Kimiyuki Suda, who serves as an Outside Director of COVER Corp. is a management specialist who has been involved in the IT industry since its nascent days. His vast experience spans from the launch of businesses at SoftBank Group Corp. to supporting the IPO of startups. He has known COVER CEO Motoaki Tanigo for over 20 years. After working together with CEO Tanigo in a senior-junior relationship at Imagineer Co., Ltd., Mr. Suda has been involved with COVER as an advisor since before its establishment to the present day. We spoke to Mr. Suda about the path thus far and future direction of COVER, which has transitioned from a VR company to a VTuber business, and has now acquired passionate fans around the world, thus growing into a global entertainment company.
From sounding board to Outside Director: Building a foundation of trust over 20 years
—You have served as an outside director or advisor at various companies. Could you tell us about more about your career to date?
I joined Imagineer after graduating from Waseda University’s School of Commerce, then served in roles in business planning at the Softbank Group’s SKY Perfect JSAT Corporation, Broadmedia Corporation’s IPO, and in the launch of Yahoo! BB. After resigning from SoftBank Group, I was involved in the IPOs of such startups as Aeria Inc., Bengo4.com, Inc., and Crowdworks, Inc. Since then, I have served as an advisor or executive at multiple companies, and currently serve as an outside director at six companies, including COVER.
—What kind of activities do you mainly perform as an outside director?
Outside directors are responsible for monitoring executive management and protecting shareholder interests. Their basic duties involve monitoring management at board of directors meetings.
I have participated in COVER as an outside director since its inception. In my case, I usually have close relationships with the leadership teams of the companies where I serve as an outside director. At first, I often take the role of a open-minded older brother and give advice to entrepreneurs. I think entrepreneurs want to learn the essence of startup company growth from my personal experience (such as a crazy business growth environment like SoftBank Group and an IPO at Aeria).
As time passes and the company grows, my role transitions from being an older brother mentor to an outside director.
—So for various companies, Mr. Suda, who has experienced the nascent days of the IT industry, is also a reassuring mentor. When did you first meet CEO Tanigo?
My first encounter with Mr. Tanigo goes back to Imagineer, the company I joined as a new graduate in 1996. At the time, that company had around 40 employees, and 10 joined as the second cohort of new graduates, with Mr. Tanigo among them. After that, Mr. Tanigo and I remained connected even after leaving Imagineer. For example, he participated as an external contractor in the business of Aeria, which was launched by a former colleague at Imagineer, who joined the company in the same year. I was also as officer when Mr. Tanigo established 30min., Inc., and during the preparation period for the launch of COVER in 2016, I was a sounding board for him to bounce ideas off about once a week. Today, we collaborate actively together, and I participate weekly general manager meetings and annual executive offsites.
I accepted the position as an officer at COVER without a second thought because of the long-standing trust I had with Mr. Tanigo. You could say we are old acquaintances. It’s hard for people to understand each other, so I’ve come to realize that long-term relationships are important (lol).
—So you’ve known each other for over 20 years. Has there been any change in your relationship with CEO Tanigo since you became an Outside Director?
Yes, indeed! I interacted casually with him as he used to be my junior when COVER was first established , but recently I basically use polite and formal Japanese when we communicate. Also, I receive more messages from him on weekends than weekdays these days (lol). I’m probably thinking more clearly with a cooler head than when I’m rushed with work during the week. Mostly it’s work-related, but sometimes I still get messages from him about my personal life, such as asking how I plan to spend the weekend. Considering my position, I try to respond to his messages immediately (lol). Also, his antenna for trends has always been more sensitive than mine, and he tells me about content that hasn’t even been released yet (Makoto Shinkai’s works and Sword Art Online, for example).
I think that the contrasting personalities of Mr. Tanigo, who is more of an indoor type, and myself, a cheerful extrovert, have also contributed to the development of a complementary and well-balanced relationship. Mr. Tanigo has a youthful sensibility and ambition, but at the same time he makes use of the experience he gains every day in his decision-making. It’s a kind of “paradoxical dualistic mindset”, which becomes more difficult with age. I feel that sustaining this thinking ability is one of Mr. Tanigo’s strengths as an executive.
Taking on the global market with high hopes for COVER: “Our mission is to provide entertainment that doesn’t end as a passing fad”
—Please share your impressions of COVER at the time of its founding and its subsequent turning points.
When COVER was founded in 2016, it was developing a VR table tennis game in a modest multi-tenant building in Shibuya. After that, I also watched in real time as the Company shifted its focus to the VTuber business. At first, COVER didn’t have a clear direction, but as it continued its research into voice apps and surveyed illustrators, and with the backdrop of the emergence of Kizuna AI—the world’s first virtual YouTuber—the pieces gradually came together.
A major turning point for the Company was when Mr. Tanigo spoke at the Infinity Ventures Summit (IVS) held in December 2017. His presentation at IVS was the trigger for spreading the COVER name in the startup community. Until then, it had been difficult to gain the understanding of investors regarding the VTuber business, but the situation flipped after the presentation at IVS, and COVER received many offers for funding on the same day.
My most memorable touchpoint with COVER’s fans was the first concert held by hololive production at Toyosu PIT. At the time, I was somewhat skeptical about holding the concert, but I was blown away by the excitement of the audience waving their glow sticks at the venue.
During the event, there was a technical glitch that caused the concert to be temporarily interrupted. A prolonged silence during a concert is quite a mess, isn’t it? After a while, people here and there in the audience started to shout encouragement along the lines of “You got this!!” (aimed at the concert organizers) Then, someone shouted “YAGOO (CEO Tanigo’s nickname), You got this!”, and before we knew it, the whole auditorium transformed into a frenzied chorus of “YAGOO! YAGOO!” I got goosebumps from the sense of unity at that moment. After that, hololive production grew steadily as a business including its global expansion. Looking back, the road to listing seems to have been relatively smooth, but in reality the problems were endless (lol). My impression is that the Company has grown through a variety of experiences, including these kinds of problems. I also believe the presence of rivals in the industry has been a positive for market growth.
—What are the unique features and your impressions of COVER that have remained constant since the Company was founded?
Both Mr. Tanigo and CTO Ikko Fukuda have long careers in the Internet industry, and a feature of COVER from the beginning is that they share a deep attachment to content. The basic stance of creating high-quality content and entertaining people has been a constant since the company was founded. As another example, both of them have generally gentle personalities. As the Company has grown, I am no longer in a position to fully grasp the atmosphere on the front lines, but I have a vague impression that COVER has always had many employees with similarly gentle personalities.
Also, the commitment to setting lofty goals has remained unchanged. Companies that have achieved global success, such as Sony, Nintendo, Fast Retailing, and South Korean content companies, frequently come up in my conversations with Mr. Tanigo. I assume that he is always aware of the management strategies and attitudes of these companies, and I feel that they represent the high goals that COVER is aiming to achieve.
—Having been involved in various companies, what are your expectations for COVER?
The main issue facing Japan’s IT industry is that it is unable to generate overseas sales and relies mainly on domestic demand. Also, looking back at the IT x entertainment industry, there are many trends that ended up as short-lived fads, such as ringtone downloads during the feature phone era and social games.
VTuber is a new form of entertainment that originated in Japan, combining IT technology and characters while leveraging the global platform of YouTube. Among these, hololive already has many fans overseas, and further growth in the global market is expected. I feel that it is COVER’s mission to continue providing entertainment that is loved across borders and generations.
Personally, I am growing a little weary of still being asked about SoftBank, the company I used to work for 20 years ago. I hope that the brand recognition of COVER or hololive will surpass that as soon as possible (lol).
COVER’s organizational vision and growth strategy: “Fostering New Talent to Become the Future Leaders of the Company”
—What are you particularly conscious of when providing management support to COVER?
Even when looking at companies like Softbank and Fast Retailing, I feel that the energy level of the founding CEO is a critical factor in the growth process of startups, regardless of their size. From this perspective, I feel that supporting Mr. Tanigo, the Company’s founding CEO, from all angles is my priority mission.
Even though COVER is now publicly listed, I think it remains a startup with ample upside for growth. I feel that there is still a lot of scope for improvement from an organizational perspective, so I would like to work to enhance COVER’s corporate value by proactively communicating not only with Mr. Tanigo, but also with other officers and employees on the front lines.
Recruiting new staff is also essential, and I regularly conduct casual interviews that could lead to potential hires. As a publicly listed company, COVER offers stability, but there’s also a bit of a “second-phase startup” chaotic vibe. If you’re someone who enjoys that kind of environment, let’s start with a casual online chat! (lol)
—What kind of talent do you think COVER will need for its future?
The next step for I envision for COVER is to become a company that attracts talented people. In particular, I sense it wants to strengthen and continue new graduate recruitment. I feel that companies like CyberAgent and Recruit Holdings, which attract top-tier new graduates, have undeniably strong organizations.
Also, given how critical artistic sensibility is in the content and entertainment industries, I’d like to foster the front lines where young talent can consistently generate fresh hit content. I would like to find Tanigo 2.0, or rather, to mass-produce “young Tanigos” who can lead the future of the Company (lol).
Recently, there has been a rise in the number of young entrepreneurs. Yet the reality is that the odds of success are low, and it is tough to take on large-scale challenges. If you want to take on a meaningful challenge, I recommend joining a company like COVER that has plenty of room to grow (lol).
—Finally, if you had to describe the true COVER in one phrase, what would it be?
What comes to mind is “a company that creates new entertainment culture”.
The content known as VTuber is creating new value by fusing the digital with real people, and is creating fans (customers). In my opinion, the value of humanity will be rerated as the AI era arrives and digitalization accelerates. I hope that COVER can become a company that continues to create new entertainment and culture within such an era.
