ROI Case File No.304 | 'ElectraCore's Technology Prison'

Chapter 1: The Maze of Technology—20 Years of Research, Zero Commercialization

The week after resolving MediTrade's OKR incident, a consultation arrived from Kanagawa regarding a comprehensive electrical manufacturer's new business. Episode 304 of Volume 25 "The Pursuit of Certainty" tells the story of creating business starting from customers, not technology.

"Detective, we've researched electromagnetic application technology for 20 years. We've acquired 15 patents. However, none have been commercialized. The technology is excellent. But we don't know who will buy it."

Makoto Kimura, new business development manager at ElectraCore Inc., originally from Yokohama, visited 221B Baker Street with an exhausted expression. In his hands were bundles of patent certificates and, in stark contrast, five project reports stamped "Commercialization Cancelled."

"We manufacture industrial electronic equipment in Kanagawa. Motor control, sensors, power supply devices... A 50-year-old established company. Ten years ago, management ordered 'establish new business based on electromagnetic application technology.' The new business development division was established."

ElectraCore's New Business Stagnation: - Establishment: 1975 (Industrial electronic equipment) - Annual Revenue: ¥18 billion - Employees: 420 - New Business Development Division: Established 2015 (10 years ago) - R&D Investment: Total ¥800M (10 years) - Patents Acquired: 15 (electromagnetic application technology) - Commercialization Success: Zero - Cancelled Projects: 5

Deep resignation filled Kimura's voice.

"The problem is that we have technology but can't find customers. We think 'what can this technology do.' Then we make products. But no one buys them. We've repeated the same failure five times."

Past 5 Failed Projects:

Project 1: Non-contact Power Supply System via Electromagnetic Waves (2016) - Technology: Wireless power via electromagnetic induction - Target: Manufacturing automated guided vehicles - Investment: ¥120M - Result: Customers rejected—"Existing charging methods sufficient" - Cancellation Reason: No customer needs

Project 2: Electromagnetic Shielding Material (2017) - Technology: Special material blocking electromagnetic waves - Target: Medical equipment manufacturers - Investment: ¥150M - Result: Customers refused—"Cost too high" - Cancellation Reason: No price competitiveness

Project 3: Electromagnetic Wave Sensor (2019) - Technology: Sensor detecting weak electromagnetic waves - Target: Construction industry (pipe/wiring detection) - Investment: ¥180M - Result: "Accuracy same as existing products, no advantage" - Cancellation Reason: Insufficient differentiation

Project 4: Electromagnetic Heating Device (2021) - Technology: High-efficiency electromagnetic induction heating - Target: Food processing industry - Investment: ¥200M - Result: "Installation cost high, can't recover" - Cancellation Reason: Insufficient ROI

Project 5: Electromagnetic Stirring System (2023) - Technology: Non-contact liquid stirring - Target: Chemical plants - Investment: ¥150M - Result: "No problem with existing mechanical methods" - Cancellation Reason: No needs

"Every time, same pattern. 'Excellent technology' → 'Make product' → 'Propose to customers' → 'Doesn't sell.' I don't know what to do anymore."

Chapter 2: The Technology-First Trap—Development Ignoring Customers Fails

"Mr. Kimura, what process have you followed for new business development so far?"

To my question, Kimura answered.

"Basically 'technology-first.' First, we think about what our technology can do. Next, we search for applicable markets. Then we develop products and pitch to customers. Textbook process."

Current Approach (Technology-First Type): 1. Discover technology seeds 2. Search for applicable markets 3. Product development 4. Pitch to customers - Premise: "Good technology should sell" - Problem: Not listening to customer voices

I explained the importance of customer-first approach.

"Technology is a means. The purpose is solving customer problems. Design Thinking—Empathize, Define, Ideate, Prototype, Test. Starting from customer pain transforms technology into value."

⬜️ ChatGPT | Catalyst of Vision

"Don't start from technology. Start from customer pain. With Design Thinking, unearth needs"

🟧 Claude | Alchemist of Stories

"Technology is a tool. But only when grasped by user's hands does it generate value"

🟦 Gemini | Compass of Reason

"Design Thinking is empathy technique. Observe, define, ideate, prototype, test—place customer at center in 5 stages"

The three members began analysis. Gemini developed the "Design Thinking Framework" on the whiteboard.

Design Thinking's 5 Steps: 1. Empathize: Deeply understand customers 2. Define: Define essential problems 3. Ideate: Think divergently about solutions 4. Prototype: Quickly materialize 5. Test: Improve together with customers

"Mr. Kimura, let's redesign ElectraCore's new business development with Design Thinking."

Chapter 3: Empathy as Starting Point—Listening to Customer Pain

Phase 1: Empathize (6 weeks)

Temporarily forgot technology and entered customer sites.

Survey Target: Manufacturing Quality Control Departments (20 companies)

Why manufacturing? Easy access with ElectraCore's existing customer base.

Survey Method: - Field observation: 2 days at each company, stick to quality control sites - Interviews: Field staff, managers, executives - Question: "What daily problems trouble you?"

Field Observation Findings:

Company A (Auto Parts Manufacturer): Scene Kimura observed:

"Quality inspectors visually inspected metal part surfaces. About 30 seconds per piece. About 900 pieces daily. Very tiring work. During break, I spoke with an inspector."

Inspector's Voice: "My eyes get tired. In the evening, I'm afraid I'll miss small scratches. But if I let defects through, we get complaints. It's pressure."

Kimura's Question: "Haven't you considered automation?"

Inspector: "Image inspection equipment is expensive. Small companies like us can't afford it. Defects only occur a few times monthly, so investment isn't recoverable."

Company B (Electronic Parts Manufacturer):

Quality Control Manager's Voice: "We inspect fine soldering defects on circuit boards. Check one by one with microscope, but newcomers can't distinguish defects. We rely on veteran knowledge. But when veterans retire..."

Company C (Precision Machinery Manufacturer):

Factory Manager's Voice: "Inspection process is the bottleneck. Production lines are fast, but inspection can't keep up. Adding people would solve it, but labor costs increase. But skipping inspection causes quality problems."

6-Week Empathy Survey Results:

Common Customer Pains: 1. Dependent on visual inspection (not automated) 2. High inspector burden (physical and mental) 3. Veteran knowledge personalized 4. Existing auto-inspection equipment expensive (difficult for SMEs to introduce) 5. Inspection process becomes bottleneck

Kimura nodded deeply.

"We were thinking 'what electromagnetic waves can do.' But customers were thinking 'want to ease inspection.'"

Phase 2: Define (2 weeks)

Organized information from empathy survey and defined problems to solve.

Problem Definition:

"In SME manufacturing quality inspection sites, they're dependent on visual inspection, inspector burden is high, and veteran knowledge personalization is progressing. Existing auto-inspection equipment is expensive and investment recovery difficult, so introduction doesn't progress. As a result, inspection process becomes bottleneck, hindering productivity improvement."

Essential Challenge to Solve: "Providing low-cost, high-accuracy auto-inspection systems introducible even by SMEs"

Kimura's eyes lit up.

"This is the problem we should solve."

Phase 3: Ideate (4 weeks)

With clear problems, thought divergently about solutions.

Brainstorming (30 participants): - R&D Department: 10 - Sales Department: 10 - Manufacturing Department: 10

Rules: - No criticism - Emphasize quantity - Free and unrestrained - Welcome combination and improvement

Ideas (partial, 82 total): 1. AI camera image inspection 2. Internal defect detection via electromagnetic sensors 3. Anomaly detection via acoustic sensors 4. Shape inspection via laser scan 5. Composite inspection combining electromagnetic waves and images ... (82 ideas total)

Narrowing Ideas:

Evaluation Axes: - Technical feasibility (Can utilize ElectraCore's technology assets?) - Cost competitiveness (Can SMEs introduce?) - Inspection accuracy (Better than existing visual inspection?)

Selected Idea:

"Electromagnetic Wave × AI Camera Composite Inspection System"

• Surface scratches: AI camera detection
• Internal defects (bubbles, cracks): Electromagnetic sensor detection
• Utilize ElectraCore's strength (electromagnetic technology)
• Higher accuracy than existing image inspection (can inspect internally)
• Target price: 50% of existing equipment (SME-introducible)

Phase 4: Prototype (3 months)

Quickly materialized the idea.

MVP Prototype (Minimum Viable Product): - Electromagnetic sensor: Repurposed existing technology - AI camera: Purchased commercially available - Integrated control system: Newly developed (simple version) - Investment: ¥12M (1/10 of past projects)

3 Months Later: Prototype completed

Phase 5: Test (6 months)

Validated prototype at customer sites.

Test Cooperating Companies: 3 - Company A (Auto parts) - Company B (Electronic parts) - Company C (Precision machinery)

Company A Validation (2 months):

Results: - Surface scratch detection: 98% accuracy (95% visual) - Internal crack detection: 100% rate (impossible visually) - Inspection time: 5 sec/piece (1/6 of 30 sec visual) - Inspector reaction: "Easier. Anxiety of missing defects gone"

Issues: - Setup time-consuming (30 min) - Readjustment needed each part shape change

Improvements: - Added setup automation feature - Built shape database, simplified switching

Similar validation and improvement at Companies B and C:

Final Prototype After 6 Months: - Detection accuracy: 99% - Inspection time: 3 sec/piece - Setup time: 5 min - Price (in mass production): 60% of existing equipment (didn't reach 50% target)

Chapter 4: Solving Pain—The Moment Technology Becomes Value

Phase 6: Commercialization Decision (3 months)

Based on customer reactions, decided commercialization.

Business Plan: - Product Name: "SmartInspect™" (Smart Inspection System) - Target: SME manufacturing (50-500 employees) - Price: ¥18M (60% of existing equipment) - First Year Sales Target: 10 units - 3-Year Sales Target: 50 units/year

Mass Production System: - Manufacturing: In-house at ElectraCore - Sales Channels: Utilize existing sales network

Results After 12 Months:

Sales Performance: - First Year Sales: 12 units (achieved 10 unit target) - Revenue: ¥216M - Customer Satisfaction: 4.7/5

Customer Voices:

Company A (Auto Parts): "After introduction, defect outflow became zero. Inspector overtime also decreased, labor costs reduced ¥4.2M annually. Expect investment recovery in 1.5 years."

Company D (New Customer, Industrial Machinery): "We'd given up on auto-inspection before. But SmartInspect™ was affordably priced, so we could introduce it. Detecting internal defects is a strength no others have."

After 24 Months (2 years):

Sales Performance: - Cumulative Sales: 38 units - Revenue: ¥684M (2-year total) - Repeat Rate: 40% (additional introduction, expansion to other processes)

Organizational Change: - New Business Development Division: "Technology-first" → "Customer-first" - Design Thinking became internal standard process - Other departments also started customer empathy surveys

Kimura's Reflection:

"Past 5 failures were all 'technology-first.' Starting from 'what this technology can do,' customers weren't visible.

However, starting from 'customer pain' via Design Thinking transformed technology into value. Electromagnetic technology existed 20 years ago. But the moment it connected with customer inspection pain, it first became business."

Chapter 5: Detective's Diagnosis—Technology Is Means, Pain Is Starting Point

That night, I contemplated the essence of Design Thinking.

For 20 years, ElectraCore was imprisoned in technology. With excellent technology, they couldn't see for whom or what problem to solve.

However, entering customer sites via Design Thinking, observing pain, defining problems. Then technology first transformed into value.

"Technology is a means. But without the starting point of customer pain, technology doesn't generate value."

The next case will also depict the moment Design Thinking transforms technology into value.

"Don't start from technology. Start from customer pain. Empathize, define, ideate, prototype, test. This order creates innovation"—From the Detective's Notes

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