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From being a backpacker after junior high school to an entrepreneur after a stint at Mercari. Mr. Kosuke Kuzuoka of HireRoo is trying to solve problems of engineer recruitment

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It has been a long time since the shortage of IT human resources was cried out. It is said that there will be a shortage of 450,000 IT personnel by 2030, and efforts to increase the number of personnel responsible for the IT field are urgently needed.

On the other hand, skill mismatch is also a serious problem in the field of engineer recruitment. It is very difficult to accurately determine a candidate's skills through multiple hour-long interviews. As a result, it is not uncommon for on-site engineers to be exhausted in order to make up for the delays in tasks and lack of skills due to hiring personnel who are significantly different from the expected level.

In order to solve such problems, we launched "HireRoo", which visualizes skills through online coding tests (*)Hireroo, inc The representative is Kosuke Kuzuoka. Mr. Kuzuoka was selected for recruitment by GAFAM, which led him to design a coding test service. After graduating from junior high school, Mr. Kuzuoka said that there was a time when he was a backpacker without going to high school. He talked extensively about his career so far, the history of his founding, and the challenges of the engineer recruitment market.

# Coding tests

A test that measures technical ability by asking students to actually write code and solve multiple-choice questions.

Serious "skill mismatch problem" in hiring engineers

First of all, please tell us about the business of Hire Lu.

In order to solve the skill mismatch problem in hiring engineers, we provide a service called "HireRoo" that allows you to check the skills of engineers with a coding test.

When hiring engineers, it is important to correctly understand the skills that the candidate has. However, in the field of domestic recruitment, there was a situation where the skills of engineers were not well measured.

In order to solve such problems, "HireRoo" was launched with reference to the coding test that Western IT companies such as GAFAM conduct at the time of hiring. "HireRoo" is created by members who are familiar with test creation. For example, while dividing the difficulty level for targets with a wide range of careers, from new graduates to tech leads and engineering managers, we have prepared problems for front-end engineers, back-end engineers, data scientists, and so on.

Recruiting companies simply select the most suitable one from a group of problems according to the candidate's experience, attributes, and desired skills. Test results can be automatically displayed as quantitative evaluations, such as code accuracy, execution speed, and code readability.

Playback function highly rated by customers (Credit: Hire Lou Co., Ltd.)

What happens when you don't have an accurate picture of your candidate's skills?

In the worst case, the engineering organization collapses. In Japan, there are still many companies that check the skills of engineers only through interviews. Since it is difficult to accurately measure skills in an interview, it often happens that a "skills mismatch" occurs when it is discovered after joining the company that the hired person does not meet the level expected of them.

Above all, it is a tragedy if you hire someone who you think is a very good S-rank engineer, but who turns out to be a C-rank engineer who can't do his job without receiving support from others. If you were looking for an S-rank engineer and accidentally hired an A-rank engineer who is reasonably good, you can still manage to catch up because the mismatch is low. However, if a C-rank engineer enters a position that you wanted to adopt an S-rank, other engineers who can do the job will be greatly burdened, and as a result, the entire organization may not be able to run.

It's a very serious problem.

That's right. Recruitment interviews are a place to "adjust expectations" between companies and candidates, but I think there is a limit to how hiring decisions can be made just by repeating 30-minute to 1-hour interviews two or three times. If the quality of the interview is low, even if the practical skill as an engineer is low, it can be covered by high communication skills. You may think that you can tell the difference between S rank and C rank, but it's surprisingly hard to tell. Recruiting engineers is a seller's market, so in order to meet the right people for your company, I think you should check your skills through a coding test.

In the first place, what kind of issues exist when looking at the entire recruitment market for engineers?

To talk about the challenges in the engineer recruitment market, it is necessary to hold down three perspectives. One is the perspective of the company that hires, the second is the perspective of the candidate being hired, and the third is the perspective of the entire recruitment market. Let's discuss the issues from each of these three perspectives.

First of all, I think that the challenges faced by hiring companies are the difficulty of forming a population and the poor cost efficiency of hiring. Currently, there are about 1 million engineers in Japan, but it is said that there are less than 1 million engineers who can actually work in companies. On the other hand, the number of job openings for engineers has increased explosively, and the current job opening ratio for engineer jobs is 9 times. In addition to our company, there are about 8 other companies that are recruiting candidates in front of us. The current situation is that it is extremely difficult to form a population for in-house recruitment because the supply and demand balance has collapsed and there is no supply that is suitable for the demand for engineers.

In addition, due to this situation, the cost structure for hiring has become distorted. Normally, when asking a human resource agent to introduce an employee, the incentive paid by the company is about 30% to 40% of the theoretical annual salary, but it is not uncommon for it to be 50% to 100% when hiring engineers. In addition, there are many cases in which the recruits leave the company within a year due to mismatches with the company, even though they were hired, and all the costs of recruiting are often in vain. The situation is even more serious because engineers earn higher annual salaries than other occupations.

I see. What are some of the challenges facing candidates and the hiring market?

I think that there is a problem with recruiting candidates that they are not able to discern the company that they should go to. There are many companies that do not clearly communicate what kind of technology they are using and what they are doing, and the current situation is that many engineers feel that they do not know which companies can realize what they want to do.

A major challenge for the overall recruiting market is the liquidity of employment and low salaries for engineers. In Japan, excellent human resources work for so-called “large companies” for a long time due to the good treatment such as lifetime employment and the ease of working, and almost no one appears in the job change market. Also, the salary of Japanese engineers is low compared to the rest of the world. Although it is a little old data, the "IT Human Resources White Paper 2017" also shows that there is a double difference in the average annual income of application software developers between Japan and the United States. If we don't pay our engineers in Japan as well, the best people will go abroad, and Japan's competitiveness will decline.

Check true technical and human power. What is GAFAM's recruitment of engineers?

Earlier, you said that HireRoo was created based on the recruitment selection of GAFAM, etc., but what kind of selection do they do?

Big Tech such as GAFAM secures a coherent schedule, such as 2 days and 1 night, and conducts coding tests for 8 hours a day. The company will pay for all transportation and accommodation. For my second job, I was selected for employment by Google and Facebook (currently Meta, hereinafter Facebook). Was this a world-class selection?" I was shocked. I'm actually a junior high school graduate. However, I realized that GAFAM hires people purely based on their technical skills and human skills, regardless of their educational background.

Why is it that Japan has not been able to employ people like GAFAM?

There are many Japanese companies that conduct two to three interviews before hiring. There is a difference in the budget for hiring, but the language barrier and geographical factors are also factors, and the state-of-the-art information and technology are arriving late in Japan. I think. Nonetheless, recently, even in Japan, companies with high information sensitivity have begun to shift to the GAFAM-type selection flow, and I think that such recruitment selection will spread in Japan in the future.

That's where you found a business opportunity with a service called "HireRoo".

I agree. I myself have built up a career as an engineer for a long time, and I believe that one of the reasons why Japan is so far ahead of the rest of the world is because it lags behind in technology. I launched it with the thought that I could contribute even a little to raising the level of.

I became a backpacker in middle school. After self-taught app development, became an engineer at DeNA and Mercari

From here, please tell us about your background, Mr. Kuzuoka. Mr. Kuzuoka, you mentioned that you graduated from junior high school, but what did you do after graduating from junior high school?

After graduating from junior high school, I saved money for a year or two and started backpacking. You traveled the world for about a year and a half.

Why do you want to be a backpacker?

When I thought about my career after junior high school, I didn't have a clear idea of what I wanted to do at the time, and I couldn't find a reason to go to high school. There may also be a problem with my personality. I have a strong desire to make my own decisions, and if everyone else goes to the right, I tend to want to go left (laughs).

Looking back now, maybe the Japanese education did not suit me. Japanese education places too much emphasis on cooperativeness, and there is a tendency to round off sharp "corners" of children and try to make them the same shape as everyone else. I don't think I was very familiar with that kind of Japanese education.

Fortunately, my parents respected my wishes, so I was able to go see the world without going to high school.

What are some of the experiences you gained while traveling around the world?

When I tell them that I used to be a backpacker, many people ask me the same question, but I actually didn't have any dramatic experiences that you might imagine (laughs). The days spent in the world are really ordinary. It was just fun.

I haven't had any dramatic changes in my sense of values or outlook on life, but traveling as a backpacker entrusts me with all decisions, so I think I've become able to think independently. Also, it was great that I was able to improve my English skills and experience cultural differences first-hand. Even small gestures, such as how to behave when passing someone near the door of a restaurant or convenience store, are completely different depending on the country and society. Being able to witness the customary culture that is ingrained in our daily lives was a very interesting opportunity to realize that the "natural" that I had felt in Japan was not the norm.

How did you spend your time after returning to Japan?

First, I learned app development by myself and created an app that could solve the problem of "difficulty finding photos of past trips" that I felt while backpacking. Nowadays, it's natural for photos to have location information, but when I was traveling, there was no such function. Even if I wanted to show a photo to someone I met on a trip, saying, "I've been to such a place," I had to scroll hard through my photo folders to find the relevant photo, which was very troublesome. I thought it would be convenient if there was an app that would allow me to create a travel portfolio, so after returning to Japan I quietly proceeded with the development on my own.

This app inspired me to join Phototraction Co., Ltd., which became my first career as an engineer. I belonged to Phototraction for about 1 year and 10 months, but I am still on good terms with Mr. Nakajima, the representative, as a senior entrepreneur.

What kind of career did you pursue after retiring from Phototraction?

It was around the time when AI and blockchain were all the rage, so I joined DeNA Co., Ltd. to get involved in AI technology. Participated in an autonomous driving project as an AI engineer at DeNA. After working there for nearly two years, I started looking for a second job change with the aim of making the most of my overseas experience to step up.

In addition to receiving Google and Facebook, I was also selected for employment at Mercari, Inc. In the end, I was the first to receive a job offer from Mercari, so although I still had to be selected through Facebook, etc., I decided to cherish this relationship and joined the company as a leader. At Mercari, we were able to deepen our friendship with Mr. Tomishima, the co-founder of Mercari who invested in our company as an angel investor. I was able to spend Mercari is still my favorite company.

I think that the business idea of "HireRoo" was discovered during the second job change, but when did you start working towards realization?

During my time at Mercari, I started developing services with co-founders Taniai and Ito, who both worked in the same office. It happened when I was 24 years old. In December 2020, when various conditions were met, I finally started a business as Hieroo Co., Ltd.

Our goal is to become a result-oriented group of professional athletes.

What are the characteristics of those who are active in your company?

I think people who are quick-witted and who can take the initiative forward are playing an active role. I am also influenced by Ms. Tomoko Namba, who founded DeNA, the company I worked for two years ago. I think it's important to have a willingness to take on challenges. That's why we've included "Fail Fast" in our company values to create a culture that celebrates failure.

We would like people who are forward-thinking and who can continue to take on big challenges, and who can learn from their failures and take on the next challenge, to join our company.

Value of Hireroo (Credit: Hireroo, inc)

Please also tell us about the company culture.

We are not a "family" but an organization like a "professional athlete group". If we create an organization like a family connected by unconditional love, I think that the bad part of the conventional Japanese organization will appear, such as those who are not very active will continue to be given positions and salaries. hand. At our company, we are trying to create an organization where people can earn evaluations and rewards based on the results they produce, like professional baseball players, and where they can work toward the same goal with enthusiasm.

Our ideal relationship is not to work together because we are on good terms, but to work together, produce results, and have a friendship as an extension of that. This culture is partly based on my previous job at Mercari.

It feels like a European way of organizing an organization.

I think it would be difficult if we didn't manage this kind of organization precisely because we are a startup that needs to operate within a limited budget. Capital strength and human resources cannot compete with large companies. I think the only thing that can win is the amount of passion the members put into the business. Google is a big company now, but they were a small startup back in the day. I think one of the reasons why we were able to beat big companies and grow so big is that each and every employee was highly motivated and worked with the power of ten people. I would like to create such an organization.

In that sense, one of our company's three values, "Pull Together" may be an important value. This word comes from the fact that everyone pulls the oars together when moving the boat. When riding a boat with more than one person, you can't go fast unless you row together with your breath. We hope to become a successful organization by trusting our colleagues and working together, just like in rowing.

Are there any initiatives that you take on a daily basis to create the organization you aim to achieve?

We have held an All Hands Meeting every Friday since the first year of our founding. It's like an all-hands meeting, where we report on our goals and progress towards them so that everyone has a sense of ownership.

Also, in order to permeate the mission and values, I try to keep saying it in every situation. Mercari's culture is so thorough that even people outside the company can express their values, and the mission and values are firmly rooted in the awareness of employees. It is sometimes described as a "gentle religion". I think that a company with little track record yet needs a common conviction in order to achieve its ambitious goals with its members. In that sense, the mission, vision, and values are important. I also recently formulated a new mission and values, and created a document called a culture deck that summarizes the behavioral guidelines of employees. You may be conscious of instilling the culture from the management level to each member.

Win in the global market. I want to show the world the potential of Japanese startups

In May 2022, we have completed 200 million yen in pre-series A funding, two years after our founding. Have you ever struggled with funding?

There were no major difficulties, but it took longer than expected to complete the fundraising. The fundraising in the seed stage was too smooth, and I thought that even pre-series A could be completed in about 1-2 months. However, when I opened the lid, it took about 5 months to receive the money.

Seed funding could have been completed even earlier.

In the first place, we did not intend to raise funds in the seed stage. When I started the business, I invested 9 million yen in capital, kept down the executive compensation, and calculated that I could survive for a year without raising funds, including server fees. During that year, I was thinking of creating a solid service and bringing in investors when it was time to bring the service out into the world.

However, after I posted on Facebook announcing my retirement from Mercari and starting a business, Mr. Sasaki from Primal Capital, who had been connected to me during the Phototraction era, contacted me. While visiting the office and talking, I received an investment offer of 30 million yen on the spot. I didn't really think about raising funds at that time, so I took it back and considered it, but in the end I accepted the offer and decided to raise funds. In a sense, the first fundraising was completed with the flow.

I see. Were there any points you focused on when choosing an investor?

We are determined to "go to the global market and absolutely win". I was thinking that I would like to have an investor who will support me in this reckless challenge. Delight Ventures and Coral Capital, who newly participated in this round, are VCs that believe that it is essential to expand into the global market. There is an atmosphere that recognizes a big challenge that will end in a strikeout. I think that I was able to meet investors who support me in aiming for overwhelming success, not half-hearted success.

Could you also tell us about your future prospects?

First of all, I would like to be the kind of person who thinks of “HireRoo” when they think of coding tests in Japan. And eventually, we want to win in the global market. In a few years, when we raise funds, we would like to seriously challenge ourselves in Europe and the United States, prove to the world the excellence of products made in Japan, and become a global company from Japan.

Japan is now like a sunken ship. I think it will be difficult to change this country significantly unless there are startups that go out into the world. Because Japan is an island country, it is easy to think that "going overseas is a high hurdle," but when you actually look overseas, there are many elements that are not that different from Japan. Even if you compare the graduates of the prestigious University of Tokyo in Japan with the students and graduates of the prestigious American universities, there is not much difference in their excellence. I think that Japanese tech companies can also play an active role globally.

Shohei Ohtani was said to be reckless when he tried to play in the major leagues as a pitcher and a hitter, but now he has achieved unprecedented results. Like Ohtani, we want to succeed in taking on big challenges as a Japanese startup.

Could you give us a message of support from the pre-seed stage to the seed stage startups?

I don't think we've succeeded yet either, so it's a difficult question... However, I think it boils down to the fact that "if you make a good product, it will definitely sell." If you make something good, investors and customers will follow. I think it is important to focus on building good services and building a good organization without being too caught up in short-term funding.

Finally, please give a word to our readers!

If you want to start a business or work at a startup, I would like you to take on the challenge. Because startups lack manpower, you can experience various jobs as a generalist. I think it's a good career choice, especially for young people, as it will help you broaden your field and find areas that you're good at.

Also, if you are thinking of starting a business, you should definitely start a business rather than get lost. It's a lot of fun, and I feel like I've grown as a person myself. For example, in order to motivate the entire team and have members experience success, we have increased the number of ways to communicate. If you have something you want to do or a vision to aim for, I would like you to make the choice of starting a business.

Hireroo, inc
Address
Room 302, 3rd floor, Manoir, 1-7-3 Yoyogi, Shibuya-ku, Tokyo
CEO
Kosuke Kuzuoka
Website
https://hireroo.io/
Careers
https://www.wantedly.com/companies/company_9352198/projects
Teruko Ichioka
Freelance writer and editor. After working as a public relations specialist at a university, a PR firm, and a start-up creation venture, she became an independent writer. She writes for publications, corporate owned media and major media outlets and is also engaged in public relations for start-ups.

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