This startup is solving Japan’s parking and retail space problem with the sharing economy

This article is part of Tech in Asia’s partnership with Disrupting Japan where we publish the revised transcripts from the show’s podcast interviews with Japanese entrepreneurs. This is heavily revised from the original transcripts. For the full interview, go here.

Napoleon Bonaparte once called England a nation of shopkeepers. And while that statement was actually an insult in context, there was still something to be said in favor of being a nation of shopkeepers, particularly in this age of ecommerce, Rakuten, Amazon, and drop shipping.

In fact, Japan, more so than the US, has a culture of tiny neighborhood shops that have never been pushed out completely by big box stores, shopping malls, and chain stores even in the big cities. I sat down and talked with someone who’s accelerating this trend by making it easier for small shopkeepers to pop up all over Tokyo.

Akiko Nishiura, CEO of Nokisaki, connects commercial landlords to small merchants who are looking for a small space. Her company, which had its first funding in 2011 and raised US$2.2 million last year, is also trying to solve Japan’s horrible parking problems.

A photo of Akiko Nishiura, CEO of Nokisaki.

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Let’s jump right into the interview.

nWhat is Nokisaki?n

The word nokisaki means a tiny space under the roof. It’s like a small space you use when you hide from the rain. We do business using that space. We are doing some special in-service but we are dealing with some unused space or spaces that are not being dealt with in a traditional real estate market. We are offering a marketplace for landlords and those who want to use their spaces.

Currently, we have 4,000 parking lots listed in our website and the number of registered users is more than 130,000.

(Note: Before you can buy a car in Japan, you have to prove first that you have a parking space for it. However, it is a challenge to find such a space in cities like Tokyo.)

In Japan, the most popular parking lots are those with coin-operated parking meters. The problem is you don’t know whether you can park your car until you get there. You don’t know whether there’s an available slot. You have to spend 30 minutes or an hour to find a vacant space.

Our service is solving such a problem by allowing people to book a parking lot before they arrive. They can book via our website and they can use it per day.

But our major users are businesses that are selling their products or promoting their services and can benefit from a pop-up store. Most of them are individual merchants or small- to mid-sized companies selling vegetables, clothes, shoes, etc.

nWhat made you decide to leave a successful career and start a sharing economy business?n

It was kind of accidental. I retired from the company I used to work at to give birth to my child. I was 37 years old at that time but I wanted to continue working in some way.

So, I planned to import some articles to South America, where I used to live, and open an online shop. I didn’t want to go back to a big organization because I wanted to spend more time with my child. The shop was not a big deal. I just wanted to do something that I liked. But the products that I was planning to import were not so popular in Japan, so I came up with an idea to test the market.

I started finding a place, but no one was willing to lease a shop for only a short period. I just wanted to rent for a month or something. It’s so common in Japan that all shops are rented long-term. It’s also very expensive. I noticed that it was so hard to have a real store while it was getting very easy to start an online shop.

An idea struck me: I didn’t have to have a well-made store. All I needed was a small space where I can display my products. There were so many unused spots available everywhere. And that kind of started the idea for Nokisaki.

nLast year, your company had to shut down for two months. What caused that?n

At the end of July, we received a notice from a security company informing us that there was a possibility our web server was being illegally attacked. So, we had to stop our service to give way to the investigation.

Actually, no client data were stolen or something and the report only said there was a possibility someone was looking into our server. But because it was a demanding request from a credit card company, we decided to shut down. At that time, we didn’t have credit card information on our web server but we were offering a payment service. So, we had to shut down until a concrete investigation was done.

The final investigation showed that there was a vulnerability, so we had to strengthen our security level. The efforts took two months after which we resumed operations.

But it was very hard for us. In the first place, it was summer. It was peak season. So, for those two months, we didn’t have any sales and at the same time owed the property owners who expected to have a large income. They didn’t receive anything, so we had to keep our relationship with those landlords, especially because our competitors were approaching. But in the end, the majority of our property owners stayed with us.

nDo you think your business model will work outside of Tokyo?n

Yes, I think so. For the parking business, people in local cities mainly use cars for transportation. In Tokyo, people commute by subway or trains and don’t use cars on a daily basis.

Moreover, the market size of the regular parking business in Japan is estimated at US$3 billion. But I think there’s a possibility that a part of this market will be replaced by a parking-sharing service, maybe up to 20 or 30 percent.

On the other hand, the market potential for pop-up shops is hard to estimate. I would say that the market size of pop-ups is much bigger than that of parking-sharing service because the regular retail market is slowing down not only in Japan but also elsewhere. The big players are closing their stores and the demand for pop-up stores is increasing.

nWhat do you think is going to be the future of sharing economy in Japan?n

It’s so obvious that the population in Japan is decreasing and we have to use limited assets with small budgets. There’s no way we can survive without introducing the sharing economy. In the future, people will be using services in the sharing economy naturally.

But they’re not so popular right now. There’s a culture difference, especially in real estate. We, Japanese, have so much attachment to our properties and we don’t want to rent out our space to unaccredited tenants.

nWhat would you change to make things better for startups in Japan?n

I would say education. In my case, I didn’t have an idea what it means to be an entrepreneur until I was 35 or 36. I didn’t know how to start my own business. In primary schools, when teachers introduce different kinds of occupations, entrepreneurship is not in the list.

Fortunately, the kids today have internet and smartphones and can do everything. They are very lucky that they have all these tools now that can help them become aware that they can do a startup.

Read more from this series here.