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Do you remember the first toy you ever touched? "Toysub!" is a toy subscription service challenging that.

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This website has been translated into English using automatic translation. Please note that the translation may not be entirely accurate.

Do you remember the first toy you ever saw and touched? It might have been something your family liked, something in fashion at the time or something you chose yourself.

Even if they don't remember it now, that toy must have made them think they would want something like this next. By playing with toys such as girls' toys and boys' toys, we learn about the concept of what is "appropriate". Our personalities as adults are also formed by such experiences. So, what kind of toy should we give our child when we become parents? Maybe we should choose something that won't be boring soon and is affordable. Or maybe it would be best to listen to the recommendations of friends and family.

Childhood is the foundation of personality formation. Through toys, they want you to touch a variety of choices and have a variety of values. From such a thought, there is a subscription service for educational toys for children from 0 years and 3 months to 6 years old. It is "Toysub!" operated by Torana, Inc. The company said it had more than 13,500 users and more than 350,000 evaluations of toys as of the end of June 2022.

For fast-growing infants, embracing a modern, sustainable concept of exchanging is important, rather than a cycle of buying and discarding. We asked CEO Norimitsu Shida about his thoughts beyond the toy subscriptions.

I encountered the "Subscription Model" and "Toy Store" while reconsidering my career

Please tell me about your career and what motivated you to start your own business.

Initially, around the end of my second year in university, two friends and I started a business. I started a business because I thought it was interesting and had no money due to my family circumstances. I needed to gain the ability to earn money other than part-time work. However, one of the people I was working with was going to quit the business and get a job, so we decided to dissolve the business for the time being, and I started looking for a job as well.

My first job was at Trend Micro, a security software development company. Out of curiosity about what defense means in terms of communication, as I had been playing with computers since elementary school and P2P communication Winny was becoming popular at the time, I found myself searching for a well-paying part-time job during my student years and ended up with a security support part-time job. Because of my knowledge at that time, I tried to find a job in the security field, but most security engineers were mid-career hires. Only Trend Micro was hiring in junior positions, such as new graduates, so I automatically decided to join the company.

After that, rather than pursuing a career as a security engineer, you moved on to a career in management at a foreign company.

Yes, I have experienced multiple positions in setting up Japanese subsidiaries in various foreign-affiliated companies regarding the timing of their entry into Japan. The salary was relatively good, and it was probably a smooth career from the outside, but I started to have a haze about whether I could continue like this. Around that time, I opened a notebook from my school days. Back then, when I had a lot of time, I wrote down what I wanted to do while I was alive, and the word "entrepreneurship" was there. Ah, I must have unconsciously thought I wanted to start a business, and it became a career choice later.

I see. As a concept, how did you develop the toy subscription business?

Around 2014, just before I started my business, the subscription model began spreading in the United States. I hadn't thought about what kind of business I wanted to start, but I wondered if I could develop a subscription model in Japan.

Around that time, my second child was born. When I went to Yodobashi Camera to buy toys, most characters lined up were familiar Anpanman characters and Shimajiro. In addition, girls' toys were pink-based, with lace, frills, and magical girls, while the boys' toys were blue-based, with cars and transforming robots, clearly divided into different categories.

If the person intends to choose that, then it's okay. However, I felt uncomfortable with the worldview that could imprint unconscious prejudices from a young age.  If it comes down to choosing a toy in this worldview, it's likely that the child might take the one their parents recommended or that their friends are proud of, even if they wanted something else. Of course, I understand that arranging top-selling products is a natural strategy for a profit-making business, but toys are closely linked to development and education. I wanted the person in charge of the toy department to have a neutral sense of values with a gradation.

At that time, I couldn't purchase the toy because I couldn't try it, but by continuing the conversation while sharing my sense of mission with my friends, I came up with the idea of Toysub! as a subscription service. At first, I was engaged in a side business to think of a business plan, and with the scale of the business, I incorporated the company and established Torana in March 2015.

So it was the sense of incongruity you felt in the toy department? Has there been any change in the toy department itself from 2015, when you started the business, to 2022?

I guess the discomfort you felt at the toy store was the catalyst. Since you started the business in 2015 to 2022, have there been any changes to the toy store?  Even now, there are many products with deeply rooted popular characters from the Showa era. The world's top company, Mattel, is leading the way, followed by Bandai Namco. It may come as a surprise, but toy sales are trending upwards by 2-5% year-on-year, suggesting that per capita toy budgets are increasing, despite the declining birth rate. It means that the budget for toys per person has increased. Therefore, the quality and quantity of toys given should have changed. Recently, there have been more opportunities to discuss diversity and sustainability, and it seems that the interest of the older generation has also changed.

Anpanman (Takashi Yanase brand) and Shimajiro (Benesse brand) are amazing. Once a parent uses Benesse's services to determine their child’s first and last name, they continue to operate based on the customer information they received at that time and send e-mails and flyers encouraging them to subscribe to Kodomo Challenge after the baby is born. When you start reading, you will receive a Shimajiro puppet in the appendix, but from the child's perspective, puppets are more petite and cuter friends, and they can be the people you talk to the most. I often hear stories of how children open up to dolls even when they don't open up to people, and that's how they get to know Shimajiro and start to answer "Shimajiro" when asked what they want as a toy. It becomes the first IP content many recognize when born (laughs).

Indeed, I have memories of opening my heart to puppets (laughs). How does the selection of toys change depending on the age of the child? What age group of children uses Toysub! The most?

At Toysub!, we target children from 0 months 3 weeks to 6 years old, but the role of toys seems to be changing from entertainment to education with a gradual change. A 0-year-old who will laugh and cry no matter what they do. At 1 year old, they start to show interest in toys. Then, toys that use shapes and color rules and those that help with physical understanding, such as recognizing circles, triangles, and squares, or making sounds when shaken or pushed, become more popular. When they become 3 to 4 years old, they can play melodies and draw pictures, and the toys they use become more applicable.

Users of Toysub! generally fall within the age range of 0-1 years old, making up about 7-8% of the total. We believe this is less a reflection of market demand and more a result of the increase in Toysub users since around 2020, as well as the growth of users with us since the beginning of the business. From a business perspective, starting Toysub from 0 years old is naturally preferable, as it would result in a longer LTV. From a personal standpoint, I would like children to have the opportunity to start using Toysub as soon as possible so that they may form flexible thinking before unconscious biases have time to form. I have been in difficult situations since I was young, but I hope that what I have received will be given to the children of the future.

What kind of customer base comprises the actual parent generation responsible for the application? 

The population by residence area shows that Tokyo's top five most populated areas are Setagaya, Minato, Shinagawa, Suginami, and Koto Wards. It seems to have been well-received by higher-income households and those with higher information awareness. Also, since homes in the city center tend to be less spacious, giving children more space to play outdoors may be difficult. Therefore, households may be more likely to spend money on toys.

As part of our advertising strategy, we conducted a survey asking our users, "What media do they watch most often?" On the other hand, there is a change in the breakdown, and while E-TV's "Inai-inai-baa!" continues to be at the top, viewer ratings for individual IP animations such as Anpanman are on a downward trend. Recently, there has been an increasing number of households where people watch original online content, such as YouTube and Netflix, on tablets instead of TVs. I think both children and parents are dispersing the media they watch. As for store cooperation strategies, major retailers exist for infants and young children, such as Akachan Honpo, Seiyu, Babies “R” Us and Toys "R" Us. They are currently in partnership with Akachan Honpo to hold events where you can try out toys.

BabyTech suggests not only toys but all the options for children

Did you have a pivot of your business idea after starting a business?

The mechanism itself has hardly changed from the beginning, and it has been continuously upgraded with versions such as system improvement, operation improvement, and the number of toys handled.

I hear that the toys are being packed and shipped from each of the company's branches, but with the new coronavirus making it difficult for employees to come to work, wouldn't operations have been difficult?

Yes, as childcare facilities began to close down and the staff was forced to stay home, the fulfillment team responsible for shipping products couldn't keep up. With the rapid spread of infection in 2021, when we were preparing to switch systems, making arrangements for fulfillment operations while wearing vinyl gloves and masks and dealing with refunds due to shipping delays was quite a struggle. After the emergency declaration was lifted, we could recover, but it was an opportunity to rethink our organization.

By constructing centers in Chiba and Tokyo, we have created a system that can respond to emergencies. The closing of nurseries varies in time depending on the region. For example, when Tokyo has closed, Chiba is still operating, and when Chiba closes, Tokyo is already restored. This way, either way, the delivery is not delayed.

With the increase in stay-at-home orders, parents have had more time to spend with their children. As children have also been spending more time at home, the expectations for toys have naturally increased. When the delivery delays caused by the coronavirus pandemic started, we received many opinions from our users. Of course, there were also harsh opinions, but in the end, those opinions reflected the great expectations for toys. We realized that what we are doing is not just about the delivery of toys but about something related to the foundation of education, such as how children spend their time.

I think the number of competitors is increasing, but where do you want to place your uniqueness?

I think having more choices for children is desirable, so I think it's good to have more competing companies and services.The basic idea behind our toy subscriptions is to shift from "choose-buy-enjoy-tire-throw away" to "arrive-enjoy-evaluate-exchange". Although there are more competing companies, only one makes this a primary business. We have also been closely engaging with our users, building trust with our suppliers, and accumulating system and operation know-how and customer data. Not many companies have accumulated this much, so the barrier to entry is low, but I think the barrier to expansion is high.

On the other hand, it is not easy to expand without operations that can be automated, so if a foreign company that has already scaled enters Japan and starts a large-scale advertising strategy, it may affect our sales. Recently, Lovevery, founded in the US in 2015, has been growing and seems to be aiming for entry into Japan. However, we also have the pride that we are the ones who know the Japanese users the deepest, and since most foreign capital enters with a focus on profits, we also think that it may not be the right direction.

The important point to strengthen the business is to secure funds, so could you tell me about the current fund-raising situation? 

In December 2019, we raised 100 million yen from Samurai Incubate, KVP, and Colopl Next. One year later, Samurai Incubate (second round) and ANOBAKA (formerly KVP, second round) added 100 million yen. In April 2022, Samurai Incubate (third round), AG Capital, SMBC Venture Capital, Mitsubishi UFJ Capital, Sumitomo Corporation, Sōhatsu no Tsubomi Fund, and other eligible institutions raised a total of 370 million yen. We are proceeding smoothly with the procurement. We continue investing in systems to optimize operations and manage customers and deliveries in-house, aiming for further business expansion.

Samurai Incubate has been investing in us since the seed period to the most recent round, so we have had a long relationship. The company has been initially interested in consumer services and has invested in Air Closet and Yamap, and we feel they expect a lot from us. When asked about the investment from Colopl Next, it is a pure investment, not a synergy-based one for the game and other entertainment content. It is the first project for Mr. Fuchie Daido, who oversees this. We are delighted to be able to choosen because of the expectation for our scale.

Some readers interested in education may want to join the company. Could you tell us about the organizational culture and recruitment?

The mission is to "connect toys and parents and children", and the vision is to "increase happy parent-child times". We are aiming to become the global #1 toy service provider. Our values are "Owe It All To You," "Grasp This Bar," and "Pioneer's Mindset".

Currently, there are bases in Chiba, Nogata, and Koenji, and some members are participating remotely. The engineering team values mutual assistance and praise, while the operations team values diligence, initiative, and numbers achieved. While there are some slight differences in what they value, overall, there is a culture of mutual assistance. We use Slack for internal communication and Jobcan for attendance management. When someone submits their timesheet on Jobcan, I ask, "Are you happy with Jobcan-touching?". Since there are a lot of part-timers on the operations team, the team leader's flat personality makes everyone feel warm and cared for, which is a rare feeling in a workplace.

I want to work with someone who can sympathize with our vision of "increasing happy parent-child time". I have been told that when I interview, I rarely hear what they want to appeal to me because instead of asking about skills, I often ask about their career goal, why they choose Torana, and what they can achieve after joining. However, isn't it evident since their resume already contains their skills and experience? Instead, I want to hear what they have learned about themselves after introspection, such as why they are here and what they hope to do.

What are your thoughts on global expansion?

The domestic TAM (Total Addressable Market) of the market for basic toys and infant correspondence education is 200 billion yen. Concerning childcare and child education, in every country, guidelines have been issued to some extent by organizations equivalent to the Ministry of Health, Labor and Welfare and local governments. The direction and roadmap of what to do are drawn by the guidelines, and you will write a business plan after considering it. On the other hand, I think it would be nice if the business operators could also express their opinions.

As for the direction of our company, I think it would be good to aim for a super app with growth potential. In the future, the number of dual-income couples will increase, but we want to be a service that helps busy people who want to invest in their children but don't have time to research what is good. We believe that the essence of our business is not a toy subscription service but a service to find options that help children grow and develop.

The strategy of platform operators is often to develop private brands based on their purchase data. Do you have any plans to develop original toys?

Yes, we have already started offering our private brand products. We are especially developing wooden toys with low initial development costs. In Japan, due to a large number of wood suppliers, orders for furniture, which is the main product of wood processing products, have decreased. Many wood processing companies are willing to cooperate in planning wood processing products that can be sold. If it is a toy made of wood, there is no need for a mold or board design. If it is made of plastic, the initial cost will be 5 million to 10 million yen to make the mold; if there are many parts, it will cost a tremendous amount of money. sSo you can not start unless there is a considerable number of expected sales.

In the United States, parents have grown up on fast food and energy drinks, so organic food and toys are the trends for children. From the perspective of sustainability, eco-friendliness, and organics, I think wooden toys are well-received in the overseas market.

I see. Would it be wooden cars and robot toys, for example? 

What I want to make is a dollhouse. Like Sylvanian Families. Dollhouses are like a little "world", aren't they? What kind of design, furniture, people live in it, what kind of life they lead. It's ideal for simulation. It's like a real Minecraft.

Do you think about character strategies other than toys?

Yes, someday, I would like to create a character that surpasses Shimajiro and Anpanman. Particularly characters and products for infants are diversifying considerably, and opportunities for new entrants are increasing. Baby Shark and Baby Bus, a big boom in Japan, are also new IPs that have become popular on YouTube. Because of the changes in the information-gathering methods of the parents' generation, in this era of information overload, consumers are likely to grow tired of familiar content and seek more diverse content. This is also a chance for us, so I hope we can create something future generations will accept.

Toy exhibitions like the Tokyo Toy Show have also changed their appearance. Initially, the planners were mostly in their 50s to 60s, but now it has been replaced by 30-40s. The values of the planners and parents who become customers have changed, and the whole industry is full of enthusiasm due to the change in the way of toy shows. Even at the Tokyo Toy Show, which was recently held, the exhibition was more lively than before the outbreak of the new coronavirus, and I felt that the signal of revival had risen.

I want to give choices to the children of the next generation after my tough childhood

How did you spend your time as a student?

From a young age until my teenage years, I lived in poverty, and it became increasingly difficult to attend middle school, so I entered a children's home. When I turned 15, I had to graduate, and my options were to choose either a Christian or Buddhist facility or to wait until my guardian came to take me home. Miraculously, my birth father was found, and I could graduate with him as my guardian. I remember feeling sad when I was told by one of the children that they thought we would be able to stay in the facility forever like we were a family. Maybe that's why I feel that no matter what situation a person is born into, they should be able to live happily.

I went to high school while earning tuition through a part-time job. I didn't have many opportunities to feel family contact, so I learned what a family is by listening to my friend's stories. I learned that there are various relationships between parents and children. Of course, I didn't have time to think about starting a business or becoming a CEO. My childhood dream was to be an arborist. Maybe I was interested in protecting and nurturing something.

Graduated from the Department of Law, Faculty of Law, Meiji University. I was working part-time at a convenience store called Meidai Mart on campus. As a second-year college student, I participated in an event called "Business Plan Contest KING2005 for Students". It was a 7-night, 8-day training camp, and that was the first time I encountered the word business. On the final day, a presentation was given to members of society. The theme then was "Considering a new business for McDonald's". I announced the idea of "renovating part of McDonald's space so that it can be reorganized into a childcare business and entering the childcare business." At that time, rather than wanting to start a childcare business, the idea was that it would be reasonable from a real estate perspective because it would definitely be near the station. The following year, I moved to the management side of KING. This organization has produced many entrepreneurs, such as Mr. Izumo of euglena and Mr. Matsumoto of Raksul Group. It was through the meeting here that I met my friends with whom I started a business together.

I was enrolled in the Faculty of Law but never thought I would become a lawyer. As I mentioned, I decided to work as a security engineer after working part-time in security, but security also has some similarities to the law. Solving problems in order is the same, so I may be suitable for this work.

How do you spend your days off, and how do you refresh yourself?

As a father of four children, I spend most of my time playing with them. The only holidays I haven't spent with my kids so far are a few days when I went to a music festival alone. I go out with them, and we are working on completing visits to places like the zoo and the aquarium. My hobbies are saunas and cars, so sometimes I drive on the highway for fun.

Do you have a message for startups in the pre-seed to seed stage?

I want you to face users thoroughly if you are going to do business. Whether the target is a consumer or enterprise, the business will only be successful through user acquisition. Some entrepreneurs prioritize other KPIs, but I’m not one of them.

Almost all users send a message to the service, even if it is minimal. If we do not sincerely face dissatisfaction with questionnaires and SNS, requests for improvement, etc., the business will not scale, which is the failure of management. Also, since employees are on the other side of the user, creating a good relationship with them is imperative. For example, at Starbucks, where baristas are constantly dissatisfied with their treatment and have grumpy expressions, they probably won't get as many customers as they do now. I know it won't be easy to reach out to all of our employees once we scale, but we want to ensure they enjoy their work as much as possible.

Finally, please tell us about the world you want to create and say a word of advice for our readers.

Among Toysub! users, the most extended usage period is 59 months, and the number of toys used is 180. I appreciate the philosophy, and I can help give children more choices of toys. I always think that I want society to value such individuals. That's why we want to be the first step in raising people who can value individuals. I believe that the first generation raised in this way will indeed have a good influence on the next generation.

Taking care of individuals is not an easy task. As it is assumed that there will be a diverse range of people, it will become more complicated, and it will become impossible to move more uniformly than it is now, and system design will become particularly difficult. Companies, schools, homes, and differences in direction increase, and the community becomes dispersed. However, even if it is difficult to unify society, I think it is okay if the individual is satisfied. Only those organizations that can withstand it will survive. Large organizations may disappear and become small and medium-sized organizations. But I think that's okay.

Nevertheless, since we are a profit-making business, we must not neglect to expand our company. The current number of users is about 13,500, but two years from now, in 2025, we would like to increase it by about 10 times the current number. We look forward to joining forces with people who sympathize with our philosophy and want to grow our business together.

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