Covid-19 has dramatically changed the way we do things. New lifestyles such as remote work or work-from-home settings became popular. Businesses are adapting to the new normal. Most if not all are setting up a new working environment in the comfort of their homes by buying new furniture and machines that are useful for their work. Hence, growth and demand are seen in the furniture industry.
Kosei Okubo, CEO and founder of Founder’s Guide and Sogyotecho, Japan, interviewed Mr. Machino, a representative director of Social Interior Co., Ltd., about his experiences in starting a business as well as the status of the furniture subscription service.
Okubo: What prompted you to build and start the business model?
Machino: I had the opportunity to participate in a startup event held in the United States and learned about ‘hardware-subscription-service.’ This has influenced me to start the business. Software subscriptions have appeared from Apple and others, but there was no hardware. Then, I began to ponder whether it would be possible to turn it into a business model.
Okubo: So you met the seeds of your current business. Please tell us about the process leading up to the service launch.
Machino: When I was looking for furniture for my new house, I was keenly aware that it would be difficult to budget for a complete set of furniture. When I asked the manager of the furniture store about it, he told me that the furniture industry’s profit margins weren’t high, and that kind of caught my attention. Next, I went to a reasonably priced furniture store, but I couldn’t imagine having everything there. I started to think, “There are so many great pieces of furniture in the world, but there is a bottleneck that makes no money. Is there anything we can do about it?” At the same time, I became interested in the furniture industry. After that, I immediately came up with a business plan to combine furniture and subscription services. We Launched “Subscribe Life” in 2018 and then the company name was changed to Social Interior in March 2022.
Okubo: Please tell us about your company’s services.
Machino: Our company’s mission is to create a society where good things circulate. We are developing three services. Social Interior Office Construction Support, Subscript Life, Subscript Life Off Price. Social interior office construction support, a service that produces total office space creation. We support everything from layout creation to space design and furniture selection, so you can create an office that does not compromise on the details. We have a rich lineup of furniture that you can choose according to your budget, and currently we have 120,000 types of furniture from 600 brands. It is also possible to select furniture using the “subscription off price” described later. By subscribing, you can cut the initial introduction cost by 95% and level the cash flow. Another strength of “Social Interior Office Construction Support” is its detailed service content, such as a dedicated support system.
Okubo: Regardless of the size of the company, this is a service that offers great benefits. Next, please tell us about “subscript life” and “subscript life off-price”.
Machino: Our Subscription/rental service for personal furniture and home appliances is much cheaper than the overall cost.
You can use it from 500 yen per month, and you can freely choose the period. All products are brand new and can be purchased as is after subscribing. We handle a large number of furniture and home appliances from famous and popular brands. On the other hand, I introduced it earlier in the service explanation of “Social interior office construction support””Subscribe Off Price”,Off-price market where you can buy branded furniture and home appliances at great prices. You can purchase up to 80% discount on furniture and home appliances returned after the usage period of “Social Interior Office Construction Support” and “Subscribe Life”. In addition, we also sell attractive products that cannot be sold in the normal market due to reasons such as being obsolete in the manufacturer’s warehouse or being production of such has been discontinued. Another major feature is that we return part of our profits to the manufacturer, realizing a recycling society.
Okubo: Mr. Machino is revolutionizing the furniture industry with his cutting-edge idea of “furniture + subscription service.” Did you envision the current business from the beginning when the business plan was created?
Machino: I had envisioned “social interior office construction support” and “subscription” .Assuming a business model from the beginning based on the idea of not having a warehouse. Therefore, we launched “Subscribe Life” after thinking about the subscription service model. On the other hand, “Subscribe Life Off-Price” was launched as a new business as part of business promotion. Initially, we sold the furniture and home appliances with greater demand that were returned to us to a trader. In addition, manufacturers had no choice but to dispose of store displays, so we wondered if we could sell them as an outlet. From there, I developed a business plan.
Okubo: So you expanded your business flexibly while looking ahead to solving industry issues. Please tell us about the benefits of using furniture as a subscription service.
Machino: The quality of furniture is proportional to the price. Of course, I can’t say that all of them are the same, but the cheap ones are worth the price. Conversely, for example, the more expensive a chair is, the more comfortable it is to sit on. If there is a chair called B that is priced twice as much as A’s selling price, B’s seating comfort is more than twice as good. That’s why instead of buying cheap furniture and throwing it away every time you move, you are better off subscribing to furniture that costs twice as much. There is no disposal fee when you no longer need it, and of course we will come pick it up, so you don’t have to worry about it. Moreover, it is environmentally friendly because it does not dispose of.
Okubo: While providing benefits to customers, it also leads to your company’s mission of “creating a society where good things circulate.”
Machino: Yes. Regardless of whether you are a corporation or an individual, I would like you to realize the benefits of using better products for a long time.
Okubo: I hear that there are even more benefits for corporate use. Please tell us in detail.
Machino: If a corporation uses our service, it can be processed as an expense . Capitalization and asset management are also free. Also, furniture is difficult to sort out, and when it comes to coordinating, it becomes even more difficult. This bottleneck is supported by the “social interior office construction support” that I mentioned earlier. A dedicated staff will provide total support for layout creation, space design, and furniture selection, so it is possible to create an office that meets your wishes.
Okubo: Please tell us about your future prospects.
Machino: We just changed our company name from subsclife to social interior in March of this year.“It doesn’t end with a subscription service company.” For our company, subscription is just a means, and its purpose is to build a recycling-oriented society. We would like to push forward further in order to achieve our mission, “Towards a society where good things circulate.” Also, we do not manufacture furniture. Since we purchase and sell everything from the manufacturer, we have always kept in mind the return to the manufacturer side in our business. We will continue to work hand in hand with manufacturers to develop the furniture industry. Furthermore, as I mentioned earlier, our business model has benefits for both corporate and individual customers. Such emphasis on “three-way good.” It is also a feature of our company that we will continue to aim for the completion of a cyclical model while developing an interior industry revolution platform that benefits both users and partners.
Our dream is “I want you to use good things to enrich your life.”
Okubo: It’s a win-win situation, and using your company’s services seems to improve the working environment and quality of life.
Machino: Yes. For example, it is the same with clothes, but if you choose high-quality products, you will feel better just by choosing them. In particular, furniture that is directly linked to work and life has a strong tendency to do so, and just having good furniture can change the quality of life. Also, if all you do is cheap furniture, you’ll end up throwing it away. However, many people find it difficult to purchase expensive furniture due to financial capacity. That’s why I want you to feel free to take it in with a subscription.
Our dream is “I want you to use good things to enrich your life.” If you start with one, your life will improve and the waste rate will decrease. As a result, it is positive for the environment and is kind to the earth. Then money will come to circulate to manufacturers and craftsmen who make high-quality furniture. In other words, everything is a virtuous circle. I want to spread this worldview.
Okubo: Finally, do you have a message for entrepreneurs?
Machino: The important thing for an entrepreneur to run a company is to increase profits while expanding the scale of the company. However, at the same time as we pursue these goals, it is also important that we will become a society that will not be able to succeed on its own from economic superiority alone. We focus on running a company that incorporates socially meaningful values and directions into the business model. And that will be the basis for new success.
With this kind of management principle, the happiness of not only employees but also managers will improve. In this day and age, if you only follow the leadership principle, employees will leave your company, and it will be difficult for the company to survive.
Of course, it doesn’t mean that you don’t have to make a profit. It is extremely difficult to strike a balance, but I would like you to be conscious of new foundations for success in order to create a sustainable company.