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Business & Tech - 01/07/19

How Big Fails Became Big Business

Written by Christy C

Prior to founding CrowdWorks, Koichiro Yoshida had had 13 ventures, all of which crashed and burned. Here, he opens up about his painful journey to offer us a glimpse of the less glamorous side of entrepreneurship.

Seven years ago, Koichiro Yoshida sold his car and liquidated all his assets to start his business venture CrowdWorks, an online marketplace for freelancers. Today, that venture has grown into one of Japan’s largest crowdsourcing platforms and one listed on the Tokyo Stock Exchange Mothers index (a subset of the Tokyo Stock Exchange populated with startups). Since its inception in 2011, CrowdWorks has connected 2.24 million freelancers with jobs from over 290k partnering companies including Toyota, Softbank and Sony. It is Koichiro’s fourteenth venture – and his only one that has survived and thrived.

Before CrowdWorks, the name Koichiro Yoshida was not associated with success. Not academically inclined, he didn’t fit in at school. Bullied as a kid, he says that “rather than trying to survive in a world of calculated certainty,” he decided to go for a less-travelled path. In 1999, during his last year at university, Koichiro opted for a career frequently stigmatised as a renegade activity in Japanese society – that of an entrepreneur, with his first business, a theatre company.

That dream soon turned into a tale of debt and failure. “The first project I did was to organise a play at an abandoned building. However, our rental contract for the space got terminated right before the show because I failed to follow the terms. I had to cancel everything that I’d been preparing for six months,” Koichiro begins. Taking a hiatus from startup life, he entered the corporate world, starting as a salesperson at the Japanese multinational Pioneer Corporation before taking a management position at the international event organising agency Reed Exhibition Japan. Still, his ambitions for running his own company persisted. “It was a dream I failed to achieve through my theatre company, and I thought I could take on the challenge one more time because I was so eager to succeed.”

Koichiro’s next venture was ZOOEE Inc., a management consulting company he founded in late 2007 and under which he initiated 13 other forays into the entrepreneurial world. “I had this misconception that, however inexperienced I was in the field, as long as I put myself in a growing industry, I should be able to manage somehow,” he explains. “So, when there was a construction rush in Dubai, I jumped at the opportunity even though I knew nothing about Dubai. I thought I could get my business off the ground simply because I was in a growing market. For the same reason, I tried selling clothes in Vietnam, doing wine distribution in Shanghai, and many more. I was desperately trying to make my businesses work right up to the point where I was the only member of staff left in my company.”

Then came a plot twist that changed everything. Alone in his office after ZOOEE Inc. had flopped on New Year’s Eve in 2010, Koichiro received a year-end gift from a former trading partner. It made him take a long, hard look at his career. “When I first started my business, I regarded entrepreneurship as a shortcut to success and wealth. The gift struck me as a reminder of the importance of living a life of purpose, one that makes a meaningful contribution to others,” he remembers.

For the last seven years, Koichiro has dedicated his time to doing just that with CrowdWorks, a platform that set out in 2011 to provide flexible working alternatives to capable people who had been left behind by Japan’s traditional employment system. “In Japan, it is not uncommon to see women with a university degree give up work when they marry,” he says, of one group he has focused on. Another is Japan’s growing cohort of retirees. “These people are usually forced to retire because they’ve reached the legal retirement age of 65. While their talents and know-how are immensely valuable to society, their post-retirement job opportunities are severely limited. CrowdWorks is here to fill that gap.”

It’s a gap CrowdWorks has only seen grow alongside big shifts in Japan’s employment market. Long defined by lifelong jobs and a seniority-based wage system, now, according to Koichiro, more than 45% of its current workforce is engaged in work types other than full-time jobs. And it’s the companies embracing this style of work he sees as the ones capturing the future. “In times of uncertainty, when Japan’s economy remains in poor fiscal shape, companies that are adaptive will be the ones steering the ship,” he explains. “Outsourcing enables them to flexibly respond to changes in the market. Take the emerging trend of a factory-less production model, also known as “fabless” production, where companies outsource their manufacturing process to overseas factories, robots and AI technologies.” Koichiro predicts that, with digitalisation at full speed, the future of the gig economy looks bright. “Outsourcing to freelancers will be the next go-to solution for businesses who want to enjoy a higher degree of flexibility, both financially and operationally.”

Riding this wave, CrowdWorks has seen significant success, gobbling up funding rounds of more than USD 14 million within its first two years and delivering JPY 1.115 billion worth of client projects to date. “I hope to create the No. 1 employment infrastructure in Japan using the Internet,” says Koichiro of his plans. “In the 20th century, it was Toyota’s employment infrastructure that delivered remuneration to the greatest number of people. In the 21st Century, it could be CrowdWorks’ turn.”

It’s quite the turnaround for a man who oversaw 14 failed ventures along his journey. “There’s no such thing as climbing the right mountain when it comes to entrepreneurship because ‘the-right-thing-to-do’ could turn into a mistake five minutes later in a fast-changing world,” he explains of his secret. “So, be agile, not only in terms of decision making but also in terms of thinking. Instead of dwelling on perceived failures, seek values in them.” And therein, according to Koichiro, lies the route to fulfilment. “My self- esteem was at an all-time low for the longest time. Now, at the age of 43, I can say I am finally walking on the path of happiness.”

 

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