Kazuhiro Mizuno, who serves as the CEO of Minto Inc., has led the production of mobile content and achieved success in various generations, ranging from deco-mail, emojis, SNS-generated content, to NFTs. This time, Mr. Mizuno, who has witnessed the evolution of mobile content, shares his insights on the digital content business and trends in the Web 3.0 era, as well as the monetization of SNS-generated content, in an interview with the CEO and founder of “Sogyotecho” (Startup Handbook), Mr. Kosei Okubo.
About the interviewer, Mr. Kosei Okubo and interviewee, Mr. Kazuhiro Mizuno
Mr Kosei Okubo
Founder and CEO of Sogyotecho. As an executive of a major IT venture, Mr. Okubo noticed common challenges faced by entrepreneurs after starting their businesses. In response, he devised the company’s guidebook called “Sogyotecho” (Entrepreneur’s Handbook). The printed version of the handbook has accumulated a total of 2 million copies, and the monthly web visits exceed 1 million, making it the highest in the field of entrepreneurship in Japan. He is known as an “entrepreneurship concierge,” providing services such as developing the Sogyotecho app, offering free entrepreneurship consultations, serving as a standing committee member of the Cabinet Office’s One-Stop Consultation for Company Establishment, and teaching classes at universities. He is also well-known for his daily entrepreneurship-themed T-shirts.
Mr. Kazuhiro Mizuno
CEO of Minto Co., Ltd. After leading the mobile and app business in his previous position, he co-founded Quon. With character stamps, he achieved over 5 billion downloads. In the blockchain field, he has been involved in NFTs since 2018, with a total circulation of approximately 500 million yen. In 2021, he ventured into the metaverse field, achieving over 240 million yen in LAND sales. Subsequently, he merged with wwwaap, the number one SNS manga platform, and became the Representative Director of Minto.
Establishing the Creator Economy and Supporting Creators Originating from SNS
Okubo: Please tell us about the reasons and background behind starting your own business.
Mizuno: After graduating from university, I joined Terashima Information Planning in 2001 and worked as an editor for a magazine called DTM Magazine. Later on, I worked as a producer of mobile content, including ringtone melodies, deco-mail, and emojis. In 2009, I became the CEO of a subsidiary company and spent two years developing game apps for smartphones. One of the games I developed, called “Touch the Numbers,” where players tap numbers from 1 to 25 in sequence to compete for speed, became the most downloaded game on Japan’s AppStore in 2010. Since my days working on deco-mail and emojis, I had a feeling that Japanese content and creators could have a global appeal. This belief was reinforced when the game app I developed was downloaded by many people from overseas. I felt that non-verbal content and creators, such as games, characters, stamps, and emojis, could resonate globally. Therefore, in 2011, I established Quon Corporation with the goal of creating content and platforms for the global market.
Okubo: So you started your own business by leveraging your previous experience.
Mizuno: That’s right. I wanted to do something that others were not doing while utilizing my experience. Additionally, in 2008, the iPhone was released in Japan for the first time, and I could foresee that the smartphone market would continue to grow for the next decade or so. It was the perfect timing, and I thought, “Now is the time!” That’s when I decided to start my own company.
Okubo: In January of this year, you merged with wwwaap (Warp) and became Minto, right?
Mizuno: Yes. Quon operated as a B-to-C consumer-oriented business, expanding its content, such as stamps and games, for both domestic and international markets, while creating and nurturing SNS-generated characters. On the other hand, wwwaap was engaged in a B-to-B business that connected SNS-generated manga creators with clients. Although both companies were involved with content creators originating from SNS, their target audiences were different in the B-to-B and B-to-C sectors. We believed that by complementing each other, we could achieve synergy as a business, and that’s why we decided to merge.
Okubo: Please tell us about the current situation, half a year after the merger.
Mizuno: Our sales have been steadily growing, and in six months, our revenue has doubled. However, this achievement is not solely due to pursuing synergy. Prior to the merger, Quon had been actively exploring the B-to-B sector while mainly focusing on the B-to-C market. Similarly, wwwaap had also been conducting B-to-B business alongside its B-to-C operations. Although both companies had their respective areas of expertise, by narrowing down their business operations to their core strengths, we were able to increase our revenue. Since the two companies with different cultures merged, ideally, we should have built a new culture from scratch and unified our ways of thinking. However, due to the difficulty of making corrections when sales are growing, we are facing challenges after half a year has passed. We are currently struggling to make the transition not only in terms of the company name but also as an organization, to become a single entity.
Okubo: Amidst the situation where some companies fail to generate revenue even after a merger, doubling the revenue is quite a success story, I believe.
Mizuno: Yes, that’s true. However, the employees still don’t have a strong sense of the merger. The current situation is that rather than both companies working together to generate revenue, they each focus on their respective areas of expertise to increase sales. This makes it difficult for them to feel a sense of accomplishment from working as a team and boosting revenue. Therefore, I am considering spending the next one to two years to establish a proper organizational structure.
Japanese Character Culture: Content with Global Appeal
Okubo: Currently, Japanese pop culture such as manga, anime, and games is gaining popularity worldwide. What do you think is the reason for the international appeal of content like stamps, which came later?
Mizuno: Japanese people have a high level of literacy when it comes to enjoying “subtle signs,” and that’s why Japan’s content and creators excel in various forms of “non-verbal communication expressions” such as characters, stamps, and emojis. Additionally, Japan has a long history of accumulating character content like manga and anime, which makes it challenging for other countries to catch up.
In the case of the United States, talented creators often aspire to the film industry, while in Japan, many aim to create manga, anime, or characters. Therefore, it can be said that the world’s most talented individuals gather in these genres.
Creating manga requires not only drawing skills but also the ability to write compelling stories. Individuals in this field possess multi-talents, like those of film scriptwriters and directors, performing all the tasks alone.
Moreover, what sets Japan apart is that pop culture is properly established as a business, which is significantly different from other countries.
Okubo: In the “Dream Occupation Survey” targeting elementary and junior high school students conducted by Nifty’s “Kids @ nifty” on April 6th this year, “Manga artist/animator/illustrator” ranked first among both elementary and junior high school students. This might be a unique result for Japan, don’t you think?
Mizuno: Yes, I believe so. There are very few countries where manga magazines, like shōnen magazines, are available to read every week. Japan is at the forefront of emoji, stamps, deco-mail, and other developments, and it can be said that it is a country where illustration and character-based communication are highly advanced.
The culture of manga, characters, and anime is ingrained in everyday life, and talented individuals gather in these fields. I think that’s the reason.
The Rise of Content Originating from Social Networking Services (SNS)
Okubo: Your company creates content in the manga and anime genres alongside creators, right?
Mizuno: Yes. Around 2010, various social media platforms such as Twitter started to be used, allowing creators to disseminate content without relying on traditional media. As a result, individuals who create content on social media and companies producing social media content emerged. We are one of those companies, creating manga and characters originating from social media while also engaging in content and creator management.
Okubo: With the popularity of social media, the scope of creators’ activities has also changed, hasn’t it?
Mizuno: Yes, indeed. When new technologies and platforms emerge, new content and creators naturally arise to cater to those platforms. For example, in the case of manga, we have seen a shift from traditional paper-based media to manga consumed on social media. In the realm of characters, stamp-based characters like the ones we create have become popular. Therefore, we try to align ourselves with the trends and generate new businesses in character and manga industries. Furthermore, many creators who post manga on social media are not necessarily aiming to draw manga for famous manga magazines. Although it may seem like similar content, a different world is being born through social media. It is a new environment with separate creators and fans, where direct feedback is received and where fans from overseas can also participate. New communities and systems are being built.
Okubo: When new industries emerge, there are usually two types of people: those who say, “It would be great if we could make a living doing something interesting,” and those who say, “Let’s make it as mainstream as possible and elevate the industry’s status.” What about in the case of content originating from social media?
Mizuno: Regarding the business of creators on social media, it is closer to the idea of “making a living.” Social media-driven content has gone through years of being distributed for free without generating revenue. To rectify this, we have developed mechanisms in our business, such as partnering with advertisers to generate income or distributing characters overseas for sale. We are creating new revenue-generating systems.
Okubo: Mizuno-san, I believe you have witnessed the transformation of mobile content from the beginning. If there are any common points or approaches when new trends emerge, please share them.
Mizuno: When new platforms emerge, I believe there is reproducibility in quickly creating the optimal content and achieving a hit. Content that users find enjoyable not only encompasses universal elements like joy, anger, sorrow, and pleasure but also involves a sense of “satisfaction” derived from optimized content. For example, a game called “Touch the Numbers” was created by maximizing the enjoyment and satisfaction of “touching the smartphone.” Instead of simply being interesting or not, it was the optimization of the pleasant feeling of touching a smartphone during the early stages of smartphones in Japan that led to its success.
Okubo: I think you have worked with numerous creators. If there are any characteristics of creators who continue to succeed, please share them.
Mizuno: Although it may seem basic, the most challenging aspect is “continuing to create.” Creators who can create every day, without being burdened by it and enjoy the process, are undoubtedly strong. While many individuals find joy in creating, the act of continuously producing work can be quite challenging. Those who can create every day without it becoming a burden are exceptionally strong. In cases where such individuals have been consistently posting content since the early days of a new platform’s emergence, they often distinguish themselves from other creators within 1-2 years and become the most popular within that platform.
Okubo: I have heard that novelist Haruki Murakami, for example, establishes a habit of waking up at 4 am every morning and writing ten pages of manuscript. Consistently continuing every day is indeed important.
Mizuno: I agree. Especially in the case of social media, it serves as proof of a creator’s existence to post content every day. For example, traditional manga artists with weekly serializations can confirm their presence through the release of manga magazines. However, for social media creators, even if it is difficult to post new works every day, it is essential to engage in some form of communication on social media. Therefore, those who do not feel burdened by this aspect are strong.
Digital Content in the Web 3.0 Era
Okubo: Your company is also involved in NFT (non-fungible token) business, right? NFT refers to data that is uniquely secured using blockchain technology, which prevents replication and tampering. When digital content is converted into NFTs, it is assigned a unique token ID that links to the creator, owner, and rights holders, thereby giving value to the original data.
Mizuno: Yes. SNS content is typically free, and it can be infinitely copied through retweets and downloads, making it challenging to assign a price or value to the content itself. However, by tokenizing digital content as NFTs, we can guarantee the uniqueness of the content and assign value to it, thereby solving these issues. I also believe that unique content specific to NFTs and Web3.0 will be created in the future, so we aim to discover new content and creators from scratch.
Okubo: Could you explain the relationship between Web3.0 and digital content?
Mizuno: By recording information about the content creators, such as who created the content and when, on the blockchain, we can differentiate between infinitely copied content and the original, which may attract people willing to pay for the original content. In fact, the content we created on the blockchain in 2018 significantly appreciated in value by 2021. Throughout my 20 years of experience in the digital content business, I had never seen such retrospective value appreciation. This proves that digital content with its value secured by blockchain technology can gain vintage value. Even if it is infinitely copied content, I believe that by tokenizing it as an NFT, it can still acquire value.
Okubo: Currently, who are the people purchasing NFTs?
Mizuno: Currently, about 70-80% are investors, and 20-30% are people looking to enjoy new content. Among them, some are willing to pay for the future of creating new content using Web3.0 and NFT, leveraging these new technologies.
Okubo: I see. In Web1.0, individuals were able to create websites and disseminate information, and in Web2.0, the advent of social media allowed for two-way communication on the Internet. What specific capabilities will Web3.0 bring?
Mizuno: Simply put, it has transitioned from information exchange to the ability to exchange money and goods digitally. Money becomes cryptocurrencies, and goods become NFTs. With Web3.0, the internet economy has finally reached completion. Furthermore, digital content will transform from something that is simply consumed to something with features such as authentication functions over the next 5 to 10 years.
Okubo: So, blockchain technology enables the addition of authentication functions to digital content itself.
Mizuno: Yes. Previously, we needed IDs and passwords to log into platforms, but in the Web3.0 era, we can give authentication functions directly to the content itself. Currently, since various platforms provide content, for example, many people download our stamps, but we cannot directly reach out to those users. However, with blockchain, data is attached to the content, allowing direct connection between companies and users. Therefore, it becomes possible to take further steps beyond just downloading stamps, such as giving additional merchandise exclusively to those who downloaded the stamps.
Future of leveraging blockchain technology
Okubo: By tokenizing content as NFTs, creators can generate revenue. But what are the benefits for users?
Mizuno: Users don’t necessarily hesitate to pay creators, but they hesitate to pay for something they don’t perceive as valuable. For example, if a 4-panel manga posted on social media gets 10,000 retweets, it means that 10,000 people have seen the same thing for free. In that case, it’s hard for users to feel inclined to pay. However, if the purchased content is unique and the buyer’s information can be verified, it creates a sense of “meaningful purchase.” This can lead to users wanting to buy NFTs to maintain their identity as fans or to support the creators.
Okubo: Your company’s website mentions that the Minto character Land sale (NFT sale) in “The Sandbox” in November 2021 generated over 250 million yen in revenue in just 4 minutes. Can you tell us if this kind of speed of sales continues or if there are fluctuations?
Mizuno: The situation where we generated over 250 million yen in revenue in 4 minutes was a bit exceptional. We sold NFTs on “The Sandbox,” a metaverse game utilizing blockchain technology, at that particular time when The Sandbox raised approximately 10 billion yen in funding from SoftBank, and just the week before, Facebook changed its name to Meta, creating a lot of attention for the metaverse concept. As a result, buyers flocked to the platform, thinking, “Maybe this content on The Sandbox is worth buying.”
Okubo: Even if luck played a part, it wouldn’t have been a hit without a solid foundation.
Mizuno: Until now, fans of content and investors were separate worlds. However, by leveraging blockchain technology, the line between content and investment has become blurred. This is also why Web3.0 has been associated with financial aspects. On the flip side, the phase where investors show interest in content hasn’t been significant before, so the infusion of investment money into content is an interesting and distinctive aspect of the Web3.0 era, in my opinion.
Disclaimer: This article is an English translation of the original content published on the website sogyotecho.jp, which is the parent company of the Founders Guide website. The translation aims to provide information to English-speaking readers while maintaining the essence of the original article. Please note that any discrepancies or inaccuracies in the translation are unintentional. For the most accurate and up-to-date information, kindly refer to the original article in Japanese on sogyotecho.jp.