Life in the Metropolis
Mark Devlin, CEO & Publisher, Crisscross K.K.

If you have planted your feet in Japan, you will no doubt have seen it and flicked through its pages. You may even have used Metropolis to book a language class, buy a TV, find a friend, or maybe more? Metropolis magazine is a byword for reliable weekly information that many in Tokyo's foreign English-speaking community have come to know and rely on for their weekly fix of what's hot and happening in Japan's biggest city.

But just how did the well-known magazine grow from a four-page sheet called "Tokyo Classified" that was handed out in the street, into the 64-page, full-color weekly magazine it is today? Or to put it another way, exactly how did a Scotsman with no publishing industry experience, very little money, and who suffered the indignity of being fired by his wife, build the No.1 English magazine in Japan?

Crisscross K.K. CEO, Mark Devlin, was on hand at the September 7, 2004 Entrepreneur's Association of Tokyo meeting to explain how together with his wife and business partner Mary, he launched Tokyo Classified, built up the Japan Today news portal, and turned the resulting business into the lean, mean, money-making machine it is today.

"By the readers for the readers."
Mark first met his future wife while studying engineering at university in Glasgow. Inspired by a classmate who said he was going to Japan to teach English, Mark sold his belongings, bought an air ticket and in October 1989 he touched down in Japan with just ￡400 pounds (¥80,000) in his pocket. He gained his first taste of the Japanese market by working in a variety of positions including English teacher, Network Administrator and IT Consultant.

How did you get started?
"I met a guy in a Tokyo club who mentioned he was launching a magazine called "Tokyo Classified" and was looking for people to run and manage the business," Mark explains about the magazine's startup phase. "The idea was very simple -- to start a widely distributed classified advertising magazine. The reason we felt the idea could succeed was that there was a need for it at the time," Mark says. "There wasn't much in the market except for a one-page section in the Sunday Daily Yomiuri and a couple of supermarket notice boards."

Mary joined the team and the couple immediately negotiated to take a 49% share of the business from their new partner. "He wanted to invest the money but didn't want to work in it, so we negotiated for 'sweat equity'".

Mark says when explaining the conditions existing in their startup phase, "We had no experience of running a company, no experience of advertising, media or managing money. We had no contacts, no distribution network, very little money, and pretty poor Japanese. All the ingredients of success! But what we did have was bravado and what we felt was a very good business idea, and we knew that between Mary and I we could take on any challenge that arose, adapt and grow."

To start a classified ads magazine, the couple needed …classifieds ads. "We went to National Azabu supermarket in Hiroo and copied down all the notice board ads, returned to the office, called up the advertisers and tried to convince them to advertise with us," Mark explains. "We had to keep doing that until we had enough ads to print. Whenever we saw anyone trying to sell something we contacted them. Then we had to get distribution. In addition to distribution in The Daily Yomiuri and The Japan Times as an insert we created the ‘target team', 16 staff who handed the magazine out in the street at popular Tokyo locations. Their high visibility worked very well for us."

Early problems
Mark quickly realized that every problem is also an opportunity. "Almost as soon as we started The Daily Yomiuri started censoring our ads. It got to the point where they would not even let us place ads for 'nude and life drawing classes'. They even censored the HIV hotline because they said it could encourage the spread of AIDS. Then just when we had had enough of their meddling, they cancelled our distribution contract with no notice. We took it as an opportunity to make our own distribution network without censorship." After putting in some very intense legwork visiting many companies, embassies, hotels bars and restaurants, they established the distribution system of 600 points that still exists to this day.

Mark recalls, "We were printing more and more classifieds and it was costing us more but we weren't getting any real sales to speak of. It just so happened that our partner was working as a high level financial analyst in a Japanese company and wanted to move to another company. We made some business cards saying ‘Crisscross Consulting' and effectively became a short-term headhunting company. We wrote introduction letters and Mary met people in the financial industry representing the team. We were very lucky; the team was taken on and we received a good commission for the placement which gave us investment to keep the business going. We also used the money to buy out our partner so Mary and I became 100% owners."

But it was not all smooth sailing. "It took about 18 months before we realized the business was actually going to work," Mark says. "We had been building up smaller clients, but it wasn't until we received a fax with a contract from a major telephone company that I knew the company was going to succeed. We had a long way to go but the first stage was basically over."

So why did the magazine grow?
"Tokyo Classified was created from reader-submitted classifieds, so it was basically made by the readers for the readers," Mark explains. "As the magazine has grown it has evolved to fill readers' needs, wants and desires. The first time people come to Tokyo, they need to find furniture, friends, a place and a job. As the magazine grew, we found that once people were set up in their place, they wanted to go out and enjoy the city, and that's why we started adding other editorial content such as the city guide. Now we are at the stage where the magazine is more about the readers' desires and aspirations, and that's why we have added more commentary and articles that make the reader think about their place in the city."

Why did you change the name to Metropolis?
"By 2001 we felt we had outgrown the name ‘Tokyo' and ‘Classifieds,'" Mark explains. "Even though the magazine might have looked cheap, the people who were reading it weren't. The community who had arrived in the late 80's and early 90's had grown up and they needed the magazine to reflect the feeling that they were more professional. So it was interesting that we changed the magazine name not to get a market but to better suit the market."

Mark also described the change in sales strategy. "In the beginning we showed clients the magazine and said, ‘This is Tokyo Classified. Isn't this the best thing ever?!' That was our sales strategy. Now we are markedly more refined and we know we are actually selling. The three points we push are; 30,000 copies audited by ABC, our target market of business professionals, and our brand, which is the trust readers have with the magazine," he says. "Because we are a free magazine we have to give results or the magazine will die. Advertisers will only continue to advertise if they get results so it is very important that their success is our success."

You're fired!
Describing what it is like to work with his wife, Mark explains, "Mary was the CEO for the first five years. Mary took charge of sales and finance and I handled the design, content and back-office. Working with your partner can be trying, but we learnt to improve our communication as we worked with each other. We are a good team, but here was a bit of a disconnect in the middle years," Mark recalls. "We had a very good salesperson in the company, who was bringing in a lot of necessary sales. Unfortunately, I couldn't work with that person so Mary had to make a decision about what was more important: me or the money that person was generating."

Mary wielded the axe, and Mark had to go. "I was fired from my own company which was very difficult because up until that time I had thought we were equal partners," he said. "After a few months break I realized I could accept my position in the company under Mary. Because I accepted her as the boss, she then felt we could switch roles, and I became the CEO."

Changing focus to news
In June 2000, Crisscross launched Japan Today, a Japan news and information portal which is now one of the world's leading sources of Japan news in English.

"I believe people have the same habits before and after the advent of the internet," Mark explains. "If you read the morning newspaper every day before the Internet, you are most likely going to read that same newspaper after the Internet. The biggest media you can do is news so we went for that."

"I met the publisher of Time Out magazine, which was coming under a lot of pressure from London newspapers that had just started making free city guides," Mark says. "If you are getting a free city guide from a newspaper, why should you spend money to pay for Time Out? I looked at that situation and thought he needed to go the opposite way and make a newspaper. Fortunately the Internet was coming and we could ride that wave. If people are reading your news every day, then you can push them to your other services. So we decided to create a news-based portal that was aimed at capturing everyone who was interested in Japan in any way and placing that portal as the gateway between the economies of Europe, America and Japan. If we can place ourselves in the middle, then at some point we should be able to get some advantage out of it."

With the launch of Japan Today, the original business model was turned on its head. "Metropolis was built up page by page, but with Japan Today we decided to go out and attract investment, start with a large amount of money and build the portal that way."

How did Crisscross secure funding to grow the new business?
"The traditional way we built up our company has been by reinvesting profits and increasing our debt," Mark says. "We have tried everything possible so that we would not sell any equity at all because we always believed that in the next stage, the business will be worth that much more. You can pay back debt, but with equity it feels like you are cutting a part of your body off. When we started Japan Today we secured some investment and were promised a lot more, but then the dot.com bubble burst and the promises people had made to us were not worth anything. The only problem was that we had already started spending. By the time of the meltdown we had moved into a big office and hired a team of 9-10 people. To survive we had to get out of the office and scale down the business immediately."

After begging the landlord to get the deposit back, their team worked on increasing the sales and cutting costs. "After some initial problems with so-called professional-grade staff, the remaining team did a great job of creating the site. We became super efficient to the point where we can now make the entire Japan Today site with just two people, even updating it twice daily," he says.

Under attack
At a particularly difficult stage in the company's growing phase, Mark found himself facing attacks from a disgruntled competitor who tried to attack them in any way he could, including attacking them on the Internet and through the legal system.

"Mary and I were on the receiving end of a variety of attacks that led up to us being listed on a website by that competitor as "Scumbags in Japan" complete with a variety of bogus claims about our business. In a small community attacks on our reputation could have had a big effect, but we found that people who knew us, our clients and staff, really stuck behind us. We went to court to have the site taken down and we also won a bogus court case brought by the competitor. It's difficult to believe but after all the trash he had distributed about us, that he was suing us for the right to advertise in our magazine! We discovered that no matter how beneficial a business might be, there is always going to be someone who doesn't like what you do. As the owners of one of the main media in Tokyo, people are naturally interested in the magazine. But for some people that high visibility makes us an easy target. As a result we have have to be even better. One of the best ways for us to defend against bogus claims is to obtain independent verification of our business. Metropolis is the only English magazine in Japan that has its circulation verified by Japan's audit bureau of circulations. In the end we learned to trust ourselves that we are doing things the right way, and we learned, don't let the bastards get you down."

So where is Crisscross today?
"Metropolis has ￥340 million in advertising revenues a year, seven years' profit history, 15% operating profit and 35 staff from 10 countries. We just finished a redesign of the magazine and are expanding steadily."

Japan Today has also experienced significant growth. "In 2000 we had 68,000 page views for the whole year. In July 2004 we had seven million pages views in that month alone from one million unique users.

The reason it is growing is that it uses the strength of the media which are its timeliness and inbuilt discussion forums which have worked out really well," he says. About future revenues Mark says. "I can't see newspapers giving up on subscription revenue so I suspect at some point that Google or maybe Microsoft will block access to news sites unless customers pay. This will be a big boost to Japan Today's income."

"To give clients access of the skills we have built up in design we are currently building a creative services division called Crisscross Creative." Mark explains "In addition to offering fast, high-quality design at reasonable rates, we can offer creative clients access to our media in a total package."

How is the future looking for the business?
"Our next objective is to take the business to the next level. We have gone for creating traffic first then have been building the services underneath. News brings people into our site and then they go to different things. We will expand revenues by adding portal services, such as personals, housing and job information, and will expand the reach by replicating the business across Asia and Europe."

"However the bigger project we are working on the Japan Today daily newspaper. We feel that Japan is such a fascinating place, and yet that is not reflected in the current English newspapers in Japan. We hope to shake up the market a bit and give the community better understanding of Japanese and global issues. We are just totally driven because we believe people need this product."

Watch this space.
Metropolis magazine: http://metropolis.japantoday.com/
Japan Today.com: www.japantoday.com/