Austin Hankwitz (00:00):
Hey everyone, I'm Austin Hankwitz and this is After Earnings. The show from Morning Brew and Stakeholder Labs brings investors up close and personal with the executives behind the world's most interesting public companies. And
Katie Perry (00:11):
I'm Katie Perry. Today we're chatting with Swimmy Minami, billionaire tech entrepreneur and partial owner of the New York Yankees, swimmy founded and is CEO of the HR Tech Company, visional, which lists on the Tokyo Stock Exchange. They were recently upgraded from Growth Distinction to Prime just a few months ago, sort of getting up listed on the nasdaq. Here in the US
Austin Hankwitz (00:33):
We talk about how he's building the Japanese LinkedIn, his 15 year journey as a global entrepreneur becoming an LP of the New York Yankees, as well as his recent recognition as being inducted to EYs World Entrepreneur of the Year, class of 2024.
Katie Perry (00:50):
And obviously we're going to talk about baseball a bit, so let's get into it.
Austin Hankwitz (00:54):
Wow. Swimmy Minami, thank you so much for hanging out with us on this episode of After Earnings. I'm so excited to jump into things.
Swimmy Minami (01:03):
Great. I'm looking forward to conversation.
Austin Hankwitz (01:06):
So visional is an HR technology company, which means you're in the business of identifying, recruiting and retaining talent. But these days a lot of focus is on the technology and maybe not necessarily the people who power it. So tell us maybe about the risk of not being great at Human Capital and what Visional technology does to help companies mitigate that risk.
Swimmy Minami (01:30):
This is 2024, so there's always going to be a good hybrid between human capital, the actual human and the technology itself. We try to bridge that gap for companies to have a good balance on how to run a good company. It all starts our business started by being the first career networking service where we're often called the Japanese LinkedIn, but connecting employers with professionals in terms of recruiting. So we're more of a single purpose kind of platform where employers and professionals connect to find each other. So it is kind of like a job site, but in a more open platform way, specifically focused on Japan. Our big difference came when we started going internally. We took a lot of the technology we had on the recruiting platform. For example, we have a patent for AI generating resume builder or an AI generating job description builder where the AI using GPT technology creates resumes using market data of supply and demand between the employer and professional.
(02:43)
And we've taken all that technology and we've allowed companies to use that in terms of talent management and performance. So for example, I have a 2000 person company. I'll have a certain project and I want someone like Rachel for this project. The technology will help us go search through our internal database of personnel to try to match and find the perfect person that is kind of like Rachel. And if we cannot find that person internally, the search will continue onto my current networking platform to find that perfect person externally. So we're kind of like the first platform or service where we combine a job site and talent management platform. So it's kind of like an external job site and an internal job site coming together as one. So that's what we are.
Katie Perry (03:44):
Swimming is a quick aside and we want to dig deeper into the product. I'm curious, you call yourself LinkedIn of Japan. Is the posting style similar in Japan as the us? There's this inside joke in the US that some people they're posting on LinkedIn, it's a little cringe and there's a unique style. Does that exist in Japan or is that a uniquely American phenomenon?
Swimmy Minami (04:09):
Yeah, LinkedIn does exist in Japan and there are great service. I love LinkedIn personally, but it's more grander or more broad value proposition in the sense that they want to connect the professionals globally and not just through recruiting, but through their regular business activities. We're a single purpose one, so we don't have postings and we don't have any other motivation other than employers finding professionals and professionals finding employers for a job search process. So we're more closer to a job site than what actually LinkedIn is. And that's what differentiated us going into the market 15 years ago because I think the delicacy towards personal information in the East Asian countries like Japan and Korea is much more than in the western world. And people didn't want to blast everything that they experience and what they want to talk about onto the internet, like our western counterparts.
Katie Perry (05:12):
That was a classy response. But based on that, I'm going to sign up because yeah, it's too much. But you guys were founded 15 years ago, and it's interesting to think about being an HR tech over the last decade plus all these conversations now ramping up on fears of automation and AI and job replacement, and you have the cynics saying, oh my God, it's going to replace all our jobs. And then you have optimists saying, no, it's going to create more opportunity and change change. So people need to be able to use the technology, but it's not necessarily going to replace them. And I'm wondering, what do you think about all that general societal conversation being someone who's building in the middle of it all right now?
Swimmy Minami (05:57):
Yeah, I'm a big student of history and I think we've gone through a lot of changes similar over hundreds and hundreds of years, technological developments. I am sure when cars came out, people who were providing horse riding services got very scared that they will lose their jobs and so on so forth. I think as humans, we're never going to know what's going to happen in the future and that's why that makes our race or that's what makes humans interesting. So to be honest with you, I'm not a predictor of the future, but I'm very optimistic that technology will lead us to something new and as humans, we will figure it out. And I'm an optimist on that. Awesome.
Austin Hankwitz (06:43):
I appreciate that answer. And kind of back to what you were giving as an example with Rachel, right? Let's say you had a big project coming up and you would sort of lean into this technology that you've built to identify who the person is specifically that can get that job done best. And if you can't find them in your own organization, you'll go recruit them externally. So I'm curious, talk to me about the privacy around that maybe. I mean, how do you know Rachel might be a good candidate for this project? How did you guys build that from the ground up while also keeping employee privacy as well as maybe skill sets and things like that in mind?
Swimmy Minami (07:19):
Sure, sure. We started off with our career networking service where there is a supply and demand where the professional actually similar to LinkedIn, wants to put as much information they want into the database. Obviously the AI really helped us even push that further by helping professionals write their resume. I think a lot of professionals have trouble writing their resume and by using market data and trying to help them and ask the right questions that they want answered. And once that happened, we started going internally. Now it's a different ball game with external kind of job matching with internal job matching. We don't have other people access other companies data, but the company itself, when they're trying to find someone, they'll use the internal data performance review attendance one-on-one, the AI will eat a lot of the data that happens internally between the employer or between the company and their employee. And when the company starts writing up their job description or when the company wants to find someone similar, the technology will help find patterns between certain individuals within the company to match. And because we're using the same technology and the same kind of data sets for internal search and also that technology came from the external search itself, we're aligned the sense that the company can use similar questions or the same kind of data sets to find the right people that matches what they want.
Austin Hankwitz (09:04):
I think that makes a ton of sense. I appreciate the walkthrough there. So now kind of moving on to the meat and potatoes of the interview is listed on the Tokyo Stock Exchange. This is one of the world's largest marketplaces for securities. Now for my US investors, you may be able to even access some of these international stocks like visional on the OTC markets over the counter now listing from the growth market on Japanese exchange to the prime market. Can you talk to me about that? I think Uscu, US investors might not exactly know the differences there, including myself, so I'm eager to hear how you were able to sort of transform and really evolve into that new listing.
Swimmy Minami (09:48):
Yeah, I mean the token stock exchange, they've kind of rearranged their sections in the last 12, 18 months. But when we did list in 2021 about three years ago, the growth market is kind of like the small cap market where the preconditions to list is much lower than the prime section, which is what it's called now. Obviously the governance and the compliance and even the liquidity figures to re-list onto the prime market, which is kind of like the real market. I mean both the prime market and the growth market are real public markets, but I think the conditions to list on the two markets are a little bit different. It's a little bit more difficult for the prime. So the Japanese companies that my American friends know, the Toyotas, the Yamahas, the Hondas, the sonis, they're all prime listed companies. And as we grew as a public company, we passed certain thresholds or certain parameters that is needed to become a prime listed company, which happened last December. So we're happy to be listed in the major league market of the to stock exchange.
Austin Hankwitz (11:08):
Most definitely. So it's kind of like getting up uplifted to the NASDAQ or maybe even getting added to the s and p 500 or something like that. Right. Very clear parameters.
Swimmy Minami (11:17):
Yeah, something very similar.
Austin Hankwitz (11:19):
Gotcha. Very cool. Exactly. Congratulations.
Swimmy Minami (11:21):
No, thank you. Thank you.
Katie Perry (11:23):
Yeah, it sounds like a major move. I'm curious here in the US as we sit and talk, we're fully amid roaring kitty meme stocks, raging back retail investing is hotter than it was in 2021. Can you articulate what the retail investor appetite and market looks like in Japan? Is there that same push towards democratizing access to the public markets? Are there similarities or differences between what? See here in the US
Swimmy Minami (11:56):
It's quite similar. Obviously the US is the world leader, especially in financial markets and a lot of the secondary markets, this token stock exchange is one of the major secondary markets in line with the London Stock Exchange. We follow similar patterns obviously. Obviously the Tokyo Stock Exchange mainly lists Japanese companies and most non-Japanese companies aren't created on that market. So obviously we'll have demographic differences. But all in all, I think the us, the NASDAQ or New York Stock Exchange is the leader in change and innovation in terms of the trends and movements of financial markets or the stock exchanges. So I think the Japanese market follows the US market very closely.
Katie Perry (12:46):
Interesting. Want to pivot to some of your earnings updates that were recently shared reporting 19% year over year revenue growth. Walk us through what the core drivers were there. Was it current client expanding to new products? I know your human capital management platform has some pretty high growth or is it net new customers? What really do you attribute that growth to?
Swimmy Minami (13:14):
Sure. I think that the biggest driver for us is that, here's an interesting figure for my American friends is that in Japan, the average turnover for full-time employees in Japan annually is 2.5%. Wow. So if you have a hundred percent company, full-time employees, only two and a half people leave the company each year.
Austin Hankwitz (13:36):
So they're not job hopping
Swimmy Minami (13:39):
Well, and it's tripled in the last 10 years.
Austin Hankwitz (13:43):
Oh my gosh. That's some loyalty right there, you guys. Some great leadership.
Swimmy Minami (13:47):
Yeah, I mean there is a lot of change. Obviously if a person changes, if a full-time employee changes a job every five years, that's probably between like 15, 20% turnover a year. So we still have, Japan has been very good at retaining employees. We have a social system of lifelong employment, and it's a little bit more difficult to fire people. Whether that's good or not, it's a different story. But Japan is changing, especially with the younger generation becoming more westernized and more open to changing companies. So for us, that is the biggest kind of driver in terms of our job platform, that's the platform we changed. That's the job platform that we started 15 years ago. So a huge chunk of our profits is coming from the current networking service and the transactions that there. So when everyone moves, we're the biggest kind of intersection for professionals.
(14:49)
So every time someone moves, we make money. So that macroeconomic change inside our country has been our biggest driver. Now, when people start leaving companies, companies needs to start hiring new people. And when that happens, the management of companies start losing track of what kinds of people, what kind of skills experiences exist in our company through their employees. And that's when they need to start managing talent. Because for 10, 20, 30, 40 years, each Japanese company knew exactly what type of people or employees they had in the company. There's not much job change happening in the country. So our human capital cloud platform, which is called Harness, is our main driver driving our growth 60, 70% a year. And I've talked to investors about this. This is a 10 year play because the phenomenon in job change and talent management is just starting in Japan and external transactions are going to naturally shift up. 2.5% isn't sustainable. It's something that will rise and increase over the years. And when that happens, the internal management of talent and human capital will need to pick up. And we're right in the thick of things right there.
Austin Hankwitz (16:14):
That is so interesting, Katie. My mind is blown right now. I did not know that. So little people, I mean, I'm just thinking about myself and I'm sure a ton of other people listening right now who are in their perhaps twenties, thirties, maybe even forties. I can count on two hands how many different job opportunities and times I wanted to quit this or try this or do that. Wow, that's such a cultural just difference that I was supposed
Swimmy Minami (16:39):
To aware. It's a cultural difference. Yeah. Japan's the size of California geographically and has 125 million people. It's about 35, 40% GDP, all of us. So it's a big country economically, but it's a slow giant trying to change. Maybe people forget in the 1980s, the US was lifelong employment based society. Right. There was not much job mobility, things like that. Yeah, exactly. Exactly. Because it was a manufacturing based country in terms of economic, from a business perspective as a whole country. And as the US moved from manufacturing to more services, the job market liquidated and people started changing jobs. And that's what Japan is going through Toyota for the first time ever in 2023, the number of hires they had laterally for the first time in decades surpassed new graduate hires from college.
Austin Hankwitz (17:35):
Wow.
Katie Perry (17:36):
Yeah. It seems like such a strong narrative to take to investors in the market that you're playing both sides of the trend, the offense and the defense and serving both. So essentially you built a marketplace where as that trend goes up, you can see upside on both sides of that.
Swimmy Minami (17:53):
Oh, definitely. Definitely. I get a lot of comments and prompts and advice from investors because we're probably one of the very few kind of, I just call it a job site that owns a talent management suite inside a company. We play both sides. We try to help companies retain talent. We try to help companies match talent internally. If they can't find that person internally, they can go externally to find that perfect fit outside the company. So I think the name of the game is data and analytics. And this all came because my last job, I was working for an expansion professional baseball team in Japan, and Moneyball played a big part in changing the sport of baseball through data and analytics. And Moneyball 2.0 now is about training and development and trying to help players become better at the major league level. And through that, I truly believe that there's a lot of analogies. Obviously baseball, you're playing with very much fewer parameters, and the end game is very similar in the sense that you want to score more runs and prevent runs. And companies in business have much more parameters than baseball itself. But I think we're playing with the same parameters in the sense that companies want higher profit, they want innovation. What kind of players, what kind of employers do they want in their companies? And the data and the analytics is going to help them find that right person that fits their company
Austin Hankwitz (19:27):
Well, speaking of innovation and profits, you noted and I quote to increase mid to long-term enterprise value. We are creating businesses in growth areas other than HR technology. Can you walk us through what that means? Some of these big ideas you might be working on or just any actual products and services that can come from the statement?
Swimmy Minami (19:50):
Yeah. Since we provide a lot of B2B services, whether it's recruitment, talent management, performance, and hr, obviously as we grow our ecosystem with our main HCM businesses, we run into a lot of issues. For example, security governance issues with our platforms, we run into problems. And when we can't find a solution that we like, we actually try to incubate businesses off of the issues or problems that we face through our business development. So we're very heavy investing into cybersecurity, especially on the security governance side here in Japan, security scorecard stuff, governance stuff, supply chain, you name it. And these are some of the areas that we're investing in because we see issues everywhere around our businesses. And when clients can't find a solution elsewhere, they actually come to us because they're hiring to find solutions in their businesses, respected businesses, and we're trying to find people for them externally to kind of provide the service or provide the solution for them. So we know a lot of the issues and problems that our clients face in Japan, and when we hear about that, then as a developer incubator of a lot of businesses in Japan, we attacked and try to incubate businesses that fit the solution that our clients want.
Austin Hankwitz (21:20):
I love the call out about cybersecurity. I think that's very, very smart. I mean, at the end of the day, as AI gets stronger and all these other different supercomputers things like that, cybersecurity is going to, it's never going away. We'll always need cybersecurity. So I think that's a very smart move
Swimmy Minami (21:37):
As we go into the cloud, as we're more mobile, as more data is being produced, defense is going to be the name of the game. And I truly believe that as owner of a lot of personal data on our platforms, that we need to be very careful. And the best way to be most careful is by having a cybersecurity business and being very keen on that area to protect our respective businesses.
Katie Perry (22:03):
Swimming, it was interesting to hear you articulate. If something doesn't exist in the market or it's not up to standards for you or your customers, you're seemingly, we will build it, we'll find it, we'll incubate it. And we recently had the CFO of ServiceNow on big IT tech company, and she was saying the same things where customers go to them because they know they can build great products and they'll ask for something, and that becomes an extension of the business. So I think there's a lot of similarities there.
Swimmy Minami (22:32):
Yeah. Yeah. ServiceNow is a great company. We use them in Japan and a lot of similarities because we're facing our clients and customers and they always have issues and problems. And whether we create that or incubate that organically or whether that's through m and a is for us to pursue, we're never going to stop figuring out what the best solutions are for our clients.
Katie Perry (22:59):
Awesome. And we heard you've recently had some exciting news. You're in the EY world, entrepreneur of the Year, class of 2024. Congratulations. That's major. And I'm curious in your mind, as you think about accolades like this in the group of people you're listed among, what do you think the main traits are that are separating the leading entrepreneurs and CEOs today versus maybe things that might've been more important in the past?
Swimmy Minami (23:31):
So I am joining in from Monaco world where the ey, world Entrepreneur awards are being held, and it's a great setting. To answer your question directly, indirectly, the key is to understand what's happening around the world, not just in your industry, not just in your country. And it's about learning. I think a lot of my, not colleagues, but the other winners and from different countries, from over 45 countries in the world, we learn from each other. And the biggest trait that the best entrepreneurs have is the constant learning, the constant relearning, unlearning, relearning, unlearning process that you're never going to stand still. And you have to continue learning from each other. And I travel a lot to different countries to meet a lot of other entrepreneurs in different areas because there's a lot of similarities on how to incubate and how you grow a new business.
(24:37)
And the best way to learn is to get primary information from the entrepreneurs themselves and the EY awards, the accolade is fun in itself, but the learning is the most important thing that I'm going to take back from Monaco. How do other companies grow? How do companies, other companies in other parts of the world try to change or digitally transform themselves? What are other older entrepreneurs thinking about as they go through their journey? So these are some of the things that I always try to take back. It's not just about the business, it's about being sustainable, and it's about trying to know the world in a different angle. And this is what I think the EY Entrepreneur of the Year awards are all about. It's about diversity and trying to learn from each other.
Austin Hankwitz (25:33):
What a powerful, powerful perspective. Swimming. I really appreciate that, and I completely agree. I'm curious, I'm sure there are countless entrepreneurs listening to this episode right now that are inspired by your story, inspired by this recent award. What piece of advice would you give them as they try and now perhaps learn more about the world as it relates to their business for the very first time? How do they take that first step? Is it to literally travel? How do they do that?
Swimmy Minami (26:01):
The easiest way one is to try to see if there's anyone else in the world trying to do what you're doing. In a lot of cases, I see that people look just around them in their own country, but in actuality, especially with new businesses using digital technology, the world moves so fast and similar issues pop up in different countries everywhere and be certain that there is at least a hundred entrepreneurs around the world that are trying to do what you're doing and trying to find that person online. And when you do find that person, ping them, whether it's through LinkedIn, whether it's through any other social media measures, X, Facebook, you name it, Instagram, just ping the other person and have a conversation. And most likely you'll find that person interesting. Most likely you want to meet them personally, just fly to their country and city and have a conversation. And that's what I've been doing for the last 15, 20 years. Not with my current business, but also with the baseball team that I helped build in Japan. I went to meet a lot of sporting teams around the world, not just in the US but in the uk. Not just baseball, but basketball, football. MLS was starting back then. Major League Soccer in the us and you learn a lot by trying to meet other entrepreneurs or other businesses that are doing something similar in a different country.
Katie Perry (27:36):
Great segue swimming because we know we only have a few more minutes left to you, and then you're going to go do Monaco things, which I'm sure are amazing. But yeah, you're a limited partner of one of the most renowned sports organizations anywhere. And I'm curious, what is the job of a limited partner? I know especially the Yankees, you got the Steinbrenner. Is it sort of like if you're at a startup and there's a bunch of investors and they're being helpful, or what value are you bringing and what does the day to day of that look like?
Swimmy Minami (28:13):
It's more about smiling and having a good time more than anything. Obviously I try to be different because I am the first Japanese limited partner of the organization, and I'm very grateful for the Stein burners and all the other limited partners who've allowed me to join the club. Obviously when I get a lot of questions, not just on the baseball side, especially with all these influx of Japanese players coming into the us, it'll be more about business, digital strategy and so on and so forth. So it's more about having fun, but if there is that occasional question that pops up that I can contribute, I'm more than willing to help.
Katie Perry (28:56):
Amazing.
Austin Hankwitz (28:57):
I think that is awesome. Now, here's the real question. If you were starting a new team from scratch and you have the universe of every MLB player ever at your disposal, who are you picking first and why?
Swimmy Minami (29:10):
Wow, that is a good question and I know what answer you want me to answer with, right?
(29:16)
Obviously the greatest player at MLB right now, the reigning MVP of the American League happens to be a Japanese player named Shhe Tani, and Tani's is great, and he's a unicorn in the sense that he went against everything that baseball stood for decades and decades and decades. And that is specialized in something that you're good at, whether that was hitting or throwing the ball, and he went against it. And that's what I hopefully believe that every entrepreneur can take back, that every entrepreneur is original, that every entrepreneur has a reason why they were an entrepreneur and just believe in yourself. And because I want you to be successful when you're successful, meaning that I want you to be happy when you're successful because a lot of times entrepreneurs throw away a lot of stuff to be successful, but you're not happy when you do that. You have to be yourself. You have to try to be happy when you're successful with your business and never forget that because it is a big pick.
Austin Hankwitz (30:27):
I love that.
Katie Perry (30:28):
I got to get in there and ask the question. It's on all of New Yorkers minds. I live a couple stops from Yankee Stadium, who is your least favorite red sock of all time? Who is just bottom of the barrel. I know it's hard to pick a favorite worst red sock, but do you have anyone in mind?
Swimmy Minami (30:50):
Well, the obvious name that pops up is Pedro, right? We love Pedro, but we hate Pedro. And it's a love hate relationship with the Red Sox all the time. And you know what? I think this is the year 2024 when we take home the trophy and we have a big parade in the city, and I'm looking forward to it together with my friends in the organization.
Katie Perry (31:13):
Hell yeah, let's go. You heard it here first. We're taking it. Let's go. Thank you so much for joining us today from, I just,
Swimmy Minami (31:21):
Yeah, I want to thank you guys and EY and this tremendous opportunity to talk to your listeners because it's very not every day you get to speak to global listeners around the world about my story and our company. And I look forward to everyone in the stock market, 4 1 9, 4 on the Tokyo Stock Exchange.
Austin Hankwitz (31:42):
I love it. Thank you so much swimming. Have a great rest of your week.
Swimmy Minami (31:46):
Great, thank you.
Austin Hankwitz (31:48):
What an awesome interview we just had with swimming. Massive shout out to him and his team for letting him hang out with us on this episode of After Earnings. I think that was my first actual conversation with a legitimate billionaire. That was so cool. So here's my biggest takeaway from the interview. Japan's workforce is clearly changing. They're no longer these employees who are working at a single company for the entirety of their lives, especially the younger folks, the younger workforce there. So they're beginning to kind of explore the idea of job hopping, something US Americans are very familiar with, so that when they're working at a company, it better aligns with maybe their work-life balance, maybe some long-term financial goals, things like that. So it seems like Swimmy is building a company that is kind, empowering these job hoppers to find their next best opportunity as well as the employers to sort of fill those positions. And it's kind of crazy. He shared that statistic of that 2.5% kind of attrition rate, right? So two and a half percent of the workforce in Japan are actually leaving their jobs on an annual basis. I did some research. That number is 47% in the United States. So the investment thesis for me is pretty simple. If I think that that two and a half percent will begin to incrementally inch higher toward the United States is 47% over the next however many years, this is a company that I'm interested in.
Katie Perry (33:17):
Yeah, what a wild stat. I mean, dms clearly open here in the US beginning to open in Japan. And what's also interesting is sort of how he's playing both sides of that trend, both empowering those job hoppers to connect with the companies and roles they want, but also building human analytics software so companies can de-risk and understand things like if their star performers might be disengaged and things like that. We also talked baseball. He's partial owner of the Yankees. No big deal. We got him to admit his least favorite red sock, which was surprisingly not Kevin Euless. I really thought we were all on the same page with that. Guess not. Also, I think he might've invited me to the owner suite at the Yankee game unless he was just being polite, which I'm going to assume is no. And that was an actual invite. And with that, this was the after earnings show brought to you by Morning Brew and Stakeholder Labs.
Austin Hankwitz (34:15):
Be sure to subscribe and share this episode with a friend and we'll catch you next time.
