Diversity Within the Product: Why Mercari CEO Shintaro Yamada and Outside Director Makiko Shinoda Focus on D&I

The Diversity and Inclusion (D&I) mindset will be important in helping shape the world and our own values in the future. Mercari Representative Director and CEO Shintaro Yamada thinks that D&I is essential for us to create a better product.

Mercari began working on D&I in 2018, when volunteer members decided to get together to raise awareness within the company. After that, the importance of D&I grew gradually until we launched the D&I Council in January 2021.

Why is D&I important for Mercari’s product and organization? It’s more than just a response to social pressure. We asked Shintaro and Outside Director Makiko Shinoda what Mercari is currently doing regarding D&I, and what challenges they foresee in the near future. We have divided this interview into 2 parts. Stay tuned for part 2!

*Face masks were temporarily removed for photos

D&I as a means to create a better product for diverse consumers

—First of all, I’d like to ask about where Mercari is right now. It has been 8 years since the company was founded, and both the product and the organization have evolved since then. Are there any changes in particular that stand out to you?

Shintaro: The demographics of Mercari users have changed a lot. When we first started in 2013, our main target were young women with children living in Japan. So at the beginning, we focused on creating a service that is convenient for them. Now, we have grown into a service used by men and women of all ages, from Japan to the US. But if we think about expanding globally going forward, we have to understand that diversity is becoming more and more important.

Shintaro Yamada (Mercari Representative Director and CEO)

—Why is diversity important for our product?

Shintaro: I basically see our product as our biggest touchpoint with users. Currently our product is used by around 18 million people every month in Japan, but if we want to double or even triple that number, we will need Mercari to be used by all kinds of people. And we won’t be able to see further growth unless we can provide a service in line with their diversity. Needless to say that in order for us to meet the needs of diverse users, we, the ones who create the product, must also include diversity within our members. We need members of all different backgrounds—of different ages, nationalities, religious beliefs, genders, etc.—to have various discussions that can be then incorporated into our product.

—So, we need diversity within the organization if we are to create a product that can be used by diverse people.

Shintaro: Correct. In a way, we are incorporating diversity in our company as a result of our quest for a better product, rather than seeing it as a goal in and of itself. If we want to provide a better product for more people, all parts of our organization need to embody diversity, whether it is the Legal Team, the HR Team, or any other team. That is why we are working on D&I as an important element of our business strategy.

A need to adapt to global standards

—As a company that expanded to the US in 2014 and to the UK in 2016 (although later withdrew from the UK in 2018), Mercari has had a very real opportunity to develop a diverse product. After building Mercari from scratch overseas, have you learned anything or had any particular insights regarding D&I?

Shintaro: I certainly felt that our understanding of D&I has yet to catch up in some areas. When you make a product only in Japan, the service inevitably ends up being tailored to Japanese people. Search portals, for example, are very different depending on the country. Google has a simple design with just a search bar and a few buttons, but Chinese portals have a lot of text, and Yahoo! JAPAN is somewhere in between. But from a global perspective, they need to communicate their service’s value proposition in a simple way.

—How did you customize the US and the UK versions of the app in order to do that?

Shintaro: In the US app, for example, we removed all the really detailed instructions we had in the JP version. At first, we thought of just translating them, but we had feedback from some Product Managers (PMs) and users who were confused, so we decided to remove all of them. Then, we tried the same thing with the Japanese version, and saw no problem at all.

Shintaro: You don’t really see these pieces of text in products from companies like Google or Apple. But once you use them, you intuitively know what you can and can’t do based on their UI/UX. I think the reason why they could come up with this kind of thing is because the United States itself is a diverse country. It’s a country made of immigrants from all over the world with different languages and cultures, so their service has to be easy to understand for everyone. When I sold my previous company to Zynga (a social game developer from the US), I thought I had learned a lot from the way they do things in Silicon Valley… But still, I realized that if you make something in Japan, it ends up looking very Japanese. That motivated me even more to adapt to global standards, and reminded me that if we are to provide our services to a diverse society, we need diversity within our own company as well.

Makiko: I’ve been a Mercari user for a long time, but I didn’t know that’s what led to Mercari becoming easier and easier to use. What you just said makes complete sense to me now.

Makiko Shinoda (Mercari Outside Director)

Think about what kind of organization we need in order to create a good product

—So, D&I is not an end in itself, but a means to an end. What kind of actions has Mercari taken so far based on this approach?

Shintaro: This may be a point of contention, but one of the first things we decided was to avoid setting quantitative goals. Goals such as “half the managers need to be women,” “increase the percentage of non-Japanese employees to X% by a certain date,” or “all communications within the organization have to be in English.” The criteria behind these goals change as the world around us changes. As we offer our service in more countries and increase the number of businesses we handle, what we and our users’ think is best or ideal will also change eventually. That is why D&I can easily become an objective, when it shouldn’t.

—Right, D&I is not about meeting these kinds of quantitative goals.

Shintaro: That’s right. We have to look at it from the point of view of what kind of organization we need in order to create a good product and how we can become more competitive. And then be able to deliver results. In other words, we promote D&I because we want to create a good product. Having diversity within our company will allow us to make a good product and, in turn, be better able to compete. If we can embody D&I in this way, other companies may also become more interested in D&I. And I hope that the work Mercari does in terms of D&I can serve as an inspiration for more companies to take on this challenge.

We’ve made progress with international D&I—next comes gender

―Mercari has been promoting D&I mainly through its Multicultural, Pride, and Women communities. What results have you seen so far, and what challenges are you facing right now?

Shintaro: Hiring people of different nationalities is essential for going global, and I feel that we have been able to see some results there for about four years now. About 80 or 90% of the new engineers joining our company are non-Japanese citizens, partly because the number of engineers in Japan is overwhelmingly small. So, we’ve been making a lot of progress internally, like having all meeting materials and Slack notifications in both English and Japanese. Although, we may have been too focused on that kind of diversity. We have been able to create a good environment for people from overseas to work in because we turned our attention to that aspect of D&I in order to meet global standards. But the fact is that we are lagging behind in terms of gender diversity and inclusion.

Makiko: When I joined Mercari, I was surprised to see fewer women than I expected. Mainly because before I joined the company I had heard a lot in the media and at events about the unique support Mercari provides for female candidates and employees. For example, I once heard that the HR department takes into account that women who have children may not be able to come to the interview because it’s hard for them to find someone to take care of their children while they’re gone. I thought that a company that thinks about these things would surely have a lot of women, but surprisingly, that was not the case.

Shintaro: Right. We still need to work on how we are going to promote gender diversity. That is one of the reasons why we asked Makiko to join us as outside director, and why we are actively hiring more women. Still, we are not making much progress. So, we decided to work seriously on that and launched the D&I Council in January this year, which is an internal committee that focuses on promoting D&I across the organization.

Structure of the D&I Council, an internal committee to promote D&I

—Why do you think you haven’t been able to make much progress in terms of gender diversity?

Shintaro: For technical positions, the number of female engineers is relatively low to begin with. So, if you try to recruit people through normal channels, the gender ratio will inevitably be skewed. But I do believe that, internally, Mercari needs to have a more balanced gender ratio, even if that ratio is disproportionate outside the company. In that sense, I think that at the beginning we hadn’t fully understood that solving this issue will make Mercari more competitive. And it’s only a matter of creating an equal work environment that allows women to perform and thrive. Of course, this is no easy task, but we don’t plan on giving up, and I believe that solving these issues one by one will take us in the right direction.

One step at a time

—What kind of environment or mechanisms do you think you need to have in place, specifically?

Shintaro: Well, one mechanism we have is “Merci Box”, a benefits package we have that includes childcare leave for both men and women and financial support for fertility treatments, but we also need ways to help eliminate things like gender bias. We have already developed an internal Unconscious Bias Workshop to help everyone understand their own biases. It is important for things like nationality, culture, and gender to not affect the hiring and evaluation processes.

Mercari published in-house training materials for “Unconscious Bias Workshop”

—Are there any differences between men and women that should be considered?

Shintaro: One thing I thought was really interesting when I read Kathy Matsui’s (former Vice Chairman of Goldman Sachs) book was the difference in the way men and women showcase themselves. For example, many women tend to not show off their work and achievements very much. If you ask a man if they want to lead a project, they will say, “Sure! I can do this!” But a woman would probably say, “I’m not sure I’m ready because I’m still lacking so much experience”. We need to take this into consideration and encourage people according to their needs. Of course, this is just one trend that Matsui noted, but I hope we take concrete actions to make as much progress as we can.

Makiko: Yes, I agree that certain tendencies may depend on gender. And also, the fact that these biases are part of our unconscious mind make them more difficult for us to notice. I once heard about a company that made a job description and had an outside professional organization check its content. Apparently, they found a number of expressions that were based on certain biases, such as race and gender, and when they corrected them, diversity among the applicants increased by several points. So, it might be a good idea to incorporate outside perspectives when we take action.

Shintaro: That’s an interesting example. We don’t really work with an external company, but we do double-check job descriptions thoroughly within Mercari and try to eliminate any biases in terms of gender and job type.

—In the D&I survey we conducted across the company in January this year, around 85% of respondents said that they think D&I is an important way for Mercari to achieve its mission, and about 60% said that they can explain what D&I means in their own words. What do you think about these numbers?

Shintaro: It depends on how you look at them… I don’t see the numbers and think, “15% of people don’t feel that diversity is necessary, this is bad,” but rather see this as proof that we need to continue making progress, even if only a little bit at a time. There may be some disconnect within the company, but I feel that we can probably solve that. We have been discussing this issue among executive members for about four years now, and while that has brought us here, we still have a long way to go. This is not something we can solve overnight, so we have to take our time and come to a common understanding.

—Another interesting thing about the survey is that it shows that members who have children see Mercari as diverse and inclusive. Many people all over the world find it difficult to work while raising children, but Mercari seems to show that there’s another way.

Makiko: That’s wonderful! And that’s probably not only thanks to Merci Box. I feel that this is the result of having a work environment where members who have children can develop their skills and feel that their growth is recognized by people around them.

Discussions about D&I at different layers within the company

―Mercari started working on D&I in 2018 with a group of volunteer members. What did you think about that initiative at the time?

Shintaro: The executive team already knew D&I was important, and we had been making some progress. So, in a sense, it felt like our members were recognizing our efforts.

—What did it mean to you to see employees beyond the executive team taking up initiative?

Shintaro: I think that it brings all our employees into alignment when everyone joins the discussion, so in that sense, it meant a lot to me. We all have unconscious biases based on the environment we grew up in and the information we’ve been exposed to. There are also cultural biases, which are deeply rooted in society. But still, I think that the executive team also needs to be involved in order to make further progress with D&I. That’s where the idea of creating a D&I Council came from.

—What role will the D&I Council play in the future?

Shintaro: We don’t want the council to be the one telling people what D&I is and what they should do. We want to create a space where everyone can get together and think about D&I. If this leads to discussions about what perspective we should have, or if we can come to a consensus on what D&I means to Mercari in a way that makes sense to everyone, even better. Otherwise, we’ll end up with something that’s just pretty on paper, but won’t be implemented in the actual organization. It’s a never-ending conversation, so all we can do is think carefully about what kind of organization we want to be and align our ideas.

—I’m sure there’s a lot we can learn if many people at different layers within the company discuss about D&I.

Shintaro: Surely. That’s why it’s important to create an environment where everyone can speak up openly if there’s a problem. This is not about putting people on the spot. The D&I Council members and executive team members also make mistakes. We want to understand each other and work together to create a diverse and inclusive environment that is unique to Mercari.