PROGRIT's Growth Strategy and the Evolution of Corporate Culture — Behind the Scenes of New Business Creation and the Challenges Involved

Shogo Okada, Representative Director and President, PROGRIT Inc.

SHADOTEN, PROGRIT's second business line, was born in 2020 amid the unprecedented crisis of the COVID-19 pandemic.

Launched by PROGRIT's Vice President Mr. Yamasaki, this business is distinguished by its speed and agility — making the most of existing resources to complete a prototype in just two weeks.

In this interview, we explore how SHADOTEN was conceived, launched, and scaled, and how PROGRIT approaches new business creation and M&A.

From balancing brand value with speed, to the secrets of product-led business expansion, to building corporate culture and shaping M&A strategy — we share the challenges and lessons unique to a high-growth company.

The Process of Creating New Businesses

— Thank you very much for joining us today.

PROGRIT offers English coaching services and subscription-based English learning services in Japan, and the appearance of Keisuke Honda in your TV commercials has left a strong impression.

We have been very much looking forward to this conversation.

Thank you. The pleasure is mine.

— To begin with, could you tell us how SHADOTEN* came about?

(*SHADOTEN: an English-learning app specialized in shadowing for improving listening skills)

URL: https://www.shadoten.com/

SHADOTEN is a service we developed in 2020, during the pandemic.

Our English coaching service "PROGRIT" had been growing, but as COVID-19 spread, revenue began to decline. To protect profits in that environment, we pursued a two-track approach: cost reduction and growth from sources beyond PROGRIT itself.

Because we could not afford large investments to drive growth beyond PROGRIT, we focused on building viable services from assets PROGRIT already had.

As we examined options from multiple angles, we noticed that the shadowing-correction service we were already providing to PROGRIT alumni had become particularly popular.

That led us to extend it beyond alumni — and the SHADOTEN business was born.

— So the shadowing service was originally offered to alumni.

During the pandemic, how did you balance the cost-cutting needed to protect profits against investment in launching the new business?

When conceiving the new business, we sought to keep costs low and leverage existing resources to the greatest extent possible to launch the venture.

The earliest prototype of SHADOTEN was launched as a minimal service — users sent audio via LINE and we provided corrections.

The initial offering was rough compared with today, but customer satisfaction was high. As the user base kept growing, we could feel the strength of the underlying demand.

— PROGRIT has launched several businesses, including SHADOTEN and DiaTalk. What is the process by which new businesses are proposed?

There is no formal proposal process for new businesses. We hear directly from whoever has an idea, and if there is meaningful rationale to pursue it as a new business, we move forward.

SHADOTEN was proposed by Vice President Yamasaki, and DiaTalk was proposed by the person who was then heading PROGRIT's English curriculum, inspired by ChatGPT.

— So those with ideas bring them directly to you, Mr. Okada.

When evaluating new businesses at PROGRIT, what criteria and thinking do you apply?

From the company's founding through around 2020, when SHADOTEN was born, the resources we could invest were limited. Our style was therefore to keep costs down, launch services quickly, generate profit, and refine the business and the service from there.

Vice President Yamasaki, who launched SHADOTEN, is exceptionally fast at turning the spark of a new business into something that can actually be offered as a service. With Yamasaki at the lead, we have launched new businesses including SHADOTEN.

— Are you still launching new businesses with the same speed while keeping costs low?

From around 2021, PROGRIT as a company and a brand began to take hold, and we became aware that offering a service that felt too rough could damage our brand value.

We have therefore preserved the original spirit — delivering services that meet customer needs quickly — while updating our approach so that new businesses launch with a level of quality high enough to surprise customers from the outset.

A concrete example is "DiaTalk," released in the summer of 2024, which we refined for more than a year from concept to launch.

— It must be difficult to deliver services quickly in line with customer needs without damaging brand value.

Within that, how do you balance speed-to-launch with high service quality?

Maintaining both speed-to-launch and high service quality is genuinely difficult.

To answer from a slightly different angle: as a company, raising enterprise value matters, so we must build expectations for the future without inflating them too far.

Saying too much about what we will do next is a mistake — and saying nothing at all is also a mistake.

So we constantly wrestle with the balance between the quality of a new initiative (the service) and the timing of its announcement and launch.

At PROGRIT, we announce upcoming services through IR disclosures to discipline ourselves into delivering high-quality services within defined timeframes.

By publicly committing to a launch date, we motivate the organization internally while sustaining both speed-to-launch and service quality.

Scaling the New Business

— You mentioned that SHADOTEN was proposed by Vice President Yamasaki. Did you have any hesitation about advancing SHADOTEN as a full-fledged business?

From the moment Vice President Yamasaki first proposed a new shadowing service, I had no particular hesitation about starting the business or scaling it.

As I touched on earlier, Yamasaki is extraordinarily fast at bringing a product up to a certain level of quality — for SHADOTEN, the time from concept to initial launch was only around two weeks.

So it was easy for me to picture the business scaling.

— Two weeks from concept to launch — remarkable speed.

Yamasaki's ability to move from concept to launch so quickly — when did he acquire it?

Yamasaki has always had a strong ability to turn ideas into tangible offerings or businesses, and I believe that ability was sharpened further as we founded PROGRIT and built up the business.

In the early days of a venture, what matters most is how quickly you can launch a service and refine it to fit the customer — so Yamasaki's strength in shortening the path from concept to launch had an enormous impact on PROGRIT.

— Shadowing is a way of studying English that one can do alone. What draws customers to SHADOTEN?

Our view is that many people who take up shadowing on their own end up simply going through the motions, without internalizing it efficiently.

Feedback is essential to accelerating the pace at which English ability grows. On SHADOTEN, English-language professionals listen to a learner's shadowing audio and provide detailed feedback on what is going well and what can be improved. Learners use that feedback to drive their study the following day — enabling efficient learning.

Also, having someone else listen to one's own voice introduces a healthy sense of tension that raises focus and seriousness — and helps sustain motivation.

— On what basis did you judge that SHADOTEN could be scaled as a service?

After SHADOTEN's launch, the number of users kept growing, so we believed we could grow it further by improving the UI/UX.

Around the same time, we also released SUPITEN (a flat-rate monthly speech-correction service specialized in speaking). SUPITEN's user base did grow, but not at the rate SHADOTEN saw.

To concentrate resources, we ended the SUPITEN service roughly a year after launch and focused on SHADOTEN.

— How do you analyze the reasons why SUPITEN did not grow as much as SHADOTEN?

I see two main factors.

First, the underlying demand for the service was not as strong as for shadowing.

Specifically, SUPITEN required users to choose a topic, draft their own speech, read it aloud, and submit a recording for correction — meaning the user had to compose the speech themselves.

That placed a significant burden on the user, raising the bar for sustaining motivation and continuing the service.

The second factor is the level of commitment I (Okada) personally brought to the service.

Vice President Yamasaki was proactive and committed to SUPITEN as strongly as to SHADOTEN.

Honestly, I had a gut sense that SHADOTEN would resonate more with customers than SUPITEN, and my commitment to SUPITEN was not particularly high.

Looking back now, I see that lower level of commitment on my part as one of the reasons we could not scale the service.

— I see. If your commitment to SUPITEN had been stronger, what would you have done differently?

If my commitment to the service had been stronger, when we hit obstacles I think I would have actively explored countermeasures — something like, "If approach A doesn't work, let's try approach B."

Instead, at the time, when we hit obstacles, I often took it as confirmation of my own hypothesis — "yes, as expected" — and did not push hard enough to develop countermeasures. That is something I now reflect on as a shortcoming.

— The commitment of key people clearly has a direct impact on a business.

How did you approach marketing as you scaled SHADOTEN?

At launch, SHADOTEN's main customers were PROGRIT alumni. To expand beyond that to the general public, we centered our efforts on web marketing — affiliates, listing ads, Facebook ads, and similar levers.

Given SHADOTEN's product characteristics, we have never run face-to-face sales like PROGRIT — neither at launch nor today.

— So web marketing has been central. Are there major differences in marketing approach between SHADOTEN and PROGRIT?

Because SHADOTEN relies solely on web marketing without face-to-face sales, the absence of a closing process — unlike PROGRIT — is the defining difference between the two services.

That said, since PROGRIT also runs web marketing, there were no new marketing tactics we needed to learn from scratch when SHADOTEN launched. We have been able to apply PROGRIT's web-marketing know-how and knowledge directly.

— So SHADOTEN's marketing also leverages existing resources.

After launching SHADOTEN, were there any new challenges in program or app design?

PROGRIT's service is fronted by people — the tutors — so in the end, if you want to drive sales conversion or customer satisfaction through human capability, there is room to do so.

SHADOTEN, by contrast, is product-led. We cannot rely on human capability to compensate in the way PROGRIT can, so we need to expand customer support and broaden every available touchpoint to lift satisfaction.

Beyond that, since PROGRIT was already engaged in program and app design, we could leverage existing resources on the service-design front as well — there were no particularly new challenges.

— Do SHADOTEN users sometimes sign up or continue because they have grown attached to a specific reviewer who corrects their shadowing?

The reviewer changes randomly each time, so we have no users who sign up or continue by designating a specific reviewer.

— So reviewers are assigned randomly. From a retention standpoint, how does SHADOTEN differ from PROGRIT?

Driving retention for SHADOTEN customers is honestly difficult, and we are still iterating.

One example of our retention efforts is using LINE to provide customer support that can be reached anytime, anywhere, with users free to ask whatever they like. This has earned high satisfaction since SHADOTEN's launch.

We therefore continue to refine our customer-support follow-up methods with great care, looking for every opportunity to raise satisfaction.

— Retention is one of those points that is always important and always difficult.

What organizational structure does the internal SHADOTEN team operate under?

The SHADOTEN team has grown somewhat since launch, but we still run with a small organization.

At launch, Vice President Yamasaki served as PROGRIT's business unit head and ran SHADOTEN as a side responsibility. A few others — including Yamasaki's secretary — were involved, all on a part-time basis.

As SHADOTEN scaled, a product manager for app development and a marketing lead joined; even today, we run the business with a very small team.

— So at SHADOTEN's launch, Vice President Yamasaki was running it as a side responsibility.

What initiatives marked turning points in SHADOTEN's growth?

Looking back, there was no single initiative or event that served as the origin of SHADOTEN's growth.

We had clear demand for shadowing among PROGRIT alumni, and it was obvious that it would deliver value to customers beyond alumni as well — so SHADOTEN's winning path was visible from the start.

There was plenty of trial and error along the way, but we have steadily executed what needed to be done, and that has brought us to where we are today.

— Having visible demand and value before launch is a wonderful starting point for a new business.

What prompted you to provide PROGRIT alumni with a shadowing service that became the precursor to SHADOTEN?

Among PROGRIT's services, the shadowing service consistently drew clearly higher satisfaction from program participants.

In addition, many PROGRIT alumni expressed a strong wish to continue studying English at a more affordable price.

After internal review, we focused on shadowing — the highest-satisfaction component — and concluded that a price point of 20,000 yen would be commercially viable. From there, we began offering the shadowing service as a stand-alone product.

PROGRIT's Organizational Strength

— I see a company's capabilities as built up from a combination of multiple capabilities. Through that lens, what capabilities do you think PROGRIT possesses?

I see PROGRIT's strengths as organizational capability and sales capability.

All of our employees are united by a defined set of values inside PROGRIT, and I see the sales strength that flows from that unity as PROGRIT's foremost strength.

Of course, as a business leader, the thought "grow revenue" is a given.

But the thought "work for our customers" and the thought "grow revenue" can sometimes be in tension.

Bridging those two stories, PROGRIT has internalized a slightly emotional principle: "we work to realize our mission."

*PROGRIT's mission: "Grow the number of people who can act freely on the world stage."

Building this way of thinking and the corporate culture around it has been a continuous process of trial and error.

— So grounded in the mission, you reconcile "company profit" and "customer interest," which can seem contradictory.

Yes. To be a little more concrete, PROGRIT offers a three-month program, with an option to continue beyond the three months for an additional fee.

From a pure-profit perspective, the focus would be on raising retention and LTV.

But from the customer's perspective, there are multiple paths for studying English — including self-study or continuing with PROGRIT after graduation.

So PROGRIT thinks mission-first. We set aside the fact that customers are paying us and dedicate ourselves to identifying the best possible means of growing each customer's English ability.

Even when we raise service prices, we believe that higher profit at PROGRIT allows us to invest more in service development and, in turn, deliver an even better service to customers.

— It is impressive that, on a mission-first basis, you have established a business that is good for both customers and the company.

How did you embed that mission across the organization?

Driving the business since founding, I have been reminded again and again that revenue is not everything. To grow the company and the business further, we renewed our mission and values — but embedding the mission internally was itself a continuous process of trial and error, and at first it did not go well at all.

As one concrete example of how we have embedded our mission and values, PROGRIT maintains a "DNA Book."

The DNA Book defines, in words, all the otherwise ambiguous language that different people might interpret differently — it is, in effect, PROGRIT's bible.

— How is the corporate culture built around PROGRIT's mission applied to the SHADOTEN business?

The corporate culture required for SHADOTEN and for PROGRIT differs somewhat.

SHADOTEN has high growth rates and growth velocity, but the source of that growth is not the kind of organizational and sales strength PROGRIT relies on. What SHADOTEN needs is the ability to build products that genuinely resonate with customers — and leaders who can pull the business forward.

— So SHADOTEN and PROGRIT call for different capabilities from the organization.

What kind of corporate culture do you plan to build from here?

I believe business growth depends greatly on corporate culture, so I want our corporate culture to evolve flexibly in step with the growth of PROGRIT, SHADOTEN, DiaTalk, and our other new businesses.

Simply imitating the corporate culture of great companies does not work. I believe we need to observe our own current and future environment — including the business itself — carefully and build the culture step by step.

Business Expansion through M&A

— Corporate culture is shaped by many variables, so simply imitating parts of successful companies is not enough. Within that organizational environment, what areas are you personally focused on as President?

Today, I am directing a large share of my own bandwidth to M&A.

To grow the business, we will sometimes build new businesses from scratch — as we did with SHADOTEN and DiaTalk — but we are also pursuing M&A to enter new domains and to accelerate the time-to-business.

Among the domains we are considering for M&A, entering the "English conversation lesson" segment — the mainstream of the English-education industry — is on our radar. We are exploring a broad set of opportunities.

— I see. If you entered the English-conversation-lesson segment, I would expect significant internal organizational conflict — what is your view on this?

If we ran the business as we do today, internal organizational conflict would almost certainly arise.

On the other hand, I believe we can avoid that conflict by updating our thinking to the point where we can absorb even an antithesis to our own approach.

— What prompted you to begin considering M&A seriously?

I began considering M&A in earnest at the time of our IPO — around September 2022.

Until our listing, our own business growth was not yet locked in, and I was pouring nearly all my bandwidth into the business itself.

After listing, the business reached a degree of stability, my bandwidth freed up, and I was able to begin considering M&A.

— What criteria do you use to assess potential acquisition targets?

Ideally, a target would be a company holding capabilities we want to build ourselves but do not yet possess.

For example, B2B corporate-training companies are attractive because they hold training expertise and content-creation know-how outside English that we do not have.

Also, considering that PROGRIT does not yet have M&A experience, we want to acquire — at minimum — a company that is profitable.

A profitable company indicates that the underlying business is already working to a meaningful degree, which lowers the risk and difficulty of M&A relatively.

— Why are you also looking at domains outside English education?

We renewed our company name, mission, and values in 2019, and we have been thinking about expanding into domains beyond English education ever since.

When we crafted the mission and values, we set aside our founding focus on English education and treated English as merely a tool — defining the mission, including beyond English, as "grow the number of people who can act freely on the world stage."

At the time of that 2019 renewal, however, we were focused on performance and the path to listing, so we had not yet been able to enter domains beyond English education.

— When considering M&A, how do you think about synergy?

At present, we deliberately do not factor synergy with existing businesses into M&A decisions.

Anchoring on the word "synergy" tends to pull people into overestimating the enterprise value of a target.

So we are looking for M&A opportunities where smooth PMI is achievable even without synergy. And for new businesses, we likewise evaluate them without regard to synergy with — or cannibalization of — existing businesses.

Put another way, our premise is "build something that stands on its own as a business," and only on that foundation do we then think about synergy with existing businesses.

— Thank you for an interview rich with insights — on the sources of PROGRIT's strength, new business creation, your thinking on M&A, and what comes next. We will continue to cheer on PROGRIT's growth.

(Left in the photo) Mr. Shogo Okada, PROGRIT; (Right) Mr. Yoji Nakamura, enableX

About PROGRIT

Under the mission "grow the number of people who can act freely on the world stage," we provide services that support people who are genuinely serious about building their English ability.

Anchored by our English coaching service "PROGRIT," we also operate subscription-based English-learning services.

Our current subscription line-up includes "SHADOTEN" for listening, "SUPIFUL" for speaking, and the AI English-conversation service "DiaTalk." In September 2022, six years after founding, we listed on the Tokyo Stock Exchange Growth Market.

Company name: PROGRIT Inc.

Address: 5F Tokyo Kotsu Kaikan Building, 2-10-1 Yurakucho, Chiyoda-ku, Tokyo

Representative: Shogo Okada, Representative Director and President

Securities code: 9560

Founded: September 6, 2016

Business: Development and operation of English coaching services; development and operation of subscription-based English-learning services

Corporate website URL: https://about.progrit.co.jp/