SignTime & the e-signature market in Japan

Jim Weisser | Co-Founder & CEO, SignTime

Why does Japan need e-signature services, and how can we get there?

We sat down with Jim Weisser, a Serial Entrepreneur from America and Co-Founder and CEO at SignTime, to talk about what it takes to start a business in Japan.

SignTime is a web application that provides e-signature services. This involves sending documents for signatures, managing documents, creating reusable contract templates and other online elements that are critical to running a business.

In the first part of our interview, we learn about Jim's current company SignTime, Japan’s current situation with e-signatures as well the obstacles they’re facing in the Japan market.

How did SignTime start?

Me and my partner Jonathan Siegel founded SignTime in September 2020 to offer digital contracts and e-signatures in Japan.

Jonathan had actually built a successful e-signature company in the US back in 2010 and we thought about building something similar in Japan. In 2018 we analyzed the market here in Japan but decided that the timing wasn’t right. There was no obvious catalyst, so we back burnered the idea.

Then in 2020 the pandemic hit, and some of the things I was doing actually needed an e-signature solution, so I contacted my business partner again, and that’s how the inception for SignTime came about.

What changed during the pandemic and what are some of the unique needs the Japanese market has?

Once the pandemic hit and most people worked remotely, the limitations of Japan’s traditional way of signing contracts became obvious. Many people had to go to the office several times a month just to put a physical stamp (Hanko) on a document.

Hanko is a chop or a seal — in Japan it was traditionally a small piece of wood with unique initials or surname engraved on it. Every company has an officially registered company stamp and this stamp is needed for almost anything. It’s very powerful so if you lose it, you end up with security challenges.

Beyond that, it’s a standard way of signing things so a lot of people use their own hanko, a non-registered one, to sign on packages that get delivered to them for instance.

What is the biggest challenge that SignTime is facing?

The biggest challenge we see is the low adoption rate for electronic signatures in the white collar workforce. There’s about 30 million Japanese people who are white collar workers and only 2% use these services. That is too low.

When we talk to companies about why they don’t use services like DocuSign or SignTime, we always hear the same reasons. Some companies only use e-signatures for international contracts, other companies claim it just doesn’t feel right because they are used to actually stamping physical documents.

So right now, we are trying to get Japanese companies to overcome these traditional ways of thinking. But it’s hard.

According to JIPDEC, only 17.6% of the companies use digital contracts with several departments and business partners whereas 15.1% said they have no plan to adapt to digital contracts mainly because of the time and effort required to introduce a new system within the company or at a client's site, as well as financial issues.

I think the reason why people in Japan are so reluctant to use e-signatures is purely emotional. Legally you can use electronic signatures in almost all cases but still people have a very narrow view of what they should be using it for. Me personally, I think you should use e-signatures for any legally binding agreement.

In terms of Digital Transformation, what are the areas where you see opportunities and is there anything SignTime has in its pipeline?

I think that we’re going to see a lot of opportunities over the next couple of years particularly regarding workflows. If you take a couple of steps back and think about digital transformation generally (See Being Digital by Nicholas Negroponte), you can say there are 4 stages of it.

In stage one you simply digitize a piece of paper. Stage two is where you start to take pieces from a process and restructure them. In the third stage those systems interact with each other and create more complex processes. Then in stage four you’re creating purely virtual things like NFTs.

My view is that a lot of Japan's white collar workforce is still at level one or two, so the opportunities for digital transformation are very substantial. There are also some interesting things you can explore with AI around contracts that we are currently experimenting with.

Interestingly there are also some physical things we are looking into as well. I can’t share too many details at this point, but my co-founder and I just authored a patent for hardware devices tying back into e-signatures.