How to build a global team while establishing a company in non-international cities
Takao, my dear colleague, wrote a nice blog post on how Gojo has cherished diversity. After reading his post, I felt like I want to write what I have done to make the team since the beginning of the company. I hope this post is helpful for those who don’t start a company in international cities but with global ambition.
The infamous Japanese work culture that we wanted to get away from
However, even now, some applicants for Gojo ask me, with slight concern, “I understand that Gojo is not like a quintessentially Japanese company, and is my understanding correct?”
Japanese work culture is somewhat notorious for its bureaucracy, hierarchy, alienation of minority, long working hours, inefficiency, etc. I think it is partly a stereotype made by media (drama, film, etc.), but it also contains some truth. Except that we work hard as most startups in the world do (but hopefully efficiently), we didn’t inherit any of the negative aspects of Japanese corporate culture.
There are two reasons why I didn’t want to make such a company.
First, I had struggled with the unconscious oppression of the majority that I have experienced as an ethnic minority in Japan. I believe many female professionals in Japan have experienced it too. Those who have never been a minority are sometimes unconscious of mildly alienating others. To be clear, I am not criticizing anyone. I am talking about how generally human groups work.
Second, since day 1, we have stated that we build the private-sector version of the World Bank. Without a doubt, such an organization consists of the best people from around the world. There is no world-renowned microfinance expert in Japan. The number of globally reputable Japanese fintech or AI startups is zero. Then, it does not make sense to make Japan the primary source for recruiting.
6 things that Gojo has done to make a global team
The challenge was that I have never studied or worked abroad. It is not a start-up founded by an immigrant who studied in the US. Due to some reasons, we established the company in Japan but wanted to build a global team. Here are what we have done.
1. Start the company with foreigners
The founders of Gojo were one Japanese, one Indian, and me (stateless). Then within half a year, we recruited one Cambodian, one Sri Lankan, and one Indian. If you establish a company with foreigners, you need to talk with him/her in lingua franca. Otherwise, the company’s foundation, such as the business plan, website, corporate principles, etc., would be defined in the local language. Do I want to join a company where important documents are written in a language I don’t know? Surely not.
2. Establish a quota and stick to it
Our first business plan stipulated that any nationality group should not exceed 40% of the members. Although we could not have been very strict on the quota, we have tried our best. Gojo’s Japanese full-time member ratio has never been higher than 50%.
I think it was one of the best decisions that I made to avoid a common pitfall that many Japanese startups experience.
Here is how they fail — all startups need to hire best-in-class talent to survive. You don’t have time. Then what you naturally do is to look for those whom you have worked with before. If you were born and raised in only one country, then they are likely to be of the same nationality group.
However, once a nationality group becomes a supermajority, you can hardly restore the diversity, because the supermajority group slowly excludes the minority members, e.g., talking in the local language even in public places. Then gradually, minority members feel excluded and leave the company. The better people leave earlier because they have more options outside.
Many at Gojo told me that I should hire more talented Japanese to get through the challenges. However, I was adamant that I would not compromise, even when the very survival of the company was at stake. I was thinking that such a recruiting might be an optimum solution for the short term but the worst decision in the long run. It is like climbing a high mountain — you have to select the right path to get to the summit, and quite often, the right route is the toughest.
Most entrepreneurs are arrogant or overconfident at least. That is why they start a company to change the world. Many mediocre entrepreneurs, including me for the first 3 years, tend to think that they can do everything better than any other team members.
As long as the founders have such a mindset, great people don’t come to the company. The reason is clear — talented people don’t want to work for a dictator. They are looking for a company where they can unleash their full potential.
As a result, mediocre entrepreneurs tend to build top-down organizations. It is like a king/queen and a host of soldiers only, no generals or officers. It may be fine for single-product companies, but it does not work for us who work on financial inclusion in many countries.
4. Be true to the mission and values
Most companies have a beautiful mission statement and corporate values. Many startups say that they are founded to change the world.
If entrepreneurs say something beautiful, there shouldn't be any inconsistency. They have to do what they believe and say.
However, many don’t do so, and you cannot hide it. I don’t know who said this, but there’s a saying that “People know every single weakness of the bosses.”
As a finance person who has observed the money management behaviors of many people, I believe this consistency is best revealed when we look at how the people spends their money. Therefore, I have been careful about my compensation and spending.
First, compensation. Peter Thiel said that there is a correlation between startup CEO compensations and their performance. The reason is clear — if the founder’s salary is low, s/he always thinks about why s/he is doing it. That self-reflection becomes a source of continuous improvement, innovation, and growth. On top of that, by lowering the founder’s pay, the startup can keep the overall personnel cost moderate, Thiel said.
Furthermore, I am working on financial inclusion. I have visited countless numbers of our clients who live with very little money. We receive our salary from their earnings, and I always want to be mindful of that.
My compensation level at Gojo is lower than 2/3 of the Gojo employees, including those who reside in developing nations and thus receive less due to adjustments given the local price indices.
Second, spending. My compensation information, cashless payment details (I seldom use cash), and the other revenue details have been stored in a shared drive where every colleague can access. I am determined to use all (not 99% but 100%) of the gains that I receive from my Gojo shares for social purposes.
If I say this, many people say that you need some money to look after your family members. I grew up in a 6 members household whose annual disposable income was just 36% above the poverty line. So I know the importance of money. At the same time, I know how much is enough.
To be clear, I think we pay competitively to our people among financial inclusion startups if we include stock options. I don’t have any intention to impose my personal principle on others. Still, I am hoping that my colleagues will also spend the money for donations or other social purposes.
5. Hire based on Principles
Since the beginning, we set forth our Guiding Principles, and we have tried to recruit people in light of them. Our principles imply that technical expertise matters, but they put much more emphasis on values alignment.
Whenever I interview people (in many cases, I am the last person), I spend 90 minutes and ask 70 prefixed questions (I update them from time to time), focusing on understanding who they are. All the questions are somewhat related, and once all of them are answered, I have a much better understanding of the applicant.
We do not underestimate the importance of skills. We need all the experts to make our mission come true. However, values alignment is much more critical. Startups face many problems, and to overcome them, we have to unite as a team. That is possible only when we work with like-minded people.
Great people and great principles make great corporate culture. Then the great corporate culture enables us to attract even greater people and refine the principles further. The mutually reinforcing process starts from hiring the right people in light of the principles.
6. Keep in touch and wait
Good people don’t move in haste. They must be assuming an important role at their current workplaces. So we have to wait until the time comes — it could be a completion of a project, family matters, or any other events. The key is to keep communicating, even if your offer gets rejected once. They may join you someday.
All that said, I think I should admit that we have been lucky. I am truly grateful to all of my colleagues for joining us. Gojo has achieved just less than 0.7% of its long-term goal, serving 100+ million people in 50+ countries. It is too premature to be complacent. We can and should do much better.