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This Japanese founder is connecting Asia with social innovation for 15 year : Here's how he achieves his goal as an entrepreneur
Challenges for youth entrepreneurs seeking social innovation
The world is shaking. Whether it's political instability due to wars, democracy crises, or global concerns like climate crisis, the challenge for social innovation has never been more urgent.
Young Asians, in particular, are more eager than ever for social innovation.
According to a UNDP report, youth in Asia are sensitive to problems with employment, access to key public services like healthcare and education, social cohesion, and climate change. Many of them want to address these issues with concrete solutions.
In that point of view, sustainability is a major concern.
One of the biggest struggles for Asian youth who want to become social entrepreneurs is to find a sustainable model that allows them to grow their businesses with a revenue stream while still being socially innovative.
This is why the story of Ryosuke Sugaya, founder of very50, is so compelling.
His experience in social innovation and entrepreneurship for nearly 20 years gives us a glimpse into the real-life challenges facing young Asian entrepreneurs today.
Starting his career as a musician in high school, Ryosuke has since traveled the world solving social problems.
In order to understand business and capitalism, he joined some of the biggest companies in the world, including McKinsey Hong Kong.
He later founded very50 to focus on tackling social issues through entrepreneurship. Here's how he built a sustainable business and social impact.
From high school pro keyboardist to global social activist
Q. Please introduce yourself and very50.
very50 is an organization launched in 2008. We have three main goals.
First, we support entrepreneurial activities in emerging countries in Asia. Second, we provide entrepreneurial education, especially for young people to become 'change makers' who will eventually create social change. Third, we are engaging in the business of securing and providing dormitories that solve the housing problems of young people.
Q. Before being a social entrepreneur, you had a very diverse background. In high school, you were a professional musician.
In my junior year of high school, I auditioned for a professional music show, where I luckily made a name for myself as a well-known indie musician playing keyboards for seven years. That helped me quickly establish myself and start making money.
Initially, I didn't think I should go to university, but I changed my mind when I attended a music festival at Hiroshima Stadium.
The theme of the music festival was "Peace in Asia," and it brought together people of many different nationalities. There were women wearing hijabs and tribal members with unique decorations around their necks.
At first, it was an exotic scene that made me feel like I was watching the movie <Star Wars>. And then I had a sense of curiosity about the world. I was wondering why that person was wearing a hijab, why that Thai person was wearing unique jewelry, and so on. That's what inspired me to go to college.
Q. Sounds interesting already. I heard that very50 derived from a campus club.
That's right. When I entered university, I started a club called ESS. As the leader of this club, I emphasized that if you want to understand the world and go abroad, you need to learn English.
"English is just a means of communication! The world wants to hear what you want to share."
Eventually, the club expanded to include 200 students. (It would later become a stepping stone to founding very50).F)In addition to ESS, my passion was to travel the world and solve problems in local communities.
Internships with NGOs like MSF challenged me to work on global healthcare issues. From medical aid in Pakistan, child prostitution in Cambodia , HIV/AIDS and mental health concerns for sex workers, the list of social problems was endless.
Realizing that the world can't be changed by English, music, or money.
Q. Since then, you've worked for some of the biggest companies in the world, including DENSO and McKinsey Hong Kong. What influenced your decision to change your career path?
When I graduated from university, I realized that music, while it has its own intrinsic power, is not the best solution to change the world for the better.
After witnessing with my own eyes that there are various problems around the world, I had a desire to learn more about "problem solving" and society itself, so I applied to companies where I could learn about business and management.
The first company I joined was Denso, a Toyota affiliate. It wasn't a perfect fit for me, so I stayed there for less than two years. I then joined McKinsey as a consultant in Hong Kong, where I worked for about four and a half years. It was a priceless experience working with talented people from prestigious universities such as Harvard.
Q.What did you discover along the way?
I got to experience a lot about capitalism, which made me understand it.
However, it also taught me that capitalism is not the only option. It felt like a waste that promising talents are only focused on how to increase the profit rate of a single company 🥹
With a thirst to explore the wider world once more, I ended my glamorous career abroad.
Q.What challenges have you taken on afterward?
After I left McKinsey, my focus was on supporting local social entrepreneurs in Thailand, Mexico, and elsewhere.
In Mexico especially, I met three young Koreans and became very close friends. Then one of my friends suddenly died in a drowning accident. I was so sad and lost.
After that, I visited Korea several times. I remember having this conversation with my friends.
"Anyone can die at any time. Let's live our lives doing what we really care about."
So I began traveling around Asia to meet and help social entrepreneurs. For example, I started a scholarship program for young people in Nepal and Bangladesh, supporting them to go to university.
With an annual investment of about 1.5 million yen, we provided scholarships to about 20 local students. Some of those who received scholarships later went on to run IT companies in Nepal.
Once again, standing on the front lines of social innovation while roaming the world has given me a new sense of purpose.
I realized that if you really intend to make a difference on the ground, you need to teach people how to fish, not give them fish. Armed with the idea that I wanted to do something for society and it was a good time to do so, I returned to Japan determined to figure out what I truly care about.
How can we pursue social innovation while making a profit?
Q. You've later founded very50. Tell us about your journey and how you went from zero to one.
It was around 2007, and I still had a strong connection with the members of ESS.
When I got back to Japan, the juniors who were just starting their careers were curious about my experience in Hong Kong. One day, they came up with a great idea.
We started selling lectures about business to entrepreneurs on a paid basis, and we set up a scholarship program based on the profits we made.
The purpose was to catch two pigeons with one bean. Our goal was to change the mindset of Japan's elite by offering socially thought-provoking business content, and at the same time, support students with money.
Of course, we didn't price the courses too high either.
For instance, Japanese NGOs tend to have low salaries. When we taught finance classes for them, we charged not that much for a 3-hour course. We wanted to do something for people who are working with a sense of calling. Internally, there was some criticism that the prices were too reasonable(?!)
Q.It sounds like you had to think about revenue to run and maintain your organization.
The lecture business alone was not sustainable, so for five years (as I mentioned earlier), we tried to organize programs for social entrepreneurs in other Asian countries and field trips to visit them.
The concept was that ESS course attendees would not only take classes, but also visit a number of Asian countries to work on solving problems with social entrepreneurs there.
Around 2015, we also ran an MBA-style training program for entrepreneurs and university students and made it a little more profitable.
Also, around the same time, one of the 60 social enterprises we had been investing in (for 5 years) became highly successful. It was a social venture selling bubble tea. The brand scaled tremendously and we were able to get a return on our investment. It was like a miracle.
It wasn't easy to meet social entrepreneurs across Asia over the years while investing in them from a not-so-big budget. But I truly believed it was necessary. Eventually, those were the periods when we connected with people who are contributing to social innovation in Asia, earned their trust, and networked.
Q. So, I guess we can describe it as a time of building up.
Then, around 2016, the education program was updated. We stopped most of the existing training focused on business people, and expanded to high schools.
Discovering new possibilities by teaching students social innovation
Q.High school...!
I had a friend who was a teacher recognized by the Global Teacher Award, and he kept telling me, "You should teach kids." I wasn't sure, but decided to give it a try.
At first I wasn't confident, because all of the economics, finance, and management courses we did were for business people, not for students. Even though it wasn't clear to me that we could branch out, I decided to take his advice.
It was an eye-opening experience for me.
The students were much more supportive, and it was great for me to be able to teach not only practical courses like finance and marketing, but also social issues in Asia such as war, social entrepreneurship, and social issues in general. This was much closer to my philosophy.
'This is what I really meant to do...!'
From there, I started looking for ways to deliver an experience that would be both beneficial to students and contribute to social innovation.
Q.What specifically did very50 attempt to do?
We came up with the idea of organizing school trips for schools, which are usually arranged like overseas trips.
For example, Japanese students go to Myeongdong in Seoul to visit the shopping culture. I thought it was a very poor use of time. Instead, they could meet amazing Korean entrepreneurs and gain insight into society.
So in 2016, we designed a completely new style of school trip program and started offering it to schools, which has allowed us to build a financially stable foundation for the company. Thanks to this, we have been able to lead hundreds of students to field trips to meet local communities and social entrepreneurs.
What I'm most proud of is that students who participated in very50's educational programs began to join the company as co-workers in 2017 and beyond. What a grateful and rewarding change!
Regardless of our revenue, it gives me great joy to see that students resonate with our vision and come back to accompany us in achieving our mission.
Real-world advice with over 15 years of social innovation & entrepreneurship
Q.It's been over 15 years since you founded very50. What are your plans for the future?
The mission of very50 has remained the same since the beginning: to spread the concept of self-independence, challenge, and good will to the world. It's a simple and powerful mission: to have a good time changing the world.
That's why we aim to build an economically sustainable organization.
In the future, we plan to move beyond an NPO and become a social enterprise. We need to be able to offer attractive compensation to our employees, so that we can attract more talented individuals to the social sector. It's going to be quite a challenge.
(As I mentioned earlier) salaries in Japanese NGOs and NPOs are low, so it's not easy to recruit competitive candidates. I would like to change this situation and make a case for social enterprises that are both visionary and financially compelling.
The case of students who have been fostered by very50 joining the team is certainly a positive precedent.
Q.Do you have any advice for people entering the social sector, especially social entrepreneurs?
Don't be a good painter. Execution is more important than a nice picture.
Q.What does that mean to you in practice?
Social entrepreneurs are more likely to rely on government taxes. If you rely on subsidies, there's a risk that you'll end up representing the interests of the giver.
There are still dictatorships in Asia, and many countries are politically unstable due to war and other factors. If government subsidies are too influential, there is the danger of getting caught up in creating a "good story" for money.
The same is also true for Japanese social entrepreneurs.
For instance, it's hard for NGO workers to be critical of the organization that has the largest budget for international cooperation in Japan. They don't want to get into trouble with the so-called 'money givers'. Instead, they act nice, yet spend the money while not doing enough to drive social innovation locally.
At very50, 99% of our revenue comes from our own business. That means we don't rely on donations or grants.
If you're an entrepreneur working for social innovation, you have to be careful that you're not depending too heavily on subsidies. The role of social innovation shouldn't stop at painting a pleasing story for donors. That's why you need to be an independent challenger, not a painter.
Q.That's very realistic advice. I look forward to hearing what very50 will do next.
I've been building a network of social entrepreneurs around Asia for a long time, and earning trust with a wide range of people. Going forward, I'd like to develop a platform to bring them together.
As an organization that is both sustainable and profitable, we hope to build a team and business that competent people are willing to join.
(Note - 外資戦略コンサルから国際協力の世界へ。15年目のNPO代表が描く、「分断の時代」のリーダー像 | NPO法人 very50)
Written by Jinny Kim (underdogs)
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