JAFCO is focusing on business matching between startups and major companies with the aim of increasing the value of startups. Is it possible to further promote collaboration between startups with cutting-edge technology and companies with abundant financial and human resources? This "& JAFCO meet up Innovators" series was planned from a sense of challenge to open innovation.

In the first installment, we will introduce a case where a joint venture was sent from JR East. We talked to Mr. Tomonori Akutsu, CEO of TOUCH TO GO Co., Ltd. and Senior Manager of JR East Start Up Co., Ltd., about what kind of barriers he overcame and led to the launch of the business.

【profile】
Representative Director Tomonori Akutsu (Akutsu Tomoki)
Born in Tochigi prefecture in 1982. Joined JR East in 2004. After launching the station Naka convenience store NEWDAYS store, the seedle workshop "A-FACTORY" in Aomori, and the common point "JRE POINT" of the JR East Group, in 2017, the acceleration program "JR East Japan" with venture companies Launched "Startup Program" and was in charge of establishing "JR East Start Up Co., Ltd.", a corporate venture capital company wholly owned by JR East in February​ ​2018. Currently in charge of investment business and program management. The company was established in July​ ​2019 as a representative of the joint venture "TOUCH TO GO Co., Ltd." with Signpost Co., Ltd., and in March​ ​2020, an unmanned AI payment store was opened at Takanawa Gateway Station. We are developing a solution.

[What's TOUCH TO GO Co., Ltd.]
A joint venture between JR East Start Up Co., Ltd. and Signpost Co., Ltd., which develops the only labor-saving and unmanned payment store system that has been put into practical use in Japan. In the startup program sponsored by JR East Start Up, the development and collaboration of unmanned AI payment stores started with the aim of"improving service to customers, reforming employee work styles and eliminating labor shortages"with Omiya Station. After a demonstration experiment using Akabane Station, it was established. In the future, we will utilize cutting-edge IT technology, device development capabilities, and operational know-how to develop unmanned payment system solutions that solve issues such as labor shortages at retail stores and maintenance of regional stores.

<Facilitator>
Takayuki Nishinaka, JAFCO Group Co., Ltd.
Joined JAFCO as a new graduate in 2006. After joining the company, he was assigned to the Investment Division and had two years of experience in investment business. Engaged in fund formation, fund raising, and investor support since 2008. In 2013, he was seconded to the Japan M & A Center and was in charge of 5 deals in the M & A brokerage business. Since 2014, he has been involved in investment support (sales, marketing, recruitment) at Business Development G.

Introduced an acceleration program to speed up the launch of new businesses

Nishinaka In July​ ​2019, TOUCH TO GO Co., Ltd., a joint venture from JR East, was established. In March​ ​2020, we opened an unmanned AI payment store at Takanawa Gateway Station, which became a hot topic. Please tell us how you came to establish the company, along with Mr. Akutsu's background.

Akutsu I joined JR East in 2004, and while still enrolled in JR East, I am the representative of TOUCH TO GO Co., Ltd. Since joining the company, I have consistently been involved in the railway "peripheral" business. After two years of experience in the store of Eki-naka convenience store NEWDAYS, he launched the Ciddle Studio "A-FACTORY" as a new business in Aomori, the common point of the JR East Group "JRE POINT", and the new beverage vending machine company (JR East Water Business). ) Has been given amazing discretionary power since I was in my twenties.

Then, in 2017, we started the acceleration program (*) "JR East Start Up Program" with venture companies. In February of the following year, we established JR East Start Up Co., Ltd., a corporate venture capital company wholly owned by JR East.

(*) Recruitment program for collaboration and investment held by major companies for start-up companies

Nishinaka What made you start the Acceleration Program?

Akutsu I was impressed with the acceleration program I saw on my business trip to Germany. A sense of speed is important when starting a new business, but it takes about three years to implement a business in a large organization after creating materials, securing a budget, defining requirements, and so on. In the startup area, new technologies have become obsolete and the world has changed after three years. I thought it was essential to create an open innovation system in order to move in line with change.

JR East Start Up was established in order to promote swift movement that is not bound by the existing in-house system by making it a group company as Corporate Venture Capital (CVC). The purpose was to realize early commercialization and social implementation by combining the assets of JR East and the technological capabilities of startups. CVC has eight members with different areas of expertise, each presenting the problem they want to solve, and recruiting startups with technologies and service ideas that will lead to the solution.

Nishinaka How was TOUCH TO GO Co., Ltd. born?

Akutsu During the 2017 startup program, I met Signpost, a financial consultant, and started developing and collaborating with an unmanned AI payment store. We were able to proceed to a demonstration experiment of an unmanned AI payment store in Omiya. In the second demonstration experiment in Akabane, there were only reflections such as system troubles occurring until just before, but many positive voices were received from users saying "I challenged well!". I felt a response to social needs and decided to establish a company in order to take risks as my own.

Nishinaka Why did you focus on unmanned payment systems from among the many new business ideas?

Akutsu From the beginning when I first touched on the concept, I had the feeling that TOUCH TO GO's unmanned payment system would be valuable in that it would allow us to introduce services as if we were shopping. I tried to sell food with the beverage vending machine I worked on before, but it was difficult to commercialize it. I realized that the process of picking and picking at the store is important for users. With TOUCH TO GO, unmanned payment is possible without changing the conventional purchasing behavior of "taking and buying products from the store's display shelves." Since the details of the purchased items are automatically created from the tracking function of the camera, there is no need to hold a barcode reader over each item.

Also, when I was doing cash register at a convenience store, I always had the frustration of "I wish I could reduce this simple work." I think I could feel the needs because I had the viewpoint of the workers in the field and the experience of touching the user pane. If I had no experience in the field, I might have given up on commercialization when a system trouble occurred in the demonstration experiment. Actually, the part-time staff of the restaurant that introduced the system once said, "It's very easy not to have a cash register!" "It's wonderful to just make food and drink!", And my feelings are wrong. I was happy that I didn't have it.

Nishinaka What kind of potential do you feel about the TOUCH TO GO business?

Akutsu "Labor saving and labor saving" by the unmanned payment system will lead to solving the problem of serious shortage of people in the service industry. By reducing labor costs, more stores will be profitable. Furthermore, the corona expanded at the same time as the business started, and the value of non-face-to-face and non-contact increased at once. We began to hear from shops in office buildings, highway service areas, local gas stations, shops in hospitals with a high risk of infection, etc., and in the spring of 2021, we started a business alliance with FamilyMart. We are thinking of taking on the challenge of the global micromarkets with the current needs as a tailwind. There is also a strong desire to become a role model for creating new services from large companies. We believe that startups that grow while using the assets of large companies are suitable for Japanese society, and we will aim for an IPO as one of the representative companies.

Both startups and companies work as the "same team"

Nishinaka Accelerating development speed is one of the ideal ways of open innovation. However, when I try it, I can't keep up with the speed of startups ... There seems to be a gap between ideal and reality.

Akutsu I think the key to bridging the gap between ideals and reality is, after all, "people." It is important to have a personal connection that can be decided, such as "If such a case comes, let's do it with this person". It's muddy and moving around across group companies on how to create daily relationships to make it easier to access company assets. As long as you create a joint venture, the ideal relationship is that both large companies and startups can work as the same team. When creating in-house materials, I have a stance of "let's make it together" as if I were a startup.

Nishinaka It's a wonderful attitude. JAFCO is also promoting business matching between startups and major companies, but there are many cases where startups are confused because they have no experience as to how to build relationships with companies.

Akutsu That's right. Therefore, I think it is important to clarify what our challenges are and what we want to do. It can't be helped if you tell them what you want to achieve and don't adjust to it. If there is a technology to adjust, how can we utilize it? It will be necessary to make a compromise, such as telling what kind of assets are prepared in terms of funding and human resources, and proposing a concrete image of technological development. It is very important to create materials that can be shared by all stakeholders for smooth collaboration thereafter.

Nishinaka When launching the Joint Venture, how did you clear the various winds in the company and lead to the establishment of the company?

Akutsu　​ ​CVC With my boss 2 ~ 3 I will go to the company's explanation for about a month, and I will answer each and every point that comes out. It is a repetition. I continued to answer questions such as what to do with patents and whether the establishment of a new company would cause conflicts with group companies. I think that the retail system solutions did not have a batting with the main business, and there were relatively few items to be pointed out. Still, by the time we reach a consensus 3 It took months.

Nishinaka The only way is to answer sincerely.

Akutsu That's right. I don't like the expression "get a budget", but I value the consciousness of "getting an investment in the business". As long as you receive the investment, you have to explain it properly and do your best. I think it's a natural explanation process to answer until you are satisfied.

Nishinaka I see. I am very convinced that the stance of "getting an investment" does not change from the perspective of a startup or the perspective of a company. Thank you for your helpful story today. How was "& JAFCO meet up Innovators"? In this series, I would like to continue to introduce various trends and cases related to open innovation, so I hope you will see it again next time.