Collaboration Design: "Ventures × Large Corporations" to Energize the Japanese Economy

One of the key buzzwords in large corporations today is "collaboration with startups."

Various initiatives are emerging across companies, such as launching startup funds and forming joint ventures, all touting synergies with existing businesses.

── How should these two entities collaborate to transform Japan's industries and economy?

Yuma Saito, who founded Deloitte Tohmatsu Venture Support (DTVS) to provide comprehensive support for startups, has been tackling this question as part of his life's work.

Dentsu Inc. Growth Design Unit (DGDU) has also launched "CoNext" to support collaboration between large corporations and startups. They are currently exploring joint projects with DTVS, led by Mr. Saito. This time, Takuma Kudo of DGDU visited Mr. Saito to discuss the ideal relationship between large corporations and startups, and how to build it.

Yuma Saito, President and CEO, Deloitte Tohmatsu Venture Support (left); Takuma Kudo, Dentsu Inc. Solution Development Center

Confronting his purpose during student days to become a "strategic advisor to executives"

Kudo: After joining Deloitte Tohmatsu Group, Mr. Saito launched DTVS and has supported startups through various initiatives, including Morning Pitch(※1). What motivated these activities?

※1= Morning Pitch
A weekly pitch event hosted by DTVS every Thursday at 7:00 AM, aimed at fostering business partnerships between venture companies and large corporations.

Saito: The catalyst for wanting to pursue this work was my father starting his own business when I was in junior high school. While witnessing the "real-life struggles and triumphs of an entrepreneur," I came across a book in the library that described the role of "an accountant becoming a strategic advisor to startups."

That book had a profound impact on me, and I decided, "This is what I want to become." Choosing a university was also for the purpose of becoming an accountant. Passing the CPA exam requires double-schooling, which is almost essential. Even in the scholarship exam for that purpose, I presented my plan: "Become an accountant and build the infrastructure to support startups." I was around 17 or 18 at the time.

Kudo: To have envisioned your future so early on and actually achieved it.

Saito: That said, I ended up spending two years studying for the exam before finally passing. That period was actually tougher than launching DTVS. I still dream about it sometimes – I wake up thinking, "Oh no, I failed!" (laughs).

But that period was valuable because I deeply questioned, "Why do I want to be a CPA so badly that I'm willing to endure this?" Also, while reading everything from history books to novels, I constantly pondered why I was alive and what I truly wanted to do.

Kudo: One of Saito-san's remarkable qualities is how his passion radiates to everyone around him. Personally, talking with Saito-san always inspires me. So the roots of that "passionate man" were in his student days.

Combustible, non-combustible, self-igniting, ignition. Four mentalities.

Saito: What ultimately shaped my strong convictions was meeting countless entrepreneurs day and night after launching DTVS. Spending extended time with highly passionate people gradually clarified my own vision.

I believe people fall into several types. Some never catch fire no matter the situation, while others are influenced by passionate people around them. I call these the "non-combustible type" and the "combustible type," and I think about 80% of people fall into one of these two categories.

The remaining 20% fall into two types. One is the "self-igniter" – the type you often hear about in organizations: "They're brilliant, but no one follows them." Essentially, they burn alone. The other is the "igniter." These are people who can light a fire in others, and most entrepreneurs fall into this category. More than just being common, I believe you have to be an igniter.

Honestly, when I first started supporting startups, I didn't behave with the same intensity I do now. But being surrounded by entrepreneurs—people for whom staking their lives on something is the norm—I gradually got influenced and somehow became a kindling type myself.

Kudo: So these four types aren't innate temperaments, but acquired traits that evolve over one's career. We've also shifted beyond just "doing ad production and calling it a day." Increasingly, we work as "insiders" stationed at large corporations and startups, involved in all aspects of branding. In this context, I strongly feel the necessity of the Igniter type.

Consulting that ends with just drawing pictures isn't enough; you need to get hands-on, even in the messy, dirty work. And you can't do it alone—you have to get the whole team involved and execute together. Otherwise, the business frontlines won't change. So, what should leaders do to get their members involved?

Saito: Few people start with a crystal-clear mission; most refine it gradually as they move forward. The key is to identify what feels like a good starting point and persistently pursue it.

As you do that, competitors around you gradually drop out. Then, people start following you, and a sense of mission emerges – that you have no choice but to do this. People who say "I don't know what I want to do" often think they can't move without something solid. But I believe pushing forward even if it's just a vague feeling is the first step.

The next five years will be decisive for Japan's economy.

Saito: That said, even those with a spark find it hard to keep their flame burning. As the old saying goes, "romance and the abacus." If you focus too much on the abacus and lose sight of romance for profit, the company will fail.

Throughout history, those who preserved their soul changed society, and I believe they are the true leaders. Truly transforming society requires resolve. Trying only to protect yourself leads to collapse.

Kudo: Precisely because the future is uncertain now, this is an era where executives' resolve toward vision is tested even more. On the other hand, I recall you once saying, "Salaried workers, in fact, should hold even stronger visions and aspirations."

Saito: That's because changing society requires leveraging the resources found in large corporations. Management resources include "people, goods, money, and information," and risk capital (※2) flows to the startup side. This is a good thing. For example, venture capital firms invest in five or ten companies; if one or two succeed, it's worthwhile, so they can take risks.

※2=Risk capital
Funds invested in ventures with high potential returns but significant risk.

But setting aside precise definitions, when comparing the sheer volume of "talented people," I believe employees at large corporations are overwhelmingly more numerous.

And then there's assets. For instance, JR East Japan also supports startups, but the company possesses numerous assets, including infrastructure. Even if startups have the passion, ideas, and the seeds of technology themselves, the assets reside with large corporations. Unless these assets are mobilized, society won't fundamentally change.

By leveraging the unique assets of large corporations and acting with strong resolve, Japan should transform within the next five years. Since the areas where startups alone can easily succeed remain limited, startups themselves should also more aggressively seek collaboration with large corporations. To quickly realize a Japan where such activities become commonplace, I want to create as many model case initiatives as possible.

Kudo: I see. So the next five years are critical. From the perspective of a corporate employee, it's time to leverage collaborations with startups that can effectively utilize our company's assets as a lever to challenge company-wide transformation.

Startups from the early days of the internet up until around 2010 could operate entirely within the virtual world, so they didn't need large corporations to succeed. However, for businesses like today's that combine IT with industry, co-creation with large corporations that possess assets is indispensable.

Saito: Even looking at the Morning Pitch events we host, entrepreneurs with backgrounds in large corporations now make up over 80% of participants. It's no longer a story completely unrelated to large corporations. In other words, people from large corporations are becoming ignition-type talent later in their careers and taking on challenges.

New business starts with vision

Kudo: Large corporations have abundant resources. While some, like JR East Japan, successfully support startups, why do others fail? I want to understand where the challenges lie in moving forward.

Saito: To do something new in business, there are three steps. First, ① communicate your vision to raise expectations. Next, ② gather resources like talent and funding. Finally, ③ deliver results. In Japan today, a results-oriented approach focused on steadily building up is mainstream. But simply shifting to this three-step process could significantly change society. And rather than chasing numbers from the start, I think it's necessary to develop a strategy for each step.

First, "articulate the vision." Essentially, you're starting from nothing, so it's perfectly fine to begin by describing the future. Take Mercari, for example. It became incredibly well-known in just a few years. They started with a vision, gathered resources with a single presentation, and delivered results.

Next, "gather resources." Large corporations have abundant people and assets, but lack risk capital. For Japan to pursue new ventures, we need to combine what both large corporations and startups possess.

Finally, "deliver results." Beyond JR East's example, successful cases are increasing. Take SMBC's joint venture with Bengoshi.com. Some approaches combine corporate brand assets with venture-like elements, while others spin off specific business units from large corporations to raise risk capital externally.

Two concrete approaches large corporations should pursue

Saito: I believe there are two major ways Japan can change. One is industrial metabolism. In the US, companies like Google and Amazon, which emerged over the past 20 years or so, now lead the nation's top enterprises. While the companies that previously supported the economy struggle, the overall economy grows due to the rise of new companies.

I recently joined the Japan Association of Corporate Executives (※3). This organization was formed when the war decimated the leadership generation in their 50s and 60s, forcing managers and department heads to suddenly become presidents. Its purpose was "for business leaders to support each other and transform society." Such major generational shifts are precisely the conditions needed to change society.

※3=Japan Association of Corporate Executives
A business leaders' organization founded in 1946. Alongside the Japan Business Federation (Keidanren) and the Japan Chamber of Commerce and Industry, it is one of Japan's three major economic organizations. Its activities include research and studies on economic, management, and social issues, exchanging views with other economic organizations, and discussions aimed at realizing policies.

Against this backdrop, I have set the goal of "creating 300 presidents in their 30s at large corporations by 2025." For instance, the core researchers advancing AI and other fields in graduate schools are under 25 years old. If many ventures require the sensibilities of the younger generation, I believe people in their 30s should step up as executives, while those in their 50s and 60s should fulfill governance roles.

The other key is transforming large corporations themselves. Because they possess significant power, they hold the potential to evolve into companies suited to the times. The key lies in promoting young talent.

Currently, in many companies, individuals who have achieved results in existing businesses compete for decades before finally becoming president. Instead, we should enable people in their 30s to become presidents of subsidiaries or group companies. For example, start by entrusting them with a company of 100 people. If successful, move them to manage 1,000, then 10,000 people, and finally make them president of the main company. This creates a pool of executives. It should also be beneficial for running subsidiaries or internal ventures.

Kudo: I still feel there's limited interaction between the management of large corporations and startup founders in their 30s. At Dentsu Inc., we're seeing increased consultations from large corporate executives about new ventures, and over the past few years, there's been a growing demand for networking opportunities outside their own companies. We're also creating platforms where we can imagine scenarios like, "What kind of chemical reaction would happen if we brought that startup here?" and facilitate matchmaking.

The "Private Study Group for Young Management Talent in Their 20s and 30s × Legendary Executives" we're planning with Mr. Saito is something I'd very much like to realize within this context. Even before forming a joint venture, it would be interesting to see how projects could be structured within various frameworks.

Saito: To change society, we must run the entire length of the "wall" between large corporations and startups. That requires resolve. Younger people tend to be more willing to take risks. Older generations possess the knowledge to support them. When both sides form the right alliance, it becomes the catalyst to transform Japan.

Alliances between large corporations and startups are increasingly recognized as a solution to the challenges each faces. DGDU's new service, "CoNext," focuses on "Matching," "Business Making," and "Business Growth" not just to facilitate alliances, but to support the essential goal of expanding business complementarily.

Details on "CoNext (Connect)", the collaboration support service for large corporations and startups, can be found here
https://www.dentsu.co.jp/news/sp/release/2020/0131-010012.html