I want to contribute to society by demonstrating "intervention value". Mr. Yukito Kondo of Fanfare, challenges to solve problems in the waste industry without any experience

The history of the waste industry in Japan is long. In 1900, the Waste Disposal Act was enacted. Over 100 years have passed since the first system was established to treat waste under government control. That is why the hurdles to change the old way of doing business are high. Many companies still have old-fashioned systems despite the urgent need to improve productivity due to labor shortages.

​Mr. Yukito Kondo of Fanfare Inc. ​ is tackling such issues in the waste industry. Mr. Kondo has developed Haisya-gasira, which uses a proprietary AI algorithm to automate labor-intensive work and quickly humanize tasks in the industry of creating vehicle dispatch plans.

Mr. Kondo has built his career on developing new businesses and launched a startup in the waste industry with absolutely no experience. In this interview, he talks about his career, how he founded the company, and the values he holds dear in life.

Developed SaaS that automatically creates dispatch plans for waste collection

First, please tell us about Fanfare's operations.

We develop and provide a SaaS Haisya-gasira that configures AI specialized for the waste industry and automates vehicle allocation planning when collecting waste. It is possible to present the optimal route and the person in charge of waste collection requests, which vary daily, in about 3 minutes.

Creating a dispatch plan is a labor-intensive task that requires sorting through all kinds of information, including the status of the day's requests, the compatibility between drivers and clients, road information, and so on, to derive the best route. In addition, it requires extensive experience to create plans smoothly, so the work tends to be done by a single person. Sometimes, the plans are still shared with the drivers on paper.

As Uber and others have shown, dispatching cars is a job in which AI excels. We launched this company because we believe that if we can harness the power of IT in a way that fits in with the waste industry, we can improve the way the entire industry work and eventually contribute to building sustainable social infrastructure in Japan, which is suffering from labor shortages due to its declining birthrate and aging population.

Did the business idea come from your experience, Mr. Kondo?

No, I wasn't particularly affiliated with the waste industry, and the business idea was born from a side job of UX consulting I was involved in when I was working at Recruit.

Initially, I studied graphic design at an art university in Kyoto. When I joined Creww, Inc. as a new graduate, I was involved in new business development and startup support for major companies. At Recruit, where I moved, I was also in charge of product development as a UX professional while involved in organizational development. I was a UX design consultant for various companies on the side, and that's when I happened to get involved with the waste industry.

While working on a side job, I realized that the waste industry had ample white space in the use of IT and that the working environment could be dramatically improved by utilizing IT. The waste industry is a necessary infrastructure that serves as the foundation of society. Even if there is a labor shortage, it can never be stopped. I wondered if IT could be used to solve the problems faced by such an industry, which led me to the business idea.

A career that continued to focus on the creation of new businesses

I see, so your business idea was motivated by a side job. Mr. Kondo, could you tell us about your career so far?

After graduating from university, I joined Creww, Inc. as a part-timer. I chose this company because I wanted to acquire the ability to start a company. As a student, I worked on a wide variety of social projects, such as launching a company to redesign crafts to solve the shortage of successors of traditional crafts in Kyoto and a sports school to help truant children return to society, but none of them ended up scaling.  I felt frustrated at the state of affairs where the number of people I could save through my projects was limited due to my lack of ability, and I was simply complacent.

Creww, Inc. was founded when "open innovation" was still a rarity in Japan to establish a culture of entrepreneurship. I was fascinated by the environment where I could be involved in both business creation, whether a large company is trying to turn from 10 to 11 and a startup is creating 1 from 0, and I thought, "I just want to be in this space". So, I contacted Mr. Ijichi, the company's president, and turned down all of the job offers I had received from 6 other companies, including an advertising agency and a production company, to join Creww, Inc. as a part-time employee.

What kind of work were you in charge of at Creww, Inc.?

I started with design-related work, using what I learned at university, and supported the creation of new businesses for major companies, starting as an assistant and gradually expanding my scope of responsibility. Ultimately, I was involved in creating about 100 businesses over the three years I was there until I resigned. I was extremely busy then and working my way through a muddy mess.

What did you learn the most while working at Creww, Inc.?

I was able first to experience the passion and enthusiasm of people who devoted their entire careers and lives ahead of them to take on the challenge of starting a company. Not only the startup founders but also many intrapreneurs (internal entrepreneurs) of major companies take on the challenge of starting a company while shouldering the expectations of those around them and their careers at their own companies.

I think I was able to set a standard for the level of enthusiasm I should have when starting my own business, and I think I was able to broaden my perspective.

After leaving Creww, Inc., you joined Recruit Co., Ltd., isn't that correct?

After leaving Creww, Inc., I joined Recruit Holdings Co., Ltd. to gain experience in organizational development and worked there for three years. I moved from new business development to organizational development because I realized the importance of building an organizational structure to promote new businesses while being involved in open innovation. Even if the necessary elements, such as people, money and environment, were perfectly aligned, there were cases where the company would shut down quickly because the organization was optimized for the existing business and could not adapt well to the new business.

What kind of organization should be created to continue to generate business and innovation? When I wanted to think about building an organization in a new environment, I had a chance to work with Recruit, a major company with an innovative corporate culture, and decided to join them.

How was your experience working at Recruit?

I gained experience in moving a large organization by steering it slowly. In addition, because Recruit is made up of members who are highly resistant to change, we repeatedly undergo paradigm shifts in the short term. I think it was one of the most significant experiences of my career to experience, as a member of an operating company, people who had been in important roles changing their positions.

Mr. Kondo, you have steadily built your career by creating new businesses. Under such circumstances, why are you taking on the challenges of the "waste industry", which you have no experience in, with a high degree of enthusiasm?

I think it is because I saw many entrepreneurs and intrapreneurs at Creww. If you don't have a high level of enthusiasm, it isn't easy to start a company. That's why I didn't start a company immediately, even though I was interested in the waste industry.

I first spent a year or so getting to know the industry on the frontlines, hoping to contribute something to the waste industry, a social infrastructure. I traveled to various business operators across the country to experience the on-site work while being stationed there and discussed trivial matters while having lunch with the employees. Through these experiences, I solidified the concept of the Haisya-gasira. When I began to have a palpable sense of providing value to people, I decided to start my own business.

By observing the industry in action, I could solidify my business idea with heartfelt conviction. I believe that is why I can take on the challenges without losing my enthusiasm even today.​

I want to demonstrate "intervention value" to everyone involved

Mr. Kondo, you have consistently valued "creating something" throughout your career, such as graphic design, social business launches, or new business creation.

Indeed, it is true that I am conscious of the idea of "creating value with your own hands." In my life, I have always wanted to demonstrate the value of my interventions to society and the people I interact with. Not only to my close friends but also to the store employees I frequent, with whom I have shallow relationships. If they are involved in my life in any way, I begin to feel that I want to create value through my involvement.

What exactly do you mean by "intervention value"?

To put it simply, it means having some positive impact. To give a specific example, I once asked the trainer at my gym to take a paid leave, which was difficult for him to take at his workplace, by repeatedly and persistently reminding them. Even if my relationship with them is shallow, I am always conscious that it would be nice if I could positively impact their lives and the society behind them through my involvement.

How did you come to be so conscious of "intervening value"?

I don't have a personal experience regarding this; I was always a slightly unusual child who felt a sense of loss and loneliness that I didn't belong anywhere in society. To bury that feeling and lead a fulfilling life, I needed to commit to what society thinks is right and what should be done. Since childhood, I have been involved in some activity that creates value for the people around me to be able to live for myself. For example, in elementary school, I used my drawing skills to draw cute animal character illustrations for my female friends and comic cartoons for my male friends as gifts.

To continue to realize the form of social contribution envisioned as a company

From here on, I want to ask you about Fanfare's characteristics as a company from various angles. Mr. Kondo, as a manager and UX designer, what did you pay particular attention to in the UI/UX of the Haisya-gasira?

I was highly conscious of the extent to which I could be tuned to the situation on the site. One issue was IT literacy. As you can imagine, many people working in the waste industry are unfamiliar with IT tools. General UX design theory doesn't work, so for example, if a person's typing speed is a little slow, but they need to input information without delay on a particular page to finish it within a specific time frame, we made sure that all input items were in a pull-down format. We were particular about how easy it would be for on-site people to use the system.

In addition, we were also conscious of creating functions that considered the waste industry's unique circumstances. There are surprisingly many issues between drivers and clients, so it is necessary to plan vehicle dispatch with an awareness of the compatibility with the client. For this reason, we also made it possible to set a blacklist for the crew, which isn't necessary for the general transportation industry.

I feel that the value of being a UX designer as a manager lies in the fact that they can thoroughly check the entry and exit points of the company's business plan and maintain consistency. The company's goals can be fully reflected in the service's usability. I believe that since there is no discrepancy between the business plan and the services provided is a unique strength of our company, Fanfare, that makes use of my professional skills and experience.

Mr. Kondo, what are your values as a manager?

Since we operate in the waste industry, which is a highly public industry, we have been thinking deeply about corporate ethics since our founding. I have summarized my ideas on corporate ethics in a notebook, citing ideas I have learned from various books. Ultimately, I believe that a very important aspect is  the extent to which corporate ethics are recognized by society as a company's reason for existence.​

Fanfare will expand further, and the number of people involved will increase, including employees, investors, and customers. How can we realize the social contribution form we envision while maintaining a sense of unity as a company? Whenever I make a decision, I always find great difficulty.

I see. In terms of increasing the number of people involved, I think Fanfare attracts talented people, including the management team. Is there anything you are conscious of when it comes to recruitment?

First of all, when it comes to recruiting management team members, I don't consider myself a charismatic manager, so I try to give them a sense of the value of intervention when they join the company. The waste industry has very stable business processes and is not an industry where trends change significantly, and envisioning the medium- to long-term future is not difficult. By realistically describing the social issues we want to solve, and the solution, we can identify what we lack and work on it.

For example, our CTO, Mr. Yabe, was also attracted to our business plan and joined Fanfare. He felt he could make this business successful by adding his experience in new business development at NEC and his AI knowledge and technology to the future I envisioned.

Also, when recruiting on-site members, we are currently hiring with an emphasis on balance. Those who join Fanfare in the current phase will become managers in the future, so we are hiring highly proactive people who can complete their tasks.

You recently completed your Pre-Series A funding. What were the key points that the investors evaluated?

When it comes to companies we request for investment, we consider whether they agree to improve the industry from a medium- to long-term perspective as a very important point.I have maintained a good relationship with investors and VCs who have fully supported the social issues I am trying to tackle from the start line. They have evaluated the resolution of industry issues and the high potential in the future for this procurement. The fact that we got a bank-affiliated VC and an energy-related company on board is significant in expanding the business we are working on because the views on the waste industry are often biased.

Could you tell us about your prospects?

As for the medium- to long-term prospects, we want to create a multi-product lineup of services that are appropriate for the workflow of all waste management companies. In addition, since we will be a mix of businesses in various phases within the company, we want to establish an appropriate organizational structure, including sales departments, in line with the progress of each business.

Could you give a message of support to startups in the Pre-Seed to the Seed stage?

Based on our experience, if we were to convey a message to startups involved in vertical SaaS in traditional industries, it would be that if the service adequately addresses industry issues and needs, there will be a demand for it

Many people worry about whether the service will sell when developing a vertical SaaS. I was anxious during the PMF and was improving the product through trial and error every day.

In particular, I feel that many second- and third-generation managers of micro, small, and medium-sized enterprises in industries with a long history, such as the waste industry, are waiting for new winds to change the industry for the better. I would like you to take on the challenge of business development while having confidence and hope for the services you are creating. I would be happy if my experience could be a little bit of hope for everyone.

Finally, please give a message to our readers!

We just completed the Pre-Series A funding of 630 million yen last July. No company in the waste industry has raised this much funding, and we're in a phase where we're just figuring out how fast we can grow.

We are now entering a phase where we must constantly change and rebuild our company structure as we work on multiple products. We are also taking on the challenge of drawing out the special domain knowledge of the waste industry as a database structure within our products. We want to run at full speed toward success in a challenging environment. We look forward to working with you if you share our goals and values.