Mercari’s Shintaro Yamada discusses what makes a truly strong organization and person
Eight years since the company was established in 2013, Mercari has grown into Japan’s top unicorn company—the term for any privately held startup valued at $1 billion or more. Superior product development, marketing that captures user insight, taking the Mercari name overseas…
Mercari was able to grow into the company it is today thanks to its people.
Indeed, the company has continued to attract talented people since its founding, backed up by a history of investing in people more seriously than any other company in Japan. Around half of the engineers at their Tokyo office are from overseas, with the organization becoming increasingly diverse.
What is Mercari’s idea of a truly strong organization or person? We sat down with its founder, Representative Director and CEO Shintaro Yamada, and asked him about his future outlook to uncover the source of Mercari’s strength.
※This article is a repost from Newspicks
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Shintaro YamadaAfter graduating from Waseda University, Shintaro Yamada established Unoh Inc., where he launched various internet services including “Movie Life,” “Photozou,” and “Machitsuku!”.In 2010, he sold Unoh to Zynga. After leaving Zynga in 2012, he went on a trip around the world. In February 2013, he established Mercari, Inc.
The unchanging, unifying force behind Mercari
Yamada: Since the company’s founding, the idea has been to “create an internet service that is used around the world.”
I took this on because I wanted to do something bigger; not just by myself, but as an organization, as a company. That’s why bringing together the right people has been so important. We take a lot of pride in that.
Our business has grown, and the organization has always changed rapidly, but my personal approach toward people has remained basically unchanged over the past eight years.
The core of our hiring approach has been to find people whose goals resonate with our mission: “Create value in a global marketplace where anyone can buy & sell.”
We want to know whether someone can embody our three values: Go Bold, All for One and Be a Pro.
Mercari as a product of individuals
What’s important for the individual working with us, though, is whether what they can do at Mercari matches what they want to do.
What kind of opportunities can Mercari provide? What will they get in return?
More than just making money, what’s important is the individual’s desire to have a positive effect on the world, to leave their mark on society, and whether that matches with the direction of the organization.
At Mercari, we have a lot of excellent members who each have the potential to create their own businesses.
These kinds of people have options. They don’t have to work for Mercari; they could go wherever they want to. If you tell these people that you want them to do this kind of work because you want to do this kind of business, it won’t resonate with them.
It doesn’t matter how hard we might try to recruit them, because they won’t be interested if it deviates too far from their own goals. The biggest impact on their performance is whether they’re enjoying what they do.
I try to meet up with friends from various industries on a regular basis. They inspire me. These days I’m always keeping in touch with them, checking what they want to do.
If I think it’s something they can achieve at Mercari, I tell them about the different opportunities that we can offer. Those people that we’ve gathered together have helped build Mercari into what it is today.
Of course, some people join and others leave, but there are some people who come back again after leaving us.
Our long-term vision remains unchanged, but our immediate challenges are always changing. So there are times when people whose aspirations lined up with the company when they first joined now find that the company is in a different place.
In a sense, it’s only natural that these people would choose to walk a different path at that point. We think it’s fine for our members to leave Mercari to do whatever it is they want to do, and we welcome any chance to work together with them again in the future.
The relationship between people and organizations is fluid, and as management, I believe that being able to provide a variety of opportunities leads to organizational strength.
The desire to bring together a multinational organization
Our efforts to hire the best candidates have led to around half of our engineers today being non-Japanese.
Our engineers are from all over the world: India, China, Taiwan, Singapore, Belgium, etc.. It’s quite natural to hear people speaking English with each other in the office.
They all have their own reasons why they chose Mercari as a place to work. They’ve been drawn to Japan for a large variety of reasons, as well—not only because of their interest in the country’s long history and culture, but due to an interest in the gaming and manga subcultures, the low crime rate, and the delicious food.
That said, I believe that our mission of creating a global marketplace is the central, unifying force in the company.
The C2C transactions that Mercari makes possible—these are helping fulfil a very primitive, human desire.
You could say that the exchange of goods and services was the origin of civilization. There’s something very appealing about Mercari to us as social animals, to think that other people would be thrilled to have something that we don’t personally value very much.
There is a kind of emotional component in Mercari’s buying and selling process.
I think a lot of our members joined the company because our idea resonated with them. They liked the idea of building a universal human activity—sharing and recycling—into an internet service.
As our company expands, so does our responsibility to society
Our goal is to build a circular economy.
As we continue to grow, I am keenly aware that we need to take on a role similar to a public service and think more about our responsibility to society.
We aim to create a circular economy by integrating primary distribution and secondary distribution.
By providing secondary distribution (Mercari) purchasing/preference data to primary distribution partners (manufacturers, retailers, etc.), we can optimize primary distributors’ product development, from production to sales, and better forecast demand.
In 2017, there was an issue of sellers listing cash, and this was picked up by the media and customers, who said, “a service platform called Mercari is leaving these malicious listings unchecked.”
We really regretted how ignorant we had been of our position in society. It made us take a step back and consider what good Mercari can do for society and what the world needs right now.
If we want to expand our business into one that is indispensable to society, our service has to be widely accepted by customers with a wide variety of perspectives.
I realized that we can’t keep on being so aggressive. We can’t keep pushing forward without thinking. Not if we want to keep growing.
During the COVID-19 crisis, we also got a lot of criticism for having masks listed at exorbitant prices during the mask shortage.
We had already been holding meetings about listings like these within the company every month, but we thought that we needed more general principles for judging the listing criteria. So we worked together with outside experts to formulate our new “Marketplace Principles,” which we intend to periodically review and revise as needed.
In March 2021, we announced an alliance with Fast Retailing to pursue a range of measures to address reselling. Fast Retailing shares product and launch information with us beforehand so that we can ensure popular items are not resold in bulk on Mercari.
I believe that another of Mercari’s responsibilities is to deepen alliances with other companies like this, in order to bolster the retail and distribution sectors as a whole.
Clear impact from D&I
In addition to recognizing the importance of social responsibility, I have personally undergone a big change in my thinking towards diversity and inclusion (D&I).
A D&I perspective is essential for expanding globally and domestically, as well as for developing services for diverse customers.
Of course, the more diversity within the organization, the more difficult it becomes to reach a consensus. Members bring their diverse values and perspectives, causing internal discussions to take that much more time and energy.
But more recently, I can see how those discussions really do lead to higher quality ideas. We get opinions from different angles and deeper discussions, finding the important, essential points. Making sure those essential points are reflected in the product leads to an extremely solid service.
Look at iPhones and Google’s services. They’re very simple, used by people throughout the world. They don’t need instruction manuals because they focus on universal elements common to all worldviews.
This is not just something for internet companies to think about. It’s an attitude that any consumer-focused business needs to have.
I am confident that D&I will be what sets companies apart and helps make their services universal.
That being said, although diversity within the organization has progressed, it’s just the beginning for us in terms of true inclusion.
We want to not only overcome the boundaries of nationality and gender, but to go further than that, to create an environment that respects diverse experiences and perspectives. That’s why we’ve established the D&I Council as an organization directly under me, to work directly on creating that kind of workplace.
Our organizations are not going to change overnight but by making steady efforts, year by year, I have high expectations that we’ll be able to establish a concept of D&I unique to Mercari.
With its foundation firm, what’s next for Mercari?
Management is like a game of shogi with infinite moves, and in extreme cases, you find yourself playing on top of the lines.
Those daily decisions we make from among the near infinite choices coalesce to form the direction of the company.
That’s why it’s important to make correct decisions—not quick decisions.
But what constitutes a correct choice depends on where the company is at the time and what we’re trying to do. Nobody can really know whether it’s the right decision in the moment.
That’s why I try to collect as much information as I can and decide after considering everyone’s opinions. Even if we come to a conclusion that isn’t my own first choice, if everyone discusses it and agrees, in the end we can do what we call “disagree and commit.”
If something goes wrong, we go back to our meeting minutes, have another discussion about what wasn’t considered, admit our mistakes, and make a course correction.
This thorough, discussion-oriented approach to decision-making is a fully-entrenched part of Mercari’s culture.
It’s thanks to us exchanging diverse, clashing opinions that we’ve been able to focus on our three businesses—Mercari JP, Merpay and Mercari US—and mark the successes we have That’s what’s gotten us to where we are now.
Currently, the number of users on the Mercari marketplace app has expanded to 19.04 million users per month, and our gross merchandise value (GMV) has expanded to 756.6 billion yen annually.
We started Merpay in November 2017 to provide financial services. It began trading on the Tokyo Stock Exchange (TSE) Mothers in June of 2018.
I’m more and more certain that we’ve made the right move, as we see more and more smartphone-based C2C business concepts in the United States and abroad. There’s clearly a lot of potential for growth in the global marketplace yet.
From here on, we’re working to double or triple the number of Mercari users in Japan, while introducing new tech to further improve safety and security.
Transparency leads to success in the global marketplace. But we can’t really call Mercari a global product just based on our track record in Japan and the US. We’re going to keep challenging ourselves and expanding.
We set up Souzoh, Inc. in January of 2021 to support the planning, development, and operation of new businesses. This was followed by the launch of Mercoin, Inc. in April, which will focus on planning and developing cryptocurrency and blockchain services.
None of this would have been possible three years ago. But now we know more about financial business licenses and legal compliance, we have the knowledge we’ve cultivated at Mercari, and we have a track record of increasing profitability.
The original Souzoh closed its doors in 2019, but the people we brought on and the lessons we learned there have built the foundations for new businesses. Now it’s time for us to think about taking on new challenges with a new, improved Souzoh.
Today, Mercari has grown into a large organization of more than 1,700 people.
We have an opportunity now to use the assets we’ve amassed to establish new businesses that can have a greater impact on the world.
There seems to be a kind of preconceived notion that the bigger an organization becomes, the more they play it safe and take things slow. I can tell you, that’s not the case for Mercari.
We’ve seen a great response to our three businesses, so now we’re ready to expand into more peripheral businesses with Mercari at the core.
As a tech company, we are in the expansion phase. Let’s see where that expansion takes us.
Interviewer: Takuma Go
Contributor: Rumi Tanaka
Photographer: Hiromichi Matono
Design: Kirika Kosuzu
Editor: Michiko Kashimoto
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Production: NewsPicks Brand Design