Makoto Nishida
MOONRAKERS TECHNOLOGIES Corporation CEO/President
Joined Toray in 1993.
In his 20s, he took on the challenge of a new business in fleece, an advanced material at the time. In his second new business venture, he took on the challenge of extending the supply chain from materials to finished products, achieving great success by expanding the business to a scale of 5 billion yen in seven years. These new businesses were the forerunners of the concepts that underpin Toray’s fiber business, which has now grown to approximately 1 trillion yen.
Currently, as his third new business, he is taking on the challenge of “MOONRAKERS,” a D2C project that aims to evolve clothing with cutting-edge technology. At the end of last year, he established an independent company through a spin-off by utilizing the “seconded start-up” system, which is currently attracting a great deal of attention as it won the “Japan New Business Award” this year.
TMIP (Tokyo Marunouchi Innovation Platform) is an open innovation platform that aims to support the creation of new businesses by large corporations and to create businesses through collaboration between large corporations, startups, industry, government, academia, and the city.
Following last year’s event, the TMIP Innovation Award 2024 was held to recognize “new business creation” originating from large companies, aiming to create a society where large companies openly take on new business challenges.
The Award evaluate new businesses launched in the past five years that will lead the next generation of large corporations based on a variety of perspectives, including market size, innovation, and attitude toward solving social issues. The Grand Prize, Excellence Award, Nikkei Business Award, and Audience Award was selected on December 4, 2024, based on pitches by the five finalists.
The winner of the Excellence Award is “MOONRAKERS”, a new brand that leverages Toray Industries, Inc.’s (Toray) cutting-edge technology and strong supply chain to deliver highly functional apparel products directly to consumers.
In this article, we invited Mr. Makoto Nishida, CEO/President of MOONRAKERS TECHNOLOGIES, which is developing the brand under Toray’s Temporary Retirement System for Transferred Entrepreneurs, to discuss how he came to start Toray’s first D2C project, why he decided to use the Temporary Retirement System for Transferred Entrepreneurs, and what he hopes to convey through the project. We also asked him to elaborate on his thoughts on what he would like to convey through his business and the potential of startups derived from new businesses of large corporations.
“MOONRAKERS” project born of Toray’s free and open-minded culture
“MOONRAKERS” was launched in 2020 as a venture project originating from Toray Industries. While attracting attention as Toray’s first D2C (Direct to Consumer) business, in November 2023, the company raised 100 million yen in funding from venture capitalists, Toray, and investors, and became independent as a startup in the form of a business operation using a temporary retirement system for startups on loan at Toray.
Mr. Nishida, who initiated this project and continues to lead the business, joined Toray in 1993 and demonstrated his business acumen from the very beginning of his career as a sales representative. In 1998, Mr. Nishida heard a rumor about a fleece product from UNIQLO, which had already started to become a hot-selling product, and he made a dive sales pitch for Toray’s advanced fleece material, winning a huge order that was several times larger than the annual sales volume at the time.
This led to stronger cooperation between Toray and UNIQLO, and the efforts made by both companies contributed greatly to Toray’s business expansion.
Mr. Nishida was then transferred to Fast Retailing Co., Ltd. which operates UNIQLO for two years. He became acutely aware of the scale of the global supply chain of a major SPA (manufacturing retailer) and the importance of total control from materials to sewn products in order to create good products. Toray was only selling materials, but by extending the supply chain from materials to sewn products, the company wanted to change its business model.
Mr. Nishida is constantly launching new businesses, but he says it was Toray’s free corporate culture that encouraged him to do so.
Mr. Nishida says, “I have felt since I first joined Toray that the company has a free and vigorous corporate culture that encourages employees to take on new initiatives, and this continues to be the case today. I was still in my 20s when I asked my boss at the time if I wanted to try my hand at a new business, and he gave me an immediate and positive response, saying, ‘Try it, but not to the point of losing money.’
Mr. Nishida’s sewing OEM business has grown to 5 billion yen in sales in seven years, and he has led his second new business venture to success, but now he is taking on the challenge of Toray’s first D2C business with his in-house venture project “MOONRAKERS”.
In the past, Toray had two positive reasons for launching new businesses: the first was to “expand the scale of business by marketing fleece materials,” and the second was to “extend the supply chain and change the business model.” In the case of “MOONRAKERS,” which was Mr. Nishida’s third new business venture, the reason was a sense of crisis that Toray’s new technology might become obsolete.
Mr. Nishida: In recent years, Toray has developed a composite spinning technology called NANODESIGN®. This is an innovative fiber development technology, and the creation of this technology has made it possible to produce garments that pursue high-level functions while ensuring a texture that is as good as that of natural materials.
On the other hand, we realized that using this technology would inevitably lead to higher prices for our products, and that we would not be able to increase orders from manufacturers. So we decided, ‘Since we have extended our supply chain this far, we should deliver the products directly to consumers’ hands anyway,’ and launched “MOONRAKERS”.
The success of “MOONRAKERS” was due to “a high level of enthusiasm for cutting-edge technology
When “MOONRAKERS” was launched in 2020, we were in the midst of the Corona disaster. A state of emergency was declared, people could no longer leave their homes, and companies were forced to telework.
At the same time, a number of tools and platforms were being developed and focused on in order to adapt to the new normal that was being established in the wake of the Corona Disaster. One of these was crowdfunding, which Nishida also focused on.
Mr. Nishida: It is common practice in the apparel industry to mass-produce products, operate with inventories, and adjust inventories through sales. It is said that more than half of the clothes distributed in Japan are thrown away or even sold overseas at low prices. This industry practice places a heavy burden on the environment and undermines the sustainability of society. This awareness of such issues was one of the reasons why we launched “MOONRAKERS”.
Crowdfunding was beginning to gain momentum. I thought it was a very innovative system. MAKUAKE, the company that sparked the idea, went public in 2019, before “MOONRAKERS” was launched. I remember that the Corona disaster was starting to attract more interest.
With this crowdfunding, the company can produce to order with the money invested by supporters, eliminating the need to hold excess inventory. I thought we could create an opportunity to solve a structural problem facing the apparel industry.
Mr. Nishida will conduct test marketing through several crowdfunding projects from 2020 to 2021. The response he received from this project led him to launch a crowdfunding campaign in 2022 for the “MOON-TECH®” T-shirt, the flagship product of “MOONRAKERS,” and the number of supporters quickly increased to over 3,000%. The amount of money raised was more than 9 million yen.
Mr. Nishida: “MOONRAKERS” is a project that challenges “to make people aware of the excellence of advanced technology. And many crowdfunding users are highly interested in the evolution of technology. It was a great fit with crowdfunding.
In the apparel industry, branding through social networking sites such as Instagram has become mainstream. However, it is inevitably difficult to convey the ins and outs of specialized technology and unseen functionality in a visually rich medium. Crowdfunding, on the other hand, allows us to write our thoughts to the fullest on a single page. In other words, it is easy to deliver our passion and enthusiasm for cutting-edge technology to consumers without diminishing it.
Since then, the number of fans has continued to grow each time the company has called for support through crowdfunding, and on several occasions it has quickly exceeded its goal by a wide margin. The company also launched an e-commerce site with the money raised through crowdfunding, and focused on gathering feedback directly from fans.
In addition, in order to deliver more enthusiasm for cutting-edge technology to fans than ever before, a showroom has been set up to deepen direct interaction with fans. What Mr. Nishida emphasizes in his direct contact with fans is to tell them that “MOONRAKERS” clothes will change their lives.
Ms. Nishida: For example, rather than explaining, ‘It has high sweat absorption and quick-drying performance and excellent form stability,’ we can say, ‘It is half dry when washed and dehydrated in a home washing machine, and no ironing is required. In the summer, many people say they wear it without drying it. Some people even say they don’t need an umbrella because it dries so quickly. By having more opportunities to talk about our products while showing them directly, it has become easier to convey our enthusiasm to the consumers.
Also, now that we can interact directly with them, it is easier for us to incorporate their opinions. For example, we sometimes receive requests from fans through conversations in our showrooms or on our e-commerce site, saying, “This is the kind of product we want.”
If we felt a request was worth incorporating, we would tell the customer that we would make it happen, and even if it took a long time, we would make it happen. The finished product becomes a “product that was created by the voice of the person who made the request,” and he or she will strongly recommend it to others. In other words, the story of the brand became the person’s narrative, and our enthusiasm was conveyed to many people through our fans.
However, Mr. Nishida says that simply communicating his thoughts out loud would not have been enough to gain this level of support. He attributes the creation of so many fans to Toray’s advanced technological capabilities.
Mr. Nishida: I am sure that this method can be imitated not only by us, but also by other companies, and I would like to encourage them to try it.
However, in order to do so, we must have confidence in our own products. What fundamentally supports the brand “MOONRAKERS” is the one and only product strength backed by cutting-edge technology and its high quality. That is why we can confidently convey the full appeal of our products.
Difficulty in coordinating within the company led to the decision to start a business on secondment
With the introduction of crowdfunding and the establishment of an e-commerce site and showroom, “MOONRAKERS” seems to have become a brand enthusiastically loved by its fans in no time since its launch. Although it appears to be smooth sailing, surprisingly, the company was unable to find a path to success at the beginning of its business. Mr. Nishida looks back on the time when the PoC project was underway, saying, “It was nothing but failure.
Mr. Nishida: Since neither the company nor I personally had any experience in the toC business, I had no expertise at all in marketing and branding. We tried advertising in newspapers and magazines, and tried measures to increase fans on SNS. ……
We tried all the so-called “orthodox” marketing methods in the fashion business, but they did not resonate at all and almost all of them ended in failure. But through those failures, we realized that our target audience was not people who were pursuing fashion. And everything changed from there.”
In addition, because this was Toray’s first business-to-consumer project and there was no precedent, “we had to go through a detailed internal approval process before proceeding with any of the measures,” said Mr. Nishida.
Mr. Nishida: There was a time when I was writing 20 requests for approval per month. At the earliest, it would take two weeks after submitting the request for approval. If the matter was to go to the management committee, it could take several months, and as a result, there were many times when the decision was not made, so my frustration only increased.
Feeling that he would miss the opportunity to start his own business, Mr. Nishida decided to take advantage of the “Temporary Assignment Entrepreneurship Program” promoted by the Ministry of Economy, and temporarily retire from Toray to start his own business. The “Secondment Entrepreneurship Program” is a program that supports new businesses started by employees of large companies by raising outside funds or investing personal assets without resigning from the company, and then being seconded to the company that launched the new business.
Mr. Nishida: I am well aware that governance is very important for large companies because it is related to the credibility of the company. However, on the other hand, I believe that applying the same strict governance standards to new businesses as to existing businesses of large companies would have more disadvantages because it would damage the sense of speed, which is essential for new businesses, and it could undermine the motivation of the people in charge.
That is why we thought that starting a business on secondment would be a very effective way to start a new business. I believe that “MOONRAKERS” has been able to grow rapidly because we have actually used the resources of a large company to launch a business and develop it “outside” of a large company.
Making “MOONRAKERS” a Role Model for Seconded Entrepreneurship
Mr. Nishida, who escaped a business setback by taking advantage of the loaned company system, says that he realized once again that “the resources of large companies are indispensable for increasing the number of start-ups like “MOONRAKERS” in Japan.
Mr. Nishida: Large companies have plenty of resources needed to create new businesses, such as funds, technology, and people. In Japan, however, new businesses are not easily created, and this is one of the reasons why the economic growth rate has not increased. For Japan to revitalize itself, it is the large corporations that must change.
They must utilize the resources of large companies to launch new businesses, and then grow those businesses “outside” the large companies with a sense of speed. I believe that the combination of the resources of large companies and the speed of startups will create more and more businesses that will change Japan and the world, and that the loaned company system will be the catalyst for this change.
In his pitch at the final round of the TMIP Innovation Award on December 4, 2024, he said, “I would like to be involved in “MOONRAKERS,” and I would like to be a role model for many people. I want to change the industry, change Japan, and change the world together with everyone involved in “MOONRAKERS”.
As a result of the judging, “MOONRAKERS” was awarded the Excellence Award. Mr. Akie Iriyama, Professor of Waseda Business School, Waseda University Graduate School, who served as a special judge, made the following comments.
Mr. Iriyama: I was listening to the pitch thinking it was a very interesting business. In particular, the idea of using crowdfunding to create clothes is wonderful. They will test-market while conducting a series of crowdfunding campaigns, and develop an apparel business without having any inventory. I was amazed that they could do it this way.
When asked about the future prospects of “MOONRAKERS,” Nishida answered without pause.
Mr. Nishida said, “I just want to keep doing interesting things. And I want to continue to convey the wonder of cutting-edge technology to our fans. Currently, we are inundated with collaboration requests from various brands that have seen the enthusiastic response to “MOONRAKERS”. In the future, we would like to take on the challenge of revolutionizing the fashion business through co-creation with a variety of brands.
But even there, I believe it is meaningless unless we, the staff, the collaborators, the manufacturers including Toray, and above all, the fans, have fun. I would like to promote our business while sharing with everyone a great deal of enthusiasm, including a sense of excitement and the thrill of not knowing what is going to happen next.
