From XR/VR to HR: Sumina Koiso's Journey of Entrepreneurship in America
From XR/VR to HR: Sumina Koiso's Journey of Entrepreneurship in America
This article will unravel Ms. Sumina Koiso, founder of Newond, discusses her journey from starting in the XR/VR industry to launching a new startup in America focused on HR and backoffice support. She shares insights into her entrepreneurial path, challenges faced, and the decision-making process behind her ventures.
Notable content:
Venturing into Virtual Realms: Sumina’s Beginnings in XR/VR and Entrepreneurship
Pivoting to America: Challenges and Opportunities in the U.S. Market
Navigating Startup Challenges: Insights into Solo Entrepreneurship and Decision-Making
Future Perspectives: Scaling Newond and Global Expansion Plans
—Thank you very much for your time today for appearing on the RiSiN podcast. To introduce this podcast once again, RiSiN invites entrepreneurs, business people, and investors active overseas, and it is a podcast where we have discussions with our guests. The reason we started this podcast was to increase the number of startups and business people challenging themselves overseas, and to focus on Japanese people active overseas, and by interviewing them, we wanted to create a media platform useful for people who want to challenge themselves overseas. Sumina-san, thank you for joining us today.
Sumina: “Thank you. Nice to meet you too.”
— To get started, please give us a brief self-introduction.
Sumina: “My name is Sumina Koiso from Newond. I am currently creating a service in America that supports HR personnel and backoffice operations of companies.”
— Thank you very much. Okay, so...you are already taking on challenges in America?
Sumina: “Yes, that's right. I founded the company a year ago.”
— Is this your first startup, or were you doing something else before? I'd like to touch on your background as well. What were you doing before starting up?
Sumina: “Well, I have several careers, but just before Newond, I was running a company called inxR that originally did contract development for VR and so on. So this is my second company in terms of founding. As for the previous service and company, originally it was a vendor, but I felt a shortage of manpower in the VR/AR industry, a loss of opportunities for those who wanted to find jobs, and information asymmetry, so, to put it simply, I created a recruitment platform for XR industries with my own capital. I ran it as a small business rather than a startup.”
— Ah, I see. And now you have started a new startup. What happened to the business you were doing before?
Sumina: “Well...to be honest, we are not actively doing sales activities now,
but we still have customers, so if they consult us, I respond in my spare time, so I haven't sold the business yet.”
— So, you're really handling it with minimal resources?
Sumina: "That's right. Before creating Newond, I focused on automating processes so that I wouldn't have to spend time on them repeatedly.”
— I see. So you've structured things well and moved on to new ventures.
Sumina: “That's right.”
— I see. By the way, before starting in the XR/VR field, what were you doing?
Sumina: “Well, after graduating from university, I joined a Japanese management consulting firm, which was my first career. I did a lot of BtoB sales and also participated in new business initiatives during my second year there. This experience really laid the foundation for me as a business person, as I was trained by my seniors.”
— I see. I understand. By the way, after you graduated, the XR/VR field was relatively new. What made you decide to start something in that field?
Sumina: “Hmm, well... This might be a long story, but let me summarize. I left my job and actually moved to Shenzhen in China.”
— Really?
Sumina: “However, I didn't go there on my own initiative but rather because I was invited and felt I had no other options. So, I ended up going there. However, while I was there, how should I put this... I was betrayed by people I trusted.”
— Like Shohei Ohtani? It's like a hot topic right now, feels similar to that.
Sumina: “But it wasn't as close a relationship as Ohtani and Mizutanisan. I had a bit of distrust, and it's a bit like that... What should I say?”
— You felt like you were deceived...?
Sumina: “Yeah, it's not great to blame others though. So, going to China, and... what can I say, it's really like entering a part of life's rut. Yeah, it's gotten quite long, but I returned home and tried to reset everything in Japan. Since I was a child, I loved drawing, so I decided to become an illustrator.”
— I see.
Sumina: “Since this story is pivotal to my origins, let me elaborate a bit more. I became an illustrator, but at that time, I hadn't even touched Adobe software, and I only had a very old PC with no skills at all. In the midst of all that, as I started taking on various jobs, design work gradually increased, and soon I was earning a salary comparable to when I was a company employee. Revenue started coming in quickly, and even though I was inexperienced, I made my first sales within the second week.”
— Amazing, that's impressive.
Sumina: “By the third month, all my clients were corporate clients, and I started earning as much as I did when I was a company employee. I began thinking about creating a design firm and becoming independent, or starting a business of my own. While I had always wanted to start a company, when the time actually came, I saw how many design firms there were and questioned whether I could succeed amidst such competition. Then, by chance, I received a 3D modeling project that involved the realms of VR and AR. At that time, there were no companies in Kansai, in Osaka, focusing on VR and AR. Drawing from my experience in a consulting firm where I solved problems and improved business operations, I decided to start a company using those skills.”
— I see.
Sumina: “That was the trigger. It turned into quite a long story.”
— I don’t often hear stories like this, so hearing it is really something... I see, it's quite enlightening. I'm often called an amoeba because I change what I’m doing quickly. Having the skills to adapt like that is quite impressive too. By the way, how long were you in Shenzhen?
Sumina: “I was there for a very short time, about half a year, actually.”
— Okay, even so, you had already decided to return home...
Sumina: “Yes, and I started to do freelancing from zero, and also building my own growth...”
— It's amazing, your resilience is truly impressive.
Sumina: “By the way, as a side note, when I returned from China, I came back in January to Japan. And then, the pandemic hit. I didn't return because of it, but couldn't openly say I had returned from China for a while.”
— Yeah, it was very stigamized then.
Sumina: “If you had said it normally, it probably would've caused a bad reaction from everyone. I mean, there was a potential for resentment.”
— Yeah. So that was new to me, that story about Shenzhen. By the way, it's a coincidence. I had originally planned to go to Shenzhen when I was in Malaysia, but the pandemic hit, and Malaysia had strict lockdowns, so I couldn't go outside and ended up returning to Japan without going. I'll be going to Shenzhen from Hong Kong for just one night, maybe next week or the week after. It's really just a tangent, but Hong Kong too, I'm planning to go there for the first time, that's right.
Sumina: “You should install all the Chinese apps in Japan.”
— I see, I see. Thank you. Let me ask you about that separately.
Sumina: “Got it!”
— I see. So that was the trigger? From XR/VR, where you were involved in various activities like different types of support, job introductions, and talent introductions, how did you transition to the layoff business, and from there, to backoffice support? Also, why America?
Sumina: “Well... To tell you why I chose the current layoff and backoffice support business first, it's because when I originally tried to expand the VR/AR matching service globally, I went to America alone several times.”
— I see.
Sumina: “At that time, what I felt was that in America, there are already so many recruitment services like LinkedIn, Indeed, Glassdoor, and Hired. In that landscape, my service, a matching service, seemed to have a weak appeal. Then, to share a bit of the story, I met Mr. Yamada Shunsuke in America, who runs a service similar to company retreats or offsites in Japan. He offered to mentor me when he saw my dedication. That was quite pivotal and connects to the latter part of my story. Through his mentoring, I developed a more American way of thinking. He emphasized that to succeed in America, one must identify market pain points and operationalize solutions. Around that time, there were significant layoffs at companies like Meta and TikTok.”
— I see quite a few.
Sumina: “Yeah. During that time, I asked people who had been laid off, "Are you facing any difficulties? Is there anything I can do?" Many employees who had been laid off expressed their challenges, and I also hypothesized that HR professionals were struggling too. So, I approached HR professionals and conducted more than ten interviews. It became clear that they were indeed facing significant challenges. That's how the idea to operationalize this business came about.”
— I see, that's fascinating. So, with the current situation... Before starting this startup, you were involved in expanding that service. Initially aiming for expansion, you met various people and encountered another concept or opportunity that you thought could become a new business. Is that the feeling behind your decision to challenge this new field?
Sumina: “Yes, that's right.”
— I see. By the way, in America, layoff news is relatively extensive. When you look at English articles, it's quite common to see news about tens of thousands of layoffs.
Sumina: “Yes, it does.”
— In Japan, you don't see that much, do you? Of course, probably because of labor standards laws. Of course, there are those, and you can't easily fire regular employees. Of course, there are various factors. In America, is it so easy to lay off tens of thousands, thousands, hundreds of employees? Can they easily lay them off? I don't really understand American labor laws. Sorry for my lack of knowledge.
Sumina: “In conclusion, it's definitely easier than in Japan, but laws vary depending on the state.”
— Oh, I see.
Sumina: “For example, what you often see, what listeners often see, probably news about tech companies in California—there's overwhelmingly a lot of layoff news. On the other hand, probably in other areas like Texas, you don't see much layoff news because state laws are different. Now that you mention it… Especially in California, especially in the Bay Area, there's a lot of layoff news because, to speak more broadly, layoffs increased actually because of the pandemic. During the pandemic, the country lowered interest rates. Interest rates came back, and those who received funding from various investors—the most costly expense, labor costs—they are tightening their purse strings.”
— I see. Thank you. So, now, how frequently can't we say that this business has pivoted? It's being run by a separate corporation, right?
Sumina: “Yes, but in terms of my time and effort...”
— Completely in this new layoff area, you decided to take a risk and went to America, right?
Sumina: “Yes”
— I see. By the way, what can I say about the current status? Are you currently validating the MVP regarding the current project?
Sumina: “Yes, that's right. Exactly. Right now, I am conducting a lot of interviews. Actually, I was wondering if I should discuss this on the podcast. I was hesitant. Originally, the business was launched to support backoffice operations, but as I continued my interviews, I found that HR people are struggling not with the automation of backoffice tasks, but more with other communication aspects, recruitment, and reemployment support. I came up with a new hypothesis that those might be the areas where they need more help, so I am currently validating that.”
— I see, I see. As I hear that, the more employees a company has, the more difficult it is to support reemployment efforts. It's hard to cover everything. First, they notify the employees about the layoffs, then handle the transitions and payroll, so HR is already overwhelmed with just those tasks. So, it's understandable that they can't fully support reemployment even though they want to. They can't handle everything. I imagine that’s the situation. It's just a guess, though. I think that’s likely.
Sumina: “Yes, exactly. Regarding reemployment, it's called "outplacement" in English. We are receiving some inquiries about it. And we are working on it stealthily and testing how to automate the process.”
— I see, I see. I understand. By the way, during the hypothesis testing phase of the MVP, what industries are you focusing on? Are you targeting specific industries?
Sumina: “Well, to conclude, we are not focusing on specific industries. We are just responding to the inquiries we receive. But I think in a B2B business, the ideal approach is to start with enterprises and then expand to startups, or to broaden the scope in that manner. That's the ideal approach, I think. For example, other companies on AngelList and startups might have different concepts, but we don't specify which industries are better. We haven't decided that. However, companies that want support for their employees' reemployment are mostly in the Bay Area, and those who want to hire such people are mostly enterprises.”
— I see, I see. That's interesting. So, for now, you are still doing a lot of hypothesis testing. During this phase, while testing your hypotheses, what insights have you gained? The needs are probably varied, but in terms of monetization, do you have any idea where the money might come from? Has any clear direction emerged? Or do you think more hypothesis testing is needed?
Sumina: “I understand. In terms of purely making money, recruitment and consulting are highly profitable with significantly higher profit margins, I think so. But whether it is scalable is another question, so how to incorporate it into a system is something I need to figure out in the next steps, I think. But honestly, right now, I am still figuring things out, so, yes, that's where I am. Yeah...”
— Got it. By the way, how many people are currently working at Newond? Is it just one person now?
Sumina: “Yes, just one.”
— That's crazy.
Sumina: “Just one, but...”
— This is truly a startup.
Sumina: “Hmm... I don't know. There are pros and cons. As for me, well, I'd say the business is still in a state of flux, but in my opinion, more people means more costs, so, well... I have already secured initial funding, so, next, I need to decide on the business direction before adding more people, which I think will make things smoother.”
— I see. So, Sumina-san, for you, while doing the MVP alone and getting a sense of PMF, then you'll move on to the next funding round, and then hire cofounders or core members, or start looking for them, that's the plan, right?
Sumina: “Yes, exactly. That's the image I have. People have different opinions; some say it's better to start now...”
— There's really no right answer to this. It depends on the person's type as well—some are good at going from A to B, and some struggle with A to B—so it varies a lot. You’ve probably done a lot of A to B, so at this phase, you think it's fine to be alone. That's the feeling I have.
Sumina: “Yes, that's right.”
— By the way, when you came up with this service, did you decide from the beginning to go to America? Or were you considering other markets? Choosing the right market is crucial. It's important, and if you get it wrong, it can be hard to start over. Did you decide on America from the beginning?
Sumina: “Yes, that's right. I didn't answer this question earlier, but the reason for choosing America is that from the beginning, I decided to focus on this market for my business. I see. It's not about taking this business to America like my previous services, which were more global. We initially aimed to keep it global but launched in Japan, acquired Japanese customers, and then considered expanding to America. But this time, I first thought about what business would thrive in America and then created this service.”
— I see. So the market comes first. That's an interesting approach. But indeed, which one is correct? There are various ways to do things. For example, some people achieve PMF in Japan first and then go to America, or decide on the market first and create a business that fits it. Both approaches are valid. In the end, if you can create a company, then that's good. That's what I think. Most people probably have a desire to challenge themselves overseas. But there are some hindrances, like language barriers or fear of failure. These fears make it hard to take risks and leap. Before they know it, they're still in Japan, which is a common pattern. But Sumina-san, you've said you want to do business globally, right? And among those options, you chose America first. So, when did you start wanting to do business globally?
Sumina: “In my case, it was when I was 18 or 19. Well, at that time, there was a student program that allowed me to go to Bangladesh, so I went. The reason I joined was quite impure; I thought if there wasn't such a program, I would never go to a country like Bangladesh.”
— I thought that was fine.
Sumina: “It was a very impure motive, but it changed my perspective on life. When I went to Bangladesh, my image of the country was based on UNICEF commercials portraying it as one of the poorest countries. I thought it was very poor. Indeed, when I arrived, the airport was very empty, and there were kids who couldn't read cleaning windows. When I left the airport, it was clear I was East Asian, so many beggars approached me. That was the situation. But when I went to the city center, it was very lively. People, cars—the energy was overflowing. I wasn't alive then, but I thought, this is probably what the Meiji Restoration was like. Japan's Meiji Restoration...”
— Old Japan.
Sumina: “I wanted to work hard in a place with such energy, and that's why I wanted to challenge myself abroad.”
— I see. When I interviewed someone else, he said he went to America with his parents when he was young and was shocked by it, which made him want to challenge himself abroad. He admired America because of it, so going abroad is important.
Sumina: “I too think it's very important.”
— It doesn't matter why, but if you just stay in Japan, it's a homogeneous country.
Sumina: “Exactly.”
— In addition to being homogeneous, Japan feels closed off. Historically, Japan was a closed country, so it's understandable. I think that's normal, and it's not a bad thing, but since Japan's passport is the most trusted in the world and you can visit over 190 countries without a visa, you should take advantage of it to broaden your horizons. Everyone should, to expand their perspectives—it doesn't matter what the motivation is. Going abroad is important, I think. If you don't broaden your horizons, you can't compare yourself, and you won't realize how fortunate you are just to be born in Japan. You won't realize how lucky you are. I see. Bangladesh. I've been to India but not Bangladesh. I'd like to go someday. And I've been to Sri Lanka and India but not Nepal or Bangladesh—South Asia? I've never been there. I'm curious about many things. Also, Bangladesh is close to India. India is a Hindu country, and Bangladesh is a Muslim country, right? Is that right?
Sumina: “I think there are two main religions. Sorry, I forgot.”
— I find that interesting. There must be a lot of history there. I skipped world history during exams, so I don't remember much. So, with that background... I see.
Sumina: “But if you go to Bangladesh now, I think it has become much more prosperous.”
— That's true. I don't know how old you are now, Sumina-san, but if you were young, it's been over 10 years, right?
Sumina: “Yes, around 10 years ago. I've been there twice, and the second time, it felt like a different country. If you go now, it would be even more different.”
— It might be a different kind of culture shock this time. But it's definitely worth it. You should definitely go. Sorry for the long talk... Thank you. By the way, considering you're doing various challenges alone in America, startups tend to fail more often than not, right?
Sumina: “That's true.”
— Being alone in America, and as a woman, while running a startup, what kind of hard things have you faced so far? Were there moments when you felt really discouraged? I'm sure there are a few. If you could share one or two of them, please share that.
Sumina: “To start with, my first company was self-funded. I did everything, including setting up the company and the back office. So to some extent, the service I created became profitable.”
— That's amazing.
Sumina: “So, in a way, I'm quite cost-conscious, and I have a decent ability to mitigate risks beforehand. So, I think I have that ability to some extent. Therefore, honestly, I haven't faced many major business troubles yet. I haven't really faced any significant issues, though they might exist, but I think those are just part of the process, so I don't really count them as major troubles. But if I had to mention one, although I'm not sure if I say this on your podcast, but here it goes. People around me give me all kinds of advice. They mean well, and it's good advice, but it often becomes noise for me.”
— I see. Listening to too many people and getting advice from everywhere makes it hard to figure out what to fit into your own framework, and it becomes noise. I see. I can totally understand that feeling.
Sumina: “Really?”
— How can I put it, I've been invited to play golf a lot, especially since I lived abroad. But honestly, I don't really like golf.
Sumina: “I see.”
— So in the end, I think I have to decide for myself. I've been attending, but not for long. I'll go with the method that feels right or the advice that works best when I swing. I'll use that as my base. That's my current approach. But at one point, it was so inconsistent... I thought it might be making me worse. I wondered why I was even attending. But I think persistence is key, so I kept going. I'm giving it a try. I see. Indeed... Seeking advice from successful people is important, but taking in everything without filtering is different. You need to filter and see what resonates with you, what makes sense to you. That's really important.
Sumina: “Exactly.”
— I've always played more intense sports like basketball and handball. I prefer interactive sports, but golf—I don't mean to disrespect it—but coming from intense sports where equipment is new to me. I've never played baseball, tennis, or table tennis, so I don't really understand what's fun about them. I don't find them intense or exciting. It might be tough, though. Honestly, I kept declining invitations, but at some point, I thought it's not right to keep declining without trying, so I decided to give it a shot. I started attending a golf school, but golf lessons in Japan are quite expensive. I wanted to keep the costs low, so I joined a school with unlimited lessons. But the thing with unlimited lessons is you get different instructors based on availability. They teach based on your schedule. But everyone says different things—from how to hold the club to how to swing your arms, how to move your head, and where to look, everything was different. It got confusing. Whose advice should I follow? I feel like it's a similar situation. Sorry for the long story, but who should I listen to?
Sumina: “That’s right. My hardest thing, surprisingly, the thing I struggle with the most is that.”
— I see. How are you dealing with it now? After realizing that, how are you handling it now? What are you doing now?
Sumina: “There are two things I'm doing now. One is not to seek advice from others.”
— On the contrary.
Sumina: “The other is, ultimately, the goal, in your case, is probably to improve your golf skills. That's the essence, I think. Maybe beyond that, you want to expand your network, or something like that. There could be various reasons, but in my case, I concluded that what the customers say is the correct answer. I thought what the users are saying is the correct answer. For example, in the previous service case, the recruiting platform I used to run, I released it and got inquiries on the first day. By the next month, I was already making sales. But when I explained the business model to venture capitalists, they didn't pay much attention. I wasn't looking to raise funds, but when they reached out to me, and I explained my business model, they said it was a small business and turned away. But it was steadily generating revenue, and the number of customers was increasing. So, I thought, this is the right way. That's what I thought... and, even with the current service, mostly from business people, and some vendors, so I get a lot of advice from people in different fields and different worlds. But it's not about that. Ultimately, if you don't solve the customers' problems, the business won't grow. So I decided to listen to the customers' voices carefully. That's the conclusion I've reached now. It's the optimal solution... Yes, the way you build your organization, fundraising methods, things not directly related to customers, are areas where you should seek advice from seniors and investors. But in those areas, you should filter the advice you take.”
— I see... Thank you. Before we knew it, the first half ended up being quite long. In the second half, with the keyword "global" in mind, I want to ask various questions. So for the second half as well, I look forward to it. For now, let's end the first half. Let's wrap it up. If you know anyone interested in going abroad or wanting to challenge themselves abroad, please share this podcast. You can listen on Spotify, Apple, and Google Podcasts. I'd appreciate it if you shared it. And if you follow it, it'll motivate us. See you in the next episode! Thank you for listening.