From Founding to its Growth Stage of the “Improbable” AI Business

On April 27, 2022, AI inside held a discussion event under the theme of “From Founding to its Growth Stage of the “Improbable” AI Business: How to overcome difficulties on the way.”

The event began with presentations by Toguchi and Nishikawa conveying the challenges they experienced before and after their companies’ establishment and their mission and vision for the future. Then, they talked about the challenges they faced in each phase and their choices from an entrepreneur’s perspective.

In this article, we will share what they answered to the questions from the audience.

Speaker Profiles

The facilitator of this event was Kurando Takahashi. The two speakers taking the stage shared the common thread of being founders of AI businesses: AI inside’s Representative Director, President & CEO (Concurrently) CPO Taku Toguchi, Taku Toguchi, and then-representative director of aiforce solutions, Tomoaki Nishikawa.

※AI inside acquired all shares of aiforce solutions and completed an absorption-type merger of the company in May 2022.

The Common Thread Between Two Men Who Started AI Businesses

Takahashi: The two both use the word “AI,” but there’s a slight difference in your approaches. AI inside takes an interest in image data, whereas aiforce takes an interest in tabular data and some areas of natural language processing.

AI needs data as its raw material. There are many types of data, such as image data and numeric data. There’s also natural language and voice, which are major types. Both founders have a background in entering AI from the perspective of data, which is their strength.

Another thing the two have in common is that both Toguchi-san and Nishikawa-san are engineers. Both representatives are unique in how they understand both the product side and the business side on top of understanding the engineering side.

Then there is the vision. But, again, I feel both have a shared vision of the democratization of AI, of continually lowering its price to spread AI throughout society.

The Foundation of a Product Begins with a Strong Awareness of the Challenges

Takahashi: I’d like to move on to the Q&A. The first question is one I’ve prepared about starting a business. Many companies working on digital transformation (DX) have first tried to acquire DX skills.

However, I think companies realize that the how-to part of transforming the existing business into a new business by using digital data, and how to create new value is essential. So, here is the first question. I believe that many people wonder what exactly they should make or do as the first step. Toguchi-san, Nishikawa-san, your thoughts?

Toguchi: I think you have to offer a solution to a societal challenge. The way I see it is if a company isn’t offering that, it isn’t a company that the world needs. So that’s why I want our company to evolve humanity and provide solutions to societal challenges.

Conversely, as typical as it is, there’s one thing that I don’t think is good — to think in terms of what you’re capable of, from what you already know, or from what you’re already good at.

slide shared during the event

Nishikawa: I feel that there’s a slight difference between the vision for a product started by a self-starting entrepreneur, and for a product started by a company. The first product you create is based on a solid awareness of challenges.

I thought that if I didn’t do something about Japan’s societal challenges, “Japan is done for,” or “This industry is not training people the right way.” So I wanted to do something about it, which is how I came up with the idea for the product.

My vision was definitely influenced by my time overseas, mainly when I lived in China. The difference in China’s approach is staggering; they experiment many more times, invest orders of magnitude more capital, and just have a massive number of AI engineers.

This thought has been the backbone of my life since elementary school when I had an intense sense of crisis about how I should work in the future.

Takahashi: When most businesses wonder what to create, they typically start from their strengths and start from there.

We often talk about a product-out approach, of simply making something and tossing it into the market. However, with this approach, the timeline is long, and there’s no guarantee on how the market will react. So many companies end up just making a product, and that’ll be it.

Listening to people who’ve developed the AI industry as far as you two have, the main point seems to be that we should first understand what social issues or industry issues we want to solve in a broad sense, and then we must grasp our strengths.

Look At Uncertain Times from a Long-Term Viewpoint

Toguchi: I see we’ve got a question from the chat. “Your company is entering the stage of considering overseas expansion, but with the current unstable global situation, how do you think about the future?”

True, things might seem pretty uncertain if you look at it from a short-term perspective. Still, when looking at the long term, there will be many obstacles like this continuously happening. It’s like a pendulum: if it goes to the left, it will return to the center and then go to the right again.

I don’t think it’s necessary to be concerned with the immediate future. However, we’re doing plenty of research with every move we make, but that might not make much of a difference in the long run.

Takahashi: What about you, Nishikawa-san? Society can move in several ways when developing under a product-out approach, so do you have any concerns in that regard?

Nishikawa: I suppose I don’t think about the short term too often. I think of it like stock prices; they might fluctuate a lot over a year, but when you look over ten years, or perhaps a bit longer at a hundred years, you find that while there are times when it slumps, it ends up finding its way back to where it used to be. So I think it is better to look at it within that context.

Toguchi: Yes, good point. If you look at challenges from the perspective of a ten-year term and find issues that you can solve in two or three years, then you just work on that. I think it’s something along those lines.

Takahashi: I think the common denominator for AI inside and aiforce is that they both position their products as a means to achieve their long-term visions.

Have the Spirit to Approach the Hard Things Without Treating Them Like Hard Things

Toguchi: I see we’ve gotten our next question. “Please tell us about any difficulties you’ve found when working on “Learning Center.”

The first thing that comes to mind is the initial release in April 2020.

Learning Center back then was… Well, I’ll be honest, it wasn’t great.

It’s been long enough that I can talk about it now, but we made a mistake in the architecture design. Sure, it was great that we had our MVP*, but it was in a state where we could only offer it to one company.

MVP: Minimum Viable Product. A product with enough features to attract early-adopter customers and validate a product idea early in the product development cycle.

And not only could it be offered to “one company,” but also you could register only one user. So it was like, you can upload training data and annotate, but the “train” button itself didn’t work…

We eventually solved the state it was in by pouring resources into it. Now, we are offering it to many users, and the functions have improved so much that it’s unrecognizable from before.

Takahashi: I see. While the “how” of overcoming these so-called hard things is a factor, what kind of mindset should you have when you’re making something that doesn’t exist yet, and when success appears on the horizon? Now then, Nishikawa-san, if you’d please.

Nishikawa: I don’t think I’ve had too many difficulties in the past. Really, everything was much more challenging when I was living in China. So I believe that as long as the thing I’m working on won’t make me die, it’s not that hard (laughter).

Toguchi: It means it’s essential to have that mindset, right? (laughter)

Nishikawa: Yes (laughter).

Toguchi: But with that being said, everyone has tough times, right? It’s just that when they happen, you have to find a solution; you’ve just got to see it through. So when those times come along, I absolutely believe that you can’t let yourself fall into conventional thinking.

If you try to find a solution based on conventional ideas, you’ll spend a lot of time only to find that they don’t work. So I think it is a matter of thinking things through until you find the correct method, to the point where you are determined to go through with it no matter who may be against it.

That’s it for part 1. In part two, we will share what they devoted their time in aside from development, and messages to those struggling with growth.

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