Shintaro Matsumoto Of NEC X On 5 Tips for Accelerating Product Ideation & Innovation

An Interview With Rachel Kline

Hypothesis-driven thinking:
When people think of Lean Startup, they often picture blindly moving forward. However, it’s important to start by forming hypotheses. By validating the identified challenges early and drawing conclusions, you can quickly recognize failures and explore directions for corrections.

In a world where the pace of change is faster than ever, the power of great ideas has never been more crucial. And yet, developing these ideas into impactful, market-ready products can be an immense challenge. The best products are not born overnight, they’re the result of dedicated ideation and innovation processes. These processes aren’t always easy, but they’re necessary and can be catalyzed with the right strategies and approaches. How do you foster a culture of creativity within a team? How can one rapidly translate ideas into prototypes and eventually finished products? How can roadblocks be anticipated and managed effectively to avoid unnecessary delays. In this series, we’re eager to explore insights, stories, and actionable tips from those at the forefront of ideation and innovation. As part of this series, we had the distinct pleasure of interviewing Shintaro Matsumoto.

Shintaro is the President and CEO of NEC X, a Silicon Valley-based venture studio backed by NEC Corporation. He manages NEC X Venture Studio team and its startup project portfolio and handles the overall operation.

Thank you so much for joining us in this interview series! Before diving in, our readers would love to learn more about you. Can you tell us a little about yourself? Can you tell us a little about yourself?

I joined NEC Corporation in 2001. NEC is a global company with a history of over 120 years in Japan, possessing world-class technology in various fields such as biometric authentication, image analysis, and AI. After working as a software developer in the engineering department, I also took on roles in the marketing department, handling alliances with international partners and strategic planning in the business unit. Starting in 2015, I led new business development in the AgTech sector, including the launch of NEC’s AgTech business, “CropScope,” and the establishment of the joint venture, DXAS Agricultural Technology. After serving as acting head of the new business development department, in June 2023, I assumed the role of CEO at NEC X, a venture studio focused on creating new businesses, using NEC’s technology and talent as its core.

At NEC X, we offer a venture program called “Elev X!” which involves various stakeholders, including entrepreneurs, investors, researchers, mentors, and engineers. My background in engineering, marketing, and business experience has allowed me to build a strength in understanding diverse opinions and perspectives, which is extremely valuable as the CEO of NEC X when interacting with them.

What led you to this specific career path?

During my tenure at NEC Corporation, I served as the acting head of the new business development department, overseeing six teams and 80 subordinates. As I observed their approaches, I developed my own insights into the successes and failures in the context of new business creation. Leveraging this knowledge, I was tasked with disseminating a methodology for new business development throughout NEC as a whole.

In this role, I was assigned as the human resource management for improving new business development capabilities among more than 800 Business Design professionals across NEC Group, both within and outside of my team. I also conducted lectures for approximately three years. This business development experience and consistent enthusiasm for innovation have played a pivotal role in shaping my current career as the CEO of NEC X.

As the CEO of NEC X, I have the opportunity to learn from the cutting-edge approaches and best practices in Silicon Valley. This experience serves as a valuable step in the pursuit of innovation, and it is expected to be a crucial element in introducing new perspectives and innovative approaches in the field of new business development.

Can you share the most exciting story that has happened to you since you began at your company?

The “FutureFusion Forum,” held on September 14, 2023, in celebration of NEC X’s 5th anniversary, was an incredibly exciting event. At this milestone moment, it aimed to reaffirm NEC X’s presence within the Silicon Valley ecosystem and create a platform for key figures in startups, investors, large corporations, academia, and more to come together and foster new ideas for future innovation through open innovation collaboration.

Co-hosted with MIT ILP, the event featured a keynote address by Aude Oliva, Director of MIT-IBM Watson AI Lab, and panel discussions with industry leaders like Rachel Calmer, a former President of Alchemist Accelerator and current co-founder of an AI startup. It was a highly impressive event.

To be honest, even after becoming the CEO of NEC X, I sometimes found it challenging to truly feel the impact of NEC X on the Silicon Valley ecosystem. However, the overwhelming response from over 400 local startups, investors, academic, and corporate stakeholders who registered for the event allowed me to tangibly experience the high expectations placed on NEC X. In particular, during the portfolio pitch sessions, the continuous stream of questions from the audience, mainly investors, gave me a glimpse of the reality of investment considerations. It was an exciting moment that also deepened my confidence in the uniqueness and growth potential of NEC X’s portfolio businesses.

What are some of the most interesting or exciting projects you are working on now? How do you think that might help people?

At NEC X, we are currently running our 10th batch of the venture studio program, and in my interactions with the entrepreneurs during Batch10, I’ve strongly felt the differences in entrepreneurship between Japan and Silicon Valley. The entrepreneurs in Silicon Valley exhibit a high level of enthusiasm and are genuinely committed to our venture studio program. They embody the freedom of pursuing a startup career at any time, and this flexibility is quite evident.

NEC X, as a venture studio, plays a critical role in supporting their success. It’s akin to being a designer, project manager, mentor, and product manager all at once, making it a highly challenging endeavor. NEC X is an entrepreneur-centric venture studio, and it cannot exist without their innovative ideas and vision. In other words, it’s not about simply giving them instructions but rather ensuring that they are convinced and genuinely passionate about what they’re doing from the depths of their hearts. This is fundamentally different from the experience I’ve had in the past while leading teams at NEC. It’s indeed a very challenging task, but I take pride in the fact that we can work with these entrepreneurs to create businesses that have a significant impact on society. It’s exciting to be part of the process where innovation is born, changing people’s lives for the better.

You’re a successful business leader. What are three traits about yourself that you feel helped fuel your success? Can you share a story or example for each?

Experience starting new businesses:

I have experienced starting new businesses, which is one of the most significant aspects of my background. Throughout this journey, I faced numerous challenges and learned from failures, which led me to gain insights into entrepreneurship. This experience nurtured my passion for driving innovation and taught me the leadership required to bring new ideas to life, ultimately shaping my current endeavors at NEC X.

Excellent communication skills:

I place a strong emphasis on building cooperative relationships and fostering trust through communication. During my involvement with DXAS Agricultural Technology, a joint venture with the major manufacturer Kagome, open and candid communication was a crucial key to fostering trust and achieving success in collaborative projects with different organizations. At NEC X, where supporting entrepreneurs involves establishing relationships with various collaborators such as investors and supporting partners, my communication skills prove to be highly valuable.

Well-intentioned busybody:

I strongly hold the desire to contribute to others. I believe this is a quality that many individuals with entrepreneurial experience can resonate with. It’s a vital element in creating businesses. As the business progresses and the customer base expands, I continually strive to provide solutions that contribute more and more to our customers. I have a memory of feeling that if I don’t do it, who will change the world? I refer to this as the spirit of being a “well-intentioned busybody.”

It has been said that our mistakes can sometimes be our greatest teachers. Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

Recently, we had a colleague who had just graduated from graduate school join NEC X. Upon hearing that she had graduated from graduate school, I had mistakenly assumed that she was much younger than me. However, that turned out not to be the case. I had jumped to the conclusion that if someone had graduated from graduate school, they must be around the age of a new college graduate. This experience made me realize that I had been more trapped by preconceived notions than I had thought.

In Silicon Valley, diversity is abundant, even more so than in Japan. It’s important to recognize the need to update our own value systems and break free from such fixed ideas.

Do you have any mentors or experiences that have particularly influenced your approach to product ideation and innovation?

I’ve had the privilege of working with Hideaki Takahashi, the Deputy President of Fuji Xerox and an external director at NEC. His advice has always been eye-opening for me. From him, I learned that to generate innovation, it’s essential to look beyond the surface and understand the background and challenges.

At that time, I was facing the challenge of dealing with relatively conservative farmers. However, Mr. Takahashi taught me that they have their reasons for being conservative, and they have the right to be. These farmers spend a year cultivating crops for harvest, and since they have only one opportunity per year, introducing rapid changes carries high risks, and failure could mean losing everything. It’s difficult to adopt new methods all at once. They have arrived at their current state by taking on challenges gradually over a long period.

I learned from him that to foster innovation, it’s crucial to see things from the other person’s perspective and deeply understand the problems. I believe that by practicing this approach, we can build a foundation for success in developing new ideas and products in NEC X projects.

In your experience, what is the anatomy of a strong product idea?

There are two main factors I consider important in a strong product idea. First, it’s essential to have “consistency” in the product. This consistency extends from aligning the problem with the solution to ensuring that the product design follows this consistency throughout the company’s concept, product interface, colors, and even to the initial touchpoints and customer success. It’s also crucial that the organization’s structure is aligned with KPIs based on this consistency, not just the customer touchpoints.

Secondly, it’s important to leverage the “strength of technology” in powerful product ideas. One of NEC X’s strengths is the cutting-edge technology from NEC and the entrepreneurial spirit of its researchers. However, it’s not just about providing these resources but also about the process of turning them into tangible products or services and ensuring they fit the market. To achieve this, we plan to increase its engineering resources and take specific steps such as offering APIs to make the products from the research labs more accessible.

What approach does your team use for coming up with new ideas for products and features?

In NEC X’s venture studio program “Elev X!,” we emphasize a thorough process of customer discovery. This is a critical approach for entrepreneurs to analyze customers and accurately identify their needs. To validate hypotheses, entrepreneurs conduct over 50 interviews in two months to understand who the customers are, what their challenges are, and more. To accurately grasp these challenges, we focus on having customers share from their perspective, rather than just asking questions.

For instance, in B2B businesses, we ask customers to reflect on their daily tasks from the time they start work until they finish. We encourage them to share specific episodes of challenges they’ve faced. This approach helps us uncover challenges that customers might not have recognized as problems or thought about solving. From the surfaced challenges, we formulate solution hypotheses and continue the interview process in an iterative manner.

Since it’s not guaranteed that the solutions generated will succeed on the first attempt, it’s essential to go through multiple trials and errors and provide insights to customers to make them realize, “This is what I needed.” Entrepreneurs participating in Elev X! generate new product and feature ideas through this continuous effort and learning process.

What is the story behind the most successful product or feature idea your team has ever had — what was the need, how did the idea come about, and what was the outcome?

Flyhound, one of the startups that graduated from NEC X, provides search and rescue support solutions using drones and utilizes the technology “SARDO” developed by the NEC European Research Institute. Their drones help locate missing individuals or disaster victims by pinpointing the location of their mobile devices and providing digital maps of search areas to contribute to early rescue efforts.

Many researchers join NEC with the dream of making their research to life and making a positive impact on people’s lives. However, in reality, taking technology from development to widespread market adoption is a challenging endeavor. But with the emergence of NEC X, new opportunities for their technology to go out into the world as startups have arisen.

Flyhound stands as a prime example of the synergy between entrepreneurial vision and researchers’ passion, with Antonio, a former NEC researcher, joining the company as its CTO. Their success is a remarkable story of how NEC X functions as an innovation platform, where NEC’s outstanding assets and the passionate approach of entrepreneurs come together to yield astonishing results.

How does your product team manage new product and feature ideas?

At NEC X, we actively seek ideas from entrepreneurs and go through an extensive process to select whom we support. We evaluate various factors, including the entrepreneurs’ experience, backgrounds, the novelty of their business ideas, alignment with market trends (including the potential for investment in their domain), and compatibility with NEC’s technology. This process involves not only NEC X members but also external advisors, investors, accelerators, researchers, domain experts, and individuals with diverse perspectives.

For Batch10, which commenced in the fall of 2023, we received applications from over 150 entrepreneurs. From this pool, we narrowed it down to approximately 50 based on the criteria mentioned above, and then invited the top 20 to participate in the Pre-Program. During this one-month pre-program, we provided workshops, one-on-one sessions, conducted customer interviews, and had the entrepreneurs repeatedly stress-test their ideas. We also thoroughly evaluated the entrepreneurs themselves, looking at their fit with the program. Finally, we had them pitch again, ultimately selecting six teams to join the program.

What, in your view, is the biggest challenge with respect to innovation?

At NEC X, we are committed to providing entrepreneurs with opportunities to connect with different worlds in order to foster innovation. For example, we aim to promote more interactions between experts from different fields, such as having healthcare specialists take on leadership roles in the agriculture sector.

To achieve true innovation, we need ideas that transcend boundaries. However, merely shuttling between one’s workplace and home is unlikely to generate such ideas. To create entirely new business concepts that have never been seen before, it is essential to step out of one’s own world and engage with people from diverse backgrounds and perspectives. Serendipitous encounters and exposure to different viewpoints are essential for sparking innovation.

Thank you for all of that. Here is the main question of our interview. Based on your experience, what are your “5 Tips for Accelerating Product Ideation & Innovation”?

Don’t get the phases wrong:
I believe that 90% of the reasons for killing product ideas can be attributed to not aligning with the appropriate phase. This could involve overcommitting resources too early, lacking the right team members when the business starts to roll, and so on. When starting a restaurant, rather than imitating the ways of chain stores, it’s important to create your unique taste and atmosphere, even if it’s rough around the edges. Mature businesses stand out, but it’s crucial not to get the timing wrong, and there are many businesses that do.

Go to the market early:
Sometimes, we tend to think that it’s a good idea to rush to the people who are willing to pay, but this can lead to mistakes. Managers from CPG brands, who are your customers, may make various demands, but listening to them doesn’t necessarily equate to happiness for the CPG brand. Sometimes, it’s faster to create mockups and directly ask consumers. Engaging with the market early and making moves that surprise customers is essential.

Hypothesis-driven thinking:
When people think of Lean Startup, they often picture blindly moving forward. However, it’s important to start by forming hypotheses. By validating the identified challenges early and drawing conclusions, you can quickly recognize failures and explore directions for corrections.

Target growth markets:
Being in a market that is certain to grow is crucial. Often, people ask whether they should go for a small, high-certainty market or a large, but slightly less certain one. The answer is the larger market. By entering a growing market, even if your business assumptions are wrong, you can pivot. This allows you to maintain a position in a market that still holds promise. Conversely, in a small market, there’s no room for accommodating unexpected pivots, which brings the risk of the entire business collapsing in one go.

Do what others can’t:
Doing things differently from others is the key to accelerating innovation. This is because the world operates on relative evaluation. Even if you produce a product at 120 points, you won’t win if there’s someone else with a 150-point product. Always be aware of others, look at things from a broader perspective, and search for alternatives when everyone is looking to the right.

We are very blessed that very prominent leaders read this column. Is there a person in the world or in the US with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them 😊

Elon Musk. I am continually amazed by his thinking. He is not just an entrepreneur or a technologist, he is a leader with a broad view of the world, full of vision for the future and a sense of adventure. There is much to learn from his out-of-the-box thinking and bold approach. In NEC X’s efforts to create innovation, I would like to explore how his kind of thinking and insight can contribute to our projects. The commonality of having an X in the company name also intrigues me 😊I believe that morning and lunch conversations with him will provide an opportunity to plant the seeds of new ideas.

Thank you so much for this. This was very inspirational, and we wish you only continued success!