Contents

Ichimura : ZEALS is challenging the “hospitality revolution,” which digitizes customer service experiences with AI technology and the power of communication. Can you tell us about your business overview?

Shimizu : The solution called chat commerce provided by ZEALS contributes through conversations between chatbots and users in the commerce domain that leads to product purchases, and in the marketing area where various users recognize products. What is characteristic is that chat commerce is provided on social media such as LINE, Instagram, and Facebook Messenger.

At this stage, we are focusing on enterprise companies to provide solutions, and we want more end users to use chat commerce. This is because as a result, a lot of conversation data is accumulated in Zeals, and better product development can be promoted while cooperating with data held by companies.

Ichimura : Why did you decide to start a chat commerce business?

Shimizu : When I thought about the future of Japan, I thought it was no longer an exciting country where people could live a vibrant life by drawing bright dreams for the future. In order to change that, I started ZEALS with the intention of “elevating Japan.” The company name ZEALS means enthusiasm or selflessness, and this symbolizes our desire to take on the challenge of changing the world from Japan.

At the beginning of our founding, we tried trial and error on what to start with in order to “boost Japan,” and as a result, we took on the challenge of developing robots. As a new form of society in Japan where the number of people is decreasing, I thought it would be possible to create a social model where robots coexist together and expand the model of a new society where robots coexist from Japan to the world. If this were the case, it would also lead to solutions to social issues, and I thought it would be great if we could create a market for the robot industry.

Unfortunately, the robot business wasn't able to get off the ground. A large amount of money was also required, and there were parts where the robot technology itself was immature. There was no established market for how to use robots. I think it was a bit difficult for a startup that had just started to take shape into a new market.

Ichimura : Please tell us how it went from robot development to service development using chatbots.

Shimizu : Because I took on the challenge of developing robots, I thought that if robots started talking like humans, various services, society, and even people's lives would change. I thought the world would change if we could have conversations like people, encourage others, take consultations, and create communication technology that supports decision making.

So, isn't it possible to deliver communication technology via smartphones that everyone has rather than a robot-like housing? I started thinking that I would like to establish that technology somehow.

And the day came when we could make that happen. On 2016/4/12, Mr. Zuckerberg of Facebook at the time released an API so that chatbots can be provided on Facebook Messenger. This means that the communication technology we have cultivated through robot development can now be delivered on Facebook Messenger, which is used by approximately 1 billion people around the world. “Something ridiculous is happening.” I felt it, focused development on that, and created a service. It's 5/13, just one month after the API was released. At that time, it was the dawn of a famous American startup called Y Combinator (Y Combinator), and the first chatbot company was born. I think the reason we were able to get off to the start was because we felt the potential in robot development and communication technology, and we had a predecessor that went through trial and error.

Ichimura : What was the solution using chatbots?

Shimizu : As for how to turn a chatbot conversation program into a business, what we paid attention to was the marketing area. I thought that by communicating with a program that automatically communicates, it would be possible to change the marketing experience that connects product recognition to purchase.

Therefore, when a demonstration experiment (PoC) was conducted together with the customer, it was found that the purchase rate was higher as a result of the experience of buying a product through customer service through communication with a chatbot rather than an EC shopping experience.

We call the new commerce experience chat commerce that even famous companies such as Rakuten and Amazon didn't offer, and we thought there might be an opportunity to win.

Ichimura : Until then, e-commerce (EC below) had only been explained for a long time, and I think it often made people recognize it, gain sympathy, and lead to purchases. What made you think it was important to serve customers there?

Shimizu : On the EC site, an indication such as “10% off now” first appears, and an explanation of the product begins. There is a state where people who want to know what kind of problems it is for people who have problems can finally arrive at the necessary information towards the end as a result of looking at every corner of the site. In other words, it can be said that general EC is not personalized.

It should be a better experience to receive suggestions after being asked “what they know” and “what concerns they have.” Chat commerce makes it possible. In the case of cosmetics, there is a sense of satisfaction if you ask what kind of skin problems you have, what kind of skin type you have, and what kind of products you usually use, and then receive suggestions about “how about this product.” Whereas EC sites are proposal-first, chat commerce is hearing-first. I feel that the fact that we were able to produce higher performance than normal EC sites is proof that we were able to demonstrate that personalized experiences with Hearing First are beneficial.

Ichimura : Can you tell us about how large-scale funding was raised in the spring of 2022, its background, and effects?

Shimizu : As an assumption, an IPO was scheduled for December 2021. The purpose of the IPO was to raise funds to challenge the world. We have explained to all shareholders that we want to expand our services overseas, that we want to strengthen our investment in AI, and that we want to conduct an IPO for that purpose.

However, various changes, starting with the American interest rate hike, were combined, and as a result, the market environment changed drastically. Mothers crashed, and we were no longer in a state where we could raise the funds we had anticipated. Even if they were forced to do an IPO, we decided that it was not a situation where the investors could continuously support the global expansion of ZEALS, and as a result, we decided to forego the IPO, and as a result, we changed our stance all at once and steered to raise funds.

While saying that, in a state where the market is broken, investing not only in ZEALS but also in startups itself is “an investment at this timing?” It was filled with that atmosphere. Under such circumstances, the person I met after receiving an introduction was Ichimura-san and everyone at JIC VGI. I am grateful that they have faced our thoughts and business possibilities and evaluated that we are doing a worthwhile business. Being able to make an investment decision just 2 months later was a big deal.

Z Venture Capital's investment was decided around the same time, and I don't think we would have been able to challenge the American market or invest in AI without everyone's investment.

Ichimura: That was pretty fast, wasn't it?

Shimizu : Thank you for making this decision so fast. Since it was an environment where there were many companies looking to raise funds, we were also asked how we were able to receive investment in such a situation, and I think our fundraising brightened up the Japanese startup scene.

Ichimura : I saw Mr. Shimizu saying “congratulations” on SNS, and there was also a message saying, “Government-affiliated funds do good things once in a while,” and I thought it was great to be able to invest in ZEALS.

Ichimura : Why has ZEALS been able to grow so far, and what are its strengths?

Shimizu : ZEALS has 3 strengths.

The first is sales strategy. A system where top tier companies in the marketing industry, such as Dentsu, Hakuhodo, and CyberAgent, and over 30 partners are responsible for selling ZEALS is not a sales network that can be created overnight. Furthermore, we are developing our business by focusing on major companies. In order to create such sales channels, we have built up this system one by one.

Our second strength is communication design.

How can we improve the conversation experience performed by chatbots to make products sell better? Communication design is about thoroughly facing these issues and designing conversations that can sell more products through various trial and error and accumulation of data, and communication designers are responsible for this. ZEALS has been building a team of communication designers since around 2016. Originally, there was no job called a communication designer, and there were no such human resources to hire. That's why we've analyzed what kind of experience chat communication would make a product sell, converted it into data, and developed highly specialized human resources. Up to now, the team has grown to around 100 people. For major companies, it is important to have a system where such highly specialized members closely accompany them, and having a high level of support in addition to products is an advantage.

The third is data and AI products.

Until now, there has been no user insight data on what kind of conversations led to product purchases in chat commerce, but we have accumulated this data.

Products and infrastructure that provide commerce experiences have also been refined based on data. Since it is a solution used by major companies, it is important not only to have a high level of security, but also to provide a strong infrastructure even though it is difficult to see on the surface. ZEALS has also responded to Japan's top level of security, and we have built an infrastructure that can respond stably even when tens of thousands or hundreds of thousands of users access chat commerce.

Recently, the number of other companies in the same industry has increased, but there is no basic function for providing chat commerce that is comparable to other companies and not found in ZEALS.

On top of that, I think we are also creating new strengths by implementing conversation data (zero party data) about how to buy products that we have been building up for a long time, and AI based on it.

Ichimura : I think there have been some hardships in the process of growing up until now. Can you tell us what challenges you've faced, or what are you currently struggling with?

Shimizu : We are struggling with multinational management until now and now. It's difficult just to have a different language, but even with a single evaluation system, each culture has its own characteristics in how it is perceived. So, even if the Japanese team members are excited by explaining that ZEALS will move in this direction in the future, that is not the case when it comes to interpreting and conveying it to foreign members that they are just as excited. Motivation does not increase simply by throwing the same message, so in particular, the members of the development organization, ZEALS, are trying to convey what exactly they are trying to do with a different approach.

For example, management meetings are conducted in English. For foreign members, as long as the meeting is held in Japanese, it is accepted that they do not have the right to participate, so we have decided that an English-based meeting is necessary.

In addition to creating materials in Japanese and English, it is necessary to change the way it is conveyed even if the same thing is conveyed, so in order to build a global team, you have to pay communication costs. Increasing communication in English takes time and is difficult.

Ichimura : It is precisely because of these hardships that human resources who can also play an active role on Amazon and Google choose Zeals.

Shimizu : From a product and tech perspective, it seems that ZEALS looks like a very unique company. This is because Asia is leading the way in the commerce experience centered on communication called social chat commerce. The term social commerce has been coined in WeChat and LINE, but in short, delivering commerce and marketing experiences while using communication on SNS itself originated in Asia, and it is in a very unique situation in America. The reason behind this is that the release of Meta's API was delayed, I think.

Social commerce is growing in Asia, so much so that the Meta team comes to study “what's going on.” Social chat commerce itself is unique and interesting, especially for people of American and European descent. Moreover, since it is an area where LLM* is leveraged, it is attractive to people who want to do work related to LLM and generative AI, and since the product is unique, it is very interesting for them.

On top of that, Japanese cultural assets have given a boost, and people who have the chance to work for larger tech companies are also choosing ZEALS.

Furthermore, social commerce is becoming familiar to people of Asian descent. When I want to make products in that field, I also want to work on AI, and want to live in Japan, if it's a Japanese tech company that has a global development system, and what they make is involved in AI and can challenge the world, the number is limited, so I think it's a pretty attractive option.

 ^{*LLM: LargeLanguage Models. A language model using huge data sets and deep learning techniques. It is used by chatbots, search engines, etc.}

Ichimura: Together with an excellent multinational team, we have been developing the American business since 2022. In terms of global challenges, what position will the American business be for ZEALS?

Shimizu : I had the assumption that if there was a chance to win in America, which is the world's largest market, I would like to focus on a global challenge. That idea definitely changed because I went to the site, chat commerce was unique, and there were no companies working on it in America. When I introduced chat commerce to American people, responses such as “What is this, I've never seen anything like this” came back. When I saw it, I realized that tremendous opportunities were unfolding right in front of me. Until now, it has been natural for solutions such as the Internet to spread throughout the world, with services spawning mainly in America. Nevertheless, the theme we are working on is a reversal phenomenon where various kinds of good fortune have overlapped, evolved uniquely in Asia, and will spread in America from now on.

When I felt firsthand that we were in a state where we could challenge the world's biggest market with an advantage, I definitely thought we should do business in America. Of course, there are important things other than America, for example, China, India, and Africa for decades to come, but it's definitely the number one market in the world at the moment, and I was able to conclude that if we can take on the challenge at the epicenter of AI innovation, there's no way we can't help doing this in America anymore.

Regarding business development in America, investors said, “Is it America? Is it America and not Asia?” There were times when I was asked the question. I think that is, in a sense, the right response. I think the question “How much are you thinking about investing?” is correct. However, he said, “Isn't it okay? Instead, only JIC VGI and Ichimura-san were the only ones who said, “If you do it, you have to do it hard,” and “If you don't invest well, you won't be able to stand up.” I was so thankful that you supported me and gave Dawn a push on my back.

Partly because of that support, we decided to take on the challenge of expanding overseas in America and set up a corporation. It was in 2023 that we began utilizing the money invested by everyone for American business.

Ichimura : Can you share your impressions of starting a business in America?

Shimizu : As for our business in America, we are very fortunate to have an environment as expected, and we learned and made great progress at the start dash.

ZEALS's business was unique, and we didn't run into new competitors, and above all else, customers who started using our chat commerce with PoC were actually able to produce performance similar to, or better than, those born in Japan and Asia. American people are buying products through chat commerce. Customers have also acknowledged that it is worth paying the price, and they have actually paid the price. Additionally, Meta has partnered with Zeals. The fact that Meta, a platformer and part of GAFA, is looking in the same direction as the future drawn by ZEALS, and it has become a relationship where they develop it together is a major development. In addition, we are in a situation where we are starting to start sales with local advertising agencies as sales partners, and we have just begun to build the strengths we have developed in Japan in America as well.

We will expand the new form of commerce and marketing experiences created in Japan to America and the world. This can be said to be a long-cherished wish in the Japanese tech industry. After TOYOTA and SONY, in the age of the internet, positions have been thoroughly taken, and there is a current situation where services that make people around the world happy, from Japan to the world, have not been created. Under these circumstances, there is a tremendous opportunity in America to redefine new ways of commerce and marketing in an attractive and cutting-edge area where AI technological innovation is taking place. If we can deliver Japanese “hospitality” services from Japan to America and the world, the goals of Japanese startups should also change. In order to create such a positive future, I have a strong desire to make the ZEALS challenge a success.

Ichimura :Thank you very much. There was talk about AI, but could you tell us what ZEALS would like to achieve in the future, including that?

Shimizu : I've always believed in AI. I sincerely thought that if we could impart the power of human dialogue to machines, the world would change, society would change, and the industrial revolution would occur.

However, this was not possible with the technology at the time, and even though they thought that advances in AI would be a breakthrough, no one knew when it would be. The timing we were first moved by the fact that the LLM era began with GPT (General Purpose Technology) was 2020, when GPT3 came out into the world.

Until then, it was NLU (Natural Language Understanding), NLP (Natural Language Processing), about understanding natural language and how to process it, not NLG (Natural Language Generation). When I watched GPT3 in 2020, I was excited that the time had finally come for AI to revolutionize the communication field.

ZEALS is currently working on AI product development. For us, LLMs such as GPT are like semiconductor chips. What will they use to design, how will they collaborate, and what kind of unique and new value will they create? How do you control LLM through a unique console using unique data unique to ZEALS? It is important whether we will shape our unique AI products in this way. We are focusing on the evolution of chat commerce experiences through AI and how efficiently conversations created by communication designers are carried out, and whether AI can support miscellaneous tasks by focusing on creating more innovative experiences.

In that sense, it is no exaggeration to say that expectations for AI itself are greater than anyone else. In the field of chat commerce, we will promote AI product development that can greatly leverage the possibilities of the most unique and most valuable communication design in the world.

Ichimura: Thank you very much. We look forward to great success in America and around the world.