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 Co-founder and Representative Director
Chiaki Hayashi

The Loftwork Inc. stockholders meeting and annual Christmas party was held on December 10th. To open this meeting and party, Loftwork Inc. stockholder Hiroaki Kitano (Sony CSL President amd CEO), Joichi Ito (MIT Media Lab Director), also known as Joi, and Loftwork Inc. CEO Mitsuhiro Suwa held a talk session. They discussed the current status and future of Loftwork as the company enters a transitional phase moving toward their next stage.

Loftwork Inc. Is in the Midst of a Complete Metamorphosis

Hiroaki Kitano (hereafter "Kitano"): Loftwork is in the middle of a transformation. This company, which started from design, has grown and spread to cover creative support for businesses, Fab, new business support and even regional development. What is this company, anyway?

When an insect undergoes complete metamorphosis within the chrysalis, its body temporarily becomes mush. The base of its adult body, such as its eyes, hands and feet are formed, and from that base a new body is rebuilt.

In much the same way, Loftwork has formed a new business which is the basis of its new body and, with that at its core, will undergo a complete metamorphosis as a company. Basically, it feels like the entire company is in the midst of being rebuilt. I'm very excited to see where you go from here.

Joichi Ito (hereafter "Ito"): As for the quality of people who are captivated by and gravitate to the company's corporate culture, I feel like Loftwork is much like the design company IDEO. Both of your teams are full of high quality, creative and smart people with outstanding communication skills and that has become your identity.

However, IDEO's business is in design only. While limited, they are quite stable. Loftwork is a little less stable than IDEO- in a good way! (laughs) You have the ability to take on challenges in a number of areas but that also carries the risk of losing sight of your core focus and becoming a company with no clear business. It doesn't have to be soon but it may be a good idea to have a training camp where you get together and clearly state your vision or create a process for producing content.

One more thing you should think about is whether or not to support members graduating from your company. Everyone is in the prime of their life and has quite a bit of liquidity, right? It would be interesting if these "Loftworkers" were to graduate and go out into a variety of places in society and, in turn, create the idea that the innovations of successful companies all had Loftwork graduates behind them.

Chiaki Hayashi (hereafter "Hayashi"): Certainly, after having spread out so far we haven't yet been able to really put into words what Loftwork's identity is. But both our clients and creators hold the stance, without barriers, of "If we all have good ideas then let's get together and do something interesting!" and that has remained unchanged since our founding.

Mitsuhiro Suwa (hereafter "Suwa"): I often use the word "community artist." Recently, we're placing a lot of importance on collaboration with many other companies and, when we create new businesses, there's the necessity of creating a community as well. There are many companies who are looking for this kind of know-how when they come to us.

Ito: Loftwork has a characteristic sense and a viewpoint which can sort of level up their clients. Rather than creating a future just as you're told by your clients, you instead wrap them up in the future that you yourselves imagine.In other words, I feel like Loftwork is more of a movement than an organization.

In order to change the system, one must change their goals.

Ito: There's this idea of a "self-adapting composite system." For example, when you turn on the faucet in the bath water flows into the bathtub. If there is a plug in the drain then water will accumulate. When you have filled the bathtub with as much water as you desire, you turn off the faucet. When you get into that bath, the water level rises again and water spills out.

There are ins and outs; stock and goals, and there is a simple mechanism for controlling these things. However, if you want to control the temperature as well then you will require a boiler and electrical system and things will begin to get complicated. In societies and economics and nature there are many of these kinds of systems which are all interconnected. They all run by loop structures and controls. Environmental problems, for example, are the same way.

Donella Meadows from MIT, in her work titled "Thinking in Systems: A Primer,"said there were 12 ways to tamper with a complicated system but that the most ineffective of these is to change the in and out parameters as if one were "changing the tax rate." Nevertheless, 90% of people try to do this.

But really what's important here is the goal. For example, Monopoly was based on a game which came out in 1903 titled "The Landlord's Game." The rules were exactly the same as Monopoly but it was a game created to teach children just how bad capitalism was and how unfair the principles of economics were.
However, when Parker Brothers created Monopoly they left the rules just as they were but changed the goal. By changing the game so that the player becomes a capitalist themselves and changing the goal to leading their opponents to bankruptcy the game changed completely. In other words,in order to really change the system one has to change the goal.

The goal of many corporations is to kill all their enemies and steal their resources- basically to create a monopoly. However, within a complicated system there is a system of feedback as well so this in turn gave birth to competition but, on the other hand, has also led to the destruction of nature.

The other day I went to one of my favorite tempura shops in Japan. It only has two rooms and only a handful of customers can fit inside. When I made the suggestion, "Your food is so good, why don't you make another location?," the owner responded, "Why?" At that time I realized that what I had just said was possibly a part of the value system that believes growth is correct and good.

This is the same "we will do anything for growth" idea that Japan has continued to hold since the end of the war. I think this is the biggest thing we need to change right now in order to fix environmental issues and also bring more happiness into our lives.

Looking back through history, any time the values of the people went through a big change, there was always some kind of art or music that went along with that change such as the Beatles, punk rock, hippie culture and the like.I'm repeating myself here but, looking at the work of this company and all of its members, I really think that Loftwork is a movement. At the time of its creation, Loftwork's concept was to create a global network between clients and creators.That basically means you wanted to "change the culture," right?
We need to perform a paradigm shift away from the current societal values that lead to expanding a business too far or trying to raise proceeds too much. So please, do your best!

Hayashi: We started Loftwork with these exact four people 16 years ago. I still remember what Joi (Ito) said when I first went to meet him in order to request his investment. "You guys really don't look like you're going to make much money at all. That's why I'm investing in you."

Ito: It was more of a donation.

Hayashi: Just as promised, after 16 years we really haven't made much money have we? (laughs) I've never thought of Loftwork as a venture succeeding in terms of proceeds but I do think that it is the most fun and happy venture in Japan. This is why, whenever someone comes to me saying "We want to work with Loftwork!," I reply like this, "If it's a project where I would think "This is fun! I'm so glad I did this!" then I can work with you. If you're only interested in making money then please go ask another company." That hasn't really changed at all since our founding.

Ito: You've always seemed like you're having fun. Through everyone having fun working together we can go on to make the world a better place. People gather in places that are cultural and enjoyable. I think those kinds of places will survive in the end.

Kitano: I think that the amount of positive influence a company can exert on the world is one indication of it's worth.Moreover, it's better if they can grow organically and sustainably. Even if Chiaki were to come to me and say "I want to buy your stocks" there's no way I would sell to her. (laughs) It's not an issue of money. I want to be a part of the Loftwork family and that's why I'm a stockholder.

Ito: Organizations and businesses tend to reach a perfect size at a given timing. After that, it's all about how well they can sustain that size. This is why I think that,more than growth, "appropriate size" is another way to measure a company's worth.

Hayashi: In 2017, we at Loftwork will be more focused on raising our quality than trying to expand our profits. We want to do something with more of an impact and to do so more effectively, more passionately, and with great partners. So at next year's stockholders meeting we probably won't have much to report in way of profits but I hope we can keep working together.

(Text: Mirei Takahashi)
(Editing: Natsuki Ishigami, Satomi Haraguchi)

Author

 CEOMitsuhiro Suwa

Mitsuhiro Suwa is the Co-Founder and President of the new-style creative agency Loftwork Inc. In 2000, with the aim of making a new infrastructure for creative talents, he started up the creative network "loftwork.com." Using his own experience working as a creative director, he is developing "loftwork.com" into one of Japan's greatest creative infrastructures. In recent years, he has put a lot of energy into giving seminars and lectures, and writing materials on the topic of the effective use of Web platforms. He was born in San Diego, US, in 1971. After graduating from Keio University's Faculty of Policy Management (SFC,) he took part in the start-up of the FM radio station established by JapanTimes, "InterFM" (FM Inter-Wave Inc.) He contributed to the radio station as the first creative director. After this creative task, he went to the US in 1997, and after majoring in Digital Arts at the School of Digital Arts, worked as a designer in New York. He established Loftwork Inc. in the year 2000.

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