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CO2 emission visualization business that has been reached by taking advantage of social needs and the characteristics of the founder

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"When you see CO2, you can see a clean future."

The terms "SDGs" and "ESG" have come to appear frequently in the media, and more and more companies are trying to contribute to the fields of environment, social and governance. Of these, we talk to  Mr. Michitaka Tokeiji, the leader of Zeroboard Inc., a startup which is tackling these environmental issues.

The company is developing "zeroboard", a cloud service for calculating CO2 emissions for businesses, with the aim of creating a "decarbonized society" that achieves virtually zero emissions of greenhouse gases, a cause of global warming.

It seems that there are many people who want to start a business in this field in the future, but how did Mr. Tokeiji start up Zeroboard?

 Hybrid career as a finance and trading company

 We understand that you worked in foreign finance and trading before your current position. Can you tell us again about your career history, taking into account the nature of your work at that time and what triggered your career change?​ ​

Yes, let's start with the first company. After graduating from college, I joined JPMorgan, a foreign financial firm, as a new graduate. I worked in the market department and handled a wide range of financial products from stocks, bonds, and derivatives. I was with the company for about three full years, but I wanted to get a more hands-on feel for the business, so I moved to Mitsui & Co. There were business divisions for finance, ICT, and logistics, and at first I handled commodity derivatives in the Financial Business Division. I was first working in the Financial Business Division, handling commodity derivatives, and in something related to today, emission rights trading. I worked in this division for about three years. After that, I was transferred to the ICT Business Division, where I was in charge of the electric power and energy business. This was before the complete deregulation of electricity retailing in Japan, and I was engaged in new business development mainly in North America and Europe, the home of innovation in this area. Including my career at that time, I have been working in the environmental field for about 10 years now. I worked for Mitsui until 2018. However, I was asked to join A.L.I. Technologies ("A.L.I."), a start-up company, as I was growing in my skills. A.L.I. is a company that manufactures IoT hardware such as drones and flying cars with the goal of realizing an air mobility society, and I was put in charge of the software business there. I was developing systems for electric power companies, making use of my career at Mitsui & Co.

 Zero Board was originally a business conducted by A.L.I., which was incorporated through an MBO (management buyout) in September 2021 in the form of a business transfer to Mr. Tokeiji, correct?​ ​

Yes, we were originally in this business internally, but it was a spin-out. Rather than A.L.I. consciously doing this in a start-up studio model, this department was a bit of an outsider even before the MBO, and it just carved out. There is a growing momentum for companies to shift to decarbonization in line with the growing ESG awareness. We have taken this form in order to promote the business more quickly. In fact, this area is also attracting a lot of attention in the financial markets, where companies are increasingly having to disclose how they are affected by climate change. I believe that I am making the most of my background in both finance and the electric power industry.

Has anything changed since you actually spun out?

I feel that the clarification of our business as "BtoB SaaS for CO2 emissions visualization" has made it easier for us to consult with alliances, raise funds, and explain our business to the media. I feel that MBO is beneficial, as even trading companies sometimes causes companies to become conglomerates and lose sight of their areas of expertise.

So things became easier after the MBO. Did you ever feel any difficulty or trouble?

Maybe there were some difficulties as we were the first ones to do it. We released this solution from a very early stage, even if you look at it in the global market. Usually, in the case of BtoB SaaS, we refer to overseas examples, but with nothing to imitate, we have to think about how to collaborate with other companies and create everything ourselves. On the other hand, I feel that being the first to start a business has the advantage of branding us as a pioneering company and making it easier to acquire good partner companies.

 In the fall of 2021, you raised a total of 300 million yen from ICJ (Inclusion Japan) Fund 2 and DNX Ventures in a pre-series A. How did you feel about this?​ ​

Well, it was a tough time for us because we had to spin out, launch a beta version, and raise funds all at the same time.   If I had to say how busy I am, I would say it's even harder now (laughs). The first two companies we approached for pre-series A funding were ICJ, which specializes in ESG, and DNX, which is strong in BtoB SaaS. I think we are very fortunate, in large part, because we were originally acquainted with both VCs (venture capitalists).

 It is difficult to meet with investors and confirm compatibility, but it seems to be quicker if it is based on personal connections. Do you use the funds you raise mainly for recruitment?​ ​

Yes, we did an MBO, so we are using the money to pay for that acquisition and for personnel expenses, and we are hiring both BizDev and engineers across the board. We feel that we have quite a few talented people here, especially engineers! Our strengths include the fact that we don't have to constantly adapt our business model, that it is easy to expand overseas because our supply chain is connected to overseas countries, and that the work itself is highly social in nature. We hope people find our work interesting. However, as mentioned above about the hardships that come with being a pioneer, the business we are trying to do from here is difficult to develop and of a high level. Many of our partners are listed companies, and we would like to strengthen our BizDev human resources even more in the future.

I see. At the time of hiring, more and more people are adopting hiring strategies that create empathy with Mission Vision Value and Purpose. Is there anything you keep in mind when designing your organization?

In terms of size, we currently have about 30 full-time members, including outsourcing (as of April 2022). In the early days, communication was easy because the members were mainly spin-outs from A.L.I., but in the current phase of scaling, we are just beginning to be aware of the concept and culture of the organization. As our presence in the marketplace emerges, we'll be able to say, "Oh my goodness, you work for Zeroboard!" and I want to make the company a place where people can say that. I want to create a culture that allows us to challenge ourselves and create new businesses while feeling that we have a social responsibility.  

Find a market where you can be a leader

What kind of person were you as a student?

I was a member of therugby club from the first grade of junior high school through college, and I have been immersed in club activities all my life. However, rugby is a sport in which each player's physique and characteristics are utilized, the right players are placed in the right positions, and victory is aimed at through team play. I also feel that this is connected to organizational management.

My university was the Department of Architecture at the University of Tokyo's Faculty of Engineering. Actually, I had wanted to be an architect since junior high school. When I was in school, Professor Tadao Ando was still at the university and his classes were very popular. The University of Tokyo divides students into specialized departments in the middle of their sophomore year, and I had to decide whether to take architecture or club activities, so I took club activities. However, I learned a lot from rugby, and when I was appointed captain in my senior year, I tried to do the same thing as the captain one year above me who had achieved good results. However, I was not able to achieve the results I wanted, even though we were supposed to be more competitive than last year, since there were still members who went on to graduate school. Other universities were also preparing their own strategies, so I realized that I had to think things through on my own and be original in order to win the competition. And no matter how much you think you have done, someone else may be thinking the same thing and making more effort. I believe this is exactly the same in business.

Your experience in club activities has been utilized in your business as well. Your first company was a finance company. What was the basis of your job search?​ ​

I did not have a designated industry in mind, but in order to finish my job search quickly, I took the first job offer from a foreign financial institution that offered me a job offer, and as a result, JPMorgan was the first to offer me a job, so I ended my job search there. (laughs) Although finance was a specialized area and I had a lot to learn, even though it was a global company, the decision making for local entities was at the U.S. headquarters, and I wanted more mobility. I wanted to move closer to decision-making at a company headquartered in Japan, so I moved to Mitsui & Co. After I left JPMorgan, there were quite a few people who moved to trading companies in the same way. I think that a career path from foreign finance to a trading company is quite common.

Did you want to start a business someday?

I'm not very entrepreneurial. However, I have come to my current position as a result of thinking that the best way to scale up my current business is to start my own business. However, while working on various projects during my time at the trading company, I felt that I could do things outside of the company, and perhaps that is why I am finally giving it a try.

What are you always mindful of in order to grow, your decision-making process, etc.?​ ​

I try to listen to the stories of various people, but rather than accepting them completely, I think it's about having originality. Even if you copy someone's successful experience, the market conditions are different and it is not always reproducible. I always think that the answer is in the market, and it's all about whether the customer accepts it, so I think it's important to interact with the market.

For example, there is a government-run emissions credit system called J-Credit, and there was a time when we were thinking of building a marketplace business where these emissions credits could be traded. However, when we brought this idea to our clients, we were told that they had not been able to visualize their emissions in the first place. So we realized that there was a need for visualization and decided to start by addressing the issues that the current market was facing.

Can you give us a message of support for startups up to the seed period?

I think it is a good idea to think about "the social impact you can make because of who you are. And "create what the market needs. In the case of Zeroboard, this means providing a "SaaS" solution for visualizing emissions to address the "social issue of decarbonization.

  I think it is a good idea to create a business in an area that is currently in demand by the market and where you can use your background, in other words, an area where you have a "Founder Market Fit."  It's what only you can do that makes you an opinion leader in the market. As long as you are copying someone else, you cannot become a market leader. Think carefully about what areas you can have a presence in. If the market is large enough, there is an opportunity somewhere, but you cannot surpass the first player by simply repeating the same thing.

 Those were very resonant words! More entrepreneurs are going to be doing self-analysis. Now, please give us a final word.​ ​

I myself have a long way to go, but there is only so much one company can do when it comes to the business of decarbonization. We are in the position of creating data infrastructure and cannot or dare not provide direct decarbonization solutions or financial solutions, but are thinking of creating them with our partners. And then we will make that ecosystem huge and take it overseas. To make this happen, we still need to gather people who understand the concept and can work together. We look forward to your participation in this socially impactful project.