What does building a sustainable future for the region mean, originating from Yamagata's Shonai?

This series follows Dentsu Inc. 'Company Design' team as they explore the secrets behind 'vibrant companies' with 'originality.' In the 18th installment, we introduce Yamagata Design, a startup based in the Shonai region that continues various initiatives to enhance the brand value of Yamagata Prefecture itself.

At the start of the interview, when we conveyed our intention to explore the "secret behind somehow energetic companies" under this series title to President Daisuke Yamanaka, he responded with a friendly smile: "I like that title. I think being energetic is the most important thing for a company. In my case, it's 99% 'fake energy' though (laughs)."

After graduating from a Tokyo university, he joined a major Tokyo real estate company. A chance encounter at Tsuruoka Science Park led him to switch careers, joining a biotech venture in Yamagata Prefecture – a place he had no prior connection to. Just two months later, he founded Yamagata Design with a mere 100,000 yen in capital. Over roughly eight years, he grew it into a company employing about 150 people. This journey alone could fill a movie.
An I-turn entrepreneur engages with the region and launches one business venture after another. What exactly does "Designing Yamagata" entail? We spoke directly with President Yamanaka.

Written by: Nobu Miyazaki (Dentsu Inc. BXCC)

Yamagata Design: With the motto "creatively designing and solving regional challenges as business ventures," the company undertakes various initiatives originating from the Yamagata Shonai region.

The essence of "town building" is designing businesses to solve problems

If we were to succinctly describe Yamagata Design's business, it is "town development" with its base camp (company building) in the Shonai region. However, President Yamanaka admitted he had reservations about the term "town development." "I used to work for a developer, but 'town development' is kind of a dubious term, isn't it? Building shopping centers, designing community spaces in cafes, or picking up trash on the beach—all of it is community building. And if you just call it 'community building,' anyone—politicians, big corporations, or individuals—can justify what they're doing. Still, we deliberately use the term 'community building company' to describe ourselves now because we've developed our own definition of 'community building' to a certain extent."

President Yamanaka continues. "Our company's work is 'designing all kinds of projects to solve regional and societal challenges.' Through that, realizing a society where people can have hope for the future – that is community development." Yamagata Design's core business pillars are tourism, education, agriculture, and human resources. To handle such a wide range of projects in just eight years – what kind of journey has it been?

Daisuke Yamanaka, President and CEO of Yamagata Design: Graduated from Keio University's Faculty of Environment and Information Studies. Built his career at a major developer company, handling commercial facility development and operations. One day, nearing age 30, driven by a desire to "start from scratch," he relocated to Shonai. With a "chance" connection and 100,000 yen in capital, he embarked on a new path.

How did this I-turn entrepreneur establish his business in the region?

President Yamanaka, who has lived in the Shonai area for eight years, says it will never truly feel like his hometown. "If asked where I'd like to go for a resort or spend my retirement, places like Okinawa naturally seem appealing. But I think it's a good thing that being an outsider allows me to see the charm of Yamagata and Shonai objectively."

To launch a major venture like Suiden Terrace, you need partners who support you both financially and operationally. How did President Yamanaka, an I-turn entrepreneur without local connections, make this happen? "For the funds needed to acquire the land, we sought cooperation from local banks and local companies." At the time, there was zero investment from large Tokyo corporations; all investors were local businesses.

While big corporations in the city list regional revitalization as a business goal, they often hesitate to invest money when considering the risks. As a result, local town development tends to rely on the government. "But areas that only do government projects lack appeal. So we raised the banner, saying we'd pursue our vision of 'town development' led by the private sector, aimed at the local people."

"SHONAI HOTEL SUIDEN TERRASSE" by architect Shigeru Ban. This nationally unique hotel, offering rural views to enjoy the charm of Shonai, was Yamagata Design's first major project.

First, find 3% of supporters and make things happen

How did you gather like-minded supporters? "The key challenge is finding those core individuals within the community who will champion the cause. This is my personal theory: in Japan, when you propose something new, only about 3% of the population possesses the ability to imagine that new thing—the power to create something from nothing (0→1). So, even if we couldn't gain understanding from everyone in the community, we decided to focus on finding that 3% first. We're not the government, so we don't need a process to gauge public opinion."

The remaining 97% are indifferent. But they're not necessarily opposed. That's what President Yamanaka says. First, create something concrete with the 3%. Then, the awareness of the remaining 97% gradually shifts. "The biggest change over my eight years launching ventures in four fields in Shonai was the growing percentage of supporters. It was a truly tough journey," President Yamanaka reflects with a laugh.

Kids Dome Sora, the base for educational initiatives. Rooted in the teachings of Ogui Sora, it develops educational programs with a stance focused on "drawing out" the innate individuality of children.

Designing the hope for the future envisioned in the concept, along with the mechanisms to achieve it

The word "design" in the company name doesn't refer to narrow concepts like form or architecture. It means the "future blueprint (concept)" – asking, "How about revitalizing Shonai and Yamagata like this?" – and the "mechanism" to bring it to life. "In fact, Yamagata Design doesn't have a single person in the traditional designer role."

President Yamanaka personally handles the core concept design for each venture. "Once the concept is established, we entrust execution to our in-house team. But since businesses are living entities, we continuously refine the concept through feedback. It's like constantly conducting social experiments."

While functioning as a company, it continuously launches social experiments. Though called experiments, how does it balance this with corporate profitability? "First, the value of a business boils down to whether it improves society. If profit becomes the sole objective, the business quickly loses its appeal. That said, without cash flow, the business cannot continue. It's crucial to uphold ideals, generate revenue, and maintain alignment between concept and operations."

From Yamagata to the Nation

Regional revitalization has been a long-standing call, but many areas face challenges like a shortage of people to take on roles and a lack of know-how. "Take a region like Shonai, for example. It's one of the typical regions facing these challenges head-on. It's not a place where large corporations are lining up to invest. But precisely because it's such a place, if we can establish various businesses with exciting concepts, profitability, and sustainability, we can give hope to many people."

The web platform "Shonai's Kan," which connects local businesses with job seekers through our human resources division, began expanding nationwide last year. By designing the system itself, we can provide know-how and replicate it in other regional cities, says President Yamanaka. "We want to give companies leading in other regions the 'tools to build the future,'" he states.

"Even just in the Shonai area, we're still only halfway there, and it took us eight years to get this far. Even if I had 47 copies of myself flying to every prefecture, it would still take eight years to get them halfway there, right? Handing our know-how and tools to leading companies in each region is the most efficient approach."

Many companies are now pushing forward with globalization. At the same time, President Yamanaka observes, society is becoming one where people often don't know for whom they are working hard or who they are thanking. "I think this ultimately leads to a state of total irresponsibility, a society where no one takes ownership." This is the landscape of societal stagnation seen from the perspective of someone active in regional cities. "In that sense too, I believe allowing freedom in where people work is absolutely essential going forward—not only for attracting top talent to large urban corporations."

Creating the future regions where people can live humanely and do exciting work

"I believe a society where people can balance a human-centered life with exciting work is actually achievable in regional cities." With both rural and urban futures uncertain, I asked President Yamanaka for his final thoughts on how we should live and work going forward.

"Once you experience the pleasant environment, clean air, and water of regional cities, you'll never want to work in Tokyo again (laughs). However, exciting work can be hard to find in regional areas. I believe the real value lies in uncovering that potential."

Yamagata Design's "design style" hints at the latent potential within local communities. As President Yamanaka jokingly mentioned during our interview, if there were truly 47 people like him, every prefecture in Japan could become brighter.

Yamagata Design's homepage is here.

Season 2 of the Dentsu Inc. 'Company Design' team's series exploring the secrets of 'vibrant companies' with 'originality.' Episode 18 introduced Yamagata Design, a startup based in the Shonai region, continuously undertaking various initiatives to enhance the brand value of Yamagata Prefecture itself.

Season 1 of the series can be found here:
The "Company Design" project site is here.

[Editor's Note]

Before the interview, I reviewed articles about Yamagata Design featured in numerous media outlets. What struck me most was the phrase "chance encounters" frequently mentioned by President Yamanaka.

Experiencing natural disasters and COVID-19 likely made many people deeply appreciate the importance of human connections. If asked whether I've ever worked with the mindset that "money ends relationships," I can't say with 100% confidence that I never have. But looking back on my life, what comes to mind are mostly these "chance encounters."

President Yamanaka says, "Life doesn't expand beyond 'luck' and 'fate,' and frankly, things rarely go according to plan. But the one thing you can decide for yourself is which direction you want to go. After that, I think you just need to roll along in that direction, tumbling along as 'luck' carries you, picking up the 'fate' that lies along the way." President Yamanaka's smile, as he spoke softly throughout about his vision for the future, was truly memorable.