After a 14-year career at the Mitsui Bank, he founded (technically as one of the promoters/executive directors) Mino-o Arima Electric Railway Company (then Hankyu Corp., now, Hankyu Hanshin Holdings, Inc.) in 1907. At Hankyu, Kobayashi made success in the management of the railway in a less-populated region by developing residential areas and an amusement park along the railway line as well as a department store at the railway terminal. He also established the Takarazuka Revue and the Hankyu professional baseball team (the predecessors of Orix Buffaloes) to attract passengers. Such a business model established by Kobayashi was followed by other railway companies in Japan.