JA

JP STARTUPSJP STARTUPS

The web magazine that introduces and supports Japanese startups

207, Inc Challenge to Create a Japan-originated Logistics Standard and Create a World Where Goods Can Be Delivered Anytime, Anywhere

Share:

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

I have a package at a nearby sales office, but I can't receive it because I'm not there ⸻.

I’m sure many of you may have had such an experience. The market for the last mile of logistics (the last point of contact where goods and services reach) is expected to grow along with the development of the EC market, reaching a scale of 3 trillion yen by 2023.

While many companies have entered this growing market and created a variety of services,​ ​ 207, Inc is working hard to create a paradigm shift in this industry.

We asked Mr. Shinya Takayanagi, the founder and CEO, who aims to build a "global logistics network where things can be used anytime, anywhere" about how he founded his company.

Please tell us about the issues and business outlines that 207, Inc is working on to solve.

While the number of parcels being delivered continues to increase, the shortage of human resources to carry them is becoming more serious, resulting in a shortage of labor despite the demand for deliveries. In the midst of this, we are tackling two major issues: improving the efficiency of residential delivery operations and resolving labor shortages in the transportation industry. In the delivery business, the optimum delivery route is based on the knowledge of each individual delivery person, and there are still various inefficient systems in place, such as multiple delivery companies delivering packages to the same delivery destination. This is inconvenient from the standpoint of the recipient of the package. 207, Inc aims to provide a service that solves the respective troubles of the delivery company, the delivery person, and the recipient, so that those involved in delivery have "no reason not to use" the service.

Could you tell us about your career to date and your inspiration to start your own business?

After graduating from university, I worked as a door-to-door sales representative for a venture company in Fukuoka, and later became self-employed. In 2012, I moved to Tokyo and joined a venture company developing mobile apps, and then became a founding member of Chapter8, which provides services for cross-border EC and inbound travel to Japan. However, at the same time I joined a venture company who had created a business which I envisioned as a student called Summary, which operates "Summary Pocket". At the time, Chapter8 had been selected as one of the first students for the Tokyo Metropolitan Government's ASAC program, so I was working as a fully committed member of two companies, sleeping in ASAC's Aoyama dormitory, working at Chapter8 in the mornings, evenings, and on holidays, and at Summary during the weekdays. While working on business development at Summary, I repeatedly felt a logistics barrier that I could not overcome. I thought there was room for improvement, so I kept my antennae up in the logistics industry and did a lot of research, which resulted in the idea of the first service, "Todoku". After that, I left Summary and Chapter Eight, and began preparing to start my own business 207, Inc in parallel with taking on contracted development projects as a sole proprietor.

You have launched services in four different business areas in a short period of time. Did you have a strategic intention for the order of the releases?

The order was not set up with a strategy in mind. The reason why I thought of doing a business for recipients at first was because I was also a daily recipient of packages and felt the pain, and I wanted to solve a familiar problem first. I had a friend who was an engineer, so we created the "todoku" MVP application together and actually went to the delivery company to propose it. However, the delivery company told us, "This isn't what we're looking for". I began to feel the many difficulties of the delivery business through the proposal activities to see what was different, and thought it would be quicker to actually experience the difficulties myself, so I decided to start a delivery company and try my hand at the delivery business. We rented a house with a garage, bought three delivery vehicles, and three of us stayed overnight to run the delivery company. Our own experience there inspired us to create the "Todoku Supporter" program for delivery staff. Next, through the use of data accumulated by "Todoku Supporter," we released "Skimmer mail," a service that solves the shortage of human resources. Finally, we released "Todoku Cloud" for delivery companies.

History of service release

  • September 2019-Receiving efficiency improvement service "Todoku" for recipients
  • From February 2020, "Todoku Supporter", an application for improving the efficiency of delivery operations for delivery staff
  • May 2020-Gig worker delivery service "Skima-bin" for the logistics industry
  • December 2020-SaaS "Todoku Cloud" for streamlining delivery operations for shippers and courier companies

Why were you able to launch four services one after another?

 I think this is the result of our flexible approach and not thinking too much about strategy from the time when we did not have a product. If we had thought about it first, we probably would have seen it as something that an early-stage startup could not do, and we would not have been able to achieve it (laughs). Also, because we were a small team, we were able to carry out our work in a top-down manner.

In March 2022, you decided to suspend the "skimmer mail" service. What was the reason behind this?

As a premise, the data accumulated by the second product, "Todoku Supporter," is essential for improving the quality of the third product released, "Skimmer Mail." Therefore, we decided to focus on "Todoku Supporter" and temporarily suspend "Skimmer Mail." The background to this decision was the fact that as the organization grew, management personnel increased, and the organization began to focus on selection and concentration while formulating its own strategies. However, we were able to make this decision because we had been dealing with the four products for four years and had gathered the materials to make a decision. The logistics domain is quite broad, but by looking at the business from various angles, such as for B, C, and E (Employee), we were able to grasp what solutions would have the greatest impact.

How much do you think your past career has influenced you in running a startup?

I think it has influenced me quite a bit. For example, at Chapter Eight, I was allowed to join the company from its launch, but I did not consider monetary rewards to be important. I believe that I was able to develop a business sense of putting aside immediate monetary rewards and working with a hunger to make the business a success. This is also where I got the idea that I could save money and time by working in a house as an office and living in it (laughs).

Did anyone around you say anything like, "It is reckless to try four products"? Also, how much do you pay attention to what others say?

When I look at startups these days, many of them are highly educated and have graduated from famous companies, but I am not like that. People around me only said, "That's nice" or "That sounds interesting" (laughs). Looking back on my career, I had nothing to lose because I had not walked through an elite life, and yet, perhaps because I had done lots of reckless things and came out fine, I received support from people around me.  

What was the most difficult thing about starting a business?

There were many things, but in the early days it was hiring engineers. It was two years after the company was founded that the first fully committed engineer joined us. When we started the company, we didn't know many talented engineers, and we had to start from the beginning by building relationships, so it took a long time. As for the ongoing process, we are facing difficulties in building an organization as the number of members grows. We had BeOpen as our action guideline, and all meetings were recorded and distributed in real time, but as the communication hierarchy has become more complex, we have recently needed to tune up our information sharing. 

How have you been thinking about raising funds?

We had decided to raise equity after the product was ready, so in the early days we secured cash with our own funds, loans, and sales from contracted development. The amount of money made in sales from contracted development would melt away in a few months. However, after we raised 500 million yen in a Series A round of equity financing in October 2021, we were able to focus more on service development.

You have participated in and won a number of pitching events. What made you decide to apply and what advantages do you feel there are to pitching events?

I applied for the "Tech Crunch Tokyo Startup Battle" after an internal member suggested that I participate. I practiced my pitch using the materials I had prepared for my clients, with the help of other members of the team. It was fun like a cultural festival, but I had to memorize the pitch materials because I couldn't see the slides on the day of the event, which was a bit difficult. At IVS LAUNCHPAD I was allowed to do the pitch while looking at the slides, so I was not as nervous as I was at Tech Crunch Tokyo. As a result, we were able to make our presence known to VCs, and after participating in IVS, we received an investment. Internally, the external evaluation of our pitch created an atmosphere of "we might win" within the company, and more people became interested in our pitch after seeing it on YouTube, etc. This had a positive effect on recruiting and organizational development.

I would like to know what MVV is to you, Mr. Takayanagi, and what are your underlying thoughts.

In August 2020, I had a camp with the members at that time to decide. Based on our own thoughts, we set a vision of "a world where things are delivered anytime, anywhere," and how we would realize this vision was reflected in our mission of "creating a global logistics network. For me, the meaning of running a company is expressed in the vision and mission, and I want to cherish them immensely. Looking back, it was triggered by the discomfort I felt while backpacking in India for a few months during my college years, when I was charged rent for an apartment I rented in Japan even though I only left my things there. I had always been stuck wondering if it would be possible to realize a world where I could retrieve my belongings left in Japan even when I was in India. Just as a revolution in the software world has made it possible to access data from anywhere, I want to create a revolution in the hardware world as well.​ ​ I want to realize a society where things are available anytime, anywhere, and where people are not tied down to their homes or their belongings.

Since your passion is so strong, it will be important to match your values when working at 207, Inc. What kind of person would fit your culture?

Now that we have 12 employees and 25 including outsourced workers (as of April 2022), to what extent do we ask our members to share our mission and vision? We believe that the degree to which we ask our members to share our mission and vision may vary from person to person. However, we believe that empathy and understanding of the values are a must, as they are the guideposts to achieving our objectives. If you read the values and share them, there is a high possibility that you will be able to play an active role in our company.

What position are you aiming for in the expanding last mile market?

In the last mile market, the market is larger for BtoB business-to-business delivery, but we want to work on expanding our share in the BtoC home delivery area. The consumer business is more complicated to deliver than the business-to-business business. There are time constraints, many people are away from home, addresses may have changed due to moving, and when you go to the designated address, there may be 10 houses at the same address. It has been said that it is a difficult job to do unless you are a skilled delivery person, because it requires multiple insights, such as whether to drive into a narrow street or stop in front of it. However, we envision a future in which anyone can perform this delivery task, and people who have never worked as a delivery person before will be able to establish themselves in the consumer business. To achieve this, we will focus on "Todoku Supporter," an application for streamlining delivery operations. We also plan to increase the number of delivery locations to 10,000. The more locations we have, the narrower the area that must be covered by a single location, which means shorter delivery distances. In extreme cases, even those who cannot drive will be able to choose delivery workers as a job option because they can deliver by bicycle or on foot.We would like to increase the population of delivery workers and create a paradigm shift in the last mile market throughout Japan..

What are your thoughts on global expansion?

I definitely want to expand globally.To this end, we are gradually globalizing our team, adopting tools that are used globally, and using English as well. Next, how do we achieve this? The logistics industry and technologies such as self-driving technology, robots, and drones go hand in hand, and the future will come when the traditional way of delivery will be replaced. The level of Japan's logistics is world-class, and if we can reproduce that Japanese quality using technology rather than by human labor, we will have an advantage when localizing our operations in various countries, and we expect to be able to expand quickly. As an area, expansion into Southeast Asia is highly probable. I believe that Southeast Asia is an area where our logistics know-how, which eliminates the need to rely on human resources, will be useful when labor costs rise in the future, given the lack of logistics and the fact that many countries have a structure that relies on low labor costs.

Practice immediately when you are interested. Pivot when you feel different.

What kind of college student were you?

After leaving high school in Saga Prefecture, I entered the Faculty of Agriculture at Yamaguchi University. While working part-time as a customer service worker at restaurants and other places, I became interested in the world of entertainment since TV and magazines were the mainstream when it came to entertainment at the time. I was interested in women's makeup before and after look, and there was a time when I wanted to become a makeup artist while double-schooling with a beauty school in Fukuoka. I continued for about a year, but I realized that this was not the path I wanted to pursue, and after quitting school, I thought of taking over my grandparents' farm. However, after experiencing farming in my hometown with a college friend, I thought this was not the way to go either, so I looked for a job. I chose a 3-year-old venture company in Fukuoka, where I started my career as a door-to-door sales representative for Internet connection services.

How do you clear your head?

I moved to Fukuoka with my family in November 2021. In the early days, me and 2 guys rented a studio apartment in Shibuya and lived in the same place as we worked, but since moving, we have been working fully remotely. By the way, at our company, all employees are fully remote.

Please give a message to junior startups.

I am not the type of person who is extremely smart, so we worked on our own to refine our operations with a strong sense of the field, launched a number of businesses, and then tested and improved them until we were just about to raise funds. But on the other hand, I think there are cases where we pivoted and did well while consulting with investors and getting their advice. I think my approach was the right one,​ ​ but it is a case-by-case basis, so I hope people will find the right way to raise funds for themselves. I also think it was good that we were able to build a relationship where we could talk about anything with investors. For both the Seed Round and the Series A round, we have investors who we can talk to about anything, and we are able to discuss things over drinks. Especially for startups aiming for the Series A round, I personally recommend having an investor who you can talk flat out with.

How do you get along with your investors?

I originally didn't have that many investors around me with that much relationship value, so at first I thought they were a little bit scary just because they were investors. However, once I realized that investors are human beings, and that they are all very nice people when you talk to them, I began to see them not as investors, but as people. I began to understand what he or she wanted to accomplish in the future, and I began to enjoy talking with them and getting to know them better. I think that if you want to care about the people you are involved with, not just the investor, your questions will come from your interest in them, so I think it is a good idea to get to know the real person in them as well while also asking a series of questions to the investor side of them.

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

​ ​​ ​In order to realize "a world where things are delivered anywhere, anytime," we will first realize a future where the difficulties for delivery staff are removed.​ ​ We believe that this future will be accomplished when all delivery staff use our product and feel its value. Next, we want to remove the negative effects on consumers, such as unnecessary re-delivery procedures and removing the obscure huge delivery windows such as "your parcel will be delivered anytime between 8am to 12pm". 

We also have casual interviews, so we are looking forward to hearing from those who are interested in our company!

Ranking