Local Business Leaders Roundtable (Part 1) "You Can't Start Without Making a Fool of Yourself"

One day in February. After the "Nationwide Delicacies Festival" held at a Nagoya department store, I had drinks with several local entrepreneurs working hard in their fields (Ms. Harada, CEO of Rose May; Mr. Sudo, President of Growth; Mr. Kato, owner of Dashiya Otomo; and Mr. Kurita, President and CEO of Yonnana Club). I heard such stimulating stories that I'll report on them in a two-part series.

Kurita: After the Matsuyama event yesterday, I ended up drinking at a sushi place until 2 AM, and now my stomach hurts like hell.

Yamada: What do you mean, "flow"? (laughs)

Kurita: That's why today it's shochu with hot water.

Everyone: Cheers!

Sudo: Does anyone even want to read our conversation in the first place?

Kurita: No one, right? (laughs)

Yamada: No, no (laughs). But simply put, Kato-san is local so that's fine, but Harada-san is from Akita, and Sudo-san is from Aomori, right? Events far away cost money for travel and lodging, and I don't think they make that much profit. Why do you participate?

Harada: We have a factory in Akita making things like jam, but selling directly ourselves is really important.
For generations, our main business was wholesaling products to retailers. But after the 3.11 Tohoku earthquake, the honey we'd been using suddenly became unusable. Then, various distributors told us, "We'll just get it from someone else now, so you're done." Developing a new distribution channel is tough, but getting dropped? It's really, really easy. They just change the entire shelf space they'd been entrusted with. We lost 100 million yen in sales and took on 100 million yen in new debt. That's when it hit me: I can't just rely on wholesaling! I have to sell directly! Online sales are good, but honestly, you can't see the customers' faces. Department store events, on the other hand, let you feel the pulse of what works and what doesn't.

Kato: I'd always refused events and only did online sales. But one day, I got aggressively invited to a young moms' event with the pitch, "No booth fee, no risk!" That was the trigger.

Kurita: The customers were so cute, and then you got hooked (laugh)?

Kato: Maybe (laughs). More than that, I didn't sell anything at all during those three days. It was embarrassing when people around me asked about sales, and I was just so frustrated, so frustrated. Actually, I got advice from Mr. Sudo then, tried it, and sales started to pick up. I guess I just didn't want to lose, so I threw myself into it, learned a lot along the way, and here I am today.

Sudo: My advice back then was "Formulate hypotheses and challenge yourself" and "Implement PDCA—verify and improve." But conversely, I've learned a lot about online sales from Kato-san. Like customer product emails—I sometimes feel tempted to slack off, but ever since he told me, "What if the company goes under because the president slacks off?", I haven't missed a single day.

Kato: Oh, really? (laughs)

Harada: For local small and micro businesses, opportunities to sell directly to customers are truly precious. But why did "Yon'nana Club," which started as an online retailer, start handling department store events too?

Kurita: It's the same as with Kato-san. Basically, it was out of frustration. We happened to get an invitation from a department store saying, "We want to do an event featuring products carefully selected by local newspapers nationwide." We felt it would be rude to refuse, so we took it on, but it didn't sell at all. Total failure (laughs). Then we got berated by the department store, and the shops that participated complained to us. I thought, "Why am I getting beaten up like this?" (laughs). That's when the fire lit in my heart. I decided I wanted to be able to do business with department stores on equal footing, and that's when I started taking it seriously. Only recently have we started to gain some recognition, I suppose.

Yamada: I meet business owners across the country through various connections, and honestly, most of them say they're "struggling," "struggling," but they're not taking any action. Successful companies really do challenge themselves without fearing failure.

Sudo: If we're afraid of looking foolish, companies like ours can't do anything. Aomori produces the most burdock root in Japan, but that means we also end up with huge amounts of burdock that don't meet the standards. So I thought, "We have to do something about this," and started the burdock tea business. But when I tried to take it to local distributors, they just said, "No, no, thanks."

Kato: That's good, isn't it?

Sudo: Oh! They meant "No, no" (laughs). That's why staying local just doesn't work. So, I alone travel over 200 days a year for events, and the whole company travels even more, covering the entire country.

Yamada: That's tough. How can you keep going like that?

...Everyone standing at the sales booth all day must have been thirsty, because they kept ordering refills of beer one after another. And so, the turbulent second half continued.