freee Chief Data Officer discusses ‘data flywheel’ for AI advantage

Shinichiro Shirotani, Chief Data Officer at freee, has outlined the concept of a ‘data flywheel’ as a true competitive advantage in the AI era. During a recent seminar, Shirotani argued that simply accumulating data does not create a sustainable ‘moat’ because data can be purchased, imitated, or becomes obsolete quickly.

Instead, true strength lies in creating a cycle where data usage generates new data, which in turn improves AI models and business operations. Shirotani detailed freee’s two-year journey to implement this cycle, noting that the initial phase required overcoming ‘zero trust’ by delivering tangible results, such as using personalized data to prevent customer churn.

As the flywheel gains momentum, companies must navigate ‘organizational friction’—such as a lack of cooperation or risk aversion—and ‘technical friction,’ which includes fragmented data and low data quality.