Creating delight 
and brightness for
people through innovative business

Up-selling is a technique used to increase sales and average transaction value by proposing a higher-priced product with better features or higher quality than the one the customer is currently intending to purchase. The most common example of up-selling is being recommended a PC with a faster processor at a computer store. In this installment, focusing again on gross profit (the indicator of a company’s fundamental earning power), we will explore up-selling as the second method for increasing gross profit, using examples from the retail industry. 1. Achieve Immense Results Without Costing Extra Money or Time In our previous article, we covered cross-selling and focused on gross profit, the heart of corporate management. This time, we will continue to spotlight gross profit, and examine up-selling as the second method for increasing it. As a quick review, gross profit is an extremely simple indicator. It is the profit remaining after subtracting the cost of goods sold from total sales, often also known as “gross margin”. Companies like Apple or Nintendo, whose products and services possess high levels of uniqueness and differentiation, can achieve high gross profit in a world with very little competition. Once again, rather than focusing on how to create unique and differentiated products or services to raise profit, we will address how to increase gross profit while handling similar products in a competitive environment. The up-selling we are discussing today, much like cross-selling, is a method that can yield immense effects on gross profit without requiring additional expenses or time. I will now explain why up-selling is important and how it differs from cross-selling in the following order. 2. What is Up-selling? First, up-selling is a technique used to increase sales and average transaction value by proposing higher-priced products, such as those with advanced features or superior quality, to a customer who is intending to purchase a particular product or service. 【Examples】 ・When intending to buy a suit, being recommended a brand-name suit or one made with premium fabric at a higher price point. ・When intending to buy a smartphone, being recommended a model with more memory or a higher-priced “Pro” model with advanced camera features. ・When intending to buy an air conditioner, being recommended a high-unit-price model with superior energy-saving performance or specialized sensor functions. ・When intending to buy a car, being recommended high-priced vehicles such as SUVs, minivans, or hybrid models. The examples of up-selling are truly too numerous to list. Even without making a suggestion directly to a customer, selling in bulk—such as large-capacity versions of daily necessities like detergent or sets of multiple items with a lower individual unit price than the standard item alone—can also be considered up-selling. Products and services that serve as up-selling targets are placed in prime positions in both physical and web-based stores. For manufacturers, these are the main products featured in advertisements. They become the in-store “staff picks” or the recommended items on a website, and are presented as high-performance or high-quality alternatives to entry-level models. I believe that almost every company involved in the sale of products or services possesses such items and practices up-selling. If successful, up-selling has a profound effect on gross profit. In the next section, we will examine why up-selling is so effective, including its key differences from cross-selling. 3. Why is Up-selling Important? Analysis Via Sales and Gross Profit Fundamentally, up-selling is a technique aimed at increasing both sales and gross profit. To understand why up-selling is so vital, we must focus on the individual components of sales and gross profit. There are two primary elements that make up sales: quantity and unit price. Let’s look at the following examples: 【Examples】 Case 1: If you sell 100 PCs at ¥100,000 each, your total sales are ¥10 million. Case 2: If you can up-sell these to PCs priced at ¥200,000 each, selling 100 units results in total sales of ¥20 million. Case 3: Even if the number of units sold drops to 60, successfully up-selling them to ¥200,000 PCs results in total sales of ¥12 million. (The above illustration shows the comparison between the total sales of PC units according to the abovementioned examples. Case 1 = blue, Case 2 = yellow, Case 3 = green.) To generate sales, a customer must purchase a product. However, even if the quantity sold remains the same, revenue increases if the individual sale price is raised through up-selling. As shown in the previous examples, even if the total quantity sold decreases, the higher unit price can result in higher overall revenue. (If the unit price is doubled, revenue will be higher as long as more than 50% of the original volume is sold.) By understanding that quantity and unit price are the core elements of sales, you can increase revenue more efficiently. It is common for businesses focusing solely on volume to resort to discounts. However, to match the ¥20 million in revenue generated by 100 up-sold units at ¥200,000 each, you would need to sell 250 units of a ¥100,000 PC if it were discounted by 20% to ¥80,000. Even more critical is the impact on gross profit (revenue minus cost of goods sold). Let’s examine the previous examples through the lens of profit, assuming a consistent profit margin of 30%. 【Examples】 Standard: 100 PCs sold at ¥100,000 (Cost: ¥70,000) = ¥10M revenue, ¥3M profit. Up-selling: 100 PCs sold at ¥200,000 (Cost: ¥140,000) = ¥20M revenue, ¥6M profit. Discounting: 250 PCs sold at ¥80,000 (Cost: ¥70,000) = ¥20M revenue, ¥2.5M profit. (The above illustration contrasts up-selling with discounting. Compared to the standard case (top), upselling (middle) achieves double the profit margin, while discounting (bottom) results in an extremely low profit margin.) If you resort to discounting to boost sales, even if you successfully increase the quantity sold and total revenue, your actual profit will decrease compared to what it was before the discount. Understanding that gross profit is composed of the relationship between revenue and the cost of goods sold allows you to increase that profit more efficiently. If one recognizes that discounting lowers profit and instead tries to increase sales volume through other means, typical measures include increasing advertising spend for e-commerce, opening more physical stores, or expanding the company’s sales force for B2B operations. While these measures may increase gross profit, the corresponding increase in expenses makes it very likely that the resulting operating profit will actually decrease. As we can see from the examples above, the most effective means of increasing both sales and gross profit is ultimately to focus on up-selling by clearly communicating the value of a product’s features and quality to the customer. 4. The Difference Between Up-selling and Cross-selling Does this mean you should simply propose the highest-priced items possible to every customer? Not necessarily. For instance, if someone comes in to buy a compact economy car and you immediately suggest a Lexus, you likely won’t make the sale. Unless an up-sell presents specific benefits aligned with the customer’s budget, it becomes forced, which lowers customer satisfaction and negatively impacts business. When there are limits to up-selling high-performance or high-quality models, the cross-selling we explained in the previous article becomes the driving force for increasing sales. As a brief reminder, cross-selling is the technique of increasing sales by proposing additional related products or services to go with the customer's purchase, thereby increasing the number of items bought and the average transaction value. [Using the example from the previous section] Selling 100 PCs at ¥100,000 each results in ¥10 million in sales. At a 30% profit margin, the profit is ¥3 million. If you up-sell 60 of these to ¥200,000 PCs while selling the remaining 40 at ¥100,000, your total sales for 100 units become ¥16 million. At a 30% margin, your profit is ¥4.8 million. If you only use up-selling, the process ends here. However, if you also sell peripherals such as wireless routers, storage devices, mice, and security software (assuming a combined price of ¥30,000) to 50% of your customers (50 sets) at a 50% profit margin: 50 sets × ¥30,000 = ¥1.5 million in additional sales and ¥750,000 in additional profit. Adding this to the PC sales results in a total of ¥17.5 million in sales and ¥5.55 million in profit. Compared to simply selling 100 standard PCs at ¥100,000 each, you can achieve 1.75 times the sales and 1.85 times the profit with a combination of up-selling and cross-selling. (The above illustration compares the revenue and profit of selling 100 of the standard units (left), 60 of the up-sold units (middle), and 60 of the up-sold units plus 50 sets of cross-sold items (right).) As we discussed in the previous section, sales are composed of unit price and quantity. Up-selling is effective at increasing the unit price, while cross-selling is effective at increasing the quantity of sales. By understanding that sales result from the combination of these two elements, and by maximizing and optimizing them through up-selling and cross-selling in a reasonable manner, you can increase sales dramatically and more efficiently than by simply selling more products. Furthermore, because neither method relies on discounting to drive volume, you can reliably increase not just sales but also gross profit. I trust you now understand that up-selling and cross-selling are methods that yield immense results for both sales and gross profit without requiring extra expenses or time. Below is a summary of the differences between the two: [Up-selling] Objective: Increase sales by improving the average transaction value per customer. Sales method: Propose high-value products or services characterized by high performance, high quality, or large capacity. [Cross-selling] Objective: Increase sales by increasing the number of items purchased per customer. Sales method: Create value by proposing the additional purchase of highly relevant products or services. As summarized above, up-selling and cross-selling increase revenue by applying different methods to the two components of sales—unit price and quantity. Because these strategies do not involve discounting, they do not negatively impact the components of gross profit. Furthermore, since they do not increase expenses such as advertising, labor, or rent, the resulting revenue growth links directly to an increase in operating profit, making this one of the most effective means of raising profit. While both methods may seem modest, it is no exaggeration to say that their impact on corporate management is profound. 5. Summary In this installment, we have discussed the effects of up-selling and contrasted it with cross-selling. While both up-selling and cross-selling are seemingly modest techniques, they are methods that can yield immense effects in maximizing sales and profit. For this reason, it is crucial to educate a company’s employees on their importance, on how to present benefits for customers to avoid forced selling, and on how to utilize various technologies for those purposes, as well. Maximizing sales and profit through up-selling and cross-selling before taking actions that involve significant expenses (such as running advertisements, opening new stores, or increasing sales personnel) is key for business managers to facilitate efficient profit generation. I have intentionally addressed cross-selling following our previous discussions on “Inventory Turnover”, “Sales per Employee”, and “Sales per Tsubo”, which focused on cash flow and expenses related to inventory, labor, and rent. If you read these in order, starting with the first article on inventory turnover, the essential points of business management will become much clearer. For those who have not yet read them, I highly encourage you to do so. What we at D-POPS GROUP want to convey through this discussion on up-selling is the same message as before: business is built by people. The customers who purchase products are people, the sales staff who sell the products are people, and those who utilize technology are all people. While I think it is impossible to win in competition and survive in business without commanding technologies like AI, I also think that technology alone is not enough to survive. At D-POPS GROUP, we believe that business success does not happen simply because the technology is good or the management strategy is sound; rather, the intersection of People × Technology × Management Strategies is what truly matters. In accordance with this line of thinking, D-POPS GROUP’s vision is “realizing a Venture Ecosystem”. Our goal is to support startups through investment to help people shine and solve social issues, providing value that goes beyond mere numbers and efficiency. We hope that you enjoyed this article and look forward to working with you in the future. D-POPS GROUP Managing Executive Officer Tetsuya Watanabe

To foster a thriving startup ecosystem, we must look back and learn with humility from the legendary leaders who built global enterprises from the ground up. In this series of “Lessons from Great Business Leaders”, we will share the words of the visionaries and thinkers who have influenced us most, reflecting on how their philosophies have shaped our own experiences in business and life. This third installment was written by our group’s advisor Sugihara. 1. “Your Mindset Defines Your Life” – Tempu Nakamura “Whether your mind is positive or negative creates two polar opposite perspectives on life. If your mind is positive, life becomes filled with cheer, adventure, energy, and vigor regardless of the circumstances. Conversely, if your mind is negative, everything in life loses its spirit. If the mind that contemplates life is negative, does not everything end in a pitiful, dark, and miserable state? Since you only have one chance at life, you must live it in the most perfect mental state possible, starting from this very moment.” (Excerpt from Tempu Nakamura: One Thought a Day, edited by the Tempu Society. Published in 2005 by PHP Institute.) 2. Reason for Selecting This Passage On a personal note, I have spent my career since 1990 working consistently within companies that were considered startups in their respective eras. Among these experiences, my time at Daini Denden (the predecessor to what is now KDDI) was particularly formative. It built the foundation of my professional life and forged the entrepreneurial spirit that has served as the emotional bedrock for my continued challenges over the years. I remain deeply grateful for that experience today. Daini Denden’s co-founder, Kazuo Inamori, is a world-renowned leader respected by executives not only in Japan but also in China and across the globe. One of the thinkers who most profoundly influenced Inamori was Tempu Nakamura. While I was there, my superiors and division heads encouraged me to read books on MBA studies or the then-popular “Lanchester Strategy”, but above all else, the very first thing they told me to read were Tempu’s works. While Tempu’s most famous longtime bestsellers are Sharpening Your Soul and Open Your Destiny, I have chosen the compilation Tempu Nakamura: One Thought a Day. It distills his essence into short, concise daily entries that are incredibly easy to read. I highly recommend it to anyone who has heard the name “Tempu Nakamura” but doesn’t have any of his works yet, or for those looking for the right book to revisit his teachings. By the way, it recently became a hot topic that the world-renowned baseball superstar and source of great Japanese pride, Shohei Ohtani, was a devoted reader of Tempu’s books before he moved to the Major Leagues. 3. My Own Experiences and Thoughts on This Philosophy Between the 1990s and 2000s, while I was in my 20s and still learning the fundamentals of being a professional, I was suddenly assigned to a new business division, the office preparing to launch DDI Pocket, which would later become their PHS* business. As a member of a launch team with just six people responsible for sales strategy, I worked with such intensity that there was no distinction between day, night, or weekends. Looking back now, I can say it was a workplace that reflected an era when terms like “power harassment” or “work-life balance” did not yet exist. Our supervisor’s orders were absolute, and unreasonable requests were common. *Note: PHS (Personal Handy-phone System) was a Japanese-developed precursor to modern cellphone technology that was popular in Japan in the 1990s, and expanded to various degrees in Asia, Europe, and Latin America. Even though I was thrown into an environment where it would have been easy to harbor discontent or want to run away, I made a conscious effort to look at the bright side of things. I did not avoid difficulties, maintained a proactive stance, and continued to put in effort even when no one was watching. It is no exaggeration to say this was entirely because I treated Tempu’s books as my bible, so to speak. Tempu Nakamura frequently mentioned something in his writings that became representative of his philosophy: “Always keep a positive mindset”, and by making this my habit, I gained a strength that influenced not only that period of my life but my entire subsequent career. It gave me the power to overcome hardships, seize opportunities, and attain numerous priceless experiences. There are a number of recurring themes within the pages of One Thought a Day, and though they’re expressed differently in different places, they all preach the importance of maintaining positivity in one’s thinking and mental state. Here are a few passages that reflect those themes. One’s thoughts create one’s life “Humans’ health and destiny depend solely on where they put their minds.” The difference between a mind moving in a positive direction and one moving in a negative direction is as vast as that between heaven and earth. The power of determination Taken to the extreme, one could even say that having a happy or an unhappy life depends entirely on one’s control over one’s mind. Willpower—in other words, absolute control over one’s mind—could widely be called the driving force that allows one to become a better person. Noble, strong, righteous, and pure The first step in conducting oneself according to the laws of nature is to keep a positive mindset at all times, no matter what happens. A positive mindset means to live nobly, strongly, righteously, and purely. There is almost nothing more important to life and existence than this. Do not voice dissatisfaction or complaints Under no circumstances should you let yourself vocalize dissatisfaction or complaints. If those feelings exist within your heart, your words will never be truly positive. People who complain are constantly looking only upward and never downward. They think everyone else is happy and that they are the most miserable person in the world. (Excerpts from Tempu Nakamura: One Thought a Day.) Encouraged by these words, I was able to spur myself on and approach my work with a forward-looking attitude, which allowed me to deal with situations calmly and read the trends of the times. Subsequently, I was involved in the launch of the mobile internet services of PHS, the launch of broadband at AOL, the music distribution business at Napster, and the creation of mechanisms to improve search engine share at Google. I have walked alongside the history of the internet industry itself. Modern business professionals are tossed back and forth by a flood of information that changes daily. We must chase not only the knowledge required for our daily tasks but also the world’s latest technical information, such as Generative AI, AI agents, and AI robotics. Furthermore, we find ourselves in an environment where we cannot help but feel anxious that our own job might become another profession replaced by AI. It is important to fill oneself with knowledge and information and to possess technical skills. However, what humans possess that is fundamentally different from AI is not information or knowledge, but rather, the mind. Technology and knowledge change with the times and can be acquired later. However, I believe that a forward-facing mind and a proactive way of thinking form a foundation and become a personal wealth that accumulates within oneself, regardless of how the era changes. Right now, I have a small scrap of paper in my wallet that has been there for about 20 years, like a lucky charm. On it, I wrote down my own “Seven Principles for Living”. The first three of these are: 1. Always think about things positively. 2. Always stay hungry to improve and strive for diligence. 3. Do not complain about things out of your control. These have completely become my own words and convictions. Looking back now, I recall that these were simplified expressions I had quoted from Tempu’s books (and Carl Hilty’s Happiness). For sharing this method of proactive thinking with the world, I am grateful to the businessman and philosopher Tempu Nakamura. 4. A Message to Our Readers For this installment, I chose the writings of a figure from a somewhat older era. I also selected him from the perspective of being a thinker who influenced famous business leaders, rather than being a famous leader himself. At first, I wondered if this might be an unconventional choice for this series. However, when I heard that the world-famous Shohei Ohtani read his work, it made me happy to realize that this philosophy is universal, so I decided to introduce it because I felt his words could resonate with both athletes and business leaders alike. We live in an era where the future is increasingly difficult to predict (although this could have been said in every era of human history). I hope that by picking up Tempu Nakamura’s works, you can find the driving force to maintain a positive state of mind and approach new businesses or entrepreneurial ventures with vigor and enthusiasm. May your work, your business, and your life itself be bright and overflowing with happiness! At D-POPS GROUP, we hold the vision of “realizing a Venture Ecosystem”. We are working on building mechanisms that allow groups of companies within our Ecosystem to grow sustainably, as well as providing hands-on support through our team of advisors. ※For more details, please read: “Venture Ecosystem: A Platform for Growth and Sustainability” I hope this article will be of some help to startup founders and business managers. D-POPS GROUP Advisor Genta Sugihara

D-POPS GROUP would like to express our sincere gratitude for your continued support. We are pleased to share two major milestones regarding the Walking Together Hand-in-Hand with Children Foundation, where the chairman of our board, Dr. Sachio Semmoto, serves as Representative Director, and our President & CEO, Kazuhiro Goto, serves as Secretary-General. ◆Certified as a Public Interest Incorporated Foundation by the Japanese Cabinet Office As of April 1, 2025, the foundation received official certification from the Cabinet Office and has begun its next chapter as the Walking Together Hand-in-Hand with Children Public Interest Incorporated Foundation. This foundation was established by Dr. Semmoto—co-founder of KDDI and renowned serial entrepreneur—to dedicate his life’s legacy to the happiness of children. This certification serves as official recognition that our activities supporting children facing abuse and domestic violence meet the highest standards of contribution to society and transparency. With this new status, donations to this foundation are now eligible for tax incentives (donation deductions). We believe this framework will make it even easier for a wider circle of supporters to join us in our mission. ◆Complete Renewal of the Official Website To properly communicate the depth and impact of our activities, we have completely redesigned our official website. Visualizing the Results of Our Activities We have published detailed reports from our grants to children’s therapeutic institutions across Japan, including direct feedback from the facilities. This allows all of our supporters to see exactly how their contributions can lead to children’s smiles. Clarified Donation Methods In addition to ordinary donations, our website now has clear, illustrated guides for supporting our foundation via the “Hometown Tax Program (Higashikawa Town Shareholder System)” in partnership with Higashikawa Town, Hokkaido. A Warm, Visionary Design The site has been refreshed with a design that evokes the bright future of children. (Link to official website: https://www.ab-children.com/en/) Our Heart as D-POPS GROUP As the number of cases related to child abuse in Japan continues to reach record highs, countless children are in urgent need of help at this very moment. D-POPS GROUP fully supports the mission of Walking Together Hand-in-Hand with Children Foundation, and we are proud to have donated the funds for this renewal of their website. As a whole, D-POPS GROUP remains committed to realizing a society where anyone can hold onto hope, and to supporting children’s futures. We invite you to visit the renewed website and hope you will join us in expanding the circle of our supporters. ☆D-POPS GROUP’s CSR Activities: https://d-pops-group.co.jp/en/column/csr20250330/

The Challenge for an AI English Conversation App: Creating a Language Acquisition Technology to Globalize Asia In this final part of our three-part series, we look back at the greatest crisis SpeakBUDDY faced in its 13-year history. President Tateishi shares how he navigated a dire situation, with only three months of runway left, by being brutally honest with his employees. We also discuss the company’s unique organizational culture, where a multinational team of over 10 nationalities balances autonomy with discipline, and explore his grand vision for leading Asia’s globalization. Finally, we reveal how their partnership with D-POPS GROUP is accelerating SpeakBUDDY’s ambition to become a unicorn company. (This interview was conducted in January 2026.) See Part 1 and Part 2 of the interview here. ◆Understanding How Long a Year Can Feel to an Entrepreneur Sugihara: It has been exactly 13 years since you founded your company. During that time, you’ve navigated various shifts, including the COVID-19 pandemic. Looking back over these 13 years, what were the major turning points or obstacles that you encountered, both personally and as a company? Tateishi: While the company was founded quite a while ago, for the first three years, I was developing non-AI English learning apps and operating solely on my own personal capital. The situation changed dramatically around 2016, when we pivoted fully to AI-driven English conversation and began receiving investment from venture capitalists. In that sense, it has been a long road. One thing that surprises you when you become an entrepreneur is that one year feels incredibly long. You’ve likely heard of Janet’s Law, which suggests that time feels like it passes faster as you get older. By my seventh year at the investment bank, my colleagues and I would often say, “This year is already almost over!” I think that happened because I had mastered most of my tasks, the work had become routine, and there were fewer new stimuli. However, when you start a business, new challenges appear one after another, day after day. Each time, you have to acquire new skills or come up with fresh solutions. This density of experience makes a single year feel exceptionally long. Doing that for over a decade has been a very lengthy, yet fascinating process. Regarding the COVID-19 pandemic, AI English conversation benefited a lot from the stay-at-home environment at first. However, as the period of restricted travel dragged on, Japanese people sadly stopped studying English. With no business trips, no international visitors coming to Japan, and no overseas vacations, their opportunities to think about English virtually disappeared. The entire English learning industry slumped, and it was a very difficult time for us. Fortunately, demand has now fully returned. ◆The Ultimate Crisis: An Honest Confession with 3 Months of Runway Left Sugihara: Of all the situations you’ve faced over the years, if you had to pick one, what was the biggest hurdle? And more importantly, how did you manage to overcome it? Tateishi: It was undoubtedly the period during the lead-up to our funding round, when our runway (the time left before we ran out of cash) was nearly gone. In a startup setting, you’re constantly accelerating hiring to fuel growth. When the pressure to raise capital hit at the same time as the need to keep the organization unified, it was incredibly intense. Developing AI services is a marathon. At first, the tech can’t quite match human performance, so you go through years of not being able to amount to much. But then, you hit a tipping point where the AI suddenly starts outperforming humans, and growth just takes off. 2019 was that turning point for us, and it was also our hardest year. We were right on the cusp of our Series A, but we only had about three months of cash left in the bank. I was running myself ragged trying to secure funding, while the team seemed—at least to my eyes—a bit too relaxed. Eventually, I couldn’t bear the stark contrast between my stress levels and their composure any longer. Until then, I had kept our financial numbers and cash flow concerns private because I didn’t want the team to worry, but I had finally hit my limit. I called everyone together and told them honestly, “This is exactly how much cash we have left, and this is how much we burn every month. If you do the math, we have three months. Our payday is the 25th, so I can pay you this month, but three months from today, I won’t be able to pay you any more.” I knew the risk that everyone might jump ship. But I couldn’t keep going with that emotional disconnect, so I decided to put all the cards on the table. While one person did choose to leave, the remaining ten members said, “Let’s find a way to push through this together,” and they really worked hard. That moment erased the inconsistency I had been feeling, and seeing them commit gave me the courage to keep going myself. First, I went to my former boss and humbly asked for a bridge loan to extend our runway by another three months. Then, during those three months, a new feature we developed became a massive hit. Our KPIs skyrocketed, and revenue went up as well. People started telling me, “Since you’ve come this far, I’ll throw in my investment.” We successfully raised about 300 million yen in our Series A. That was the most grueling time of my life. Since then, I’ve made it a point to share the details of our company’s expenses and exactly how much cash we have on hand. Sugihara: By doing that, I imagine the employees feel like they are truly in the same boat. Tateishi: Exactly. At the end of the day, you can’t reach the same decision if you don’t have the same information. I believe that if you make that information open to others, you’ll eventually reach a shared understanding. ◆A Team of 10+ Nationalities: The Strength and Struggle of True Diversity Sugihara: SpeakBUDDY is a remarkably global company. About a third of your employees are non-Japanese, representing over ten different countries. What are the benefits of this multinational team, and what challenges have you faced? Tateishi: It’s a bit of a chaotic mix, ha ha. ‘Diversity’ sounds great as a buzzword, but in reality, managing it is incredibly difficult. Everyone has different perspectives and values. It’s a constant challenge to keep everyone aligned. However, the upside is that it naturally brings in ideas we never would have had otherwise. We can flexibly adopt global best practices and viewpoints that aren’t bound by Japanese common sense. Plus, since we are a language company, many of our Japanese hires join specifically because they studied English and want to work in an international environment. For them, working in a cross-cultural team is a source of genuine professional fulfillment. From a management standpoint, it’s a huge strength. For specialized roles where the domestic talent pool is small, such as engineers and designers, widening our search to include global talent allows us to hire elite performers. Although, running all-hands meetings in both English and Japanese with simultaneous interpretation can be rough, ha ha. ◆Encountering D-POPS GROUP Sugihara: You recently attended our business briefing and social gathering. What were your impressions? (Click here to read more about the event.) Tateishi: I was primarily struck by the sheer number of people in attendance, since they were all executives! It made a deep impression to see leaders of that caliber listening so intently to our story, asking sharp questions, and offering collaboration ideas on the spot. During the formal briefing, I felt a bit of a distance, but once the drinks started flowing at the social gathering and we got into our personal stories, I felt like I was immediately accepted as a companion. I really felt that D-POPS GROUP is a company with a strong family vibe. Actually, we have a new feature currently in the R&D stage that hasn’t been released yet. When I shared the idea at the briefing, the reaction from the audience was overwhelming. Afterward, our Executive Officer Morimoto and I were talking about it, and we’re pretty sure that idea is going to be a hit. Having that kind of validation from a room full of entrepreneurs gave us the confidence that we’re heading in the right direction. Sugihara: SpeakBUDDY already has many supporters and investors. Why did you decide to accept our investment, and what has the experience been like so far? Tateishi: The biggest reason was that President Goto, and you as well, really listened to us with such sincerity. It made us really want to grow alongside you. D-POPS GROUP is a very unique organization, and there are many elements of your company that make me think, “This is the kind of company I want to build.” When we were raising the funds, I told my team, “I want entrepreneurs whom I truly respect to become our shareholders. I want us to aim to become a company like D-POPS GROUP, so I absolutely want to accept their investment.” My thoughts at the time were, “I want us to learn from you, so please invest in us!” ◆Building a Great Company that Balances Autonomy and Discipline Sugihara: Regarding our company’s aim of realizing a Venture Ecosystem, are there any parts of that vision that resonate with you? Tateishi: Above all, I deeply resonate with your commitment to developing unicorns. To be honest, I’ve never been the type of person to put stickers on my laptop, since I always felt, “I don’t want to ruin a machine that I’m trying to keep clean!” However, since the D-POPS GROUP unicorn sticker has a genuinely cool design, and more importantly, it serves as a constant reminder of your ambition for us to reach unicorn status, I decided to put that sticker on my laptop. Sugihara: We really appreciate that, especially since you don’t even put your own company’s stickers on it, ha ha! Now, where do you see SpeakBUDDY in 5 to 10 years? Tateishi: Over the next five years, our vision is “to become the AI language acquisition startup driving Asia’s globalization”. And in ten years, we want to fully realize our mission: “Open a world of opportunities by achieving true language acquisition.” Lately, one thing I’ve been consciously trying to pursue is “to build a truly great company”. This may be an abstract goal, but I want SpeakBUDDY’s very existence to make people say, “I’m glad this company exists.” To achieve that, I feel like we really need to return to the roots of our mission, vision, and values. Organizationally, we spent the last year significantly strengthening our discipline. Startups are often free-spirited, autonomous environments, and we ourselves operate on a hybrid model centered on full-remote work. I’m personally someone who didn’t originally like to create rules, but as we grew past 60 employees, errors and accidents inevitably started to occur. So, I decided to steer us toward a culture that strongly asks for discipline and accountability. I recently read that “only by balancing autonomy and discipline can one create a great company”, and it struck a chord. Autonomy without discipline is chaos, but discipline without autonomy is stagnation. I want both at a high level. Sugihara: Autonomy and discipline seem like opposites, but they are actually two sides of the same coin. At companies like Google, the environment looks free, but the governance and the focus on achieving goals are incredibly intense. You are free to choose how you work, but you are also held totally responsible for the mission. Both aspects co-exist. Tateishi: Very true. That’s directly related to the recent moving of our office and us paying closer attention to the culture we’re building. ◆From Asia to the World: Leading Global Integration Sugihara: Do you have concrete plans or an outlook for expanding into the market in Asia and the rest of the world? Tateishi: We do. While we’ve temporarily paused our efforts to enter the Taiwanese market, we’re looking at opportunities to move into East Asia first, followed by Southeast Asia. Ultimately, we want to expand to Europe and the rest of the world. Sugihara: Right, since Southeast Asia alone has a population of over 600 million. Tateishi: It is a remarkably attractive market. There are billions of people worldwide struggling with English, so we want to provide our services to them, for sure. First, we’ll focus on succeeding in Japan, and then scale up from there. ◆A Message to Readers: “A New Way to Master English” Sugihara: Finally, do you have a message for our readers? This column is read closely by executives, entrepreneurs, and investors who have a real eye for professionalism. Tateishi: Everyone can feel the staggering pace of AI evolution every day. In an era like this, I believe we are being asked to question traditional methods and try something new. For English learning, too, I encourage everyone to try different methods from what you’ve done before. At the risk of sounding biased, I believe English is only going to become even more important for business professionals as AI makes international collaboration easier. We are seeing an increasing number of young people for whom English fluency is a given. We hope the professionals currently leading our industries will also take advantage of SpeakBuddy to brush up on their language skills, develop their own unique English style, and not get left behind by the younger generation. Interview conducted by D-POPS GROUP’s advisor Genta Sugihara. SpeakBUDDY, Ltd. President and CEO: Tsuyoshi Tateishi Address: 3F +SHIFT Nihonbashi Sakuradori, 3-14-3 Nihonbashi, Chuo-ku, Tokyo Established: May 2013 Website: https://www.speakbuddy.com/en

Design Concept that Combines SLA Theory and a Sense of Companionship to Truly Teach Japanese People to Speak In Part 1, President Tateishi shared the story of how 5,000 hours of studying led to his mission of utilizing technology to tackle the challenge of learning English. In Part 2, we delve into the core of SpeakBUDDY’s rapidly growing AI English conversation service, which has been adopted by over 300 companies. What is the decisive difference between SpeakBUDDY and major competitors like Duolingo or Speak? Beyond simply being available anytime, anywhere, for anyone, President Tateishi discusses their unique Second Language Acquisition (SLA) theory and meticulous design philosophy that enables Japanese learners to achieve true fluency. (This interview was conducted in March 2026.) ◆The Four Pillars of SpeakBUDDY’s Competitive Advantage Sugihara: Now that we’ve heard the particulars of how SpeakBUDDY came about, could you explain to our readers about your company’s AI English conversation service that has come this far? Tateishi: SpeakBUDDY is an English conversation service where you practice with AI characters, which we call “Buddies”, rather than human instructors. It’s not just a back-and-forth exchange with these Buddies, though. The service is designed so you learn essential expressions through immersive storylines. These expressions are categorized by level, allowing users to master key phrases suited to their specific proficiency in each lesson. There are four key reasons why this approach is superior to face-to-face lessons. The first is that you can learn anytime, anywhere. The second is that it is significantly more affordable than hiring human tutors. The third is particularly relevant for Japanese learners, who often feel embarrassed about making mistakes or intimidated by talking to foreigners. With an AI, those barriers vanish, so you can make mistakes and learn with total confidence. The final reason is learning efficiency. AI-driven analysis allows for a more effective learning cycle than a human teacher can provide. AI English conversation excels in these four places. Sugihara: The anytime, anywhere aspect is a big one. How long does a typical lesson take? Tateishi: A single lesson is completed in about 15 minutes. We’ve heard from many users that even online video lessons can be a hassle because they feel they have to dress up, do their hair, put on makeup, etc., before jumping into a call with a human instructor. Our app eliminates that friction, allowing people to learn whenever they have a spare moment without any preparation. ◆Where SpeakBUDDY Differs from Duolingo and Speak Sugihara: Recently, we’ve seen a rise in similar services like Duolingo and Speak. Could you walk us through where SpeakBUDDY excels and what makes it unique compared to those other players? Tateishi: We have immense respect for Duolingo as a service. However, we view them more as a comprehensive learning platform focused on vocabulary and grammar rather than specialized for speaking. Because they prioritize gamification, they are an excellent entry point for beginners to engage with a new language as if they were playing a game. In contrast, we are hyper-focused on speaking. For the Japanese people who have studied English to some extent in middle and high school but still find themselves unable to speak, SpeakBUDDY is the more effective fit. Regarding Speak, the US-based AI app that also focuses on verbal expression, I believe we have the edge in two areas. The first is ease of use. Our UI and UX are meticulously crafted to be intuitive, making it easier for users to build a daily habit. The second is our scientific foundation. We’ve integrated rigorous Second Language Acquisition (SLA) theories into the very core of our design to ensure users achieve actual fluency. The fusion of these two elements is where we stand out. Sugihara: I’ve noticed the app can be quite persistent with having me review expressions right when I’m about to forget, ha ha. Tateishi: That’s the idea! Our review system is based on Ebbinghaus’ “forgetting curve”. We ensure that learning is reinforced through spaced repetition to guarantee retention. Packaging such high-level pedagogical expertise into an app is one of our greatest strengths. The other differentiator is in the name itself: the “Buddy”. While apps like Speak can feel like you’re talking to a somewhat mechanical interface, SpeakBUDDY is built on storytelling and rich character development. We’ve created a world where you interact with human-like IP (original characters) within realistic scenarios, and that fundamental philosophy sets us apart. Sugihara: The character design is certainly distinct. You encounter characters like a boss with a realistic Indian accent, which makes the conversation feel grounded in the real world. The entire app feels like one cohesive universe. Is this design aesthetic a point of particular focus for you? Tateishi: Absolutely. We are a company that is obsessed with design, and I take great pride in our incredibly talented design team. We even received the Good Design Award in 2021. Actually, our entire design team currently consists of international talent. I’ve always personally loved the type of UI/UX aesthetics found in the West, so having international designers lead the creative process is a defining characteristic of our product. At our core, we believe that consistency is key to language acquisition, and the key to consistency is enjoyment. Internally, we often use the terms ‘Buddy-ness’ or ‘Buddy sense’ to describe how we want every aspect of our app experience, from the characters to the interface, to embody a sense of companionship and rapport. ◆Over 300 Clients: Rapid Growth in the Corporate Market Sugihara: Have you been putting a lot of effort into developing your corporate client base? What kind of companies are adopting your services, and what are their primary objectives? Tateishi: We have focused heavily on corporate expansion over the last three years. Due to the increasing need for communication driven by corporate globalization, we have now surpassed 300 corporate clients. Most companies implement the service as part of their self-improvement programs or employee benefit packages. In terms of industries, while we naturally serve global enterprises, we’ve seen a recent surge across all sectors due to a recent trend towards management of human capital. More companies want to support their employees’ self-development through paying for our services. After all, there are people who genuinely want to improve their English in every company. We see a particularly high rate of adoption in the IT, manufacturing, and customer service industries. We already provide sector-specific content, and we plan to further strengthen our corporate-oriented curriculum moving forward. Sugihara: What kind of feedback are you getting from these companies? Tateishi: It’s incredibly rewarding to hear from HR managers that their employees no longer feel a resistance to speaking English or that they have begun participating proactively in international meetings. We often hear from HR and training coordinators that they have never seen such a positive internal response to an English training program before. Sugihara: I see, so the employees themselves are reporting their satisfaction back to the HR department. Tateishi: Right, and then the number of applicants for the program is often multiple times higher than the original estimated number of applicants. Apparently, the turnout has been up to ten times higher than for in-person English conversation training. I’m pretty sure the fact that you can start so casually, with such a low barrier to entry, must be a big factor. We’re also seeing significant adoption in the hospitality sector, such as hotels. With the rise in inbound tourism, SpeakBUDDY is proving very effective in lowering the so-called “English allergy” barrier for staff when international travelers drop by their shops or hotels. ◆More Employee-Friendly than Traditional English Training Sugihara: In many large Japanese corporations, English training often comes with rigid requirements, like having to achieve a specific TOEIC score. Tateishi: That’s true. Traditional corporate English training usually felt like a burden…you had to hit a certain score, or you might even have to pay for it yourself if your attendance was too low. SpeakBUDDY’s greatest strength is its ability to be offered to a wider range of people at a lower cost. Instead of a mandatory chore, it becomes an employee benefit that people want to take advantage of. Sugihara: That approach is only possible because so many of your customers study consistently. Is the corporate segment still growing at this point? Tateishi: Yes, it’s continuing to grow very rapidly. If there are any companies out there struggling with their English training programs, please do introduce them to us, ha ha! ~To be concluded in Part 3~ Interview conducted by D-POPS GROUP’s advisor Genta Sugihara. SpeakBUDDY, Ltd. President and CEO: Tsuyoshi Tateishi Address: 3F +SHIFT Nihonbashi Sakuradori, 3-14-3 Nihonbashi, Chuo-ku, Tokyo Established: May 2013 Website: https://www.speakbuddy.com/en In the third and final part of the interview, we discuss: ・Gathering all employees together for an honest confession of short funding ・Building a great company that balances autonomy and discipline ・Creating an AI language learning startup that will drive globalization in Asia ・And other topics Be sure to check it out here: https://d-pops-group.co.jp/en/column/speakbuddy-part3/

From 280 Points on TOEIC to a Perfect Score and 5,000 Hours of Studying, Forming a Belief in the Necessity of AI English Conversation In December 2025, D-POPS GROUP invested in SpeakBUDDY Ltd., the developer and operator of the “SpeakBuddy” AI English conversation app. (Read more about it here.) How did someone who was once considered the worst English student in his grade go on to build a cutting-edge, AI-powered English conversation service? In this three-part series, we look into the entrepreneurial journey of SpeakBUDDY’s founder Tsuyoshi Tateishi and the future he envisions for language learning. In Part 1, we explore his incredible transition from a low TOEIC score of 280 to 5,000 hours of dedicated study, his experiences at a foreign investment bank, and how a trip around the world sparked the idea for AI-driven English conversation. (This interview was conducted in March 2026.) ◆“Worst at English in the Entire Grade” Sugihara: To start off, could you tell us what gave you the initial push to develop the SpeakBuddy app? Tateishi: First of all, the biggest reason I chose the field of English was because I was actually terrible at it during my student years. English requires consistent, cumulative effort, but I hit a wall in my first year of junior high school and just couldn't keep up with my classes after that. By high school, my teacher told me I was "the worst at English in the entire grade." Sugihara: So the student who was the worst in his grade became the CEO of an English conversation app company, ha ha! Tateishi: Exactly. That was my reality in high school, but the turning point came during my job hunt in university. I received a tentative offer from a foreign investment bank, and starting my career there was what finally forced me to start learning. Sugihara: It was a foreign-owned firm, so didn't they interview you in English? Tateishi: Oh, they did. The final interview was in a boardroom with the then-CEO of Citigroup Global Markets Japan and a row of executives from various departments. At the time, they were testing whether candidates could handle that kind of pressure. Since investment banking is a business where people are the only real assets, they were looking for character. That 10-on-1 interview was mostly in Japanese, but at the very end, the HR Director said, “Alright, I’m going to ask you a question in English, so please answer in English.” Up until that point, all the interviewers were Japanese, so they were probably assuming, “He graduated from Keio University, so he can probably handle it.” But in fact, my English was non-existent. My TOEIC score was only 280, so I knew I wouldn’t be able to understand any questions if they asked me in English, so I had prepared exactly one response in my head: “I can’t speak English. But I will study hard. So, no problem!” I said it with total confidence, but in fact, that single sentence was the only English I had learned. Back at that time, just memorizing that one phrase had been a struggle for me! The entire room of interviewers froze. Everyone was like, “Wait, what? You applied here with that level of English? This is a foreign firm…what are you expecting to do?” However, this was during my third year of university, so I told them, “I still have one year until I graduate.” At the time, I had just become the youngest person that year to pass the CPA exam at age 20. I was studying 14 hours a day…other than study and sleep, I would spend only two hours a day to shower, eat, and commute. I was used to finishing an entire textbook in a single day. So, I truly believed it when I told them, “I have a year, and that’s enough time for me, seriously.” At the time, I figured if I could get a 750 on the TOEIC, I would be basically fluent. Compared to the CPA exam, where if you fail, you have to wait another year, I felt no pressure at all. When I said, “I’ll start tomorrow”, they looked at me and said, “You do look like the type of guy who would actually do that.” Still, I walked out thinking I had definitely failed the interview, since it was a global firm and I couldn’t speak a word of English. But later that day, someone from their HR called me. Apparently, the CEO had been my biggest advocate. He told them, “Hire that guy.” The HR worker asked me, “What on earth did you say to the CEO?” Now, what I had told the CEO was this: “I might not speak English now, but through my CPA studies, I realized there isn’t that much difference in the capacity of human brains. It’s all about having grit. I know for sure that if I put my mind to something, there’s nothing I can’t achieve, and I will absolutely get this done.” The CEO decided, “Let’s hire one interesting guy like this”, and that’s how I got the job. ◆The Problem for Japanese Who Study English for 5,000 Hours Tateishi: Over the following years, I reached a perfect score on the TOEIC, passed the Eiken Grade 1 (the highest level of Japan’s most popular English proficiency test), and logged a cumulative total of approximately 5,000 hours of English study. Through those 5,000 hours, I had a painful realization: learning English would be far more difficult than I thought it would be when I was job hunting. I realized that this might be the single greatest challenge facing the Japanese people. I struggled with it while at that foreign-owned firm, and even after I moved to a Japanese brokerage, I was stationed in Hong Kong where I had to use both English and Chinese. If you can't use the language, you simply cannot do the job. I learned enough Chinese in Hong Kong to handle daily conversation, but if people ultimately can't understand what you're saying, you can't conduct business. Japanese people are excellent workers, but just because their English isn't great, my compatriots were being looked down on by people from headquarters or other overseas branches, and I couldn't stand it. During global training sessions and such, Japanese participants may not be able to speak English at all, but when it comes to the actual work output, they are consistently the best. Changing the reality that Japanese people are brilliant but are dismissed because they can’t communicate in English became my core motivation. I spent 5,000 hours to get there, but that’s not a realistic path for everyone. I want to use the power of technology to drastically shorten that time. This is the fundamental reason I chose the field of English education and began developing SpeakBuddy. ◆Making a “Doraemon” Who Can Speak English at Home Sugihara: Did you always have the desire to be an entrepreneur, even as a student? Tateishi: I did. I remember asking during my job interviews, “If I work at this investment bank, will it help me when I start my own company later?” But after seven years of intense, high-pressure work, I had completely forgotten that dream. However, as my desire to create a service that truly helps society grew stronger, I remembered, “Oh right, I actually wanted to start a company!” So, I quit as soon as I returned from my overseas assignment. I decided to quit first, and think of a business plan later. So, with my back against the wall, I finally went on the world tour I had always wanted to do, and I mapped out my business plan while traveling. While hopping from country to country, I was also teaching myself app development. The English learning app I built during that trip actually reached number 1 in the overall App Store rankings. Sugihara: Hitting an overall ranking of 1 is incredible! Was that app the prototype for what SpeakBuddy is today? Tateishi: Yes, I’d say that was the prototype. During my world tour, I also did a short-term study abroad program. Even when you are overseas, you find yourself wanting someone to practice English conversation with. But making friends in English out of thin air is incredibly difficult. People always say, “Just get a foreign boyfriend or girlfriend”, and I actually tried to do that while I was abroad, but it’s not as easy as it sounds, ha ha! While I was abroad, I thought, “If only I had a Doraemon* at home who could speak English with me, that would be enough.” That desire to create a Doraemon who speaks English was the starting point of our service. *Note: ‘Doraemon’ is a beloved character from a Japanese children’s cartoon who always helps the other characters with their various problems. I included a voice recognition feature in that first app, and I’m proud to say it was likely the first app in Japan to feature English voice recognition. However, back in 2014, the accuracy was still quite low. But over the next year or two, I felt the technology improving at an exponential rate. I became convinced that in the future, I would be able to create a real AI English conversation partner. In 2016, I stopped everything else I was working on and focused all my resources on AI English conversation. ◆The Problem with AI-related Branding in 2016 Sugihara: When you released the precursor to your current app back in 2016, were you already using the word ‘AI’? Tateishi: Yes. Even at the 2016 launch, we were calling it ‘AI English Conversation’. Since we had no capital at the start, we began with a crowdfunding campaign. It went surprisingly well—we raised about 4 million yen—and we were already positioning it as an AI-driven service even then. Sugihara: The speed of AI adoption and evolution lately is staggering. While language models have developed explosively in the last year or two, you were really at the forefront. Tateishi: We were the only ones in that space back then. But honestly, the immediate aftermath of the release was a struggle. People in 2016 were very vocal with their skepticism, asking, “Where exactly is the AI in this?” They’d complain, “I’m talking, but this doesn’t recognize my voice at all!” Back then, AI conversation meant little more than speaking to a character with an electronic voice. The conversational AI was still in its infancy, with a simple tree structure where we programmed specific responses to specific phrases. You couldn’t engage with it via truly free conversation like we have now. In the end, because we were getting so many reviews asking “Where’s the AI?”, we actually removed the word ‘AI’ from our branding around 2017. Having AI in the title seemed to raise expectations so high that it led to people leaving 1-star reviews, so we decided to take it out for a while. Then, around 2019, speech recognition technology started to improve dramatically. We also built our own proprietary speech recognition engine, which boosted our accuracy significantly. From that point on, the quality of our conversational AI was able to truly shine. Sugihara: When I try using features like BuddyChat now, the AI responds naturally even if I say something completely random or trivial. It clearly isn’t just simple pattern recognition anymore. Tateishi: Yes, it can handle tangents and keep the conversation going. I feel like I can finally say “This is AI” with my head held high. Back in 2015 and 2016, we were right in that peak of inflated expectations on the hype cycle, which was followed by a valley of disillusionment. During that valley, people kept telling me, “AI is a joke; it’ll never work.” But gradually, it became the real deal. Sugihara: For someone who has been working on this for a decade, do you feel like it's about time for the AI boom to finally sweep across the world? Tateishi: In a way, yes. It feels like things are moving exactly as I expected, though there’s a bit of a time lag in terms of when the world finally noticed. To be honest, even with GPT, we were looking at GPT-2 and saying, “This is going to be incredibly useful.” So by the time GPT-4 arrived, our reaction was like, “Well, it’s already been impressive since the beginning.” It’s only been in the last few years that speech recognition, Natural Language Understanding (NLU), and Personalized Learning Logic have finally synced up. Because the level of inference has jumped so significantly recently, we can now provide high-level free talk like BuddyChat. It feels like the times have finally caught up with SpeakBUDDY. ~To be continued in Part 2~ Interview conducted by D-POPS GROUP's advisor Genta Sugihara. SpeakBUDDY, Ltd. President and CEO: Tsuyoshi Tateishi Address: 3F +SHIFT Nihonbashi Sakuradori, 3-14-3 Nihonbashi, Chuo-ku, Tokyo Established: May 2013 Website: https://www.speakbuddy.com/en Next, in the second part of the interview, we discuss: ・The four pillars of SpeakBUDDY's competitive advantage ・Where SpeakBUDDY differs from Duolingo and Speak ・Rapid growth in the corporate market and feedback from business clients ・And other topics Be sure to check it out here: https://d-pops-group.co.jp/en/column/speakbuddy-part2/