KOSÉ’s accelerator program leads to a quantum leap
In 2018, KOSÉ became the first major cosmetics company in Japan to launch an accelerator program. Aiming to stimulate open-innovation focused on beauty, KOSÉ delved into the challenge of co-creating new businesses together with startups. We take a look at why KOSÉ launched the accelerator program and how it fared in the first year.
Since being founded in 1946, KOSÉ has helped fashion the cosmetics market with their characteristic products, including ONE BY KOSÉ, and with the philosophy that it’s the products themselves that create competitiveness.
As changes in distribution methods started to bring about a paradigm shift in the cosmetics market from around 2000, KOSÉ went on to achieve a sharp recovery through the “selection and concentration” of their brands and products. Currently, the company is working on its growth strategy entitled “VISION2026”.
As they head towards realizing this vision, KOSÉ’s management has recognized that the key to their growth is not just the efficacy of their products but also the creation of new value such as the product experience. Accordingly, it was necessary for them to go beyond the existing framework of their business. The problem was that even though KOSÉ’s research labs were strong in the chemistry field and could create top-class products, they didn’t quite have the engineering technology. It was going to be difficult for them to bring about a landmark breakthrough with what they had. There was a growing recognition within the company that an open-innovation approach ought to be adopted, where ideas could be imported from outside and developed.
Launching the 2018 accelerator program
KOSÉ had already tried starting an in-house venture system and also tried inquiring with venture companies to see if a joint-business was possible. However, they found that many of the ideas brought up in-house had already been taken up by other companies, and also, they didn’t know where to begin figuring out which venture companies would be worth working together with. They were having trouble discovering a way forward that had potential for commercialization.
It was after looking back on their own strengths and thinking of how they could best utilize them that they arrived at the idea of an accelerator program. The plan was that KOSÉ would decide on a theme, then have ideas be brought in by companies from a variety of different business circles, and together they would try to create new businesses backed by KOSÉ’s in-house resources.
In June 2018, the initiative was officially launched as the “Co-Creation with KOSÉ Innovation Program”. Out of the 80 companies that applied, 20 passed the initial document screening, and in the middle of August, each of those 20 companies was invited to give a presentation and participate in an interview. They were then narrowed down to 6 companies.
At this point, several KOSÉ employees were assigned to each of the six companies, and from September they worked together to brush up the proposals. Joint meetings were held at least once a week — depending on the candidate company — to polish up the ideas into feasible projects. By the end of October, the candidate companies were narrowed down to only four, and on January 30 a “demo day” was carried out where the final report meetings took place. In the end, KOSÉ chose the quantum computing firm, MDR Inc.
Breathing new life into established methods
Quantum computing applied to the cosmetics field can help to find the optimal recipe from countless combinations of cosmetics formulas. This combining of formulas has traditionally been a field that required a level of ingenuity only possible by humans. Long believing that their strength lay in their human researchers who create these formulas, KOSÉ had never thought to use the power of computers to come up with new formulations.
As they were learning about quantum computing from MDR, the whole team, including KOSÉ’s management, started thinking that a breakthrough may be possible in this area that only humans were thought to be capable of.
They decided to try combining formulas via a quantum computer and requested MDR to create a cream similar to a particularly famous brand. They were hopeful — though also apprehensive — as to whether the quantum computer would be able to reproduce the cream to the extent of its distinct texture of which usually only humans can discern. The results were surprising.
Not only had they been able to create a cream almost exactly like the original, but they also had created several derivative creams due to having used a genetic algorithm. Of these were creams with textures that seemed unlikely to have been thought up by humans. KOSÉ became excited not only for the efficiency of having the cream made so quickly but also for the possibilities of unexpected innovations being born.
Up until then, researchers had designed each formula individually, mixed the ingredients in a beaker to create a sample and adjusted it for mass production. However, all this was now possible in a much shorter time thanks to quantum computing. Indeed, their joint development with MDR has led KOSÉ to start thinking of the possibilities in breaking away the barriers between the lab and the factory and how the very idea of a factory itself could now change. Currently, KOSÉ has assigned a budget and staff to their activities with MDR, and a project for utilizing quantum computers in KOSÉ’s R&D has been launched.
From this valuable encounter with MDR, KOSÉ has announced its next accelerator program for 2019. This time the number of themes has been broadened from three to six, and ideas from a larger variety of fields have also been welcomed to further help strengthen the company’s foundational business. This is due to the successful first year of the program, which has made KOSÉ confident of the possibilities of co-creation in their whole value chain. As to which company will be selected next, the result is scheduled to be announced in the spring of 2020.
Text: Ching Li Tor
Original text (Japanese): Yukari Akiyama
