111
Lessons Learned from Asia Benjamin Joffe, CEO | Plus Eight Star | Santa Monica, 2009.07 How Beijing, Tokyo and Seoul are relevant to L.A.
| Date post: | 22-Nov-2014 |
| Category: |
Travel |
| Upload: | benjamin-joffe |
| View: | 11,510 times |
| Download: | 0 times |
Lessons Learned from Asia
Benjamin Joffe, CEO | Plus Eight Star | Santa Monica, 2009.07
How Beijing, Tokyo and Seoul are relevant to L.A.
Here is the plan
0. Introduction
1. How Asia can innovate
2. China | 5Cs of Innovation
3. Japan | Mobile Galapagos
4. Korea | Ultra-broadband laboratory
5. Closing & Questions
0.Introduction
ベンジャミン
本杰明
벤자민
Benjamin Joffe
4 years
1 year
4 years
www.plus8star.com
Innovation ArbitrageChina | Japan | Korea
What we do
– Worked with mobile SNS in Japan in 2003• With avatars, virtual goods and GPS!
– Advise leading companies worldwide• Microsoft, Adidas (E-commerce / Digital strategy)
• IMVU (US | 3D chat / Virtual World)
• MIH (China/S.Africa | Largest shareholder of Tencent)
– First commercial report on Tencent “Inside QQ”
– Partner of 3D social gaming startup Cmune
– Co-Founded Mobile Monday in Beijing
1How Asia can innovate
The biggest barriers to understanding are our
assumptions
Claim #1
General assumption #1
Everything from USA is great
General assumption #2
Everything from Asia is weird(and sometimes funny)
Two examples
Movie 1
Magnificent Seven
(1960)
Seven Samurai
(1954)
Movie 2
The Matrix
(1999)
Ghost in the Shell
(1989/1995)
Using best scripts & Talent
• Adapted from Asian movies
– Fistful of Dollars Yojimbo
– Star Wars Hidden Fortress (partly)
– The Ring (id.)
– Shall We Dance? (id.)
– My Sassy Girl (id.)
– The Departed Internal Affairs
• Asian movies succeeding “as is”
– Kungfu movies, Crouching Tiger Hidden Dragon…
Old Boy – Made in Hollywood
Directed by Steven Spielberg
Starring Will Smith
In theaters in 2010
Who came first?
Leveraging best practices
Innovation is a consequence of
TalentMarket size
InfrastructureInvestment
Claim #2
Internet1.3 billion
Mobile3.3 billion
Source: Morgan Stanley, 2007
Digital Population
Country USA China Japan KoreaPopulation 300 mln 1,300 mln 130 mln 50 mln
Internet users 225 mln 340 mln 100 mln 35 mlnMobile users 260 mln 650 mln 100 mln 45 mln
x 5 1,680 mln
x 2 Total 475 mln
x 3 785 mln
IT Infrastructure3
G u
sers
% of Internet connections measured above 5Mbps(Source: Akamai, 4Q08)
China
0%
20%
40%
60%
80%
100%
0% 20% 40% 60% 80%
www.plus8star.com
Avg. 15 Mbps
Avg. 7 Mbps
Avg. 4 Mbps
Alexa Quiz
USA China Japan Korea
#1 Google
#2 Yahoo
#3 Facebook
#4 YouTube
#5 MySpace
#6 MSN
#7 Live
#8 Wikipedia
#9 Craigslist
#10 eBay
?
Alexa Quiz
USA China Japan Korea
#1 Google Baidu Yahoo JP / SB Naver
#2 Yahoo Tencent FC2 Yahoo
#3 Facebook Sina Google JP Daum
#4 YouTube Google China YouTube YouTube
#5 MySpace Taobao Rakuten Google
#6 MSN Netease Livedoor Cyworld
#7 Live Google Ameblo Nate
#8 Wikipedia Sohu Mixi Google KR
#9 Craigslist Youku Wikipedia Live
#10 eBay Yahoo Goo Facebook
Alexa Quiz
USA China Japan Korea
#11 AOL Soso Google (error)
#12 Blogger Ku6 MSN Tistory
#13 Amazon Kaixin001 Nicovideo JoongAn Ilbo
#14 Go Mop Amazon JP Chosun Ilbo
#15 CNN Live 2 Channel MSN
#16 Twitter PCOnline Nifty Gmarket
#17 Microsoft 56.com Yourfilehost Paran
#18 Flickr Yahoo CN Biglobe Auction
#19 ESPN Sogou Geocities JP Blogger
#20 Photobucket Tom Online Infoseek JP Friendster
Innovation is beyond technology(it’s about services ^_^)
Claim #3
e.g. LAMP stack(Linux / Apache / MySQL / PHP)
+ HTML / Flash / AJAX…
Technology?
Largely commoditized…
2China
China is innovating more and more because offive key factors
Claim #4
5Cs of Innovation™
a. Copy
“Benchmarking”“Inspiration”
“Best practice”
“If I have seen farther it is only by standing on the shoulders of Giants.”
(Isaac Newton)
Pragmatic Entrepreneurs & Investors
Innovation ROI?
“Blue oceans”
Entry barriers
Technology?
Capital?
Talent?
Intellectual Property?
Censorship?
The Underpants Gnomes
Business Plan
Copy can backfire!
Japan: Mayonnaise
China: Whipped Cream
Copycats often die
• Market not sustainable
• Business model does not work
b. “China”
Scale / Geography / Demography make some services viable
...$1 billion do not appear overnight
Already in 2007(We even published a report…)
Attention Threshold=
1 billion dollars?
Market Capitalization(June 2009)
21 bln3-15 bln?
REAL MARKET CAP
Maybe simply not looking?
c. Combination
Will it blend?
Tencent (1998)
d. Competition
“Survival of the fittest”
(Herbert Spencer)
4 Facebook
20 YouTube
10 MySpace
5 Match.com
3 Yahoo
4 Twitter
?
What happens when you have
Tough Spots
“Execution”
“Concepts”
Sociology
Psychology
Marketing
Metrics
Business models
Payment
Feedback loop
e. Constraints
“Necessity is the mother of invention”(Plato)
Low GDP/capitaSmall transactions / making millions from cents
Limited advertisingAlternative business models / B2B to B2C
No credit cardsAlternative payment systems,
mobile, virtual currencies
No legacy industry(is it a constraint?)
Leading Companies
97
370
1047
429 452 468522
439
0
200
400
600
800
1,000
1,200
Kongzhong Sina Tencent Sohu Net ease Baidu Shanda Alibaba
Web
Portal
Mobile
content
IM Portal +
Games
Online
games
mln USD
Search
engine
Online
games
Only B2B
e-commerce part
www.plus8star.com
0%
10%
20%
30%
40%
50%
60%
70%
80%
0 100 200 300 400 500 600
Gaming in ChinaProfits of 9 listed companies
Note: The profit Margin for Tencent game and NetEase is taken as the one of the whole company.
www.plus8star.com
Revenue 2008 (mln USD)
Pro
fit
ma
rgin
20
08
(m
lnU
SD
)
Battlefield by Electronic Arts
When we started two years ago, there
was a real question mark: Can the free-
to-play model work as it did in Asia?
The answer is an emphatic yes.
Ben Cousins
General manager
Battlefield Heroes team
Electronic Arts
More innovation
Lihua | Order food over IM
Alimama | Ad exchange + Micro-retail
Babytree | Vertical for young parents
Huica | Mobile coupons
PPLive | P2P Internet TV
Hozom | Address book + SNS
iNezha | RSS-to-IM
Qifang | P2P Micro-lending
Digu | Twitter + Pics + Celebs
Lakoo | Appstore for non-iPhones
2Japan
Japan is the world’s most advanced mobile market
ANDToo isolated for its own good
Claim #5
Beyond Voice & Beyond Telecom
92%
50% 50%
3G Mobile TV NFC
40%
Data ARPU
95%
50%
Non-SMS ShareFlat-rate Data
In addition
• Business models
– Micro-payments since 1999 (“i-mode”)
– “App store” since 2001
• Content
– Mobile music, mobile ads, mobile commerce…
– Financial services by mobile carriers
• LTE at 300Mbps starts next year!
Mobile Market
• Mobile content
– 4.3 billion USD in FY07
– 40 USD / user / year
• Mobile commerce
– 7.3 billion USD
– 70 USD / user / year
Before & After 3G
1,186
204
419
0
108
229
500568
1,091
862
225185
231
1,140
0
200
400
600
800
1,000
1,200
2004 2007
Mill
ion
USD
www.plus8star.com
Galapagos Syndrome
• No foreign mobile brand is strong in Japan
• Too complex to survive abroad?
Some examples that work
“Social NetworkingIs Not a Business”
MIT Technology ReviewJuly/August 2008
And more (April 2009)
Mobile Social Networks?
Social Networks
Company Mixi DeNA GREE
Reg. users 16 mln 12 mln 8 mln
Usage 2/3 mobile 100% mobile 100% mobile
Revenue 2008 $120 mln $320 mln $60 mln
Profit margin 31% 40% 63%
From users 5% 80% 75%
Market capitalization $500 mln $1.4 bln $1.2 bln
www.plus8star.com
Mobile Game Town
Revenue Breakdown
[1 billion JPY = 10 million USD]
Japan Game Market
[1 billion JPY = 10 million USD]
More successes
Golf Digest Online
• What is it?
– Golf online vertical
• Numbers
– 1.37M registered users
– 128M USD, 6.9M USD profit, Listed
• Business models
– Ads, e-commerce (booking, products), subscriptions
Cookpad
• What is it?
– Cooking focused vertical
• Numbers
– 6.67 M USD rev., 1.76M profit
– Profitable, IPO
• Business models
– Ads, subscriptions, lead generation
So-Net M3• What is it?
– “Medicine” “Media” “Metamorphosis”
– “Social network for doctors” / Vertical site on medical products.
• Numbers
– 177,000 doctors
– 85 M USD rev., 24 M net profit, Listed
• Business models
– Advertising, subscriptions, surveys, jobs
Various Virtual Worlds
• Services
– Nicotto Town (250K)
– Ameba Pigg (350K)
• Content & business models
– 2D
– Virtual items
– Avatars and spaces
3Korea
Korea is a window into the future of broadband
ANDForeign companies leverage
Korea’s ideas better
Claim #6
Online Games
• 1 billion USD market
– Larger than Japan with 1/3 population and 1/2 its GDP/capita
– 1/3 of China’s
• Pioneer of
– Online gaming!
– Virtual goods model
Kingdom of the Wind (Nexon, 1996)
Cyworld
• Real-name SNS
• Beats FB and MySpace
• Virtual goods
– Avatars
– Page skins
– BGM
– Fonts!
• … since 1999!
Naver
• Google & Yahoo’s
nemesis in Korea
• Innovations
– “360 search”
– Yahoo Answers
– Since 2002!
• More
– Knowledge shopping, etc.
Alternative Media Models
• Citizen journalism | OhmyNews
• Video Jockey “VJ” | Afreeca.tv
• Online education | Megastudy
• Various smaller services with innovative concepts.
www.plus8star.com
benjamin0123
http://twitter.com/plus8star
www.linkedin.com/in/benjaminjoffe
www.slideshare.net/plus8star
+81 | Japan
+82 | Korea
+86 | China
Telecom & Internet
+ Added Value
* High quality
Contacts
