Eight Keywords for Delving Into Mercari: Our First 10 Years and the Potential and Future We Seek to Unleash / The First Keyword: “Mission”
February 2023 marks the tenth anniversary of Mercari, Inc. We now have a new Group mission of “Circulate all forms of value to unleash the potential in all people.”
Here at Mercan, we are beginning a new series feature called “Eight Keywords for Delving Into Mercari: Our First 10 Years and the Potential and Future We Seek to Unleash,” where we will shine the spotlight on the thoughts and dreams put into this new Group mission and what we intend to achieve in the future. We will hear from key people who will lead Mercari into its next era, and try to paint a picture of the present and future of the organization that is Mercari to help us imagine how we can contribute to the company in the coming ten years.
The first keyword is also the core of everything that Mercari has ever done: “Mission.” We talked to Naoki Aoyagi (@naoki), Senior Vice President of Japan Region and CEO of Mercoin, Inc., and John Lagerling (@john), Senior Vice President of Global Strategy and CEO of Mercari, Inc. (US), and asked them the story of the new Group mission, as well as their vision of the future. These two leaders who also happened to join the Group around the same time have insights that only they can provide.
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Naoki Aoyagi (@naoki)After working at Deutsche Bank, Naoki Aoyagi moved to GREE where he held the positions of CFO, CEO of GREE’s US corporation, and general manager. In November 2017, he assumed the role of Merpay CEO. His responsibilities included promoting Mercari’s payment and financial businesses utilizing his expertise of the financial and tech industries on a global scale. He took on the role of Chief Executive Officer of Mercoin, Inc. in April 2021, and Senior Vice President of Japan Region (head of Mercari Group’s Japan businesses) in January 2022.
John Lagerling（＠john）John Lagerling holds a masters from the Stockholm School of Economics and conducted his master’s thesis research at the University of Tokyo, Graduate School of Economics. After spending seven years at Google in various leadership positions, including Director of Android Global Partnerships, in 2014 he assumed the position as Vice President of Facebook, Inc., where he headed global business development, mobile partnerships, and other business partnership initiatives. John joined Mercari, Inc. as Executive Officer and Chief Business Officer in June 2017. He assumed the role of Senior Vice President of Global Strategy in addition to his position as CEO of Mercari, Inc. (US) in January 2022.
Discovering their own missions during the discussion phase
──Let me begin by asking you the background of creating this new Group mission.
@naoki：While it is true that the new Group mission came to form at a momentous time, namely the tenth anniversary, I think the seeds of its discussions were sown as far back as five years ago. All of Mercari Group’s businesses have grown considerably, and many new possibilities have opened up. This brought in many new Go Bold challenges that ended up exceeding the scale of our original mission.
Of course there were many businesses along the way that we took on but that didn’t succeed, but these past five years I would like to say that we have managed building and chaining new businesses together very well, with the marketplace at the center of it all. Now that it is time to scout new horizons as an entity, the timing proved itself to be perfect for an all-new mission for the entire Group.
In 2017, which is when I joined Mercari, the marketplace grew remarkably. We began seriously taking on the challenge of going global, collecting a huge amount of talent from all over the world. Shintaro (Shintaro Yamada, Representative Director and CEO of Mercari) very often tells us to “take liberties” with our work. As each member, myself included, was coming up with new visions and dreams for the future, discussing these together naturally led to the conversation of coming up with a new Group mission.
──So the conversation has been going on for a long time!
＠john：Another factor behind the decision that we would formulate a new mission was the transfer of Koizumi (Fumiaki Koizumi, Director, President, and CEO of Kashima Antlers F.C. Co., Ltd.) to Kashima Antlers as CEO. He was a key person to the original mission, and his leaving the marketplace ended one generation and started another, in a sense.
It is of course thanks to Koizumi that Mercari is where it is now, but it is true that over time, the people holding key positions for the entire Group have changed. This of course includes Naoki, Tamo (Hirohisa Tamonoki, Senior Vice President of Global Expansion), and even myself in a sense. Mercari is still Shintaro’s dream; that hasn’t changed. But over time we have managed to build a workplace where each person can voice their own opinion, the collection of which over time has formed what is now our new Group mission.
@naoki： I’ve been involved in the work of starting new services that leverage the strengths of our marketplace for a long time now. I’ve often wondered the purpose of us chasing other businesses as I was working on them, though. For a long time, I felt potential in us helping people who themselves have hidden potential and/or the mind to take on challenges by building up their credit. Merpay’s mission statement is “Building trust for a seamless society.” We have been discussing since 2018 that this mission is an essential element in achieving Mercari’s original goal, and that Mercari has to be an entity empowering each user to realize their potential and support them throughout that journey.
──I understand that in the new Group mission, “Circulate all forms of value and unleash the potential in all people,” the part of “unleash the potential in all people” is an all-new message.
@naoki：From our perspective, the point is to bring Mercari not front and center, but instead beside its users, always in support of them. We may have created the platform that is the marketplace, but it is the users who are the protagonists, and we only play supporting roles in their lives. And because that notion is very central to what we do, we aimed to achieve not a marketplace created by just us, but rather an open one.
@john：As we are also in turn supported by so many users, and have built so many touchpoints, Shin, Naoki, and myself as well had the entrepreneur-like question of “What can we do?” in our minds. Putting the answer into a mission statement was an idea that came much later, though. (laughs) But it is human nature to grow and evolve, no? Sometimes you can only understand what you were thinking after the action is already done and you’re looking back at it. Everyone has moments like that. Similarly to how iterating that sort of experience over time builds the character of a person, we were able to iterate and eventually “discover” our new mission.
@naoki：Yes, we had to “discover” it. I myself wasn’t able to settle on anything for a long time, actually. Shintaro often said that it was okay to take our time with it. He chose to continue discussions rather than forcing the project to the finish line.
＠john：I was also prepared to pause the project for a while. Because the discussions didn’t seem like they would ever come to an end, I began to think that maybe a Group mission would not be beneficial for everyone. And there would not be anyone to blame for that. All things have to happen at the right time, so I thought maybe the time had not come yet. I felt frustrated because of that, but Naoki’s suggestion of putting the discussions on hold put me at ease. I did not have the courage to voice such a bold idea.
＠john：Yes, really. (laughs) I’m not saying that in a joking manner, though. Taking that break allowed us to get away from the constant tension and refresh our thoughts and senses. I do believe that pause ultimately led us to a better result. It probably isn’t very interesting to hear about the dead end we hit, but it did happen so it’s a story worth telling.
@naoki：From the beginning we were discussing whether it was necessary to make such a change now. Each of the businesses is in a different phase, and circumstances change by the second. It couldn’t have been helpful to only focus on creating a Group mission ahead of everything else. If the mission doesn’t fit the strategies and transformations of the business, then the people actually pushing the business forward will not be able to fully sympathize with it. It shows you how much gravity a mission has.
＠john：Naoki and myself were part of the team formulating the Group mission, but we also have to represent the voices of those running the business. If we can’t come up with a mission that we all will stand behind, then we won’t be able to call it “our” Group mission.
@naoki：In the process of formulating the Group mission, one thing that especially left an impression was that the suggestions for improvements from the US team got deeper and deeper over time. There were also other prospective missions, but the wording for those didn’t feel right. The messaging was roughly similar, but the meaning of the words didn’t carry the nuance of “Mercari as a global tech company” very well.
As we strive to achieve global success, a mission statement that can’t fully motivate the members battling on those fronts would eventually lead to schisms. Although it is possible that we still would have been able to perform alright, we chose to take a step back and resolve any discrepancies. It took a long time, but I’m very glad we were eventually able to get it right. (laughs)
The potential that Mercari is to “unleash”
──Can you look back upon 2017, the year both of you joined, to reflect upon your perspective of Mercari as a company and the possibilities you imagined?
＠john：Allow me to answer first as the “older twin brother” who joined slightly earlier. (laughs)
@naoki：Go ahead, big brother! (laughs)
@john：My first impression was that Mercari’s competitive power as a global company based in Japan was coming to form. I saw that many highly skilled members shared a common vision and that the business itself was growing rapidly. These gave me high hopes from the start. Meanwhile on the US side, even though Mercari US started out as a very rushed project, to say it bluntly, the business was still able to march ahead. I thought that if the points of improvement were properly addressed, there was great potential of success.
@naoki：I used the US version of Mercari when I was living over there. It was quite an unrefined service back then. After John joined, I remember observing how the business grew as he took on improving the basics one by one, instead of adding shiny and fancy features. This in fact led to great growth between 2017 and 2020.
When I joined Mercari, I had one-on-one conversations with Shintaro and Koizumi, asking them about their future business strategies. I believe John did the same. Koizumi told me back then that he thought the Japan business would grow for sure. We had 10 million monthly active users around that time. He said that those figures would definitely double, and even grow three to five times. Right now we have double the number of MAU compared to then, but I believe we are still far away from achieving the full potential of Mercari.
＠john： I remember telling Naoki about Mercari’s problems. I don’t remember exactly which problems, but I made sure to be honest and not just fluff it up. I wanted Naoki to join badly.
@naoki： Inside the organization you can’t help but notice what’s missing and what can be improved. I felt so much potential and observed much vigor. Of course, there was so much that was left to be desired back then. We’re talking five years ago. The canvas was still mostly empty. It’s a huge challenge for a marketplace platform provider to launch a fintech service.
On the other hand, coming back to the present, we are now in a growth phase different than when Mercari was listed on Mothers. We are about to take a whole new step. This new Group mission, while it includes the missions we have followed up to now, is also a statement for getting rid of barriers and boundaries which held us back a bit. There cannot be a better time than now to make such a statement.
──Does that mean the creation of the Group mission will bring about momentous changes in the business itself?
＠john：Maybe not one huge, momentous change, but rather multiple changes that will slowly demonstrate their impact over a long period of time. Half of what is stated in the Group mission is already becoming reality, while the other half is our dreams for the future.
Mercari has a culture of expecting personal growth from its members alongside the growth of the business. This is one of the reasons why there is so much attention on this company from all sides. What I mean by “growth” here is reaching more users and our current users using the service more often. In other words, being more useful to more people. I believe Mercari’s technologies, alongside its ESG initiatives, have already been contributing to the good of society. However, we can only help with solutions as long as we are able to make a profit. It would not be the whole truth if I told you we are only aiming to achieve the mission and nothing else. Any conversation about the mission tends to turn a tad romantic, but I don’t think we need to shun away from mentioning financial gains at all. It’s not evil to be a for-profit organization. I think we found a good balance in that aspect as well.
@naoki：My interpretation of it is that I feel we must make a major change in order to grow the business to the next level.
We’ve made it to 20 million MAU, but making it to 30 or 40 million won’t be possible by just repeating what we have done so far. We need to involve different services or brand-new stakeholders and expand our horizons that way.
We can of course go for a well-behaved power play with our synergetic marketplace and fintech businesses, but the potential that Mercari needs to unleash, as well as the ideal form of a global marketplace, still has some missing links waiting to be found. To find those links, we need to be open to many different methods and businesses. I believe this new Group mission is the change to provide the positive impact we need.
＠john： Makes sense to me. On the other hand, the fact that Mercari is always looking to do new things can be both a blessing and a curse. I believe respecting the existing businesses and operations is more important than new challenges. It takes a great deal of resources just making sure that our services run smoothly every single day. Companies like Mercari who have their roots in start ups tend to always look for “the next thing.”
Naoki said this about how the service was five years ago, but I believe we still have a lot of blank areas on our canvas, and a lot of possibilities for how to fill them. However, the marketplace business model is still the core. We need to recognize the grind and put in the effort day in and day out.
@naoki：Looking ahead at what possibilities await us, the part of the mission that says “Circulate all forms of value” leaves a lot to the imagination, and that’s very promising. I believe the marketplace has contributed much in the way of realizing a circular economy, but if we were to focus on how much we have been able to realize the transfer and exchange of value, we still have some categories on Mercari that are not very strong in terms of engagement. Examples include rights and digital assets. Our current approach will not be enough to change that. We need to mix things up and expand our reach. The new Group mission will allow us to further unleash the operations that have already been going on to a certain extent.
＠john： From my point of view, I feel great excitement and potential seeing highly skilled people such as Mark (Masato Yamamoto, Fintech CEO), Jeff (Jeff LeBeau, Marketplace CEO), Wakasa (Ken Wakasa, Marketplace CTO), and other key people come together under the leadership of Naoki to take the business to its next phase.
@naoki：In 2022, we established our new Center of Excellence in India, which promises a great deal in terms of global expansion, as we were only based in Japan and the US up to now. Amidst all these fresh winds blowing about, I see more opportunities for the next generation of leadership, the names John just mentioned and more, to achieve great results. This leadership includes people from Europe, such as John and Akis (Aki Saarinen, CPO of Marketplace), as well as people from Asia. Creating the right environment for such talent to perform well is the best leverage Mercari can have over the market. I don’t mean to be overly praising my own organization, but I do believe having this potential and utilizing it properly will create an even more interesting Mercari in the days ahead.
＠john：As the person responsible for global strategy, I see that the US economy has gotten worse recently, making for quite the harsh conditions in terms of external environment. We had to make some tough decisions when facing adverse winds. But still, Mercari US is loved by more people than ever now. Even if we haven’t been able to achieve huge growth, we have been able to brave the storm. I believe this next year will give us the opportunity of focusing on how we can make our existing users happier. That is why, even though the conditions are not at all easy, members of the US organization are motivated to tackle what’s ahead. Each member has higher productivity and our decision processes have sped up.
The essential work to “circulate all forms of value”
──Mercari’s primary focus has been the creation of a circular economy. Now that we have a Group mission aiming to “circulate all forms of value,” what are the issues you feel should be addressed immediately?
@naoki：Up until two years ago I was contemplating the value of intangible assets, often represented by NFTs. This past year, however, there have been major changes regarding the value of things, and my thoughts have also changed since. In addition to the depreciation of the yen and higher costs for raw materials, the costs of logistics have also gone up. As prices change at breakneck speed, if the market fails in some way or another, I believe that Mercari will be there to help cover the deficiency. As opposed to the fixed prices of primary distribution, we have the elasticity of a marketplace on our side, able to adapt to changes in the economy.
We are able to fulfill that role in some areas, but for others, the changes in prices are happening more intensely than anticipated, which means we have to keep up with the pace to not get left behind. Mercari is able to provide a personalized experience to its users, where they are able to find what they need, discover things they want, and match with people who will sell those items to them. This means there is a lot we can do in terms of holding a complementary position to the primary distribution market. If we can fulfill that role completely, we can become a service essential to society. I believe the essential work we must do lies in making the marketplace flexible enough to fully adapt to the changes in society and the economy.
＠john：This is going to sound very business-y, but the value of things is attached to time. Within the finite period of time that is life, people use the things they need to use at the time they need to use them, and once their needs are fulfilled they pass it along to the next person. This is the cycle that Mercari has supported so far. It is not just material resources that hold time-based value. So Mercari must be a platform that can provide foundational support for people’s lifestyles, with services including fintech.
As technologies like VR and the metaverse expand in the future, new forms of value will continue to come into existence. Mercari, in that sense, has not reached its final form. Even for us that vision is too difficult to see now, which can be a little concerning. But this path we are on is that of a great adventure, and that gives us more anticipation than concern.