Episode 26 Graduation

A decision made after much thought Sense of relief
Company entrusted to Keyence due to deteriorating business performance

Toward the end of 2007 and into the following year, we began discussing a business alliance with Keyence. It all started when we were looking for a way to sell the “xfy” technology introduced in the previous episode to Keyence’s manufacturing clients.

At this point, JustSystems’ business performance was deteriorating further and further. As the discussion of collaboration with Keyence in business operations progressed, I approached them about investing in JustSystems. Initially, I proposed that they make a small investment.

JustSystems’ flagship product is Ichitaro, a Japanese word processing software. At the time, a foreign investment fund approached JustSystems to invest in the company, but Hatsuko and I decided that JustSystems should partner with a Japanese company so that the Japanese-language software used primarily by the Japanese people could fulfill its role in the market.

Keyence, which has a large number of manufacturers as clients and is considered a good standing company financially, would be a perfect partner. That was our thought, but things took an unexpected turn.
The Lehman Shock occurred in the fall of 2008, and as its effects spread not only to Japan but also to financial markets around the world, the shadow of the crisis crept over our company, which had been operating in the red for some time. The company’s auditors began to question the sustainability of the company’s business.

When Keyence learned of JustSystems’ financial situation during the investment negotiations, the terms shifted from the initial talk of a small investment to an investment involving a larger shareholding ratio and the dispatch of directors. If we accepted these conditions, we would be forced to relinquish our position as the largest shareholder.

It was, so to speak, whether or not to effectively let go of JustSystems, a company that Hatsuko and I had nurtured together to this point. We were forced to make that decision.
I must confess I was troubled. I can’t help but be troubled. But our options were limited.

Thus, we decided to proceed with raising 4.5 billion yen in a third-party allocation of new shares, with Keyence as the underwriter. This would give Keyence a 43.96% stake in the company. In response to this decision, I stepped down as chairman, and Hatsuko, Managing Director, stepped down as Vice Chairman with no right of representation.
Tomoaki Fukura, who joined JustSystems as a part-time employee when he was a student at Tokushima University Faculty of Dentistry in the early days of our company’s founding and who led the development of Ichitaro, was newly appointed President. This was one of the conditions that Hatsuko and I presented to Keyence this time.
Although we were disappointed and regretful, we were more relieved that the software we had developed so far was now in the hands of a Japanese company and not an overseas company.
That day when I was a 29-year-old company employee. I was on my way home after driving Hatsuko to a client, grabbing the steering wheel and watching the passing scenery on National Route 2 in Himeji. I strongly felt that “Japan is actually supported by these small companies”. Then I likened my life to the flow of the mighty Yoshino River when I made the decision to start my own business, picking myself up thinking, “If we are all fools anyway, why don’t we dance?”
In the early days of the company’s founding, time passed in vain as we failed to win any contracts. I will never forget the day we received our first order, weeping together with Hatsuko’s grandmother, who opposed my marriage to Hatsuko. Hatsuko and I then developed Ichitaro, a word-processing software with revolutionary kana-kanji conversion features, and made a name for ourselves in the computer industry. In the midst of all this, we were supported by young employees who gathered at our tiny company in Tokushima.

Our journey at JustSystems has come to an end, and the day came when Hatsuko and I “graduated” from the company. I was 60 years old at the time. However, this was not the end of our challenges.

With Tomoaki Fukura (far right) and others
(second from left is the author, in 2009)