New Group Company Merlogi’s CTO and CPO Reveal Their Thoughts: “All Our Members Are Product People”

On October 28, 2021, Mercari Group announced the establishment of Merlogi, Inc.

Meet Merlogi CTO Ryan O’Connor and CPO Kei Kinoshita, two Mercari veterans with substantial experience in Mercari’s Japan business. In this edition of Mercan, Merlogi HR representative @asai interviewed the two executives about their expectations and views on the latest Mercari Group company.

Why did you decide to move from Mercari to Merlogi?

ーTo begin, I would like to ask both of you what led you to move from Mercari to your current positions.

@kei: After I joined Mercari in June of 2016, I became a product manager (PM) for the US and UK versions of Mercari. Then in October of 2018, I started working on Mercari Japan business. Finally, I worked as the Product Owner (PO) until February of 2021. The month after that, I stepped away from the Product organization to move to the Business Operations Division (the division that looks after business-side operations such as offline strategies). For a long time, I had been focusing on Mercari, but when I moved to the Business Operations Division, I started to work as a Product Owner for new business.

Mercari has now become this colossal product used monthly by over 20 million users. But when you look at this in comparison to the number of people in Japan who are on the internet and the popularity of smartphones in this country, there are still a lot of people who are not using Mercari. In expanding our number of users, we must of course expand our existing businesses, but I also feel that Mercari Group has to use new businesses to increase the number of usage scenarios we cover. Out of our many new businesses, after I left the position of PO for not-yet released projects, I became involved in Mercari Repair.

@kei: When we moved ahead with the product planning for Mercari Repair, we talked about creating a separate company to take care of logistics. At the time, @nokazu (Merlogi Representative Director & CEO Kazuya Nobe) said that a product partnership with Mercari Repair was something to think about. The way I saw things was that if I thought of a logistics company in the wider context of offline service experiences related to Mercari, such a company would be highly compatible with Mercari Repair. It was my thoughts on building an offline experience of Mercari’s web service that gave me the role as the CPO of this new company.

ーEver since you joined Mercari five years ago and worked as a PM, you’ve continued to push for offline business ventures. Does your background from before you joined Mercari include areas related to offline business?

@kei: No, it’s rather the opposite; the online service experience has always been my primary battlefield. But in addition to being a PO for Mercari, I saw the ripple effects created by offline touchpoints like Mercari Post and Mercari Workshops, from which I got a really strong sense of potential for new business. Now obviously, as people we live our lives offline. But there are all sorts of situations where I’ve felt inconvenienced as I go about my regular day. However, having online products is convenient. For example, being able to order a coffee from Starbucks using an app is really convenient. I feel like there are a lot of ways that we could make things more convenient by fusing offline and online services.

Kei Kinoshita (@kei)

ーThank you. @Ryan, I believe that you, on the other hand, have been working in logistics as an Engineering Manager (EM) ever since you joined Mercari, correct?

@Ryan: That’s right. In October of 2019, I joined Mercari as an EM working on a backend engineering team. Before I joined, I heard that the team I would be assigned to worked in logistics, and my first impression was that the work sounded interesting. Actually… or should I say coincidentally, my family started a company related to logistics in 1906, so I have that background as well. I wasn’t even looking to work for a logistics-related company, but as fate would have it, the job found me.

Once I had been working for about a year, in January of 2021 I was not only in charge of logistics, but of Mercari’s overall customer journey as a service. During that process, @nokazu and @aki.nakanishi, a PM who was working on the development of Mercari’s offline service experience, told me that they were going to create a new way for the company to do logistics. To start, I actively exchanged ideas with people who sought my opinion on how product development and an organization should work from the perspective of someone who has worked in engineering. But I didn’t just give my advice and opinions on what we should do or improve on, I also voiced some complaints. And when I did that, I guess I offered too many complaints, and so they invited me along saying, “in that case, @Ryan, let’s work on Merlogi together.” That’s how I got here.

Ryan O’Connor (@Ryan)

ーYou complained your way in! I have to ask, what sorts of things did you share your opinion about?

@Ryan: More and more new Mercari Group companies were being established, and I said that I was worried about whether communication between divisions was working. This is why I gave a range of advice, like how many people we would need to create a development team for the new company and what our final product should ideally look like. In addition, I also shared my thoughts about how to build Merlogi so that we aren’t just looking at our own growth, but beyond that to the day when Mercari Group invests in other new businesses and presumably creates new subsidiaries, so that we can absorb the extra load. Of course, we should have a better picture of what our collaboration with Mercari will look like. The image I conveyed of Merlogi was that it should not stand alone, but rather grow with all of the companies of the Mercari Group.

The shared idea at Merlogi that “all our members are product people”

ーListening to you talk about your individual backgrounds, I got a sense of your original ideas about the Mercari products and organizations that you both handled. What I’d like to ask you about next is your own concepts of products and engineering.

@kei: My personal motto is “all our members are product people.” What this means is that to us, the act of creating products is a procedure, and on the other then of that procedure are our users. Creating designs and writing code are both parts of creating our products. The roles of PMs, designers, and engineers are all different, but they all create our product. I don’t want teams to simply proceed with their work based on the specifications that their PMs write. I want all of our team members to exchange opinions, look at things from the user’s perspective, and ask themselves things like what they think would best serve the user. I picture all of our members thinking about our users and products, and within that flow, writing specifications and creating tickets are just a few of the PM’s roles.

Regardless of what a person’s role is, I want all of the members involved in projects to discuss the product they are working on. Planning, UI design, and development are all processes intended to build the product, and that product is built for our users. We want to leverage the building of our service experience and of our technology in a way that will contribute to our users and to Mercari’s business without making the product our only goal. At Mercari, there are a lot of members who feel the same way, which I find reassuring, but I have this as my motto so that my own self discipline does not waver. Then again, we’re barely out of the starting gate, so maybe it’s a little too strict… (laughs)

@Ryan: I feel the same way as @kei. From an engineering perspective, technology is a means of creating an appealing user experience. We leverage innovative technologies as tools for creating the best possible products for our users. I think that what we are able to build for our users and our business is not just a product for the present, but rather infrastructure that will be leveraged for future needs. In other words, I feel that we must not neglect our commitment to building the foundations of our business with this sort of mindset. I think that this is an important role of engineering. As we create our business and product going forward, the engineers will also have to have this mindset.

ーIt’s my understanding that you will both remain Mercari employees and take on the roles of Merlogi CPO and CTO, respectively. What sorts of ties do you want to form between your existing roles at Mercari and your roles at Merlogi?

@kei: Well, for example, users will be able to list broken items. After it is shipped, we will take possession of the package and connect with a repair service to have the item repaired. That’s the sort of value-added service that I would like to provide. Merlogi is a service born from the needs I have seen while managing Mercari. That is why I want to create synergy between the different services that Mercari Group provides. It would make me happy to know that the sincerity of our commitment to creating an offline service experience was conveyed to our users. This will further accelerate the issues and contributions to the world that people associate with Mercari’s services.

In this sense, we would like to collaborate with Mercari in simple ways and based on the user’s experience. I think it would be even better if we could start by looking at what sorts of service experiences we can provide between the current forms of Mercari and Merlogi, and then planning and designing around that ideal while each of our teams blends their skills together to find the solutions needed to make it all happen. There will probably be project teams that combine members from Mercari and Merlogi. To turn this idea on its head, I would prefer if we did not start drawing boxes for each other to show whose job ends where. If I could bring us back to the starting point, I would like us to go forward by thinking about what would be a good user experience or what would link to a good user experience as our focus.

ー@kei, is this why you remain registered as a Mercari employee as well?

@kei: Yes, I continue to be registered as a Mercari employee as well. I think that this structure is a good one for us to have. At the moment, it is basically a given that the members of each group company work as full-time employees for only their company. And I think that committing yourself deeply to one business is a really great way to work. However, in Merlogi’s case it’s a given that we will work in collaboration with other group companies. In that case, I think a situation where our members are only committed to Merlogi would be less than ideal. Merlogi is still in the startup phase, so I would like for us to be more involved with each service offered within the Mercari Group.

@Ryan: By skillfully merging Mercari and Merlogi, and by using the strengths honed from the technology demonstrated in each product, I am confident that we will be able to build a flexible infrastructure. I don’t want people to distinguish between Mercari and Merlogi; instead, I want us to be a mixture of both.

Looking broadly across the services available today, many of them focus on a service experience that is exclusively either online or offline. I once tried to make a reservation for travel tickets; it would have been a simple procedure if I had used that company’s ticket window, but as soon as I tried to purchase my ticket online, it became this arduous task. I think that having the experience of being able to complete something easily online is great, but I think that covering experiences ranging from online to offline is the sort of thing that people can expect Mercari and Merlogi to do well. I think that by combining the products of Mercari Group, we will ultimately be able to create a balanced online and offline experience for our users.

@kei: To add another point, being able to market our services now to Mercari’s more than 20 million users is one of our strengths. In addition, looking to the future, I would like us to be partnered seamlessly with after-sales services that are highly compatible with secondary distribution like packaging providers as well as repair and cleaning services. Say, for example, that a user sells an article of clothing on Mercari; instead of just sending the item, they could take it to a dry cleaner who would take care of everything so that after the clothing was cleaned, it would be packaged and shipped to the buyer. I think that would be tremendously convenient.

And just so you know, Merpay is already linked to the payment process for Mercari Repair. The Merpay PMs start by defining the requirements of the payment service for us and then communicate closely with us to provide support and establish links that bridge companies. Talking about this now, it seems obvious to me that it shouldn’t matter which company our users deal with, or whether their experience takes place online or offline—the user experience is what matters most. As Merlogi’s CPO and CTO, we will work directly under @nokazu, who is in charge of the Business Operations Division. I wholeheartedly think that a formation that commits us to both companies is great. It’s also good to think of this as not being siloed.

@Ryan: The letters l-o-g in Merlogi are also part of the words logistics, technology, and ecology. For our part, we have every intention of going beyond logistics.

@Ryan: I think of each of the companies of Mercari Group as “multipliers” of the strength of the other companies. From each of the services that are available, we are able to provide good services for our users. Each company has its own services, but putting them together allows us to create a really great total customer experience. Say for instance, if we wanted to move into the payment field to develop a service within Merlogi, I think it would be difficult for us to build something like that from scratch. However, we already have Merpay as one of our partners. Merlogi’s services allow us to unbox new experiences that so far have been impossible for other companies to offer. If we can combine all of our services skillfully in new ways, I think we’ll be able to create experiences that no one has ever had before.

If I were an engineer looking at Mercari Group, I would say that what makes us appealing is probably that our engineers can focus on our products. And this goes beyond our products, since our engineers will get a real sense that their abilities are the multipliers of our services. What’s more, with all of the numerous products and services that we have, they will get to see not just the work that they do on a daily basis, but the status of all of the services, which is also fun. I think that what some might call the less fun aspects of an engineering job, like being in a siloed environment where you only get to see and do your own work, will not apply.

What impression do the CPO and CTO of Merlogi have of each other?

ーFinally, I’d like to ask the two of you, from your individual perspectives, how do you view each other?

@kei: This is purely my impression from own perspective, so if I have it wrong, I’d like you to tell me (laughs). @Ryan believes strongly in engineering and technology, while at the same time he also shares the perspectives of our products and users. I feel that he believes that technology is purely a means to an end. Although, I also have a lot of reverence for technology, of course. How was that?

@Ryan: Thank you. That’s probably about right. Not only do I consider technology important, but also how I should apply my efforts to benefit the company. I apply technology while thinking about what would be good for the company and our users; that’s my perspective. Right now we’re actively recruiting engineers, and the viewpoint I just described is what I want to see in all of our successful candidates. It doesn’t matter how skilled a person is on paper; if they don’t consider their product or business, frankly speaking, that’s a serious problem. But I would like to welcome into our ranks people who have a product-focused point of view and want to build this company.

@kei: I’m sure glad I got that right. If I could say something more about this—@Ryan said that the engineers shouldn’t go to their PM and say, “Hey, what’s happening with such and such? Hurry up and give us a decision!” Instead, he believes that engineers should also be proactive. Of course, deciding on specifications and creating tickets are the PM’s job, so I think that the PM does have to master those tasks. But thanks to this idea, each engineer takes care of jobs like organizing specifications, which really helps us. I also feel that they share the important idea of “simplify the product!”

@Ryan: I think that this is exactly what @kei was talking about earlier when he said “all our members are product people.” At the moment, much like a startup company, Merlogi is operating with very few members, so I myself feel that if one of our members wants to do something, I want them to give it a try and take action. If a person is bothered by there being no existing design or no specifications for something, I say they should do something about it themselves. What I mean to say is, people are free to do what they want. We work a little differently than people do at Mercari’s Japan business, where the service phase and the headcount both differ compared to Merlogi. It’s possible that on teams with a larger number of members, individuals do not have to take ownership of all the details, because a larger number of people means more specialization. But that sort of action is also welcomed at Merlogi. To the engineers who work at Merlogi, this is a big challenge and also a big part of what will make the company appealing.

ーSo @Ryan, from your point of view, what do you think of @kei as CPO?

@Ryan: The product management teams are extremely proactive and highly motivated. Any other PM would probably be annoyed by all the questions they get from the engineers (laughs). @kei’s mindset and stance is that he’s always welcoming to everyone. He actively creates opportunities to get involved with our engineers’ work. I’ve never heard @kei say “no!” to anyone. He also makes time to attend our daily standup meetings, but I get the sense sometimes that he might be forcing himself to do too much (laughs).

@kei: No, I’m not doing too much (laughs). I used to be an engineer, so when it comes to the latest technology, even if I’m not working with it personally, I sincerely want to know about it. I ask people about the sort of technology they are using now and about the latest trends, and I’m generally always surprised by what I learn.

@Ryan: Looking at things from another perspective, I feel that it’s easy to work collaboratively because of how he promotes data-driven product management. It’s indispensable for reliable product management. I get a real sense of the idea “data driven for growth.” In the context of other discussions I’ve heard, there are also members who develop new features seemingly for no reason, but we can see the data. We can see that our members aren’t just making things randomly. They have a sense for looking at our existing data while improving the product to better serve our users.

In terms of Merlogi, we have data that we originally collected in Mercari deliveries. We aren’t just going to run delivery trucks without looking at any data. We can think about making delivery more efficient based on our existing data. This also links back to ecology. I think that being able to improve logistics with a data-driven approach is one of the things that makes working at Merlogi appealing.

@kei: There is one last thing I forgot to say about @Ryan. When I heard that he loved craft beer, I knew that we were going to get along great (laughs).

@Ryan: I’d love to grab a pint with you! Let’s do that as soon as things calm down.

ーThank you both so much for speaking with me today. Merlogi is just getting started, but we are reaching out so that you get to know us. Next, we plan to hold live online sessions covering the business landscape and issues in each of the areas that we cover.