Quakebook record

See the quakebook at http://quakebook.blogspot.com

Okay, it’s been two and a half weeks since the earthquake and tsunami, and I’ve been slack in not writing something here.  First and foremost, Yumiko and I are fine.  Her family is fine.  All our friends that we’ve contacted (including Yumi’s friends in Sendai) are safe.  We were in St Louis when it hit– and for that, I feel guilty.

I feel guilty for not being there, for not being able to help.  I feel guilty for not “sticking it out” with all my friends in Tokyo and Chiba that are somehow putting one foot in front of the other and trying to make a normal life again.  We didn’t evacuate Tokyo, we had left two weeks before it hit (as scheduled).  I would like to think that we wouldn’t have evacuated, but then again, I see my friends who have moved their wives and children down to Western Japan or back to the US, and I honestly can’t say what I would have done.

Living in Japan, one cannot help but confront the older generation that put up with incredible hardships to make the modern miracle.  These people endured starvation, bombings, privation, and said nothing, but simply picked up the pieces and worked harder to make an economic powerhouse out of ashes.  My own father-in-law tells the story of when he was 8 years old in 1945, and he had to scour the woods near his house for grasses and edible roots to boil over an open pot.  He ate grass.  For several weeks.  This same man went on  to  work incredible hours at a construction company and ended up retiring just a few years ago in relative comfort.  He reminds us of this occasionally, and it pretty much shuts me up for any complaints I may have been entertaining in the back of my head.

Now, we’ve got a whole new generation of Japanese that will 頑張る (“gambaru” – to stick it out, hold on, endure) through their own phoenix-like period.  The country is broke.  The economy was already wobbly after years of stagnation.  The population is in decline.  Japanese efficiency is gradually being eclipsed by their Korean neighbors and the cheaper Chinese/Vietnamese/Indians.  The government was never really that transparent nor reassuring, aside from Secretary Edano (who finally got some sleep).  It will be a tough slog.

I am hopeful however.  This is the first large-scale disaster that we’re really seeing unfold in real-time first-hand.  My twitter feed has been both a curse and a blessing: a curse because I am not there and can do little but donate to the Japan Red Cross; a blessing because I’ve been witnessing my friends move through various stages of recovery:

  • In those early hours, it really was all about contacting each other.  That’s it.  The phone lines were jammed, cell phones turned off.  If twitter or Facebook ever proved their worth, this was it.  We couldn’t reach our parents for almost a full day, but ultimately, my father logged into Skype, and we were able to talk for 30 minutes (free!).  I got twitter updates from all my friends, and the initial panic subsided.
  • The next few days was a scramble of aftershocks, sleepless anxiety, and the creeping uncertainty of the Fukushima nuclear plant.  Here again, social networks proved their value if anything but to keep small bits of information rolling amongst my friends.  The most fascinating bit was to see the first-person reactions against the western media– who were getting the situation completely wrong or couldn’t even be bothered to leave their hotel rooms.  One more strike against old media, methinks.
  • Prayforjapan.jp showed a stream of tweets, several of which had me in tears at several points throughout the last three weeks.  The selflessness and gratitude of survivors has been covered elsewhere, so I won’t list them out here again, except to say that it’s a shame that many of the best stories were never translated into English.
  • The adrenaline started to wear down, and my friends began to update the most inane little bits of update on twitter and facebook: “Leaving work, headed to the station now” followed 30 minutes later with “at the train station, walking home now”.  It dawned on me that these updates served a couple of roles: it reassured us (friends and family) that these people were still alive, and it probably reassured the writer in some sort of Bill Murrayish baby steps baby steps one-foot-at-a-time way to get through the rolling blackouts and hoarded food.
  • After a few days, the lightness started to come back.  The Kiwis and Aussies in Tokyo started sending twitpics of the pints they were drinking, the Japanese friends started to trade black humor about what the yakuza would do with no pachinko parlours.  The rebirth was beginning.

Now, we’re actually starting to see something constructive come together.  the Libyan revolt has since eclipsed the western news, and Japan still sweats the Fukushima plant, but these networks are starting to put things together themselves.  I still cannot figure out where the money to rebuild will come from, but I know that Japan will be alright.  This is an incredibly resilient place, an incredibly warm and resilient people.  日本は回復する!頑張ろ!

If you’d like to help, please donate to the Japan Red Cross.  If you’d like to see these stories and find out more about the real time unfolding of this whole thing, check out the #Quakebook at http://quakebook.blogspot.com

Sakura view of Mt FujiThe highlight of Springtime for Japanese is “Sakura-mi“, where everyone takes an afternoon off, meanders to the local park with their co-workers, spreads out some blankets, and starts singing ballads while drinking sake and enjoying the pink cherry blossoms that cover every tree in sight.  It’s a great time.

Facebook is rapidly approaching its Sakura-mi in Japan.  Until now it was the dark horse behind the dominant Mixi.jp, and really only used by Japanese students and employees who had spent time in the U.S. or E.U.  But now, with the movie The Social Network hitting it big in Tokyo, and Mixi dying a slow death from no new functionality and a poor user interface, the network effect that accelerates Facebook adoption is taking off.  However, it’s not all sweet rice wine and kara-age.  There are some snags.

Facebook has the following going for it in Japan:

  • The movie is pretty much like a 90-minute tutorial on how Facebook works, and that it’s okay (necessary) to use your real ID and not a fake alias.  Japanese are finally getting used to that point.
  • Mixi always accepted and centered on people making aliases, which seems like a protection of privacy (a big point for Japanese), but ultimately prevented people from connecting with their real-world set of friends.  Everyone had their real friends, and their Mixi avatar strange connection friends.
  • Facebook has its marketing act together: it’s a viable advertising channel which means that companies are looking at it seriously (which they never really did with Mixi).
  • Facebook has a workable API for others to utilize (e.g. Facebook login).  Mixi never got that far in their product roadmap.

However, Facebook may run into some bumps:

  • When we all signed up for Facebook 3-4 years ago, the Facebook viruses and scams weren’t as advanced as they are now.  I see my Japanese friends signing into Facebook for the first time, but many of them are falling victim to the same scams and dupes that tricked my young nieces when she first joined up.  In short, Japanese users are still a bit naive.
  • The “real identity” thing is a big lump for Japanese users to swallow.  If they use their real ID, that means that all those people from High School and old jobs and college can now really find them.  Americans went through that phase, but admit it– if you could do it over again, would you really “friend” all those random people that you happened to graduate at the same time from some school 15 years ago?
  • On-gaeshi.  I’ve described this before as a benefit for short texting like twitter, but I still see it as a small hindrance for Japanese.  Friending one person in a group obligates them to friend all people in that group, and anytime they get a friend request, they feel they MUST return the favor.  It almost puts a compulsory feel to the network effect, and it creates a slight anxiety for users.
  • Lack of shopping benefits: there’s no deal at Starbucks or Takashimaya or Mitsukoshi for participating in a given Facebook promotion, because those large companies are still way behind on the Social Media thing.
  • Work environment: Japanese office workers are pretty much sitting shoulder to shoulder on long bench tables, with the section chief at the end of each row, and the bucho sitting behind him (furthest from the front door, of course).  There are no cubicles, no offices, no privacy.  There’s no way office workers can screw off on Facebook during work time.

I’m sure Facebook will eventually roll through the country.  I am also relatively confident in predicting that penetration will never be as high as it is here in the US.

Darth Vader wants you to buy a smart phone

Not my first choice for spokesman, but hey-- it's Japan.

Smartphones and tablets are changing how we input, read, and interpret information.  The finger pinching, sliding, and accelerometers are giving us a way to interact in very common sense approachable ways.  “No duh, Dave” you say– true.  This topic has been chewed over many times.  I’d like to bring up a new angle, however: The East Asian markets never liked keyboards in the first place.  Typing documents was always a chore, and it held back office efficiency for a long time.  These new devices may actually get them over the hump.

If you’ve ever tried typing a sentence in Japanese, Chinese, or to a lesser extent Korean, you know it’s a laborious process.  Because of the character-based text, people were often forced to type in phonetic equivalents, then search through homonym matched until they found the right word.  Then there’s the honorifics and other cultural baggage that Confucius laid on top of everything  that stretch simple greetings of “how are things?” into “forgive me for not writing sooner, I wish you all the best.  How is your incredible workload doing lately? You’re such a hard worker…”  For Internet activity, the URLs still are centered around the ABC latin alphabet.  Yes– other character systems are now ‘accepted’, but no one really types those.  In short, Kanji is a bitch.

Enter the smartphone.  We can now talk to our computers, and they understand us a statistical majority of the time.  We can wave them around, and they know what we’re trying to do.  We can look at QR codes, and skip that whole ‘type in this URL landing page’ mess.  For the urban markets in Japan, Korea, and China– where everyone treats their mobile phone as their primary access point– the Internet is becoming very useful again.

Some friends of mine are in the mobile app business here in Japan, and business is good.  Watch out, app market.  Things will get pretty hot pretty quickly.

FTC says search engine alliance doesn’t breach anti-monopoly law
Google owns the search engine market in North America and most of the English-speaking world.  It’s strong on the continent of Europe.  Here in Japan, however, it’s still second (and spaced back a ways) to Yahoo Japan (note: Yahoo Japan is a separate organization from Yahoo US, although they started out together).  In PRC China, Google is getting strangled by Baidu and the CCP– but that’s another day’s story.

I’ve always marveled at Yahoo Japan’s ability to stay on top of the game.  I’ve noticed most Japanese use Yahoo for their homepage, and the mix of news, sports, weather and search make a nice jumping off place (standard portal stuff).  Culturally, I can only guess as to why this is the case:

  • Did the Japanese embrace the web right at the peak of Yahoo’s power, who simply lucked into first place?
  • Do Japanese prefer clicking through to finding something instead of text searching for it?  (yes)
  • Did the blank white abyss of Google’s homepage just not gel with the Japanese? (likely– behold the Japanese hatred of whitespace in advertising sometime)
  • Did Japanese cell-phone internet access initially skew them toward Yahoo? (also yes– it’s been called the “galapogos effect“)

One other smart play that Yahoo Japan did a long time ago was to launch Yahoo BB, a broadband service launched in 2001 by the communications pioneer Son Masayoshi.  This likely cemented the brand for many Japanese.  Just as the Internet meant AOL for many Americans in the mid- to late-90s, the Internet meant Yahoo for Japanese quickly adopting broadband.

But what happens when the dominant portal cannot get a quality search engine from the US partner anymore?  Develop one in-house?  [That's what the Chinese are trying-- and it's an expensive venture, made possible only by the cheap labour and lavish government funding provided by Beijing.]  No, too expensive.  It’s better to go shopping, but which engine to get?

The Google search engine is the clear leader– everyone knows that (even Japanese users– they simply stay on Yahoo because it’s their default homepage).  The Bing engine may have been a better deal, but likely came with too many strings attached.  Overall, IMHO, this deal seems to be a good idea for both partners: Yahoo gets a quality search engine and can continue to concentrate on it’s portal offerings (news, email, shopping, etc.), while Google finally gets enough penetration in the AdWords market here.

Samsung apartment cluster in Seoul. It looks like those towers in The Matrix...

The word zaibatsu (財閥) in Japanese, or chaebol (재벌) in Korean, translates most closely to ‘business conglomerate’, but there are some important differences than what Americans or Europeans might understand: zaibatsu are very close-knit to their partner companies, often exchanging shares, emphasis is placed on vertical integration wherever possible, money can slosh around internally much more easily than modern Western law would allow.  While the zaibatsu were broken up after WWII by MacArthur, their shells continue on in Japan: Mitsui, Mitsubishi, Sumitomo. (side note: Mitsui and Mitsubishi each own either side of downtown Tokyo).  In Korea, the Chaebols are even tighter, usually family-run affairs, and pretty much stitch up +80% of the Korean economy.  Perhaps you’ve heard of a few: Hyundai, Smansung, LG, Lotte.

We are now starting to see the rise of the Internet Zaibatsu: Amazon, and Google lead the pack, with Liberty Media, IAC, and other smalle companies following close behind.  These organizations share many of the same qualities of a classic zaibatsu (that sets them apart from just being a conglomerate):

  • sympathetic data swapping among properties (either product data or personalized customer profiles) is a central goal in order to maximize economies of scope.  This can bring great seamless integration, or it can dunk you into an opt-in email hell from “partner companies”.
  • IT infrastructure is shared wherever possible for economies of scale
  • Properties are free to do what they want to meet P&L goals, as long as part of those goals serve the larger good by extending functionality or getting new data sets into the graph.

So far so good, right?  Here’s the thing: zaibatsu are simultaneously tremendous pools of capital and research innovation, but they are also desperately smothering to the environment around them.  The mere hint of a zaibatsu contemplating entry into a market is enough to scare the crap out of the mid-level players.  I am not stating that they are monopolists or oligarchs, just that the zaibatsu structure makes these tough companies to beat.

To a certain extent, the confidence (arrogance) that comes with being a zaibatsu can lead a company into strange directions.  At the extreme edges of the vertical integration strategy, zaibatsu companies will get into businesses where they probably don’t belong.  For example, Samsung specializes in heavy equipment and manufacturing, which lead them to electronics and appliances and all sorts of robots and then data control and professional services.  In the process, Samsung has also bought up huge tracts of land in Korea, which in turn got them into the apartment housing and farming business.  Strange bedfellows.

Google, in a search for ever-more efficient data centers, has gotten itself into the hardware business, data center construction, and overall power management.  Some eyebrows went up, however, when Google started to publicly state it was investigating new ideas toward Fusion power and other nuclear designs.  Is that a natural extension to address their electrical grid needs, or is it just hubris to think they’re so smart they can bring us Mr. Fusion?  Most recently, Google has announced boutiques.com, which may actually put them very close to the line of direct competition with the advertisers that pay the bills.  In terms of competition with Facebook or Amazon, boutiques.com makes perfect sense.  In terms of ’sticking to the core business model’ however, it may stray from the path, IMHO.

Amazon started with books.  Amazon then became such a great early ecommerce store that they branched out to other forms of media.  Soon, Amazon sold everything, including some things that probably don’t make sense, or didn’t really catch fire (like groceries).  That was all horizontal expansion.  The vertical expansion has gone both up the chain and down the layers: Amazon has spent a lot of time and effort to monetize and commoditize as much of their infrastructure as possible.  Their servers, their OS, their digital storage, their shipping are all now services for sale (independent of you being an Amazon merchant).  Shipping, warehousing and business metrics are all available from Amazon.  I’m surprised they haven’t pursued nuclear power like their friends in in Mountain View, yet.

In the end, which model is better?  One school of thought says that the Internet market loves specialization.  As an employee of shoes.com, the day we saw our competitors start stocking watches and trinkets and other chotchkies on their homepages was a good day.  Every day that Zappos moves more toward general merchandise is better for a shoe-only website, right?  The other school (the zaibatsu school) says that it’s all about customer wallet-share.  Anything an organization can do to satisfy more of the needs of their customers is a good thing.

Personally, I am not passing good/bad judgement on either model.  I am just trying to re-introduce a Japanese/Korean term for what we’re seeing lately.

The 1-yen coin will float on water

Japan is a very urban environment.  The countryside is draining of people, and the population is increasingly concentrated in a few large cities (kinda like that P K Dick story, except without the nuclear war).  As a result, there is a convenience store every 100 meters.  These ‘konbini’ are pretty much like their US equivalents, with some extra bonuses: a lot more microwave lunches and sandwiches all brought in fresh that morning, many more kinds of hot food (beyond just the 7-Eleven Hot Dog), and you can even pay your utility bills by handing the clerk the bill and some cash.

One thing is missing, however: the penny dish (take-a-penny, leave-a-penny).  Why?

Yes, the smart ass quick answer is because they don’t use “pennies” in Japan, they have little one-yen coins made out of stamped aluminum, which can even float on water from the surface tension because of their light weight.  Why no 1-yen dish?

The 1-yen coin is, monetarily, about the same value as a penny.  It is just as much a nuisance, also.  They jangle in your pocket, take up space, and are probably more expensive to manufacture than their actual worth.  Americans long ago voted their disdain for the penny by leaving them randomly on the counter, which spurred the idea of the penny dish in the first place.  Japanese are often astounded at the sight and concept of the penny dish when they first see it (this is usually their second surprise for the day– the first was “wow! You have 7-elevens here in the US, also?!?”.  Every time I buy something at a kombini here in Japan, I leave the 1-yen coins on the counter, hoping that someone behind me will use them, and the light bulb will finally go on for the store manager.  It hasn’t worked yet (and I’ve been doing this since the ’80s).

I’ve often ascribed this disdain for the penny dish to the store’s need to run an exact till, to issue exact change and keep perfect books.  That isn’t it, though– the whole point of the penny dish was so that the clerks could balance the till down to the last penny on each transaction and at the end of the day.  Then, I used to think it was because Japanese have an extended sense of “fair dealing” where they ask and get the stated price for every item (as opposed to their haggling, free-dealing neighbors).  That may be part of it, but I think I’ve finally figured out why: the Japanese term is “enryo” 遠慮 which the dictionary translates as “hesitation”, but that’s not all of it.  Something drives that hesitation, and I think it’s the anonymous nature of the penny dish.

Japanese people are not averse to borrowing things– neighbors borrow ingredients when they run out, pickup trucks when they move, pens in the office, and everything else.  However, the biggest difference here is that there is more ceremony, more polite asking, more quick returning, and overall a better personal connection between the borrower and the borrowee.  In other words, Japanese will only borrow something if they can return it right away, or otherwise compensate for the imposition with some nice gift, like a $100 cantaloupe or $75/pound of thin-sliced beef.   The concept of penny dish has no back-path; there is no way for the borrower to find out who their benefactor was that left the money there before.  Japanese cannot get the concept of “pay-it-forward” on this level yet (okay, maybe that’s too much– Japanese are very generous people)

That, or maybe it’s just culturally weird to leave money sitting around in such a down economy.

I’ve relocated to Tokyo with my wife for a four month assignment (possibly longer) in order to work with my company’s retail and wholesale partners in Japan, Korea, China, and perhaps The Philippines.  I hope to understand the nuances of Ecommerce much more closely as I settle in over here.  Here’s what I can tell from the first week:

  • Japanese retailers are behind the US retailers in terms of integrating social media.  This is likely due to Facebook’s (relatively) recent arrival.  Twitter seems to have good penetration, but not so much integrating into the catalog sites yet (no one is screaming ‘tweet this product!’ at me like every site in the US)
  • Design aesthetics are– well– a bit on the noisy and crowded side.  This is probably just as much due to the print legacy of crowded leaflets as well as to an under-representation in the drive for UX and its effect on conversion.
  • Rakuten.  They still call the shots.

I’ll be meeting with as many marketing software and ecommerce vendors as I can while I am here.  If you know of anyone I should meet in Japan, Korea, or China, please let me know.

Japanese twitter users at a football game. Source: theHindu.com (I see Ricky from "Better Off Dead" finally made it over to Tokyo)

I increasingly hear from people that they are “giving up” or abandoning twitter. Reasons given are the usual suspects: the signal-to-noise ratio is bad, no quality insights are possible in 140 characters, most tweets just look like shallow self promotion, product company spam. Indeed, there was a golden era (that lasted about 6 weeks) where one could tweet about a company, and receive a prompt response. Now that most companies have installed a twitter-monitoring robot, the service level is quickly degrading right down to the same level as the automatic email responders– or worse– the automated telephone system.

Twitter as a viable business tool is limited; as a marketing blurb tool it’s adequate, but as an ongoing small-talk medium it seems to do pretty well.

As I’ve picked up more and more Japanese friends on twitter, I’ve noticed that it seems to be doing relatively well in Japan (compared to the US market). Why is that? Is it just the stereotype of tech-friendly gadget-wacko Japanese? Or are there some other more specific factors in play? I have absolutely NO SCIENTIFIC RESEARCH to back this up, but here are my postulations. Perhaps someone out there can follow up with some actual useful information. I’m throwing this out now to get the conversation started.

Possible technology explanations for better twitter penetration into Japan:

  • Character/language density – One quality of East Asian languages that use Kanji is that many words can become pretty short. In English, “transport” is 9 characters; in Japanese it’s two: 交通. “Tokyo” is 5 characters in English, Japanese is two: 東京. Similar consolidations go for names, places, verbs, etc. Yes, Japanese grammar may get longer, but since when is proper grammar needed in twitter? It seems that the Japanese writing system has an inherent “density” advantage over English.
  • Input tools – Twitter seems tailor made for mobile devices: short, text-centric, quick input. For a networked society that already preferred the mobile phone-based Internet access, twitter drops right into place, often much handier than email. I’ve discussed this before.

Along with the tech explanations, however, there may be some cultural differences in play. These are kinda squishy, so please squint appropriately:

  • Inherent public posting – Most Japanese people I know guard their privacy pretty strongly, but no more so than Americans or Europeans, I think. However, there sometimes is a strong tendency to make idle chit-chat items public out to the group. Japanese people will usually not talk with strangers, unless someone breaks the ice with small talk about the weather or some ramen noodles. Then, the mode shifts to everyone wanting to build a connection with others, and everyone will pipe in their 2 cents. Mind you, this isn’t a political debate or anything concrete, just pichiku-pachiku. Twitter seems to facilitate this nicely. Let me put it this way: that signal-to-noise ratio that drives some of my American friends nuts fits in nicely with the low-level buzz that Japanese ping to each other to reinforce their relationships.
  • ongaeshi 恩返し — My wife (who is Japanese) dislikes instant chat with other Japanese, because of all the built-in politeness requires everyone to say “thank you” and “goodbye” at least 4 or 5 times before closing the conversation. For Japanese, a similar thing looks like it’s occuring in twitter, albeit in asynchronous slow motion: someone follows you, you actually have a bit of an obligation to follow them back. If someone tweets your name, you’ll RT a simple acknowledgement. Taken together, this may push enough people past that critical mass needed to keep a social network flourishing.
  • Lack of a Mixi / Facebook alternativeMixi is pretty noisy and cumbersome compared to Facebook, but has an interface completely native to Japan. Facebook, while cleaner, may be a little too “close” for the idle chit-chat that seems to go on in twitter (this is no different than the US: don’t you hate that guy on Facebook that has hotlinked all his tweets to show up in his friend feed?). Taken together, twitter gives a good outlet for quick updates via mobile phone in a text-rich environment (easily consumed on the train).
  • Son Masayoshi– The great thought leader of Softbank seems to be a prolific twitterer. Along with other leadingtech figures in Japan, Son seems to actually hold ongoing debates and policy discussions via twitter. This openness is refreshing if not counter-intuitive for Japanese business. Put together, twitter looks like the domain of the tech-forward progressives.

Just search in Katakana

UPDATE 4JUL2010: The ICANN board has now approved Chinese character URLs. I doubt this will change the marketing strategies for Japanese companies, however.  I think we’ll just get a bunch of redirects.

Americans invented the Internet, and it’s going to stay nice and readable to Americans as long as they have anything to say about it (daggumit). Most people in the Americas, Western Europe, and Australia are blithely unaware that a battle has been raging for several years among the internationalists over the format of the URL (the web address you type to go somewhere on the web). Why? Because these countries all use the roman alphabet. Our slavic friends would love to use cyrillic URLs; Chinese want Chinese characters, Koreans want hangul, etc. The ICANN (the international standards cops) are still only testing and allowing non-roman alphabets in limited trials.

Last month in Tokyo, I noticed something about all the adverts on the trains: the Japanese companies have found a way around the common restriction: they simply tell you (the customer) what to search for, using Japanese kanji and gana, nevermind what the actual proper URL may be. I’ve highlighted two examples here (forgive the low photo quality– lighting on subways isn’t so bright).

On the good side, by asking the commuter to search for a specific keyword, they’ve immediately screened out all the content from the English-language Internet (which can be overbearing in volume). Every mobile phone has this rudimentary web search capability, so the call-to-action is immediate.

Solar backpacks-- just search for

On the bad side, however, this strategy assumes some risk: if I ask for my customers to find me by searching for “スマート外国人” (smart gaijin), what happens when someone else comes along with a better SEO value for that term? All my advertising now goes to benefit someone else.

Mitigating this risk are three factors: 1) campaigns on the trains cycle pretty quickly, so keyword hints can be updated often; 2) the keywords are pretty specific, and the campaigns only bring more traffic, which then reinforces the lead position; 3) Rakuten has an almost monopoly-level stranglehold on web publishing in Japan. If two companies conflict over a desired keyword, Rakuten can probably work it out between them (ah, the Japanese sense of controlharmony). It’s kinda like when AOL or Yahoo could get away with this back in the day.

250px-suica.jpgI recently came back from an extended stay in my other home, Tokyo.  While there ,we did the usual daily things: ride the train, buy groceries, get lunch, eat sushi, watch Godzilla movies (well, okay, just once).  Here’s the thing: we only used a credit card maybe 3-4 times over 10 days, and used actual cash even less.  Everywhere we went, we used our Suica card.

This thing is metal, the size of a credit card, and uses contactless RFID to talk with whatever cash register is nearby.  Japan Rail started using Suica on the train wickets 10 years ago (traditionally, the choke point of inefficiency in any station) in order to speed people through before they get packed in like sardines (you’ve seen the pics before, and yes– it’s true).  From there, it soon spread to the convenience kiosks on the platform, the convenience stores next door, and now looks pretty ubiquitous anywhere within a kilometer of the station (which means everywhere except your grandma’s house).

Visa and Mastercard never got very far in Japan (compared to marketshare in the US).  JCP (a Japan-specific credit card) had a good run, but looks to be shrinking to second-class status like Discover Card.  Cash was always king: I used to walk around with the equivalent of $500 in my back pocket; most Japanese had $1000 on them at any given time.  Big cash + crowded trains = pickpocket’s dreamland.  I couldn’t ever figure out why crime was so low.

But enter the Suica– it’s got both Cash and Credit Cards beat:

  • can be loaded up with credit via monthly automatic deposit, cash in an ATM, or even cash-back from some POS
  • personally stamped with your daily commute route
  • same size as a credit card
  • no numbers or identity to be stolen
  • MUCH MUCH faster than a credit card transaction

visa1.jpgThat last point is the killer.  To buy anything, all we had to do was tap this thing inside a circle on the glass counter, as if we were beknighting the transaction,  done.  Meanwhile, a credit card requires a swipe, a printout, the hostess signing the receipt, and we (the buyer) countersigning.  I know that some US places are just accepting the one swipe under a given amount (no signing required under $25 or so), but it’s still slower.

My prediction: Suica or other RFID cards are coming to the US soon (some are already here).  They’ll take a good chunk away from Visa corporation, especially in mass-transit towns like Boston, NYC, DC, and/or San Francisco.  My money is on Boston or San Francisco, especially if they can figure out a way to build community-centric bullshit around the card.

If I were Yelp, I would be teaming up with JR on bringing a branded card to SFO right away.

© 2010 Dave Jenkins contact me via twitter @davejenk1ns or via email blog at davejenkins dot com Suffusion WordPress theme by Sayontan Sinha