A Day with fonfun's Tsubasa Mizuguchi, the Listed-Company President Who Takes Zero Executive Pay and Outworks Everyone

The shadowing begins on a rainy morning. Mizuguchi takes a child to kindergarten by bicycle and rides off in a raincoat. The staff explain that the single most important thing to understand about Mizuguchi is that "a private company acquired a listed company." Shirai likened this to "a Yoshimoto comedian buying Yoshimoto Kogyo."

Mizuguchi does the kindergarten run every morning. Since they work during the day, the morning drop-off is about the only thing they can help with, so they feel they at least have to do that properly, they say.

On the way to the office, Mizuguchi buys a Red Bull at a convenience store. On weekdays, Red Bull is the first thing they drink after waking up, a habit that has lasted about 10 to 15 years. The point is to get caffeine and sugar, so when there's no Red Bull, coffee will do instead.

At the store, Mizuguchi compared a 220-yen item with a 200-yen item and chose the cheaper one. To Shirai, who assumed a company president wouldn't care about prices, Mizuguchi replied that they live every day paying attention to prices down to the 10 yen.

They arrived at the office at a time when almost none of the employees had come in yet. As Shirai marveled at the presidential-looking desk—"just like in a TV drama"—Mizuguchi explained the day's schedule: a morning meeting at a group company, an investment-related meeting for a group company, an internal audit meeting, receiving visitors, a meeting at another listed company where Mizuguchi also serves as an executive, a visit to a group company in Akihabara, and, in the evening, a post-M&A PMI meeting at yet another group company. Work was expected to run from around 9 a.m. until around 10 or 11 p.m., and Mizuguchi says this is roughly what every weekday looks like.

Asked whether it all gets confusing, Mizuguchi answered that it doesn't, because in each moment they are focused on that particular task. As for why they work so much, they explained that they believe an executive must work harder than the employees, and that they see this as their responsibility. When Shirai said this was different from the image of a laid-back president, Mizuguchi said there are probably presidents like that, but that isn't what they aim for, adding, "I wouldn't want to work under a president who doesn't work."

For Komatsubara of fonfun's internal audit office, Mizuguchi was the president of the company Komatsubara joined after changing jobs at 30. Komatsubara's first impression was of someone who walked very fast even when passing in the hallway—a fast talker and a fast walker. It was surprising at first, but Komatsubara says they've gotten used to it.

What Komatsubara finds impressive is that Mizuguchi works harder than the employees and even keeps a close eye on the internal chat. Komatsubara was struck by how much attention Mizuguchi pays to everything. After working from morning to night, Mizuguchi still goes on trips with family on weekends. Komatsubara said they get tired just going along to one child's soccer, and described Mizuguchi as a "stamina monster."

Around midday, when Shirai offered to join for lunch, Mizuguchi replied that they never eat lunch. They haven't eaten breakfast or lunch for about 15 years. For the first month or so they felt hungry, but once they decided not to eat, the hunger stopped. It started in their late twenties, when they felt that the drowsy period after meals was a huge waste of time. Even at night, they say, they don't eat very much.

In the afternoon, they head to Akihabara, home of YNP, a fonfun group company acquired a little while ago. According to Mizuguchi, more than 90% of YNP's employees are women, and the company has an on-site daycare. After receiving IT training, employees are dispatched to client companies under what is known as SES (system engineering services). Mizuguchi has carried out 11 M&A deals over the past two and a half years or so, including one just the day before. YNP was the fifth or sixth of those acquisitions.

On the way, Mizuguchi talked about how they got started. They didn't originally start a business because they wanted to be an entrepreneur. They married as a first-year university student and had a child, and needed to earn tuition for both themselves and their spouse while supporting the child. Going independent as a sole proprietor seemed the most rational way to do that. To support a family, growing the company little by little would bring more stability and generate profit continuously. With that in mind, they expanded the business.

For a long time Mizuguchi ran an unlisted company as its 100% owner, but a few turns of events led them to run a listed company. Along the way, they began thinking about how joint-stock companies work, what a listed company ought to be, and how listed companies with sluggish market capitalization should change—and they are now trying to put those ideas into practice themselves.

At YNP, they were greeted by the company's president, Matsui. Matsui is a director of fonfun and was at the first company acquired by Mizuguchi's Cybridge Group. Over the roughly 15 years since, Matsui has served as an executive at various companies.

Matsui says Mizuguchi is not at all the type to make grandiose promises. Mizuguchi breaks each task down and checks that it is being carried out properly. Where an ordinary president would forget their own instructions, Mizuguchi remembers them until they're done. So employees get grilled on the details, though that attention to detail has mellowed compared with when Mizuguchi was younger, Matsui says. Asked about Mizuguchi's strengths after working together for so many years, Matsui cited "never wavering." Mizuguchi doesn't waver on what the company exists for or what the business is for. Some presidents say their employees are family and they'll protect them, but Matsui sees Mizuguchi as placing more emphasis on employees becoming able to work independently.

In a follow-up interview, Mizuguchi explained their management philosophy. Because they started the company to support a family, they have always been very conscious of how to build a company that won't go under. Some companies achieve great results by relying on a single business, but Mizuguchi doesn't much like that model. A company that is strong in a particular industry or field does well while that business is growing. But when a recession hits or the structure of the industry itself changes, it takes heavy damage. So Mizuguchi has built a portfolio of businesses generating stable revenue across multiple fields and industries.

The core is IT. Since they started out as an IT company, they have used technologies such as IT and software development and grown the company little by little through repeated M&A, Mizuguchi says. When Shirai summed it up as "like a house: with only one pillar it collapses, but with lots of pillars it won't," Mizuguchi agreed.

Asked what prompted the idea of buying a listed company, Mizuguchi points to their own investment experience. They had been investing in stocks while continuing to run their owner-managed business, and also making venture investments. But in venture investing, many deals never reached an IPO or exit. Meanwhile, the Japanese market has plenty of listed companies with market capitalizations equal to or lower than those of the startups they had invested in. Unlisted shares can't be sold without a buyer, but listed shares can be sold on the market. Considering liquidity, they concluded it was more efficient to invest in listed companies with low market caps than in unlisted ones, and invested accordingly.

However, the share prices of those companies barely rose. Mizuguchi acquired more than 10% of the shares in several stocks or became the largest shareholder, and did "somewhat activist-like things" by pressing the companies, but the share prices still didn't go up. That led to the conclusion that, rather than investing in companies run by someone else, it would be better to take on the risk personally, properly gain control through a tender offer (TOB) in accordance with the rules, and raise the corporate value.

Mizuguchi describes fonfun's situation before the TOB as follows. Its market capitalization at the time was about 1 billion yen, around 20th from the bottom among the roughly 4,000 listed companies in Japan. The share price rose during the TOB process, but the company still wasn't valued. From the stock market's perspective, it was seen as a company that made no difference whether it existed or not, Mizuguchi says.

Mizuguchi says there is a logic to being valued by the stock market. Since the company hadn't been profitable, the first step was to make it profitable. The existing business alone wouldn't be valued, so they carried out M&A from a DX and IT angle and gradually rebuilt it into businesses that would be valued. Listed companies disclose results every quarter, so it's literally like getting a report card once every three months. Under those conditions, over two and a half to just under three years, the company reached a market cap of about 10 billion yen. That, Mizuguchi says, is what they've done at fonfun.

Asked how far they aim to go, Mizuguchi answered that having no finish line is how capitalism works. A role-playing game ends when you reach level 100 or beat the final boss. But a capitalist economy has no upper limit; as the scale changes, what you do and which businesses you take on change too. Mizuguchi described it as "a bottomless pit of building something bigger, something more highly valued."

Asked about salary, Mizuguchi revealed that, as stated in the disclosure documents, their executive compensation at fonfun is zero yen. Living expenses are covered by a fixed salary from Cybridge, another company Mizuguchi owns. fonfun is set up so that it gets valued when it turns a profit, and when the share price rises, the value of Mizuguchi's large shareholding rises. So there's no need to take executive pay, Mizuguchi says. They added, though, that since they aren't selling the shares, they can't convert them to cash—what grows is assets, not cash. When Shirai said, "You work the hardest and get paid zero," Mizuguchi laughed and agreed.

At the same time, Mizuguchi acknowledges there could be debate over whether this is appropriate. There may well be criticism that not taking compensation distorts the profit and loss statement (P&L). Even so, Mizuguchi noted that overseas, people like Elon Musk also work for zero pay, and said they are simply copying that.

Asked which field they'd choose if starting a business today, the answer was "AI, without a doubt." Building generative AI itself requires enormous amounts of money, so that's out of reach, but generative AI has only just arrived and many people don't know how to use it. When Mizuguchi started out, the internet already existed, but many people didn't have websites, even though they would soon need them. It was relatively easy to make money from the gap between those who had information and those who didn't. Today, there are all kinds of uses, such as applying generative AI to improve business operations or everyday life. Since lots of people still don't really understand that, Mizuguchi sees many opportunities to make money in that field.

To Shirai's question of whether you can start without money, Mizuguchi answered that some businesses can be started with an advantage because you have money, while other work lets even people without money earn a certain amount. In the latter category, today it would be businesses like contract work or consulting related to generative AI.

Asked what makes a good organization, Mizuguchi answered that what they're aiming for is an organization under owner management that can fight strongly even amid change. Whether their own decisions are truly right can only be judged over the long term. Even so, they make each choice believing it is right in that moment. So they think that members of the organization becoming able to make similar judgments leads to a strong organization. For better or worse, if people in the organization can judge "how would Mizuguchi decide in this moment?" in the same way, their decisions effectively become the same as Mizuguchi's own. That kind of organization is what Mizuguchi currently considers a strong one.

At 5 p.m., as Mizuguchi finished a meeting, Shirai said, "Isn't it about time to head home?" Mizuguchi replied, "The day's only just getting started." Next up was a meeting with the audit firm. After that came a meeting about the future management of Image Information Development, a listed company. Mizuguchi's company underwrote a third-party allotment of shares by that company in January, now holds about 40% of its shares, and has a capital and business alliance with it.

The day's work ended at 10:30 p.m., and Mizuguchi said, "We finished early today." Even so, Mizuguchi wanted to stop by the office in case any employees were still there. Asked whether today had been especially busy, Mizuguchi said weekdays are always like this: "This is every day."

When Shirai marveled at the sheer energy, Mizuguchi said their wife works just as hard. She is raising eight children, so it's the same, Mizuguchi said. All Shirai could reply was, "I've got nothing to say to that."

The next day is a day off, but there's an online meeting at 10 a.m. There's also a fair amount of work to finish before the end of Golden Week, and Mizuguchi plans to get most of it done during the holidays. As for dinner, Mizuguchi will eat if there's something at home, but sometimes the kids have eaten everything, and in that case they'll go without. They're not hungry, but people want to eat when food is right in front of them, so they eat if there's something and are fine if there isn't. Just as in the morning, Mizuguchi rode home by bicycle.

Looking back on the day, Shirai's honest impression was, "It really was all for real." On location shoots there are sometimes staged moments along the way, but this time there were none—just an ordinary day that kept going. Having heard many of Mizuguchi's ideas, Shirai found them "really simple." Nothing extraordinary, just one point after another that left Shirai able to say only, "That's true."

Asked whether there was anything Shirai wanted to change starting tomorrow, Shirai replied, "Maybe I'll try skipping a meal or two." And Shirai wrapped up with, "Starting tomorrow, I've got to live a bit more properly."