Mourning in Japan: an American entrepreneur in business for the bereaved.
THESE HARMLESS OLD LADIES are doing business with a foreign revolutionary, one who some established Japanese funeral homes think is actually the devil incarnate. American John Kamm is trampling the traditions and sensitivities of a culture formed around the disposing of the dead.
Kamm, of course, sees himself in a more positive light. He has uncovered a can of worms, not an industry. He wants to make it possible for people to die with dignity and not get taken financially. In just 18 months he has already wrought havoc and the transformation of an incestuous industry representing the bad things that Japan used to stand for.
The 33-year-old Kamm was born in Omaha, Nebraska in 1971. His father was a city administrator who had to follow assignments around the country. The Kamms lived in many cities before winding up in Denver, Colorado, where Kamm earned several degrees. Since then he's been the administrator for a Japanese gold mine in Brazil, a hospital restructuring expert in Los Angeles, a field geologist studying dinosaur remains in Arizona, and, of course, an embalmer.
Kamm first came to Japan when he was 18, after a Japanese college roommate invited him to visit. During the course of this initial adventure, he was bathing at a local sento when a local Japanese boss took a liking to him and offered him a 6-month job on a road construction crew. Kamm learned all his Japanese on the Meishin Expressway and various roads around Kyoto--roughing it with the best of them and picking up a spectacular accent in the process. He fell in love with Japan and swore to one day return.
In 1992, Kamm went back to school in the States, picked up his degrees in biology and geophysics and worked his way through college by embalming part-time.
Embalming? Well, as it turns out, after putting up with decades of being a frustrated city official, Kamm's father one day threw it all in and for reasons unknown to the family decided to start a funeral home. Kamm talks proudly of his father, calling him a quintessential entrepreneur, facing the risks of financial ruin and ridicule to work for himself. Watching his father address these challenges left a deep impression on his son and gave him the will to find challenges of his own.
Apart from working for his father, Kamm also worked as a freelance embalmer, doing last minute jobs for funeral homes around the city. He would charge $300 per embalming. He also managed a crematorium, directing funerals and ordering caskets--in short, learning the business.
Why embalming in Japan?
The tradition of embalming as it exists today probably started in the US during the civil war. The Yankees were dying by the thousands on the fields of the South, and by the time the bodies were transported back North, they were badly decomposed.
The story goes that one day an enterprising entrepreneur proposed to the army to bring the bodies back to their family claimants in fresh condition, starting a revolution in the field of preserving corpses.
Kamm readily admits that although the field started from a practical need, these days embalming is more of a tradition--apart from cases of traumatic or violent death, there is probably no need for it. Yet in Japan, the demand for embalming is actually increasing.
The goal of embalming is to make the deceased's body look as respectable and lifelike as possible. The process starts by removing all the guts, known as the viscera, the brain (if there was an autopsy), and replacing the blood in a person's body with formaldehyde, or embalming fluid. There is a lot of know-how related to doing this, such as when to add clot-breaking component to the embalming fluid and how to massage the limbs to distribute the fluids. After the fluids are removed, there is body reconstruction with wax in the case of accidents or violent death, make-up and shaving of the face.
Kamm says that it takes him two to three hours to embalm and dress a body. He also says that there is very little expertise in the field, and most embalmers operating in Japan go to the US for training. Until recently, there was a law in Japan forbidding the mutilation of a body, and embalming was considered mutilation.
However, when the Kobe earthquake occurred in 1995, the demand for reconstruction of mutilated bodies was so high that one individual, Bill Stevenson, an American operating out of Osaka, was able to kick-start the demand for embalming and eventually turn it into an accepted business activity. Stevenson was instrumental in pushing the authorities to understand that the risks of not embalming could exceed the ethics of whether the practice constituted mutilation.
In particular, he convinced the authorities that bodies in a state of decomposure can be highly contagious--regardless of the fact that in the past 1,000 years, people seemed to be able to deal with such issues--and thus need to be preserved properly for public protection. This was quite an accomplishment, and it enabled Stevenson to go on to establish an industry.
Now, it is true that Hepatitis can live in dried blood for three to four days, and there are indeed many different spores and molds that live in the body after someone dies. But still, playing the card of safeguarding public health was a smart move by Stevenson, and the authorities decided that the rights of the living did indeed exceed the rites of the dead.
But Stevenson played another trump card to push his case and business. He built at great cost a state-of-the-art lab with water recycling and other safety systems, created a set of licensing standards and proceeded to make the embalming industry look just like any other highly regulated medical business in Japan. The authorities lapped it up and started rewriting the laws to not only allow, but in some cases to actually promote the practice.
The result is that some wards in Tokyo have already passed edicts stating that for all victims of homicides and suicides, the bodies must be embalmed so as to preserve key evidence until the police are finished with their investigations. Expectations are that these laws will be emulated across Japan, and that existing embalmers will find themselves flooded with business.
Another reason why embalming is being promoted by authorities is because of the fear of Aids. The only way to completely sterilize a body, and of course remove the blood-linked Aids infection risk, is to embalm the body first. Once again, public health (though the risk is actually miniscule) is a major consideration in bringing new procedures for handling bodies into being.
But this doesn't mean that there is going to be a boom in the number of embalmers in Japan any time soon. Quite apart from the fact that you need know-how about dead bodies, which simply isn't available in Japan, the job is also quite dangerous.
According to Kamm, formaldehyde, the main stuff used to preserve bodies, is quite corrosive. If you stick your finger into a solution of the stuff, Kamm says, your skin will peel right off. It is also carcinogenic and a leading cause of throat cancer in embalmers, as some older professionals have found out the hard way. So the regulations relating to the use of formaldehyde are comprehensive and limiting.
Education of a revolutionary
Kamm got into the funeral business in Japan after working on an MBA at Waseda about nanotechnology. He was asked in the last semester of his course to write a paper about business systems. Seeing as how he didn't have much time and knew the funeral business well, he decided to write a paper about the death certificate procurerment system and how Japan compares with the US. In doing his research, he happened to interview a character in the funeral business who had a reputation as a misfit: He had a small company in Saitama and was disdained by his colleagues. The more they ignored him, the more radical he became.
Kamm became the ideal audience for the misfit, and over a period of time, at bars and the gentleman's home, they got to know each other well. Kamm learned that the funeral industry in Japan is largely unregulated. Not only was there virtually no licensing, but there was also rampant abuse of customers during their most vulnerable time. Kamm asked his sensei how funerals and associated services are priced, and the answer was: "The funeral home looks at the customer and sizes them up, then charges accordingly. Basically, they can charge whatever they want!"
What Kamm learned on those long winter nights over a bottle of Jinro (Korean liquor) would provide the young American with the fuel for a whole new mission: that of bringing transparency to the Japanese funeral industry. The revolutionary had had his fuse lit.
All Nations starts
Kamm submitted his thesis, but he wasn't thinking about nanotech any more. Instead, all he could think about was how to turn the funeral industry upside down. After having put himself through an MBA in Japan, he had virtually no cash, just a seed fund of [yen]5 million, and knew that if he was going to make any impact at all, he had to make a big splash.
In July of 2003, with help from JETRO, who supplied an office, legal help, an accountant and a bunch of other services besides, he borrowed JETRO's downtown Tamaike conference hall and put on an event entitled "The World History of Funerals." He called up a group of funeral suppliers, people he'd met during his thesis research, and convinced them to sponsor the event and participate as exhibitors, providing caskets, urns and other paraphernalia.
The exhibition was a huge hit. Hundreds of people attended. Kamm had the presence of mind to call the media during the middle of it, and that night both his exhibit and his sponsors were all over network TV.
That event was the starting point for Kamm's master plan, which was to use his natural sales ability to market and gain the attention of the mass media, and to drive public interest and sales to his partners--later to become his franchisees.
Essentially what Kamm had realized is that the players in the funeral industry are a dour bunch. Most of the funeral homes he was dealing with are out in the countryside. The existing players were not able to project a positive image of their industry. Indeed, what they needed was someone to rally behind, someone who wasn't one of them so that business flow would be non-partisan--and, hey, maybe a crazy foreigner was just the guy for the job.
Through diligent research and making friends with people in the industry, Kamm developed his now-famous concept of low-cost funerals--not the cheapest, but certainly the most transparent. He created a concept which could be likened to a franchise, whereby funeral parlors agreed to display his logo and supply services to him when he got respondents from his PR efforts.
The big difference from running a franchise, however, is that Kamm didn't ask his agents/partners to pay franchise fees. Instead, they just had to give him a commission from each sale, and to agree to abide by the price menu and ethics rules that All Nations advertised--like not slipping in sneaky extras at the last minute.
Riding the wave of publicity, Kamm formed an alliance with an old-world funeral parlor group called Sogi-hyaku-to-ban, meaning "Funerals 110," alluding to the emergency number that Japanese can call when they need assistance. They treated him with caution initially, but after Kamm started generating business through various media ploys, the group started to open up to him.
It took Kamm a while to educate the Sogi-110 group members to stick to the price and service menu, but as he started sending them business after his increasingly successful efforts on TV and the newspapers, many of them realized that Kamm's business model might just work--and any new business was better than none, which was the predicament facing some of the member companies.
Over the past year, Kamm has built All Nations into a primary agitator and doer in the Japanese funeral industry. He has more than 12 funeral homes in his network and is delivering flat rate services to more than 100 families per month. Revenue is still low, but then so are costs. Plans over the next two years are to sign up an amazing 900 funeral homes, around half of the members of the national Sogi (funeral) union.
By that time, the All Nations brand will be dealing with more than 2,000 funerals per month.
The key to Kamm's success is that he is a marketing wizard. He is on TV at least once a month, and has been showing up with increasing frequency in other media. He likes TV, though, because of the immediate effect. Even a short appearance can bring a deluge of 500 or more phone calls from prospective customers that are then funneled to partners around the country and even overseas.
But making it into the media week after week requires some ingenuity--something, luckily, Kamm has no shortage of. He has learned that the most attractive news for TV is created by challenging the clubby image and funeral service system on its weakest points: kickbacks and unknown services pricing. Thus Kamm's rule for members of his organization is no kickbacks, as tempting as they may be.
Kamm has some harsh words for the old-guard in the funeral industry--particularly the funeral directors. "You can't screw people, especially when they've just lost a father, a mother, or some other close relative. They're crying, and they're in no position to make rational decisions. Unfortunately, the funeral directors prey off this and say things like, 'Oh, my goodness, don't you think it's a bit disrespectful to the gods if you put your mom in this cheap casket? You need to get her something better,' sending them off to a casket maker that has an 'arrangement' with the funeral director." Other ways include steering people to monks who will pay 50 percent kickbacks on [yen]700,000-worth of services for two days.
Nurses and bribes
Just weeks ago, Kamm chanced upon a bar owner from Kyoto who confided that his biggest customers are funeral homes--including Japan's largest funeral home chain--who throw parties for nurses. It's hard to believe, but apparently the nurses of many hospitals are paid to "help" family members with phone numbers of reliable funeral homes. Worse still, they will actually call the funeral home directly and have the funeral director sitting outside the door of the hospital room as the person dies. Once these vultures get their hands on the body, there are not many surviving family members with the strength to challenge the situation and demand another vendor. Once the process starts, so does the billing. It costs [yen]30,000 to have a body transported from the hospital room to the funeral home.
Kamm persuaded the bar owner to go on national TV (TBS) and name the company--a Kyoto firm called Koikisha. The program has yet to air, and they denied the claims.
So why is the system so rotten? Kamm believes it's because funeral homes don't know how to market, and so get very few customers. He reckons that the average funeral home does almost no business in the first three to five years, while sitting, waiting and getting to know the neighbors. Even by the end of this period, they are probably only handling three to four funerals per month. This paucity of business means that the funeral directors are driven to "stick it to them" when they actually do get customers.
No one really knows what the average charge for a funeral in Japan is these days--the whole point, of course, for Kamm's crusade--but a TBS report in July 2004 reckoned that the average cost is about [yen]3.46 million, not including a grave stone, memorial and monk service. Kamm thinks this figure is actually a bit high, and a more likely number is around [yen]2.5 million. In contrast All Nation's service is just [yen]280,000.
It's too early to say yet whether Kamm can win over the diehards in the industry, but one thing is for sure--there would be very few other candidates with the right combination of background, skills and passion to transform a moribund industry. Now that he is on the verge of receiving some venture funding, the Japanese funeral industry had better watch out. There is a revolutionary in their midst.
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|Date:||Oct 1, 2004|
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