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[Entrepreneur Interview #03] Kazusuke Obi (X-Locations)

  • Interview
2024.09.19

The Challenge of Turning Location Information into “Big Data” in the Age of Smartphones

Recently, D-POPS GROUP made an investment in X-Locations Inc., which provides people flow data analysis platforms and advertisement delivery services using smartphone location data, and we have begun walking together as fellow members of our Venture Ecosystem.

☆The press release regarding this investment in X-Locations Inc. is here:
https://d-pops-group.co.jp/en/column/x-locations/

For this article, we interviewed Kazusuke Obi, CEO and founder of X-Locations Inc., about the circumstances of the company’s founding and about Location AI Platform® (referred to as LAP from here on), the company’s proprietary system for analyzing people flow data.

① What was the impetus for founding your company?

With the widespread adoption of smartphones, we have entered an era where everyone can use convenient services that utilize our location information (latitude and longitude over time) through smartphone apps. Behind these services, enormous amounts of location data exist as big data in the network. Location information that was previously overlooked as mere “log data” can now be newly collected and analyzed due to recent technological innovations in mobile internet, GPS, GIS, and AI, making it possible to use statistical modeling, visualization, etc., to extract valuable insights. That value will only continue to increase in the future.

Our company is convinced that “a new era of extracting and utilizing useful information from vast amounts of data”, like search engines and generative AI, has arrived. I believed that a platform was needed to utilize this information for daily life and business purposes, so I established X-Locations to realize this vision.

② Please give us a brief summary of your services.

X-Locations’ people flow analysis platform LAP is a service that analyzes location-based big data via AI to provide visualization and other insights.
Additionally, our advertising services utilize people flow data to provide effective advertisement delivery based on the user’s movement history. We support optimization of marketing and tourism initiatives for travelers by utilizing behavioral data of inbound foreign visitors, including inbound advertising and analysis.

③ What points make you superior to any similar companies?

X-Locations’ strongest advantages are as follows:
1. Use of comprehensive, unbiased data sources (sample data)

The sample data that forms the basis of our analysis primarily uses data obtained by smartphones from GPS satellite signals, utilizing data that is not dependent on specific carriers or apps. We have been integrating various data sources and conducting comprehensive location data collection and analysis since before COVID-19, and our ability to provide accurate, unbiased people flow data is a strength that differentiates us from other companies.

2. High-precision location data and proprietary AI analysis technology with no privacy concerns

We provide a proprietary platform (LAP) that can capture highly accurate analysis results and insights (visualization of people’s real behavior) by collecting and analyzing location-based big data at high frequency and utilizing proprietary AI algorithms. By completely disconnecting the acquisition and analysis of location-based big data from the smartphones and their users, there are no concerns about violating personal information, and pinpoint location analysis and visualization are also possible.

3. Smartphone advertising services utilizing Japan’s largest-scale location data

By combining high-precision people flow data with AI analysis, we provide smartphone advertising (i.e., geo-targeted advertising) based on specific areas and behavioral patterns. We also possess one of Japan’s largest collections of increasingly in-demand behavioral data for inbound foreign visitors, which puts us in a position to design effective inbound advertising and promotions. By deploying advertisements at optimal timing and locations based on data for each region and tourist facility, our services enable efficient marketing without waste.

 

④ What have been your biggest challenges since starting the company?

As a startup, working with limited resources (funding, personnel, etc.) to accumulate big data, develop proprietary algorithms and continuously develop our unique user interface, while communicating the usefulness of this newly-emerging “people flow data” to companies and getting them to adopt it.
Also, when we launched our services on the market, it was right when the COVID-19 pandemic hit, so we had to deal with that.

⑤ What do you most expect from shareholders?

It’s certain that the usage of “people flow data” will become extremely fundamental in economic and social activities going forward. We would like to ask for your support in activities that spread the awareness of its usefulness.

⑥ What is the best part about receiving investment from D-POPS GROUP?

Our services have been widely utilized across D-POPS GROUP’s Venture Ecosystem, including both group companies as well as other investee companies. This has created opportunities that serve as catalysts for business development for every company, including ours.

⑦ What aspects of realizing a Venture Ecosystem resonate with you?

Startup companies usually have to focus on growing their businesses by themselves. However, by forming connections within an Ecosystem, they can share information and opportunities, so I resonated with the idea of creating a place like that.

⑧ What is your ideal vision for the company 10 years from now?

In 10 years, I want X-Locations to be a global company.

⑨ What challenges do you foresee in achieving that future?

Developing the necessary technology and building the right partnerships. By “partnerships”, we don’t mean just recruiting reseller partners for our products, but partners who will also contribute to the Ecosystem as third parties on our people flow data analysis platform.

⑩ Any closing comments you’d like to briefly share?

We sincerely thank D-POPS GROUP for advocating for our mission, and for supporting us in both funding and business development.

Company Information

Company Name: X-Locations Inc.
Company President and CEO: Kazusuke Obi
Address: 6F Kobayashi Bldg., 1-2-9 Ebisuminami, Shibuya, Tokyo
Established: January 2018
Company Website: https://www.x-locations.com/

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The main deciding factor for me—who originally aimed to be a teacher—to join D-POPS* was when President Goto told me, “As we build a 3-billion-yen company that grows to be worth 10 billion yen, then to 30 billion and 100 billion yen, I want to create an environment where young people can take on challenges, so I think it would be great to have someone like a teacher with us.” *Note: D-POPS Corp. (page only in Japanese) is the company originally founded by D-POPS GROUP’s President and CEO Kazuhiro Goto. Based on that kind of culture, President Goto now leads an entire group company and is moving forward to the next major domain, whether that be creating a Venture Ecosystem or contributing to society as an entrepreneur. What I’m conscious of is that I want to pass on President Goto’s desire to provide a stage where young people can take on challenges and overcome them, even while bumping into walls. I’m working with the intention of continuing what I’ve inherited here at STAR CAREER, so I’m simply implementing at STAR CAREER what President Goto conveyed to me: creating an environment where young people can continuously take on challenges and communicating the value of facing obstacles. Journey to the Venture Ecosystem, and Beyond <Interview with D-POPS GROUP President Goto>https://d-pops-group.co.jp/en/philosophy/ Sugihara: I see. Indeed, at most companies led by presidents who emerged from D-POPS, many members have genuine, warm smiles. Recently, there are also many companies that have joined without being brought up out of D-POPS. Have you had the opportunity to speak with any presidents of these other group companies? Hosaka: Yes! I enjoy good relationships with the presidents of various companies that have joined D-POPS GROUP. Simply put, I’m interested in the presidents and members of companies that have joined D-POPS GROUP. I myself have been in the D-POPS environment from the beginning, so as a fellow group president now, I want to know more about their situations before and after joining. Sugihara: It’s definitely important to have someone like you, President Hosaka, who takes interest in our members and actively expands the circle. ◆“Realizing a Venture Ecosystem” Sugihara: Returning to what you said earlier, the members of D-POPS GROUP (not only President Goto) would like to spread the key phrase “Venture Ecosystem” throughout Japan. Is there anything about realizing a Venture Ecosystem that resonates with you, and are there any such activities that you’re intentionally engaging in? Hosaka: Indeed, D-POPS GROUP has officially set its sights on realizing a Venture Ecosystem, but even from the time I joined D-POPS, there was already a stage where young people could take on challenges. I believe that the vision at D-POPS evolved into an even larger worldview in today’s D-POPS GROUP. I sincerely resonate with how the foundational thinking at D-POPS has expanded into a much broader worldview within D-POPS GROUP. What I’m currently aiming for relates to places like the Shibuya Hikarie Building, where D-POPS GROUP’s headquarters is located. Since there are companies in various industries within D-POPS GROUP, I want to firmly establish that joining our group does not only mean gaining access to places like Shibuya Hikarie or industry know-how, but it also ensures increasing a company’s capability of recruiting core employees—even in a challenging job market. Sugihara: With 23 group companies now, being able to say things like “Our company is number one in recruitment capability”, or “Our company is number one in employee training”, or “Leave this backend system to us”—having various companies you can rely on for areas where you’re not as strong is one of the unique aspects of a Venture Ecosystem, you know. ◆Ideal Vision for STAR CAREER and graphD in 10 Years Sugihara: So, President Hosaka, could you tell us your ideal vision for STAR CAREER and graphD ten years from now? Hosaka: Simply put, I consider these two companies, STAR CAREER and graphD, as my assigned areas of responsibility in realizing the worldview that D-POPS GROUP is aiming for. For example, as D-POPS GROUP continues to grow, if they face challenges or need someone to handle certain tasks, I want to be someone who’s always ready to take action. Sugihara: Are there any initiatives you’re currently working on or challenges you face in moving toward that future? Hosaka: We do have some challenges, which we will address starting this October, in the second half of the fiscal year. Actually, all the senior managers who were responsible for each of STAR CAREER’s business units have delegated authority to the next generation. So now, the members who previously worked under those managers have become the final operational supervisors, independently engaging with those clients and supporting team members. I believe the reason why the 20-year survival rate for core businesses tends to be low is that even if they establish a business during an upward trend, they can’t ride the next wave once the business enters a stable or stagnant period. So, while developing three types of businesses—existing, core, and new—we’ve been able to expand our business fields from mobile phone shops to call centers, customer support, and back office support. We’ll continue to nurture the current trends as our existing business. Mobile phone shops, which were once on an uptrend, have now stabilized, but call centers and customer support are expected to continue growing, partly due to the digital transformation wave. We’ve decided to entrust the growth of these existing businesses entirely to our younger staff. And our previous executives will handle the newer business ventures, such as RPO (Recruitment Process Outsourcing), Carepo, and job hunting café operations. We’ve changed our policy so that leaders who are responsible for new businesses should achieve certain sales targets within three years. Sugihara: I see. The people who joined during the company’s launch have cultivated an entrepreneurial mindset through the staffing business—in other words, they’ve studied and gained experience in new business development. That’s truly the venture spirit. Hosaka: For sure. Recently, when we pivoted our business during COVID, we developed new business areas, talent development, and related evaluation systems through a collective effort of all our members. Now we’ve made the decision to have the next generation of members drive the business forward. Next, I intend to focus on properly launching Carepo and the RPO business. And we’re aiming to reduce the gross profit share of the staffing business from its current 90% to 50% over the next three years. The idea is to have our new businesses and the staffing business each account for half of our gross profit. ◆Message to Readers Visiting Our Website Sugihara: That’s a splendid goal. Finally, in closing, could you share a message for our online readers? Hosaka: Of course. When I talk with various people from D-POPS GROUP, I always get a certain sense. For example, there’s a famous manga with the repeated line “I’m going to become the Pirate King!” The protagonist is aiming to reach Treasure Island and earn the title of Pirate King. But interestingly, among the crew members on the same ship, only the protagonist wants to become the Pirate King. One member wants to become the world’s greatest swordsman, another member wants to be able to create sea charts of the entire world—everyone is working hard toward the single goal of reaching that place, but what everyone wants to gain when they get there is different. I think D-POPS GROUP is like that. Your dreams can come true in our Venture Ecosystem. There are many companions here, so we can cooperate with each other to fulfill each other’s dreams. I’m really looking forward to having more members join our Venture Ecosystem’s community in the future.   STAR CAREER CO., LTD Company President and CEO: Tatsumasa Hosaka Address: 25F Shibuya Cross Tower, 2-15-1 Shibuya, Shibuya-ku, Tokyo Established: May 2016 Website: https://star-career.co.jp/
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