We spoke to Hakuhodo Keithly's CEO, Shigematsu, who is promoting web3 projects with a variety of client and partner companies and hosting global hackathons, about trends in the web3 field and his company's future prospects.
Please tell us about Hakuhodo Key3’s business.
Toshinori Shigematsu (hereinafter Shigematsu): We are an independent subsidiary, but we are also in a position like Hakuhodo's web3 specialist unit. Sota Watanabe of Aster Network is also a board member, and we are a joint venture that Hakuhodo and he co-founded.
Hakuhodo's business originally started from solving social and corporate problems.
We have strengths in "sei-katsu-sha insight," a philosophy that provides deep insight into consumers, and in creativity, so we are a company that uses these to solve problems that could not be solved by Web 2.0 until now using new web3 technology.
We are working on things like using web3 technology to launch new businesses for companies, and whether web3 can increase engagement between fans and brands. We also help companies solve challenges that have been difficult to solve as a company through global hackathons.
Last year, we held several hackathons in cooperation with Toyota, Mazda, Mitsubishi Estate, and others.
You were originally the Shanghai branch manager of Yomiuri Advertising, but how did you come to be appointed CEO of Hakuhodo Keithly?
Shigematsu: I joined Yomiuri Advertising as a new graduate and was in charge of real estate advertising for four years. I think I was very lucky to start in this field. That's because real estate advertising has a very wide range of work to be involved in.
For example, in addition to producing and distributing inserts, we also produce websites, pamphlets, and blueprints. TV commercials, sales center models, and videos to be shown in theaters are also produced by advertising companies. I was involved in everything from small to big things at once, so I'm grateful that I was able to get off to a good start as an advertising man.
One particularly memorable experience was when I was in charge of a new apartment building in the Bay Area with my senior colleague in 2001, 23 years ago. We put tempered glass on the walls and floors of the sales center and laid out TVs all over the place, and when people stood on them, they flew over the sea and arrived at the property. Looking back, I think that was VR.
Around 2005, the importance of the Chinese market increased, and Yomiuri Advertising also discussed entering the Chinese market. There was only room for one person to be a start-up member, but for some reason I, who had been with the company for five years, was chosen and ended up being stationed in Shanghai.
Before I went, I thought I would come back in about three years, but I found it interesting to learn Chinese and use it to work locally, and before I knew it, I had been there for 12 years.
One memorable job was working for a Japanese sports drink in 2013. At the time, there was a Guinness World Record of people from 80 countries in one sauna, so we tried to surpass that record by cramming people from 99 countries into one sauna (laughs), and when they came out, we filmed a video of them drinking the sports drink with gusto, and used that as a PR promotion.
We were successfully certified by Guinness, and it was also broadcast on Chinese news programs. We also installed a lot of interactive content using projection mapping and Kinect in the production factory, and had it certified as a factory tour route for nearby elementary schools.
Tens of thousands of people have participated in this factory tour so far, and it was a very rewarding job. By the way, the Guinness World Record for saunas was broken in Finland in 2019 with the participation of 103 countries (laughs).
The feeling of fighting a guerilla war in China was very appealing, but at the same time, I had a small anxiety about whether I would be able to work properly with large companies in Japan in the future.
I've always liked new technology, so after returning to Japan, I joined a metaverse-related subsidiary of a large company as a director. It was just during the COVID-19 pandemic, and there was a time when business exhibitions could not be held at all, so I tried to hold them in the metaverse space.
You can exhibit and participate in business exhibitions from home, and you can collect data on which PDFs of which products visitors are looking at. At the time, it was a big topic that you could get business cards for new sales even during the COVID-19 pandemic.
Around the same time, I happened to have the opportunity to come into contact with blockchain. I bought cryptocurrency for the first time in 2017, but I think I really started to get involved around 2021. After studying it, I came to understand the idea that "the condition for the establishment of the metaverse is web3."
I thought that true metaverse life would only be possible when it became possible to prove my identity in the metaverse, prove that the clothes I put on my avatar are my own, or do work and get paid and convert that into legal tender, and other such proof and economic activity could take place within the metaverse.
Around the time I was tweeting about this on social media, Hakuhodo heard about starting a new blockchain company and contacted me to join. Just as I sensed a big trend in 2005 and moved to China at the time, I felt that web3 would definitely be coming in 2023, and so I jumped into this industry.
Please tell us about "KEY3 STUDIO". What do you want to achieve here?
Shigematsu: In advertising agencies, for example, we decide which commercial director to hire based on the content of the project. Each director has their own specialty, so we don't always use the same person. In addition, when creating a website, we choose a company that is strong in a specific area, and we gather the best people and companies, both domestic and international, for each project.
The scope of web3 is actually as diverse as the uses of paper, and we believe that it can take various forms such as money, paintings, membership cards, and resumes, so it is not realistic for one company to handle everything related to web3. Our basic project approach is to work with various specialized companies, such as companies specializing in wallets, DID, NFT minting, and royalty management, to solve clients' problems.
Considering the wide range of web3, this kind of teaming is essential, so we established "KEY3 STUDIO". In short, it is a peer organization prepared to respond quickly to web3-related projects, and we approach whether we can use web3 to solve clients' problems in the correct way and with the right team.
Please tell us about "web3 Sherpa," which was announced in January 2024.
Shigematsu: In the global web3 market, various services and products are being created, mainly by startups. Some major overseas companies are also starting to provide applications using web3 technology.
However, there are still few development projects using web3 technology in Japan, and I think the reasons for this are the lack of engineers, the complexity of development tools, and the difficulty of creating a strategy that links to the company's issues.
To solve these issues, Hakuhodo Key3, Hakuhodo's Marketing System Consulting Department, Startail Labs, which has web3 development knowledge and solutions, and NTT Data have collaborated to provide "web3 Sherpa."
Hakuhodo is often seen as strong in concept-making based on sei-katsu-sha ideas and creativity, but not in development or operation, but this team can accompany projects from start to finish, from strategic planning to PoC implementation and operation.
Please tell us about Hakuhodo Key3's strengths.
Shigematsu: It is not possible to identify, solve, and close a problem using only web3 technology and know-how.
I think that our strength, including Hakuhodo, is that we have a wide range of knowledge, such as identifying problems, formulating plans, understanding the needs of consumers at the time, and grasping the difficulties faced by managers. Hakuhodo places importance on sei-katsu-sha insight, and believes that it can support the growth of companies and problem-solving based on that.
The technology contained in the web3 field is merely one of the means. If web3 is appropriate for solving a client's problem, we at Hakuhodo Key3 are asked to support them, and conversely, if it is determined that web3 is not necessary, we will not forcefully propose incorporating web3 elements.
We also play a role in connecting with other departments at Hakuhodo, and propose truly appropriate solutions.
How do you imagine the world will be like once web3 becomes widespread?
Shigematsu: I think that web3 is not something that will destroy and repaint the Web 2.0 world, but rather an evolution that will increase its convenience. For example, OpenSea, an NFT marketplace, is also operated on a Web 2.0 platform.
Considering the issues facing Japan, such as population decline, a weak yen, a declining birthrate and aging population, and economic stagnation, companies are in an increasingly difficult situation. According to a large-scale fixed-point survey by Hakuhodo, the severity of the current situation felt by corporate executives has increased from 40% to 80% over the past 20 years.
Under capitalism, companies are required to grow, but in the current environment, this is very difficult. Under these circumstances, the development of new businesses is facing its limits. As an advertising company, we believe that one thing we can do through blockchain is to create a possibility for collaboration between companies.
Data in CRM (customer relationship management) systems is a valuable asset for companies, and collaboration is difficult. However, blockchain functions as an infrastructure that transcends the boundaries between companies, facilitating cooperative relationships that were previously difficult to achieve, such as providing one company's services to customers who have purchased one company's products.
I think this will help companies grow, and it may also make society a little more convenient and profitable for consumers. I think web3 has the potential to realize cooperation between companies in an unprecedented way, and create a future where things are easier to use.
What are the future prospects for the web3 sector?
Shigematsu: It is said that the number of web3 users in 2024 will be about the same as the number of people using the Internet in 2000.
Looking back at the state of the Internet in 2000, i-mode was introduced in 1999, and Google search only just began in 1998. The birth of Facebook, Twitter, iPhone 3GS, and LINE was still a long way off. Just as it took a certain amount of time for the Internet to become widespread, it will also take time for mass adoption of web3.
In 2000, the Internet was not yet commonly used, and when I took the employment exam for Yomiuri Advertising, I was instructed to come to the Ginza office to pick up my application form. Faxes were also commonly used in daily work.
Just as we unconsciously changed from fax to email, I believe that over the next 5 to 10 years, it will gradually become more widely accepted by the general public, and eventually web3 will become a commonplace part of everyday use.
What is your view on the importance of wallets in web3?
Shigematsu: Obviously, you can't send or receive crypto assets or NFTs without a wallet. That's why I think it's important to have wallets that are used naturally and blend into everyday life.
There is a possibility that major carriers will start selling smartphones with wallets pre-installed in the future. If that happens, the number of users who have wallets will inevitably increase, and the opportunities to use them will also increase.
I think it will also become commonplace for wallets to be quietly installed in the apps of companies that general users use on a daily basis.
For example, a certain automobile company is developing its own app, where fans of the company can write comments. If it has a wallet function, can store digital collections, can easily connect to the NFT marketplace, and has a UI/UX that allows buying and selling, I think the barrier to entry for users will be greatly lowered.
In any case, I'm very excited to see what form the killer app will take, and if possible, I would be happy if our company could be involved at that time and place.
Please tell us about your future prospects.
Shigematsu: This year, we plan to hold several events with NTT Digital with the intention of achieving interoperability between companies in order to popularize web3.
By working with various companies on web3 projects, including through events like this one, we hope to be able to help with the mass adoption of web3, which will likely come unknowingly.
Finally, we are currently recruiting employee candidates and contract workers, so if you are interested, please apply on our website (https://www.key3.co.jp/). Thank you for today.
Toshinori Shigematsu
CEO of Hakuhodo Keithly Inc. He established the Shanghai and Taiwan branches of Yomiko Advertising and became their general manager. After returning to Japan after 12 years of working in Greater China, he joined an XR company as a director. He launched a virtual event platform in the metaverse space and has been in his current position since January 2023.
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