"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 32nd edition, Mr. Naoto Fukutani, Representative Director of BackTech Inc., appeared and talked about future business challenges along with the perspective of venture capitalist in charge, Satoshi Kiyota.
【Profile】
BackTech Inc. CEO Naoto Fukutani
After graduating from Fujita Health University, completed a master's course while engaging in clinical work. After obtaining a doctorate from the Kyoto University Graduate School of Medicine, he founded BackTech Inc. and assumed the position of CEO. It is creating a results-based healthcare business that will become "the norm for healthcare in the futre, such as the results of its products being published in international medical journals and the website of the Ministry of Health, Labor and Welfare.
[What's BackTech Inc.]
Based on medical evidence, it operates "Pockets Therapist®", which supports the well-being of organizations and individuals, which has been introduced to major companies / health insurance companies such as Konica Minolta, Kirin Brewery, and the SHIONOGI Group. It solves the "pain of the body and mind" of workers and promotes the improvement of labor productivity in Japan.
In October 2022, it raised 450 million yen with JAFCO as the lead investor.
Society will not change just by waiting people to come to the hospital. Problems I felt in the medical field led to entrepreneurship
―Please tell us about the business of BackTech.
Fukutani The Company's main service is a healthcare service called "Pocket Therapist®". We provide B to B to E corporate online services based on the concept of realizing well-being for organizations and individuals. As an organizational issue, many companies have "employees' physical pain and mental disorders" that are factors that reduce labor productivity. "Pocket Therapist ®" is a service that aims to improve labor productivity through mental and physical care by visualizing and resolving performance degradation due to such disorders.
In addition, starting with "Pocket Therapist®", we set and visualize indicators such as "work engagement" and "absenteeism/presenteeism" related to ESG management according to a company's medium- to long-term policy, and support turning the PDCA cycle.
―What kind of symptoms does "Pocket Therapist®" specifically focus on?
Fukutani As factors that reduce the labor productivity of Japanese people, stiff shoulders rank first, and back pain ranks third. In addition, there is research data that about 80 % of people who feel mental health problems have physical pain such as stiff shoulders, back pain, and headaches. When I started the business in 2016, our focus was more on physical pain, such as stiff shoulders and back pain.
Since 2020, due to the impact of the corona wreck, the problem of mental disorders has increased, and the range of services has been expanded to include mental and physical care, and the number of points of contact with companies has increased.
―How do you deal with physical issues such as stiff shoulders and back pain online and provide care?
Fukutani In many cases of companies that have introduced "Pocket Therapist®", stress checks are conducted once a year, and about 10 to 15 % of high-risk members are interviewed by industrial physicians while looking at individual data. . Therefore, we will ask those who have stiff shoulders and lower back pain to use "Pocket Therapist®" to provide proposals to improve their lifestyle habits and introduce exercises online.
Many people think that stiff shoulders and lower back pain will not get better unless they actually touch their bodies. However, in most cases, the only people who can improve by having their bodies touched are those within three months of onset. However, 90 % of those who suffer from stiff shoulders and back pain have been suffering for more than three months, and medical research shows that chronic symptoms that last for more than three months are not only physical, but also related to stress, lifestyle, way of thinking and other factors. Therefore, we also provide services such as online sessions to relearn the habits of thinking so that the way you perceive things becomes positive.
Since I am originally a research professional, and since our founding, we have received many criticisms about whether online health service can really improve our health. Our company has compiled international papers by working with universities, which allowed us to provided information on specific countermeasures. Through such a process, we are able to provide solutions based on medical evidence, which is one of our strengths.
―Please tell us the background to choosing healthcare services as a business.
Fukutani I received a doctorate from Kyoto University Graduate School and conducted research on the theme of "how to invest in the health of employees to draw up a company's growth strategy." Until high school, I was aiming to be a professional baseball player, but I got injured and gave up. Through rehabilitation, I met a physical therapist and became interested in the medical field.
What got me thinking about starting a business was my experience working at a hospital, which I did in parallel with my research in graduate school. One day, a woman in her 40s who worked at a hotel came to the hospital with a limp, complaining that she had a pain in her lower back. She said she had already suffered from depression and came to the hospital after quitting her job. There is a research paper that says that about 70 % of people with physical pain have depressive symptoms. Including that incident, a large number of people who finally came to the hospital when they reached their limit made me think, "Society will not change if we, medical professionals, just wait at the hospital."
Japan's working-age population continues to decline, and Japan's productivity has been stagnant since 1970 among OECD countries. If we ignore physical pain and continue working with low productivity, Japan's economy will not develop. There are about 28 million people in Japan with back pain, but only 5 million people visit a hospital in their lifetime for that reason. The World Health Organization (WHO) has also announced that back pain is the number one cause of a decline in healthy life expectancy. If we can use technology, we should be able to approach people who can't come to the hospital at workplaces or at home. This feeling that I felt in the medical field is at the core of "Pocket Therapist®".
―How did you start your business?
Fukutani I participated in the "Entrepreneur Development Program" held at the Graduate School and spent half a year creating a prototype that led to the current business concept. In the name of user interviews, I went to nearby cafes and bars, found business people who seemed tired, and asked them, "I want to create this kind of service. Please tell me what you think." There were quite a few people who enthusiastically talked about their own health problems, and this strengthened my belief that there must be a social issue here.
The final pitch of that program was a disappointing 2nd place. But the angel investor Tetsushi Takimoto (deceased, former Kyoto University visiting associate professor), who was a judge at the time, said to me, "You guys are number one in my opinion. Start your own business now." . Those words left a deep impression on me, and I thought, "Simply coming up with an idea has no social value. Unless it is implemented, it is meaningless." I don't think much about risks, so I decided to give it a try.
In 2015, before our founding, we also participated in various business contests, listening to the voices of the judges and participants, and brushed up the resolution of our business. I also met Mr. Kiyota from JAFCO through a business contest.
―Please tell us about any difficult episodes during or after starting the business.
Fukutani I can't say enough about all the hard things (laughs). The concept of "health management" is spreading nowadays, but when I started in 2016, there were no needs at all. I visited many listed companies, but at the time, I received many comments saying, "Why should companies pay for the health of their employees?" We also struggled with the difficulty of demonstrating cost-effectiveness over a short period of time because we were investing in health, and we were unable to make sales pitches that could stimulate demand.
On the other hand, there were many end users who wanted to cure stiff shoulders and back pain no matter how much money they spent. Therefore, we decided to switch to a policy of starting hypothesis verification from a plan for individuals and shifting to a corporate plan. When the concept of "health management" began to spread, we pivoted again to services for corporations.
―Why did your business focus remained unchanged even when you were confronted with the reality that there was "no need?"
Fukutani Because I had a background in research and work experience at a hospital. I was convinced that "companies just haven't realized it yet" and "the time will come when they have to work on the health of their employees."
Confronting social issues without blurring. I felt trust in the attitude of not running away
Mr. Fukutani and JAFCO venture capitalist Satoshi Kiyota (left)
― In October 2022, you raised 450 million yen in Series B round with JAFCO as the lead investor.
Please tell us how you started thinking about raising funds in the first place and how you communicated with VCs.
Fukutani Originally, I thought that as long as I was dealing with major social issues such as stiff shoulders and lower back pain, I would capitalize the business and do it properly. Two months after our founding, I made a pitch at an acceleration program in Osaka City, and a VC decided to invest on the spot. It was at that point that I started to seriously consider our future exit story.
I wanted to work with VCs who took the time to understand my personality and business hypothesis verification results, so even when I wasn't financing, I met with VCs regularly to update information. Even after I met Mr. Kiyota, we went out to lunch once or twice a year to build a relationship of trust. At the time of this funding to further strengthen the organization and drive the business, I finally got to work with him.
―From JAFCO's point of view, please tell us about the attractiveness of Mr. Fukutani as an entrepreneur and why you decided to invest in him.
Kiyota He has many charms. The first is the strength of the desire to start a business. With half-hearted feelings, entrepreneurship is too hard and tends to break your heart. But Mr. Fukutani continued to face the issue without wavering. A person who will not run away from this business for a moment, and will continue to do it until it succeeds. I has been convinced of this after a long period of knowing him and wanting to work with him.
The second is that the way he communicates is very thoughtful and pleasant. I thought that good compatibility was essential as a partner to grow the business together.
The third is a sense of speed and a strong sense of numbers. I felt particularly strongly at the stage of investment consideration and felt a sense of security when I received an answer to my question within a day. He is also persuasive he talks based on clear numbers and evidence. I feel that this is a strength unique to Mr. Fukutani.
Fukutani I'm happy. From an entrepreneurial point of view, I felt that I was constantly being tested to see how much the business could grow while we weren't meeting. If we meet six months later and find that the previous issues have not been resolved at all, then your aptitude as an entrepreneur is in doubt.. That's why it was so meaningful to meet regularly. Whenever I received an opinion, I always tested my hypothesis, and I always had the awareness that I could not be the same as before.
―Could you tell us why you chose JAFCO, Mr. Fukutani?
Fukutani It's because he really valued the entrepreneur's time from the stage of investment consideration. There was a sense of not wasting even a single moment of my time. For example, even if there were figures related to a business that were out of control and has been postponed, he approached me with the stance of saying, "I think it's difficult to manage in the current situation, so we'll sort them all out. Please just provide the data." I was grateful for his supportive attitude, saying that entrepreneurs should prioritize their business and spend their time.
In fact, up until now, I had been spending a lot of time on clerical work and managing numbers, but JAFCO helped me create an environment in which I can concentrate on my business. From now on, I would like to use my time for recruiting and sales, and grow both the business and the organization. Most recently, I would like to strengthen recruitment in all directions, from engineers to customer success, sales, etc., in order to create a strong organization to increase sales.
Aiming for a society where one can obtain mental and physical health with just "Pocket Therapist®"
―Please tell us about the future prospects of BackTech and what you want to achieve through the business.
Fukutani "Health management" is now an essential initiative for sustainable business growth. First of all, I would like to create a society where it is natural for listed companies to introduce our services and increase their corporate value. I would also like to proceed with hypothesis testing for small and medium-sized enterprises and support them so that they can maximize the performance of each and every employee.
Currently, we are expanding the service from stiff shoulders and back pain to mental disorders, but in the future, we will consider horizontal expansion to symptoms peculiar to women such as PMS (premenstrual syndrome). Furthermore, we would like to promote collaboration between online and real life for those who want to see a doctor in real life but don't know where to go. For example, it would be ideal if we could set up "Pocket Therapist®" certified treatment clinics near or near train stations along the Yamanote Line so that employees of contracted companies could immediately use it. I would like to create a world where everything from mental and physical health consultations to specific actions can be completed with just one "Pocket Therapist®".
－Mr. Fukutani, what do you think is important as an entrepreneur?
Fukutani It is an overwhelming sense of ownership as a user. When I first started my business, I only knew the medical field, so I went to the offices of corporate personnel and health insurance unions to work. When I was there, I could see the issues that the HR people were having, which led to business ideas.
Even now, when I visit a customer, there are people who tell me things like, "Speaking of which, this part is difficult to use." I believe that going to places with problems is the starting point of business creation.
―Finally, please give a message to those who aim to become entrepreneurs.
Fukutani The most important thing is not to give up. If there is a social issue that you want to solve, you should keep trying, even if you don't know if it will succeed. That's the only way to increase your odds of success. Our generation will create the society we want to pass on to our future generations. Let's keep moving forward together so that we can pass on a society with a future.
Person in charge: Comment from Satoshi Kiyota
With the spread of ESG management and the SDGs, the number of companies working on "health management" is rapidly increasing. However, it is difficult to quantitatively evaluate non-financial information, including the health status of employees and productivity, and companies are probably going through a process of trial and error. Among them, BackTech provides comprehensive services from visualization of non-financial information to service provision for improvement and subsequent verification. Its main product, "Pocket Therapist®︎", is based on medical evidence and is used to improve chronic pain such as stiff shoulders and lower back pain. By approaching the issues of physical pain, it also offers an effective service for improving emotional pain such as mental disorders, thereby establishing a very unique position. I will also support the growth of the company so that it can contribute to the improvement of productivity in Japan as a whole.
