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Venture Ecosystem: A Platform for Growth and Sustainability

  • Media
2024.11.26

At D-POPS GROUP, we understand a “Venture Ecosystem” to be a dynamic platform that enhances the growth and sustainability of a community of enterprises. United by a shared identity and philosophy, these companies continuously innovate to address critical social challenges through groundbreaking business models. We are committed to making this ideal a reality through daily strategic efforts and unwavering dedication.

Below is an expanded explanation of a Venture Ecosystem.

1. What is a “Venture Company”?

In Japan, startup companies—whether in the early stages of seed financing or the late stages of major corporate development—are also known as venture companies. Kotobank, a Japanese online dictionary, contains the following definition:

During times of transition in industrial structures, the leading role of industry changes, new businesses that did not exist before are born in cutting-edge fields, and new markets are created. Companies that rapidly invent unique technologies and products according to the needs of such times are called “venture companies”.

To put it a little more broadly, if a culture of challenge permeates a company from the top executives to the employees, and if that company is tackling new areas with unique ideas and business models, it can be called a venture company. In addition, an enterprise that did not start up recently but continues to challenge itself with ever bolder undertakings can also be considered a venture company, no matter how large it may be. In this sense, any Japanese company can be called a venture company as long as it has the spirit of a startup.

With this viewpoint, we consider the consumer-to-consumer online marketplace Mercari (which has released new services one after another according to their value statement, “Go Bold”) and Rakuten Group (which launched Rakuten Mobile with completely new base station technology even after it had achieved significant growth) to be exemplary Japanese venture companies.

Internationally, companies like Alphabet and Meta are still brimming with venture spirit, as well.

2. What is senmitsu?

In the real estate industry, it is said that only about three out of every thousand negotiations will successfully close a deal, and this concept is expressed in the Japanese business term senmitsu (literally translated, ‘thousand-three’). In the food industry, it is said that only three products out of a thousand will become an enduring staple in the marketplace, so the term senmitsu is used there, as well.

In the venture capital (VC) industry, the data from a case study on funding reveals that out of a thousand companies interviewed, 3% of those are considered for investment, one-third of that 3% actually receive funding, and then only 30% of those ventures successfully exit. Therefore, (1000) ✕ (0.03) ✕ (⅓) ✕ (0.3) = 0.3% = 3 out of 1000…in other words, senmitsu.

Thus, the probability of success for a venture company is extremely low.

However, the probability of success can be increased, depending on the following factors:

(1) Continuing to strive with greater effort than anyone.
(2) Learning from and helping other colleagues in the same situation.
(3) Consulting and receiving support from senior managers and mentors.
(4) Learning from both successes and failures in starting new businesses.

3. What is an Ecosystem?

In ecology, the term “ecosystem” refers to a community of organisms and the environment that surrounds them as a somewhat closed system. When the organisms that exist in a certain area and the nonliving environment that surrounds them are considered together as one system that is closed to some extent, this is called an ecosystem. (Source: Wikipedia.org)

If we transpose this to the business world, we can say that it is a group of companies with a certain common identity and philosophy, regardless of whether or not they are physically gathered in a certain area.

Imagine a forest, which is composed of a variety of plants, the insects and small animals that carry those plants’ seeds, and the larger animals that prey on them. The forest is perpetuated and grows through the mutual interdependence of these animals and plants, which eventually decay and turn to soil, providing nutrition for future generations in an unending cycle.

Now, replace this metaphorical forest with a group of actual companies. When a community grows and sustains while mutually influencing other members, that is what we call a business ecosystem.

Now, what are the specifics of a business ecosystem?

4. Collaboration

Companies in an ecosystem are not enemies or competitors who are constantly at each other’s throats. Rather, they are colleagues who have a good relationship and positively influence each other. As such, there will be a natural tendency for them to initiate the following cooperative measures.

(1) Pioneering customers

Introducing each other to new corporate and consumer customers, and jointly cultivating new markets to increase the number of fresh clients. (This means more than simply providing work for each other.)

(2) Industrial cooperation

Supporting sales efforts by leveraging the existing sales channels of one company to introduce new products or services from another. Such business partnerships are not marked by mutual distrust, but rather by discussions conducted in good faith and contracts based on consistent, reasonable terms.

(3) Personnel exchange

Companies within the ecosystem will exchange information as well as executives, engineers, marketers, and others in the same position and job category with other companies to stimulate each other. This includes everything from short-term secondments and temporary relocations to personnel transfers.

(4) Generating new business

This collaboration and personnel exchange among companies will act as the impetus for inspiring ideas to improve efficiency and create new businesses, products, and services. This not only increases profitability, but also sows the seeds for future growth.

5. Mutual Learning and Support

Corporate management is not always smooth sailing. Competitive conditions and rapid changes in the marketplace often put companies in very difficult situations. To successfully navigate through these stormy seas, they need to learn from and help each other.

(1) Study groups

In fields where expertise is required, affiliated companies hold study sessions. These are taught by knowledgeable individuals from within the ecosystem or by guest lecturers. Social events are also held on a regular or irregular basis, and great ideas can come out of these, as well.

(2) Lending and transfers

When there is a temporary shortage of personnel at Company A, such as during the launch of new routes or systems, personnel from Company B—which has sufficient staff at the time—are sent to Company A to help them. In return, when Company B is in the same situation, Company A sends personnel to aid them, too.

(3) Joint recruiting activities

Joint information sessions allow the recruitment of many talented individuals to their optimal positions among the many companies within the ecosystem. However, these activities can only be successful if the identities and fundamentals of every member are aligned, since that will attract candidates who resonate with those shared principles.

6. Ecosystem Renewal

The ecosystem is not just a collection of companies that are all the same size and in the same industry. Rather, it includes diversity and a wide range of development, from startups that have just begun to senior entrepreneurs who have a long track record but continue to take on new challenges. As mentioned above, corporate management is not always smooth sailing. Indeed, there are times when companies have to close their businesses.

Therefore, the idea of constant renewal is a crucial feature of the ecosystem.

(1) Startup businesses

The most important role in the ecosystem is played by startup companies that create new businesses. They exemplify the seeds of a forest or the eggs of a nest. Internal entrepreneurship and the budding of independent off-shoot companies is encouraged, and parent companies invite them to continue a business relationship. Equally as important, when the community encounters outstanding startup companies that share its philosophy, it invests in them and welcomes them to join the ecosystem and establish capital ties with the other members.

(2) Mentors

Within the ecosystem, a group of advisors and mentors with a wealth of knowledge and experience is absolutely essential. In our forest analogy, they stand as giant, centuries-old trees that store abundant nutrients and provide water. They introduce prospective clients from their network of contacts built up over time; they happily allow junior leaders to bounce ideas off of them for planning business strategies; and they provide training for the executives and managers of each company in the ecosystem regarding organizational theory and how to cultivate a healthy working culture.

If an entrepreneur has a mentor or senior manager who can be consulted at any time, he or she will have exponentially more success than one who works alone without anyone to consult.

(3) Role of alumni

As companies grow through friendly competition and mutual learning and support, it is only natural that some leaders will successfully exit through going public or through strategic acquisitions.

When these “alumni” (former leaders in the community) leave to pursue other opportunities, they may or may not choose to return to their original company in the future. Either way, because they are still united in philosophy and principles, they do not cease to be a part of the ecosystem. Rather, alumni remain involved in the community as lecturers in study sessions, as interim managers to help restructure companies that are struggling, and in other roles as they are invited.

(4) Rebirth and revival

Suppose there is a company that unfortunately cannot avoid liquidation. However, among the employees of this company, there are many talented people who would be valuable anywhere. Perhaps the leader of this company was not well-suited for management, but was an incredibly capable lead engineer.

If these skilled employees are able to change roles and transfer to other companies in the ecosystem, they could very well make tremendous contributions there. Providing a platform for people in the ecosystem to continue to shine as brightly as possible by starting again, or opportunities for recovery—this is what truly characterizes an ecosystem.

7. What is a Venture Ecosystem?

To synthesize all of the various aspects mentioned above, a Venture Ecosystem has the following defining features:

(1) Consisting of companies with an indomitable, entrepreneurial spirit

(2) Members that learn from and help each other

(3) Personnel united under a common philosophy and culture

(4) Growth and renewal on an individual basis, leading to continuous growth as a whole

(5) Birthing new startups from within, and expanding through acquisitions

(6) The entire community standing together, with a united front, to face changes in the environment

(7) A platform that supports the growth of the community

More comprehensively, a Venture Ecosystem can be described as: “A platform for growth and sustainability that supports a community of enterprises that are united by a common identity and philosophy and continue to take on the challenge of solving social issues through highly innovative business models.”

D-POPS GROUP and the companies participating in its Ecosystem will continue to learn from and support each other, striving daily to become a platform that is indispensable to society.

We hope this article helps you to understand the meaning of “Venture Ecosystem” in D-POPS GROUP’s long-term vision of developing a Venture Ecosystem that is essential to society.

D-POPS GROUP Advisor
Genta Sugihara

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2026.02.05
Sales per Tsubo
D-POPS GROUP is a collective of companies that integrates actual businesses and technology together, a concept that we denote as “Real Business x Technology x Group Synergy”, aiming to realize a Venture Ecosystem that will continue to be indispensable to society even 100 years from now. Measuring the efficiency and profitability of a store location is indispensable for managing physical stores, which is at the heart of “Real Business”. In this article, we will explore sales per tsubo※, which is a critical metric used in Japan for this very purpose. ※The Japanese unit of measurement tsubo is defined as an area approximately equal to 3.3 square meters. The principle of ‘sales per tsubo’ can be considered as directly equivalent to sales density (in either sales/m2 or sales/ft2) with a simple conversion factor. Sales per tsubo refers to the amount of sales generated per tsubo, which will vary by industry. For example, supermarkets with high foot traffic and department stores or electronics retailers dealing in more expensive items will usually generate higher sales per tsubo. In explaining how this metric functions in practice, we will focus on the consumer electronics industry, for the sake of consistency in comparison with our previous articles on Inventory Turnover and Revenue per Employee. 1. One of the Three Key Elements of Store Management We previously looked at examples of inventory turnover (which affects cash flow and, in turn, a company’s balance sheet) as well as revenue per employee (which mainly relates to personnel expenses, and thus impacts P&L). Sales per tsubo primarily relates to rent and, like personnel expenses, is a vital indicator for P&L. Together, inventory, personnel expenses, and rent form the three essential elements of physical store management. If you haven’t read the previous installments on inventory turnover or revenue per employee, I encourage you to do so to see the full picture. 2. Calculating Sales per Tsubo Simply put, sales per tsubo is an indicator of a store’s productivity. The higher the figure, the better. It is generally calculated by dividing annual sales by the total sales floor area (in tsubo). For example: ・A store with ¥50 billion in annual proceeds and a sales floor of 4,000 tsubo earns ¥12.5 million per tsubo. ・A store with ¥1.5 billion in annual proceeds and a sales floor of 1,000 tsubo earns ¥1.5 million per tsubo. ・A store with ¥400 million in annual proceeds and a sales floor of 80 tsubo earns ¥5.0 million per tsubo. ・A store with ¥400 million in annual proceeds and a sales floor of 80 tsubo earns ¥4.0 million per tsubo. Averages vary widely according to areas and types of business. In the suburbs, an electronics store might earn around ¥1.5 million and a hardware store only ¥500,000, while a convenience store and a drug store could reach ¥5 million and ¥4 million, respectively. Factors include how frequently a product gets purchased, unit prices, the size of the products sold, and whether the location is urban or suburban. Notably, while suburban stores may have lower efficiency, their rent is also significantly lower. Therefore, one cannot simply compare sales per tsubo in isolation, but rather view it in the context of local real estate costs. 3. Why is Sales per Tsubo Important? To explain why sales density is critical, let’s look at the following example. As explained above, comparing companies in different locations (urban vs. suburban) or with different product categories is not an effective comparison because rent and unit prices differ too greatly. Therefore, just as we did in the previous article regarding sales per employee, we will use two rival electronics retailers as examples. They sell the same products and are both located in urban areas. (These model companies are fictional but based on the numbers from actual businesses.) Metric Company B Company C Store Count 24 45 Sales Floor Area 75,000 tsubo 74,000 tsubo Sales Per Tsubo ¥10.09 million ¥6.00 million Total Sales ¥750 billion ¥440 billion Ordinary Profit ¥50 billion (6.7% margin) ¥4 billion (0.9% margin) The Company B featured here is the same one from our previous discussion on sales per employee. Company C is a group-managed company with many franchises; for this example, we have extracted only the data for their urban store brands. The figures have been aligned with the fiscal year of the sales per tsubo data, and the floor area has been reverse-calculated from the sales and efficiency figures. These two are known competitors, both operating in urban centers and often opening stores adjacent to one another in major hubs like Shinjuku. Here, I want to draw attention to floor area versus the sales per tsubo. Company B uses 75,000 tsubo to generate approximately ¥750 billion in sales, whereas Company C uses 74,000 tsubo to generate approximately ¥440 billion. When converted to sales per tsubo, Company B stands at ¥10.093 million and Company C at ¥6.002 million. While both companies boast very high efficiency, their total floor areas are nearly identical (around 75,000 tsubo). If you take the difference in their sales per tsubo (¥4.091 million) and multiply it by that 75,000 tsubo of sales floor, you see a difference of over ¥300 billion in total sales. This gap represents the difference in revenue. If we calculate the gross profit for both companies using the industry average of 30%, the gap in gross profit alone is nearly ¥90 billion. It would be quite complicated to calculate their exact costs of rent, so we won’t do that here. However, both are urban retailers in similar locations, so if we assume their rent is roughly the same, this difference in gross profit translates directly into a difference in bottom-line profit. There is a ¥46 billion gap in ordinary profit and a 5.8% difference in profit margin between Company B and Company C, and it should be clear that sales per tsubo is one major factor driving this disparity. As mentioned in the previous article, even with minor differences, the gross profit margin in the electronics retail industry—regardless of the company—generally hovers around 30%. Whether in this industry or any other, when companies handle the same products at a similar scale, there will seldom be any large discrepancies in gross profit margin. In this comparison, as stated, a ¥90 billion gap arises from sales per tsubo. When competing companies sell the same products, in similar locations, using similar floor space, I believe that inventory turnover and sales per employee are the only other metrics that could account for such a massive difference in management efficiency. This is not unique to our model case. In restaurants, apparel stores, supermarkets, or any brick-and-mortar locations, there is no escaping sales per tsubo. Achieving a sales per tsubo that significantly outperforms competitors in similar locations leads directly to a major advantage in the unavoidable competition of business. 4. Key Strategies to Increase Efficiency By now, I suppose you recognize the importance of sales per tsubo, but the next question is how to increase it. There are several key strategies, and I would like to highlight the most representative examples below. ① Focus on purchase frequency or unit price Even if unit prices are low, like groceries or daily necessities, high purchase frequency makes it easier to drive up sales per tsubo. Conversely, for high-unit-price items like luxury brands, the high price per transaction compensates for lower frequency, allowing for high efficiency. From this perspective, it is perfectly logical for community-based drugstores to carry food and daily goods that are bought more frequently than medicine. Similarly, it is a sound strategy for electronics retailers to expand their lineup to include a mix of high-purchase-frequency consumables and high-unit-price hardware. ② Optimize product size and eliminate wasted space In short, this means displaying small products without leaving any gaps. This is plainly visible if you look at Don Quijote, convenience stores, drugstores, or urban electronics retailers. While some stores carry large items, the focus is on smaller goods packed tightly together all the way to the ceiling. From the perspective of sales per tsubo, this is a highly rational display strategy. Take electronics retailers as an example: urban stores are often branded as “　　　 Camera”, like Yodobashi Camera, while suburban stores are “　　　 Denki” (i.e., electronics), like Yamada Denki. There is a reason for this. In the past, urban stores were so small that if they stocked refrigerators and washing machines, they would have no room for anything else. Consequently, urban stores focused on cameras, watches, portable devices, beauty appliances, and small office equipment. Suburban stores, benefiting from lower rent, could afford the lower efficiency of large appliances. This specialization was an inevitable result of optimizing for sales per tsubo. Historically, there used to be a number of urban stores that did focus on large appliances. Just by looking at Akihabara today, one can see that these have mostly been consolidated into the most powerful stores, and only a few of those remain. This, too, was an inescapable outcome driven by sales per tsubo. ③ Master cross-selling and up-selling Cross-selling and up-selling can lead to significant improvement through store-wide effort. When you go to buy a suit, most stores will suggest a matching shirt or tie (i.e., cross-selling). When you look at PCs, many stores will suggest one with a high-performance i-series core processor rather than a cheaper model (i.e., up-selling). Up-selling changes the unit price per item, and as the price goes up, so does sales per tsubo. Cross-selling increases the number of items purchased per customer, which raises the total transaction value per person and, by extension, the sales per tsubo. The examples above are the primary ways to increase efficiency. While there are other factors, the ultimate key—as with inventory turnover and sales per employee—is ensuring employees are educated on the importance of this metric. Success comes from management with a human touch, where the company and staff constantly innovate in procurement, product display, and customer service to boost efficiency, supported by technology that can visualize inventory and sales data. Ultimately, the leap in management efficiency through improving sales per tsubo is also built upon the intersection of “People × Technology × Management Strategy”. 5. Conclusion In this article, we discussed sales per tsubo. In the industry of physical stores, there is no business that does not occupy space. Optimization of space is quantified in Japan as sales per tsubo, which leads to the maximization of operating profit and provides a major competitive advantage over rivals in similar locations. Sales per tsubo is strongly affected by product characteristics (price, size, sale frequency), product assortment and display techniques (filling gaps), and customer service techniques (cross-selling/up-selling). In other words, the catalyst for increasing efficiency lies in the constant ingenuity of both the company that defines the product concept, and the employees who actually perform the procurement, display, and service mentioned above. With this discussion of sales per tsubo, we have now covered the three essential elements of store management: inventory, personnel expenses, and rent. By reading this series—including the previous articles “Inventory Turnover” and “Sales per Employee”—the key points of store management should become much clearer. What we at D-POPS GROUP want to convey through this three-part series is that business is built by people. The customers who purchase products are people, and those who devise strategies and utilize technology are also people. While it is impossible to win in competition without mastering technologies like AI, technological skills alone cannot ensure survival. We believe that business success is not just about good technology or a good strategy; it is about the intersection of “People × Technology × Management Strategy”. Based on this philosophy, D-POPS GROUP aims to realize a Venture Ecosystem by supporting startup companies in order to solve societal problems. 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
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2026.01.15
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