“Leaning in closely to the vision of business leaders”
Realizing a Venture Ecosystem through M&A
D-POPS GROUP has 25 group companies that we call partners (at the time of publication).
For this article, we interviewed Takahiro Kato, the Managing Director, Operating Officer, and Corporate Planning Head of D-POPS GROUP Co., Ltd., as well as Co-President of Faithful Corporation, one of D-POPS GROUP’s first member companies. (This interview was conducted in December 2025.)
◆Journey to Joining the Company
Sugihara:
Thank you for agreeing to this interview, Mr. Kato!
I understand you joined the company in August 2006. Could you tell us about your career up to that point and the circumstances that led to you joining?
Kato:
My previous job was at an accounting firm in Sendai, where I worked as a financial consultant. I was responsible for supporting the establishment of medical corporations and the opening of medical malls. I worked like crazy there for about five years.
At the time, the company had a compensation structure where performance was directly reflected in your salary. Despite being in a regional city and being only 23 years old, I was earning an annual income of about 5 million yen. Given the price levels of 20 years ago, that was quite exceptional treatment.
However, because I started earning so much at a young age, before I knew it, the focus of my attention shifted from the customers to my own income. I started prioritizing what benefitted me most, thinking things like, “I can get this customer to sign for this amount of insurance.” I think I had become conceited.
Around that time, a mentor who had been very kind to me since my days as a part-time student worker went independent and started his own business. That CEO became my client, with an attitude of “If Kato is going to do his best on this, count me in.” However, I ended up getting promoted later, and in my new position, I no longer directly handled his account, so I became emotionally detached. After a while, his business stalled, and he had to close it down.
Back when I first started learning bookkeeping in an ordinary high school, I had the pure ambition of becoming someone who helps out CEOs in the future. And yet, I failed to notice the changes in my dear mentor’s situation due to my shortsighted desire for personal gain. I was tormented by intense regret, realizing this was the result of my own arrogance.
I thought to myself, “Rather than supporting a president from afar as an external consultant, what if I could support a single company president and scale a business even more if I became his or her right-hand man?”, and began looking to change jobs.
Sugihara:
Is that when you met President Goto?
Kato:
Yes. At the time, I was interviewing with two companies: D-POPS and one other.
The other company wanted me to join immediately after giving me an offer. However, I was still living in Sendai at the time, and it was right before my daughter was to be born. I told them I absolutely needed them to wait three months, but they declined, saying that would be difficult.
President Goto, on the other hand, was different. When I honestly explained my circumstances, he said, “I understand. I’ll wait three months.” Moved by the depth of his character, I decided to join D-POPS.
What I still haven’t forgotten to this day is the intensity of the interviews. I went through two rounds, and President Goto handled both of them personally. Each one lasted over three hours—more than six hours in total—listening to my future goals and feelings while I shared what I could contribute. It was precisely because of that dense, meaningful dialogue that I felt certain I wanted to make a fresh start under this man.
◆D-POPS in the Early Days
Sugihara:
Three hours! That’s incredible. What was your role when you joined in 2006?
Kato:
My role back then was defined as “taking charge of general back-office operations”. I was hired into the administrative office with the potential of becoming an executive staff, but when I actually started, I was shocked by the state of things, ha ha.
For example, I was solely responsible for collecting sales proceeds from all the stores. At that time, installment sales (loans) weren’t common yet, so millions of yen in cash accumulated in each store’s safe every day. I spent my days going from store to store, collecting the cash, carrying it to the nearest ATM, and depositing it day by day so we could track it later. After visiting five or six stores, it would be evening. I’d return to the office and spend the rest of the day reconciling cash and handling the accounting.
The atmosphere of the organization was like a battlefield. I had the feeling that in order for us to survive, I needed to produce results even if it meant knocking the neighboring competitors out of commission. It didn’t matter if you were a full-time employee, a part-timer, or a dispatch worker…everyone was simply chasing the number of units sold—in other words, sales—right in front of them. It was that kind of time.
Sugihara:
The management system also must have been completely different from what it is now.
Kato:
Quite so. At that time, attendance was confirmed through a system where store staff would send a fax to the head office when they arrived at work. Outside of this system, we couldn’t even tell if a particular store was open. Occasionally, the head office would receive calls from customers asking, “Why isn’t the store open today?”, ha ha.
Later, we introduced an IT system, but then some staff started clocking in remotely from outside the stores. We realized that it wasn’t any use to just make sure our employees were clocking in.
Next, we tried a method where staff had to answer a company philosophy-related quiz every morning using the stores’ fax machines. However, some clever people tried to cheat by programming the fax machines to send it at a set time. It was a constant game of cat-and-mouse with fraudulent access and time-card tampering, so we needed to rethink the entire system from the ground up.
Sugihara:
How did the organization transform into what it is today?
Kato:
I think the big change started around 2007 or 2008 when we began hiring new graduates. We shifted away from a culture where “anything goes as long as you hit your numbers”. As educated new graduates joined, the organizational consciousness flipped completely. Looking back, that was the major turning point.
Sugihara:
Did your own mindset change, too? When did that happen?
Kato:
Yes, there was a significant shift that changed my outlook on life. For a long time, whenever President Goto visited banks to report on our management status, he would always use the words ‘sincerity’, ‘humility’, and ‘gratitude’. To be honest, at the time, they sounded like nothing more than magic words to me. But after being in contact with this organization for so many years, I’ve truly internalized those words and come to agree with them deeply.
◆Building the Organizational Foundation
Sugihara:
Before the transition to group management in 2017, you reportedly handled all sorts of tasks as Corporate Planning during the D-POPS era.
Kato:
Yes. For about ten years before we moved into M&A in earnest, I spent all my time running around to build the organization’s foundation. At the time, we didn’t even have a contract with a labor and social security attorney, and labor management was essentially handled by President Goto’s mother. So, I started by switching those tasks to a professional system.
I also worked on eliminating time lags in cash management to visualize cash flow and created a performance management system that didn’t exist before. I set up the data needed for management decisions one by one, such as calculating precise figures per individual store including seasonal factors and managing store-specific profit and loss (P&L).
Sugihara:
Without such meticulous system design, managing at the current scale would be impossible.
Kato:
You’re absolutely right. However, while organizing the systems, what I always valued was the heat and passion of the front lines—what we call our store staff’s “empathy-driven customer service”. Right after I joined, I had a one-week orientation where President Goto and I visited every single store together. We would stand in front of a store for about an hour, watching the staff interact with customers, and then discuss it.
President Goto told me, “That store manager’s numbers might be average, but they enjoy such overwhelming feedback from their customers. Look, the customers are leaving with such smiles. The shape of the smile differs by store, but that is the strength of D-POPS.”
He taught me not just to manage numbers, but encouraged me to feel the temperature of our stores and the bonds with customers firsthand. I think it was because of that experience, I was able to focus on creating organizational management systems that were heart-led, rather than creating systems just to control people.
Sugihara:
Were you ever directly involved in the actual business operations at those stores?
Kato:
To accurately understand store operations, I spent only two weeks at one site. After understanding the work flow and what problems they encounter there, I returned to my duties at the head office.
Although I was in the administrative office when I joined, my proposals were often planning-oriented, and I was frequently asked for creative improvements. I was given the advice: “Change your title to ‘Corporate Planning’, get out there, and make things move more.” From that point on, I’ve been working in Corporate Planning for around ten years now.
◆The Start of M&A Strategy and Meeting Faithful Corporation
Sugihara:
You were appointed as the President of Faithful in 2017. What led up to this?
Kato:
Around 2015 to 2016, just as D-POPS GROUP reached 10 billion yen in sales, we faced a massive headwind due to changes that were made to the sales rules within the telecommunications industry. It was our second time to experience a crisis of that scale, resulting in a 100-million-yen deficit in just three months.
At that time, the executive members decided that instead of going on the defensive, we should show a challenging spirit. Each of us stepped into new domains. Mr. Hori, who had been in charge of HR, took the lead as the CEO of Good Crew. Mr. Iwama became the CEO of Gnext, which we had acquired through M&A. Mr. Fujita established Advancer, and Mr. Hosaka founded STAR CAREER. The executive staff of that era began making big moves.
Amidst that, I was entrusted with being responsible for M&A.
Sugihara:
Was this shift towards M&A strategy necessary?
Kato:
Yes, it was a natural progression for the head of Corporate Planning to take charge of M&A. President Goto had been saying for a while that he wanted to pursue M&A, and there was a sense of urgency, that we wouldn’t be able to dramatically increase our growth trajectory only through businesses built up using internal resources alone (i.e., organic growth). It was difficult to work backward from our growth goals based on a labor-intensive model. So, we decided to make M&A a central pillar of our growth strategy.
In fact, this Faithful Corporation was one of the companies I acquired while serving as the head of M&A.
Sugihara:
So, you became the representative of the very company you decided to acquire?
Kato:
Yes. Our first M&A deal was a company called graphD, and the second company we acquired was Faithful. Since I was the one who proposed and pushed for the acquisition, I took it upon myself to steer the ship afterward. That is how I became its President.
Sugihara:
It sounds like the very structure of D-POPS GROUP changed radically between 2015 and 2016.
Kato:
Exactly. That was when our current group management platform was built.
Sugihara:
You mentioned Faithful was the second company you acquired. What sort of business were they doing at the time?
Kato:
Actually, that business had to pivot just a few months after we acquired them.
Initially, Faithful’s main business was article production outsourcing. However, right at that timing, society was starting to question the reliability of curated media, which sent shockwaves through the entire industry. We were caught in the middle of that storm, and the articles we were handling came under fire.
We found ourselves in a situation where we couldn’t continue the core business that accounted for 70% to 80% of our revenue, and we plunged into a massive deficit. Normally, one might give up and conclude that the M&A was a failure, but if we had retreated then, we wouldn’t have been able to make our next move. So, we decided to cut off the unprofitable old business and aim for a recovery.
◆Building a Sustainable BtoB Model
Sugihara:
How did you go about rebuilding the company into its current business from that point?
Kato:
The business as it stands today was not something we inherited from the acquisition…it was built completely from scratch.
At the time, D-POPS GROUP’s non-executive director, President Naito of Findstar GROUP Co., Ltd., gave us the following advice at a board meeting: “If you slightly shift your existing business model, you will find new business opportunities.” So, we asked ourselves, “Besides selling mobile phones in physical stores, what are we capable of doing?” Then, we decided to pivot entirely to communication consulting targeted at corporations.
While launching this new business, I was handling bank relations as an executive staff of D-POPS GROUP. There was an expectation from those around me not to exhaust the staff working on-site, and to create a sustainable business. I came up with the idea of a model that utilized banks as referral partners, and figured that would be the best. I proposed this to the banks, and they thankfully agreed to help introduce us to other companies.
◆Thoughts on the Strengths of Faithful and His Colleagues
Sugihara:
If you had to describe Faithful’s current business in one sentence, what would it be?
Kato:
In short, we support small and medium-sized enterprises (SMEs). We had originally taken over a media business, but we steered it to build the current consulting model that solves the challenges of SMEs in an entirely new way.
Sugihara:
Among the many consulting firms out there, what are Faithful’s strengths?
Kato:
Our overwhelming strength is definitely that since our staff—who have years of experience in mobile phone shops—provide the consulting proposals, we can put all that know-how to good use. Other companies selling office automation (OA) equipment to corporations tend to just sell the products, but the relationship ends there. Follow-up is difficult for them, and because they lack deep ties with telecommunications carriers, they can’t handle complex adjustments.
We can provide fair and neutral comparative proposals backed by strong relationships with carriers. Above all, we have an environment where members who transferred straight from an on-site workplace are able to contribute right from the start.
Sugihara:
So then, the environment for your members was also part of your consideration when launching that new business.
Kato:
Yes, and in fact, we had an underlying goal there as well. Operations for mobile phone stores are naturally focused on weekends, but a BtoB business allows us to create a work environment focused on weekdays.
As members progress in their careers, they can acquire higher expertise and provide more to our clients and our company itself. By digging deep into the BtoB domain, I wanted to expand the options my colleagues would have in the future.
Sugihara:
Was the transition from store-based BtoC sales to corporate BtoB sales a big obstacle for your members?
Kato:
That is still an area of great struggle for us, even today, and we are in a constant process of trial and error. The sales styles and required knowledge are completely different, so that wall was even higher than I imagined.
The vast majority of Faithful’s members are transfers from within our group. The nature of starting out this way is different compared to an organization built from the ground up by recruiting specifically for BtoB sales. So, the question of how to transform the customer service skills cultivated in stores into the ability to solve corporate problems remains an unending battle and challenge for our company.
~To be continued in Part 2~
Interview conducted by D-POPS GROUP’s advisor Genta Sugihara.
D-POPS GROUP Co., Ltd.
Managing Director, Operating Officer, and Corporate Planning Head Takahiro Kato
Faithful Corporation
Company Co-President: Takahiro Kato
Address: 32F Shibuya Hikarie Building, 2-21-1 Shibuya, Shibuya-ku, Tokyo
Next, in the latter part of the interview, we discuss:
・Keeping busy as the Head of M&A
・The importance of people for D-POPS GROUP’s style of M&A
・The “flow of energy” that President Goto values
・“Realizing a Venture Ecosystem”
・5-year vision
・And other topics
Be sure to check it out here:
https://d-pops-group.co.jp/en/column/kato-interview-latter-part/
