"Entrepreneur's aspirations" to hear the background of deciding to start a business, the conflicts until the business gets on track, and the desires to realize through the business.
In the 28th installment, Mr. Takashi Endo, CEO of ROUTE06 Inc, will appear, along with the perspective of Shogo Sakata, the capitalist in charge.
We asked him about his future business challenges.

【profile】
Takafumi Endo, CEO of ROUTE06 Inc.
After graduating from the Graduate School of Information Science and Technology at Tohoku University, he worked at the Development Bank of Japan Inc. and Dream Incubator Co., Ltd. before founding Smarby Co., Ltd. and becoming CEO. After the company's M&A with a major apparel company, he was appointed CPO and CMO of Stripe Department Co., Ltd. After participating in Delight Ventures Co., Ltd. as an EIR, established ROUTE06 Inc.

[What's​ ​ROUTE06 Inc.]
ROUTE06 is a DX partner that supports business model transformation of major companies. By providing an enterprise software platform and supporting agile commercialization, we realize the platformization of commercial transactions and contribute to the creation of new corporate value.

Portfolio

Supporting DX to expand sales as a partner of large companies

ーPlease tell us about the business of ROUTE06.

Endo We mainly provide DX support to traditional large companies in Japan. There are various initiatives for DX, but we support DX for new businesses and existing businesses. We specialize in DX that extends the top line, such as creating new sales and expanding existing transactions.

It is characterized by two pillars: "platform services" that provide systems such as online marketplaces in the form of SaaS, and "professional services" that provide support by forming a teams of in-house product managers, engineers, and designers. thing. While drastically shortening the system development period with the API platform "Plain", we will build and design a system that meets your needs all at once. We can flexibly respond to proposals while creating mockups, use various APIs, and improve UX, so we can provide high-quality services with shorter delivery times and lower prices. That is the point of differentiation from system integrators and consulting firms, and it is the point that clients appreciate.

ーWhat kind of projects have you worked on so far?

Endo For example, as a new business of Sogo & Seibu Co., Ltd., we collaborated on the launch of an OMO store (a store that combines the functions of a physical store and an EC site) called "CHOOSEBASE SHIBUYA". I have been involved from the concept stage, such as what to do with the business model and customer base, and have launched a wide range of businesses, including the digitalization of the customer experience at physical stores, the transition to cashless payments, the construction of store systems and business flows, and the construction of EC sites. Thank you for your support. In addition, we support companies in various industries such as retailers, manufacturers, and trading companies.

ーPlease tell us how you decided to develop a DX support business for large companies, and how ROUTE06 was founded.

Endo I was born and raised in the countryside of Yamagata Prefecture, but as far back as I can remember, I saw the collapse of the bubble economy, the slump in the Japanese economy, and the gradual decline of local shopping streets. Perhaps because of this, one day I began to think, "I want to do work that contributes to Japan," and "I want to create a system of 'redistribution of wealth' that circulates money to local regions and venture companies, and connect it to the future of Japan. I joined the Development Bank of Japan and also worked at a consulting firm. I was also interested in starting a business, so in 2014,I founded a children's clothing e-commerce company. This was because I wanted to create a new economic zone by creating sales ​​​opportunities for small and medium-sized children's clothing brands and creating opportunities for mothers who are raising children to enjoy shopping. I sold the company to a major apparel company, but I always wanted to start my own business again.

It was four to five years ago that I started thinking about the business concept of DX support for large companies. Ever since I worked at a bank and consulting firm, I have always felt that there are many challenges in system development for large companies. Just adding a single input item costs tens of millions of yen, or the idea is limited by continuing to use a conventional system whose UI and functions have not been updated for years... Therefore, we started to consider a business that would change the world of system integrators by making use of the system development know-how that we had cultivated in the EC business. At that time, large companies were just starting to promote open innovation with startups. Businesses like ours will be needed even more in the future, and we can contribute to society as much as possible. With that conviction, I founded ROUTE06 in 2020.

ーAmong your various experiences in banking, consulting, entrepreneurship, etc., is there anything that you think is particularly useful in your current business?

Endo  are a lot of things, but especially my experience when I started an EC company is useful for supporting DX of large companies. E-commerce business is hard to operate and difficult to grow rapidly.It is a business that grows steadily through careful accumulation of steady work, such as cultivating brands, photographing products, writing introductory articles, etc. It is a strength to be able to discuss issues other than the system, such as talking to the person in charge of new business at the client company that the initial steady continuation will surely lead to results, and talking about team management in the start-up period. think.

Trust in capitalists with consulting experience for large companies

Mr. Endo with JAFCO capitalist Shogo Sakata (left)

- In June​ ​2022, you raised a total of 1.5 billion yen in Series A rounds. Please tell us about the background of considering this funding.

Endo The​ ​second term ended at the end of last year, and we started talking about actively making investments that would lead to future business growth. In order to gain more trust from large companies, it is essential to strengthen the security and expand the functions of the platform, and PR and branding of the company itself are also important. I have been talking with Mr. Shozo Isaka of JAFCO from time to time since the company was founded, but when we started to consider raising funds this time, a member of Delight Ventures, one of our shareholders, introduced us to JAFCO again.

Sakata I met President Endo for the first time when we were considering investment. Before joining JAFCO, I was in charge of new business launches and business strategy planning for large companies at a consulting firm, so I had a first-hand sense of the issues that ROUTE06 was tackling. Although ROUTE06 's business is unique, there are some aspects that make it difficult to understand its strengths at first glance, but the president explained it very logically during the first meeting, and I was mostly convinced of the business's potential at that point. Good enough. In fact, it took about a month to go through the internal approval process, and in total, two and a half months for deal closing.​​ ​

ーWhy did you feel the potential of ROUTE06?

Sakata There is still room for DX in large Japanese companies, and among them, the DX of the customer contact part handled by ROUTE06 is an area that startups have not worked on so far. The size of the market and the amount of room for improvement were important points. From my previous job experience, the DX area of large companies was an area that I was paying attention to when looking for investment candidates, so it matched my interests very well.

When we interviewed the company's existing business partners when considering investment, we heard many say that they were "overwhelmingly committed and trustworthy". I also felt a great potential in the company's strength to work together with large companies to start their new business from 0 to 100. I think there are companies that are doing 0 to 1 and 1 to 10, but the number of companies that can be deeply involved as a member of the business start-up members is extremely limited. In addition, President Endo is a person with a wealth of experience who knows the logic of large companies and the know-how of startups. The reliability is also one of the points.

-Could you tell us why you chose JAFCO, Mr. Endo?

Endo We had an absolute sense of trust in JAFCO's wealth of experience as Japan's largest VC, the knowledge and networks cultivated there, and the size of investment. We are very grateful to have JAFCO participate as a long-term partner in anticipation of additional investment in the future. I also heard that each person in charge is deeply committed to BD (business development) support after investment and provides generous support, even though it is a classic VC, and that point was also attractive.

Also, Mr. Sakata is cool at first glance, but he has a hot passion hidden inside. He has consulting experience for large companies, so he immediately understands our thoughts and what we want to say. I wanted to grow the company together with a capitalist who could see through and evaluate macro trends and true demand, not whether the business was easy to understand or whether it was on trend or not, so I was very pleased to have Mr. Sakata participate.

Providing opportunities for digital leaders of large companies to grow

- Please tell us about the support after the investment and what support you expect in the future.

Endo Since our business is aimed at large corporations, we need to further strengthen internal controls within the company. I would be very grateful if JAFCO could frankly point out the points for improvement. In the future, we would like to ask JAFCO to introduce us to your customers and business partners to us. Over the past few years, large companies have become more interested if introduced byVCs, so I would like to work with VCs to advance business development.

Sakata Certainly, there are an increasing number of cases in which large companies with whom we have connections contact us after looking at our portfolio and saying, "I'm interested in this company." Rather than just introducing the company, I would like to collaborate with ROUTE06 in the form of creating a business.

-How do you plan to expand your business after raising funds?

Endo First of all, we will strengthen the development of our own product, the platform "Plain". We will invest in hiring people and building an organization to make the product compatible with a wider range of industries and functions. I would like to work with business partners to expand the range of services we provide.

In terms of our long-term vision, we would like to increase the number of product managers, engineers, and designers within the company, both in Japan and overseas, and create a company with thousands or tens of thousands of employees capable of digital manufacturing. It is very meaningful to provide opportunities to be involved in the launch of a new business within various large companies regardless of where you live. This leads not only to the growth of our own employees, but also to the growth opportunities of the members of large companies. Working together on a large project, if successful, may elevate the person to a more discretionary position. I believe that nurturing new digital leaders who are active in large companies is the true social value that our company should pursue.

The company's growth is valuable to the world. Can you have faith？

- Please tell us what you want to achieve in the future, President Endo, and your aspirations as an entrepreneur.

Endo As a manager of the company, I am always conscious of whether or not the company believes that its growth is of value to society. If you believe that there is value in short-term profits, I think you should pursue it, but in my case, I want to be in a state where I can confidently say that the world will become a better place through the growth of my company, clients' businesses, and employees.The interesting thing about the company ROUTE06 is that it can be involved in business in all industries through DX, and it has the potential to have various forms of business in its own company. We will continue to take on challenges while making decisions about whether or not the business will lead to the creation of value for the world.

-Finally, please give a message to those who aim to become entrepreneurs.

Endo I think it's important to work on a business theme that you can concentrate on and perform best. The best business for me, which is meaningful only because I do it, not because I can do it in terms of skills. To that end, it is important to analyze your own personality and ambitions, what you have gained in your career, and how you are viewed by those around you. I have also had various experiences so far, and because I have reexamined myself, I am able to choose the current business where I can demonstrate myself to the fullest.

As long as the choice is correct, even if you start a business and struggle, you can usually manage. Not only from my own experience, but also from the entrepreneurs around me, those who are honestly working hard are always stepping up in any form. Even if you don't get the results you want in your startup, you can be active in a career where you can make the most of yourself. The number of people who help entrepreneurs, including VCs, has increased dramatically compared to the past. Take on bold challenges with the support of those around you.

Person in charge: Shogo Sakata　​ ​Comment from

In recent years, large companies have made considerable progress in DX in the so-called "defensive" area, including infrastructure systems, and many excellent players have emerged. However, the true DX of a large company can only be realized by promoting ``aggressive'' DX such as ``generating sales'' and ``creating value''. The awareness of large companies toward open innovation has changed significantly over the past few years, and opportunities for startups to enter the market are increasing, but the number of players engaged in "aggressive" DX is still limited. ROUTE06 is a company that specializes in just that area. In addition, President Endo is an experienced entrepreneur who has been engaged in business support at banks and consulting firms, and has successfully launched his first startup. I believe that the company will change the common sense of the SI industry and become a driving force in furthering the growth of large companies.