Crowdworks, the startup behind crowdsourcing platform of the same nae, recently announced that it has raised 1.1 billion yen (or about $11 million). In the second part of our interview with the CEO, Koichi Yoshida (the first part is here), he talked about what is needed to really establish crowdsourcing in Japan, as well as the pain that inevitably comes when startups grow rapidly.

The Bridge: I’m sure there are lots of obstacles to establishing a C2C or B2C working style in Japan. What will be the key to expand this new kind of work in this country?

Yoshida: I think the key lies in whether the individual worker can be independent or not. Crowdsourcing first emerged 10 years ago, a new working style based on the premise that individual workers could be work responsibly for businesses. But companies too need to have somewhat mature mindset. Previously they used to place an order for work without thinking twice. They had little problems with dealing with sales reps to place an order, but that method has become less profitable. Even for a company that has never used crowdsourcing, some are now expressing interest in it.

The Bridge: You said that companies need to change their mindset. What about the workers? Does one need a specific mindset to do crowdsourced work?

Yoshida: Unlike working for a company, individual workers need to be more responsible for their own work. They need to complete it once they accept it. Some workers start at a rate of 5000 yen (about $50) for writing an article, and later the rate grows to 10,000 yen and then 20,000 yen. Those workers, who successfully build up experience, constantly receive requests for work estimates.

It will take some time until the mindset of individual workers changes dramatically. But the overall cost effectiveness could motivate companies to use crowdsourcing as “the fourth resource”, after hiring permanent workers, temporary workers, and outsourcing.

The Bridge: I think that this new working style won’t become really common unless it is accepted in more wide-ranging areas and across a wider demographic. You previously said you were willing to expand the service to smaller cities by building partnerships with local governments, such as Gifu prefecture and Minami-soma in Fukushima. Can you tell me more about this plan?

Yoshida: We will continue the partnership with local governments, focusing more on local workers. There are many workers bound to a certain region, so to speak. We will consider implementing a kind of safety net, such as offering insurance when workers are unemployed.

The Bridge: This is something we often forget, but there are still many people don’t use the internet, seniors in particular. We’ll need to serve this cluster better in order to establish a culture around crowdsourced work.

Yoshida: This is just a plan, but we are thinking to divide the market according to skills or needs. For example, we have work where a sign manufacturing company requests a worker to take pictures of broken signs. Such a task can be put in a category where no special skill is required.

The Bridge: I see. As long as the worker can use a digital camera, then he or she can do the work.

Yoshida: There are a wide variety of abilities among seniors. Some do just data entry and some design business cards with remarkable skill. If the smartphone becomes truly mainstream, more people will be online and that could spur demand for micro tasks such as data entry.

The Bridge: Still there will be people without an internet connection. Will it be possible that a third party business could use Crowdworks to matching senior workers and jobs?

Yoshida: Some workers actually delegate their work by hiring other workers. The overall concept is based on open source, so various ways to get the work done are possible.

I cannot go into too much detail here, but I talked with Yoshida-san about the difficulties that come with local expansion. I can personally relate to the local culture through my own past work experiences, and I know that it is not always so welcoming of new-comers.

I believe that the key to making crowdsourcing mainstream in Japan lies in utilizing hidden resources like seniors or people in other locales. But in this interview, I had impression that Yoshida thinks promoting companies’ use of the service and fostering an overall understanding of the process is the first thing to do.

Inside a fast-growing startup.

The Bridge: What was the most difficult time during these three year at Crowdworks?

Yoshida: To be honest, now is the most difficulty time. We have carefully built a KPI management tool before we started the service. We were united to achieve our goals. But it is not so difficult to reach your goals when you have only one metric to meet. It gets harder when the number of KPIs increase to two or three. We work under pressure.

There is a sort of difference between the original members on the team and those who joined after a while. I have to decide whether I should narrow this mental gap, or focus on moving forward.

The Bridge: You are expected to be experienced leader for your team. What approach do you take when talking to them?

Yoshida: One thing I tell members is to work for users, as opposed to the stockholders. Based on my past experiences, I believe the company who serves users will win the market eventually.

The Bridge: So the team works for users, and you work for stock holders.

Yoshida: Haha.

The Bridge: Thank you for your time today.

So what do you think about the future of crowdsourcing in Japan? Crowdworks’ success is definitely not the result of a bubble – or at least, I’d like to believe so. The scale of their business is not so large compared with other businesses like game developers. But I got a strong impression that this service is going to take time to expand. Creating a new working style is sort of analogous to establishing a culture where new graduates can consider crowdsourcing as an option for their first job, as an alternative to being employed by a company.

Due to time constraints, we didn’t have a chance to discuss the company’s competitors, like Lancers. I think a united front with competitors is necessary to establish the necessary culture, but Crowdworks needs to win this competition in order to thrive in the industry. We hope to touch on that topic next time.