[Conversation] Innophys Co., Ltd. x Bosch Co., Ltd. Successful matching example between a startup and a large company

*"Deep Ecosystem" is a unique initiative of the Tokyo Consortium that selects startups that are expected to grow rapidly in the future, with an eye toward overseas expansion, and provides intensive support to help them grow into unicorns. For the selected companies, we will utilize the Tokyo Consortium's concentration and network, including Tokyo Consortium members, domestic and overseas business companies, venture capital, and institutional investors, with an eye to expanding not only domestically but also overseas. Support is provided by diverse members.

Why did we join Deep Ecosystem?

(I.e.: Today, we will be joined by Mr. Yoda from Innophys Corporation and Mr. Abe from Bosch Corporation to hear about ``Successful Matching of Startups and Large Companies Using Deep Ecosystems.''
The moderator will be Niko Suzuki of Tokyo Consortium, who is in charge of Innophys.
First of all, could you tell us why Innophys joined Deep Ecosystem?

Yoda:Deep Ecosystem is useful for startups that want to further grow their business with an eye on overseas expansion, as they can receive a wealth of advice from experts, especially those with a variety of experience and knowledge both domestically and internationally. We were very interested in being able to immediately apply this to our business, so we applied because we wanted to be a part of it.

(I.e.: What kind of support did you receive after being selected as a target company?

Yoda: Our company is particularly focused on overseas business, so we received support for our overseas business. There are three main types, and the first is "overseas business research." In particular, since our products were originally created for the nursing care industry, we thought that they could become more popular in the nursing care industry overseas, especially in Europe. However, on the other hand, we were faced with the issue of not being able to make much progress in market research if we were alone, so we requested the help of Tokyo Consortium to conduct market research on the nursing care industry in France, Spain, Germany, Italy, and other countries. I did. As a result, we learned that in France, national facilities such as Japanese special nursing homes provide services similar to those in Japan, so we are currently approaching these facilities in partnership with a local agent.

Second, as in this case with Bosch, we were introduced to famous companies within the Tokyo Consortium, and they supported us until the actual purchase. This support was very much appreciated by us. Normally, if we are just a startup, even if we want a large company like Bosch to purchase our product, we often have a hard time connecting with them, but this time, we received an offer from the Tokyo Metropolitan Government and the Tokyo Consortium. By introducing us, we were able to gain the trust of Bosch, which led to us doing business with them.

The third is external PR. At an event called "City-Tech.Tokyo" held in February of this year, I actually appeared on stage and was able to promote my work to many people. They also introduced us to ``Morning Pitch,'' in which various large companies participated, and provided us with a PR venue. I believe that this kind of support is also very helpful for startups.

As we receive actual support from the Tokyo Consortium, we feel that they are very close to Innophys. They kindly ask us, ``What does Innophys need right now?'' and ``Which customer segment should we prioritize and approach in order to generate sales?'' We are also receiving support for strategies such as this, which has been extremely helpful in terms of increasing sales.

(I.e.:thank you. Next, could you please introduce the details of Innophys' business?

Yoda: Our company develops and sells muscle suits that reduce the burden on the body. Some people may not be familiar with muscle suits, so I'll give you a brief explanation. Needless to say, Japan is facing a declining birthrate and aging population, and various social issues such as labor shortages and increased nursing care burdens are serious. It has turned into. For example, if you imagine a factory or warehouse, there is a lot of heavy work that takes place. In places where a lot of heavy work is being done, it is difficult to attract people, and even if hired, they will not be retained. On the other hand, as the people who work there grow older, they must continue to do heavy work, so "improving the work environment" is an issue that many companies are facing. Muscle suits are expected to be one of the solutions, and are gradually becoming popular. We run our business with the desire to help solve these social issues through muscle suits.

(I.e.：Next, I would like to ask you about the reason why Bosch is a member of the Tokyo Consortium. Could you tell us about the motivation and purpose behind Bosch becoming a member of the Tokyo Consortium?

(I.e.: We believe that startups are essential for promoting open innovation, so we contacted the Tokyo Consortium, which has a wealth of experience and information.

(I.e.: I think startups are very curious about how they can collaborate with a company like Bosch, which has sales of 10 trillion yen. Therefore, I would like to ask you about how the collaboration with Bosch is progressing. Please tell us about your approach to collaboration with startup companies and your schedule.

(I.e.: Our company has a collaboration program with startups called ``Open Bosch'' led by Bosch Venture Capital, the corporate venture capital of the Bosch Group. Thanks to this program, we are now able to do business with startups much more quickly. In the past, collaboration with other companies sometimes did not go smoothly, such as stumbling over transaction standards. We are a large company and even if there is a company we would like to collaborate with, it may take time to make a decision. For example, selecting vendors takes time to ensure quality assurance.

The advantage of ``Open Bosch'' is that if you can skip that process and just make sure that the startup is reliable, you can get to PoC (Proof of Concept) in a few steps. It was revolutionary for us to be able to start a project in as little as a few weeks. You will have the opportunity to see the effects of your startup company's ideas as soon as possible. This program itself allows us to try various things, and it can be used to improve efficiency and improve the environment at work sites, such as in our business with Innophys, and it can also be used for more cutting-edge technology such as autonomous driving. We are also conducting demonstration experiments.

(I.e.：I heard that the standards for doing business with start-up companies have been relaxed, but are there any minimum standards that must be met in order to be able to collaborate with them?

(I.e.：For example, we do not set absolute standards such as requiring a late-stage company. It is important that the partner suits our needs as much as possible, that we can support each other, and that they have the skills.

(I.e.：Bosch has more various divisions than we expected. We cover a wide range of fields, including not only automobile parts, which are the first thing people imagine, but also energy, so I think most startups have some type of demand. However, for better or for worse, it is not well recognized, so I think that if it becomes more recognized domestically in the future, it will be able to create an environment where it can collaborate with many startups. There are people like Mr. Abe who work with startups, so I think this type of collaboration will be created again in the next few years, and for Innophys, collaboration with group companies that are part of Bosch will progress. Is it?

(I.e.：Certainly, raising awareness as a company is a challenge for us. We are conducting public relations activities such as setting up a showroom next to the cafe at our head office in Shibuya.

(I.e.:The cafes in Shibuya have a really nice atmosphere.

(I.e.:We would be happy if more people, including university students and the general public, could come. We display a variety of products and services that we would like you to learn about, see, and touch. Approximately 9% of Bosch Japan's sales are related to automobiles, but globally, non-automobile products account for about 4% of sales. We would like to connect more with our customers in various fields. To that end, we would like to increase opportunities for more people to learn about Bosch.

Why was the collaboration between the two companies successful?

(I.e.: Now, let's move on to the collaboration between Innophys and Bosch. Deep Ecosystem was the impetus for the transaction between Innophys and Bosch, but could you please tell us more about the specific circumstances?

Yoda：Bosch has various factories not only in Japan but also on a global basis, so I was introduced to them that there might be work that requires muscle suits. Bosch also has startup support programs such as ``Open Bosch,'' so we asked if we could use such a framework to improve the workplace environment through our products.

(I.e.: At first, I was just trying to figure out what to do, but when I was wondering if there was a way out, I contacted Tokyo Consortium. We were then introduced to Innophys, and Mr. Yoda visited our factory and proposed a muscle suit to us. We have heard from people in the field that they want to use it and give it a try. I could have proceeded with just the free trial, but I thought it would be better to use the product for a certain period of time and measure its effectiveness, so I decided to use Open Bosch to do business with you. I decided to. In addition, by thoroughly measuring effectiveness, we can share the results with Bosch Group colleagues around the world. In fact, we have heard from people from overseas that they would like to have a meeting.

(I.e.：Bosch is a very large organization, so I believe that we were able to do business because Mr. Abe was able to move things within the company and listen to what people were saying on the ground. By the way, Mr. Yoda, what did you appeal to Mr. Abe when you first contacted him?

Yoda：Bosch has introduced excellent equipment, so I am wondering if there is any cargo handling work that requires the use of the lower back, and whether or not the people who do this work are suffering from lower back pain. I asked him about this and other things. As a result, we learned that some manual work was still required, so we told them that our product might be of help. Our products pursue ease of use. For example, we talked about points such as "does not use electricity," "basically requires no maintenance," and "easy to install."

(I.e.：Could you tell us specifically what kind of transaction occurred?

Yoda:We have installed 5 units of ``Exo-Power'', a muscle suit that mainly reduces the burden on the lower back, and ``Soft-Power'' at the Tochigi Factory and the Musashi Factory in Saitama. We have heard that they will continue to measure the effects, and that if the effects are positive, various developments will be made.

(I.e.：At first, there was a site where we thought it would be a heavy burden on the arms, but we asked them to actually visit the site, see the work being done, and talk to the people working on site. As a result, we received a suggestion that a product that would reduce the burden on the lower back would be better. It was good that you were able to visit the site thoroughly.

Yoda:It's important, isn't it? Initially, we had planned for the workers to wear suits that would reduce the strain on their arms, but when we actually visited the site and saw the work being done, we found that they were not using their arms very much.

(I.e.: Although he could raise and lower his arms, he was not in an environment where he could keep raising them, so it seemed that the strain on his lower back was greater than on his arms and shoulders.

Yoda: We thought that a product that supports the lower back rather than the arms would be more useful, so we made some changes.

(I.e.：I think it was great that we were able to hear directly from the people in the field. Both factories are a little far from the city center, but Innophys went out of their way to visit them. Due to the coronavirus pandemic, we had been communicating online for a long time, but we were able to meet for the first time at the factory.

Yoda: Things change when you meet them in person. Mr. Abe's personality was also clearly conveyed. By the way, did you know about Innofes products?

(I.e.:I saw it at an exhibition around 2016 or 17. When I looked at it again after being introduced to it by Tokyo Consortium, I felt that it had evolved from what I had seen before. For example, improvements have been made to make it easier to use from the user's perspective, such as by minimizing the parts that come into direct contact with the body to reduce stress.

Yoda：When you actually tested our product, what attracted you to it?

(I.e.:I think it's really nice that there are few parts of the back that come in contact with the body. Another thing is that it doesn't require charging. I don't have to worry about forgetting to charge it and not being able to use it, and electricity bills are very high these days, so I feel that Innophys' products are easy to use in that respect.

Yoda:thank you.

(I.e.:What kind of feedback do you hear from people who are actually using it?

(I.e.: It's very popular. At the factories where we took the survey, we received comments such as ``I feel less tired in the evening,'' ``I feel much better,'' and ``I want to continue using the product.'' The pain varies from person to person; some people experience pain in their lower back, while others experience pain in their knees, but it seems that people tend to feel fatigued in the late afternoon.

(I.e.：Well, you're starting to feel tired.

(I.e.:As the population in the field is aging, some people say, ``Even if you don't feel pain, wouldn't it be better to use it from a preventive perspective?'' This is the issue I am currently facing and would like to discuss with you.

Yoda:For example, if someone wants to prevent back pain, there are suits that are considered entry-level models, so it might be a good idea to start there. Accumulating fatigue from repetitive work can gradually lead to lower back pain, so I think it is necessary to reduce the accumulation of fatigue.

(I.e.：I would like to build a continuing relationship with both companies, but could you briefly talk about the future?

(I.e.:When I went to a factory in Ibaraki, I told them that other factories were conducting trials like this, and they said they wanted to try it out themselves. There are other factories as well, so I would like to try them out. We also hope to introduce our products to factories in other countries. Bosch is a global company that can easily be expanded horizontally. Some departments in Europe are already interested in this, and one of Bosch's strengths is that we can spread good things very quickly. We look forward to providing feedback to Innophys about our results and working together to solve future issues.

Yoda: thank you. This time, we have introduced it at two factories, and first of all, we will try to be useful to these two factories, and secondly, since Bosch is expanding its business globally, we will introduce it to both Japan and overseas. We hope that we can be of help to you at our factory as well.

(I.e.:thank you. Today, we heard a variety of stories from a position on the front lines about successful cases of matching startups and large companies through deep ecosystems. The Tokyo metropolitan government aims to "establish Tokyo as a global hub city for the startup ecosystem, thereby strengthening its international competitiveness, creating and growing startups, and ultimately realizing the sustainable development of Tokyo's economy." We have expressed our strong determination to implement innovation through the startup ecosystem into society and promote activities that give back to the local community. How do you feel about this? Specifically, do you feel that deep ecosystems are effective in connecting startups and large companies? Also, how would you like to use it in the future?

Yoda：Start-up companies are in a situation where people, goods, and money are in short supply, so we are very grateful to have the opportunity to receive support like Deep Ecosystem. We are able to gain access to companies that would be difficult to reach on our own, and by receiving introductions from people such as the Tokyo Metropolitan Government and the Tokyo Consortium, we are able to give our clients a sense of security and trust. I feel it's very big.

When you have limited people and time and need to increase sales efficiency, first of all, you need to conduct a thorough analysis and think about how to approach this in order to increase sales. We also provide practical support.

After all, it's a place for PR. We are very grateful to be given this opportunity to promote our work, as gaining more and more recognition will become extremely important for our company in the future. In this sense, I think Deep Ecosystem is a very good program. With your continued support, we hope to expand our overseas expansion.

(I.e.：Our Japanese subsidiary operates with a limited number of people. It's important to create something on our own with our own strengths, but from now on, we always hope to borrow the help of other companies and startups, use our strengths to our advantage, and create something new. I am thinking. It is not easy to meet a good startup like Innophys, so I hope that we will continue to have good opportunities to meet through the deep ecosystem.