enough revenue (5mil yen) to secure a Business Manager Visa.

If you're working for a larger techno-giant like JNJ, there is often an apprehension of R&D explorations outside the business's wheel house.
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Thus during "Front End" explorations, we typically highlight "NUD"s... aspects of a given technology that are "New, Unknown, or Different". Too many NUDs and a technology rarely charters as it gets squeezed out by other high revenue opportunities with lower risk. This is quite contradictory to how many startups operate, but that's also why the techno-giants tend to persist and 94.7% of startups fail.
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Our decision to "bail" was highly influenced by NUDs that exposed our inability to reach clear air in our Japanese ventures.

• After multiple attempts Felicia was not able to secure an international teaching position in time to subsidize tuition. She did land a part-time subbing job but it took two months for her to establish Japanese banking... thus she couldn't receive any revenue in time to alleviate our burn rate.
• Joining Japanese medical insurance was outlandishly expensive. For the first two years that we lived in Japan we were on private health insurance and only paid into US social security. Upon joining the Japanese plan (while unemployed), we were expected to pay two years of back-taxes... roughly 11% times two years of inflated salary due to various ex-pat benefits from JNJ.
• After a visit to JETRO (Japanese External Trade Organization) I learned that there was no way for me to legally get a consulting business off the ground within current lead times to secure Japanese business banking and self-sponsored Visa Status.
• I had underestimated the risks of landing high ticket clients for brand management. We did weeks of free work to land a bid, everything looked incredibly promising and there was even a bit of wine & dinning. But the client attempted to extort more free work, and when we began pushing invoicing milestones conversations the deal evaporated. Lead times of this failed deal led to an overdraft on US Checking and we immediately realized we couldn't replicate this process with another potential client fast enough. Its kind of like how a cheetah can only miss three gazelle hunts before it dies from lack of energy.
• Weak Yen diminished pricing power for brand management, paid community, and startup consulting w/ Japanese companies. I would need to have 60%+ clients in US in USD to overcome this gap.
• Skool launch strategy failed to account for apprehension of paying for a community that folks couldn't experience first. Thus a two community model was necessary... one free to migrate interested users and a paid one to take them to the next level. Lead times for this approach also blew past our burn rate projections.

So how did we know when to bail?

When I started making mistakes...

• When I put too much hope in landing our first "high ticket" client, and didn't trust my gut that something was off about the deal.
• When I pushed selling my Skool community in a way that made one of my prior colleagues and friends uncomfortable. Reconciling this relationship was far more important to me and it triggered a full reset of my approach to skool moving forward.
• When I struggled to deliver for my first two initial clients because I needed to focus on closing additional clients to chase profitability
• When I realized there was no feasible way to overcome back taxes and confidently used Japanese Health Insurance
• When I realized there was no feasible way to keep my kids in international school in 2025.

I think the most challenging aspect of discernment was that many entrepreneurs are told that if we just stay in the fight longer than all our peers... if we just outlast the competition... then we will win.
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But the reality is that entrepreneurship is a long game with multiple hills that aren't worth dying on. You need to build the discretion on when to traverse to the next hill and cut your losses.
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So over fall break, Felicia and I made another impossible decision... our 14th move in 3 years.

We pulled our kids out of school immediately, allowing us to salvage a tuition reimbursement of 20k. The exact amount necessary to coordinate overseas shipment of all of our goods to Chicago. We floated international airfare on the AMEX and within 2.5 weeks of our decision we touched down at O'Hare a day before Halloween. We've been graciously hosted by Felicia's Father and Grandparents until I land a job.
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We pulled our 401k that I've built up over the last 10 years at JNJ to purchase a minivan (2016 Honda Odyssey), zero out a portion of our liabilities, and cover living expenses until early Q1 when I anticipate being hired by either Baxter, Medline, Abbott, AbbVie or some other lovely medTech company in North Chicago.
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But I'm not done as an entrepreneur. I just didn't want to die on that hill in Japan.
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While one framing of this story is that I failed and "bailed" to Chicago... I prefer reframing it, that I learned exactly what it takes to build the life I desire in Japan for me and my family. I know my product market fit, who to bring along in the journey, how to scale gradually, realistic lead times, and I'm confident that we'll find our way back to Japan on our own terms.
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But that's for next week's Sunday Sips.
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So as you navigate imperfect assumptions, risks, and NUDs in your own life.
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May you boldly keep moving forward... trusting that there is nothing too big for you to handle. Sure, circumstances might redirect you or set you back a few years financially... but that doesn't define who you are or what you're capable of.
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And as always friend... keep changing the world!

🧐Content Worth Sipping On

🧠 SKOOL | A Frog in a Pot Why do we continue to stay in jobs that don't serve our best interest both personally and professionally. Watch on YouTube

🧙‍♂️ My First Product Market Fit Why most small business owners fail at content creation and brand management. Watch on YouTube

🤖 Our First 1on1 - New Here? My engineering origin story, 12 moves in 1 year to get to Japan, and a big jump into SKOOL Watch on YouTube

🧙‍♂️ aFamilyFrenzy Social - The Pancake Princess Check out some of the great work I'm doing with my clients to Connect Their Digital Societies. Watch on YouTube

Hey Friend, ​ Each week, I curate Sunday Sips with a specific subscriber in mind. ​ Today's post was inspired by Paul a retired JNJ'er and old friend from my days back in surgical robotics and Front End Innovation. I was so excited to see that they had subscribed to Sunday Sips and it immediately sparked various ideas on Business Development and Entrepreneurship. ​ If you have a specific question or topic that you'd like me to sip on, just reply to this email... and maybe you'll get a shout out next week.

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