What can a startup do in Asia? How are the big Internet guys faring? And what is Asia anyway? Presentation given at Geeknrolla in London on March 2011.

1. Asian
Eye
Startup
Guy
the
for
@benjaminjoffe
|
Geeknrolla
|
London,
March
2011

2. 1984

3. 1984
2010

4. Karate
Kid!
1984
2010
• Los
Angeles
• Beijing
(jobless
in
Detroit)
• Japanese
master
• Chinese
master
(karate?)
• Mysterious
• Bilingual
talented
(Chinese)
kids

5. HELLO!
MY NAME IS
@benjaminjoffe

6. “Mister
Asia”
–
Mike
Butcher

7. CEO,
Plus
Eight
Star
www.plus8star.com
Best
pracQces
from
Asia’s
digital
space
Research,
Strategy
&
“InnovaQon
Arbitrage”

8. Co-­‐Founder,
Mobile
Monday
Beijing
(38
events,
130
speakers,
3,000
parQcipants)

9. Angel
Investor,
Advisor,
Keynote
Speaker
• Speaker
100+
talks
in
17
countries
• Advisor
• Investor
in
Asia-­‐based
global
companies

10. 4
years
1
year
5
years

11. #HowAsianAreYou?
4%
2%
2%
Chinese
8%
Japanese
8%
42%
Korean
French
American
33%
German
Singaporean

12. Bacon
1.
Our
#1
Problem
2.
What
is
Asia
3.
Local
Leaders
4.
Foreign
Players
5.
Local
InnovaMon
6.
Where
is
the
bacon
for
my
startup?

13. Our
#1
Problem?
PreconcepMons

14. The World According to the West!
The West
The Russians
Revolutions
Orkut?
Offline
Asia
West (sort of)

15. Common
AssumpQon
#1
Everything
from
USA
is
great

16. Common
AssumpQon
#2
Everything
from
Asia
is
weird

17. Common
AssumpQon
#2
Everything
from
Asia
is
weird
(and
someQmes
funny)

18. Biggest
Issue
with
Asia:
Illiteracy
Foreigners
can’t
read
a
word!

19. Western
Framing

20. Which
Movie
is
This?

21. The
Lion
King
Kimba
the
White
Lion
(USA,
1994)
(Japan,
1965)
“Even
our
lawyers
are
not
that
good”
–
a
Disney
animator
(rumor)

22. Where
is
it
from?

23. Origins
Red
Bull
KraMng
Daeng
Lipovitan
Austria,
1987
(“Red
Water
Buffalo”)
Japan,
1962
Thailand,
~1970

24. Which
Game
is
This?

25. FarmVille
Copied
from
China
1. Five
Minutes
(China)
2. Slashkey
(US)
3. Zynga
(US)
4. Playfish
(UK),
etc.

26. Who
Came
First
• Harvest
Moon
(1996)
– Super
NES,
by
Victor
InteracQve
– Inspired
Happy
Farm
• Where
is
the
innovaMon?
– Not
in
the
game
concept,
but
in
viral
&
social
mechanics

27. 2.
What
is
Asia?

28. “Pick
up
your
jacket!”

29. What
is
Asia?
• Obvious:
Cultures
&
Languages
• Less
obvious:
Separate
Ecosystems
– Size,
GDP/capita,
infra,
capital
access,
etc.
• Beyond:
Parallel
Universes
– Past,
present,
future,
different

30. Users
USA
Japan
South
Korea
China
Unit:
million
+8*
|
www.plus8star.com
2,000
1,500
1,000
500
0
PopulaQon
Internet
Users
Mobile
Users
3G
Users
Sources:
CIA
World
Fact
Book,
MIIT,
Japan
TCA,
SKT,
March
2011

31. Users
Country
USA
China
Japan
South
Korea
PopulaMon
310
mln
1,330
mln
130
mln
50
mln
Internet
Users
245
mln
460
mln
100
mln
40
mln
Mobile
Users
295
mln
860
mln
120
mln
50
mln
3G
Users
120
mln
50
mln
115
mln
30
mln
+8*
|
www.plus8star.com
Sources:
CIA
World
Fact
Book,
MIIT,
Japan
TCA,
SKT,
March
2011.
Numbers
Rounded
for
easier
comparisons

32. Networks
100%
3G:
98%
Web:
60%
Avg.
8.5
Mbps
80%
3G
Users
(%)
3G:
60%
(W-­‐CDMA
only)
Web:
72%
60% Avg.
14
Mbps
C
hi 3G:
40%
40%
n Web:
34%
Avg.
5.0
Mbps
a
20%
3G:
5%
Web:
0.5%
+8*
|
www.plus8star.com
Avg.
1.0
Mbps
0%
0% 20% 40% 60% 80%
Internet
ConnecMons
Measured
>5
Mbps
(%)
Sources:
Akamai
4Q10,
Japan
TCA,
SKT,
ITU,
IDA,
Internet
World
Stats,
March
2011

33. Japan
&
Korea
have
the
Fastest
Internet
in
the
World
Top
100
Fastest
Internet
CiQes
CiQes
Measured
>10
Mbps
1
13
15
North
America
10
Europe
13
Japan
Japan
16
South
Korea
South
Korea
Hong
Kong
61
Source:
Akamai
4Q10

34. 3.
Local
Leaders

35. Sites
Ranking
Rank
USA
China
Japan
Korea
UK
1
Google
Baidu
Yahoo
JP
Naver
Google
UK
2
Facebook
QQ
Google
JP
Daum
Google
3
Yahoo
Sina
FC2
Nate
Facebook
4
YouTube
Taobao
YouTube
Cyworld
YouTube
5
Amazon
Google
HK
Google
G
Market*
BBC
6
Wikipedia
Netease
Ameblo
AucMon*
Yahoo
7
Twiver
Google
Livedoor
Chosun
eBay
UK
8
Blogger
Sohu
Rakuten
11th
Street
Windows
Live
9
eBay
SoSo
Wikipedia
Yahoo
KR
Wikipedia
10
Craigslist
Youku
Goo
Joins
MSN
Twiver
+8*
|
www.plus8star.com
Sources:
Alexa.com,
March
2011,
Rankey.com
(Korea)

36. Social
Networks
• China
• Korea
– QQ
650M
– Cyworld
20M
– Q
Zone
490M
– QQ
Microblog
110M
• SE
Asia
– RenRen
95M
– Mig33
(mobile)
40M
– Sina
Microblog
70M
– Kaixin001
40M
– 51.com
40M
• Japan
– Mobage
(mobile)
25M
– GREE
(mobile)
25M
– Mixi
(web+mobile)
25M

37. Local
Leaders
• China
• Japan
• Taobao
(#1
E-­‐commerce)
– Web
guys
• Tencent
(#1
IM,
Games,
$3B
sales)
• Sojbank
(Yahoo,
Apple,
Broadband)
• 11
game
companies
market-­‐listed
• Rakuten
(#1
e-­‐commerce)
• Sohu
(#2
portal),
Sina
(#1
Free-­‐to-­‐Play
+“Twiver”)
• Mixi
(SNS)
• Baidu
(#1
search)
Games
• CyberAgent
(ad
net,
games,
blogs..)
• DangDang
(“Amazon”),
listed
• Nico-­‐Nico
Video
(“YouTube”)
• Youku
(listed),
Tudou
(“YouTubes”)
• M3
(doctor
SNS,
$100M)
• RenRen,
Kaixin001
(“Facebooks”)
• Cookpad
(recipe
portal)
• Korea
– Mobile
guys
• Naver
(#1
search
+
portal
+
Q&A)
• DeNA
(mobile
SNS,
$1.3B
sales)
• Daum
(#2
portal)
• Gree
(mobile
SNS,
$600M
sales)
• Nexon
(Online
games,
$1B
sales)
• CA
Mobile
(mobile
ads)
SNS
&
Mobile
• Hangame
(Online
games)
Free-­‐to-­‐Play
• Commerce
Zappallas
(mobile
zodiac,
$100M)
• NC
Sox
(Online
games)
Games
• Xavel
(mobile
shopping+fashion)
• Cyworld
(#1
SNS)
• Nate
(#1
IM)

38. Beware!

39. Global
Shopping
– DeNA
(Japan)
buys
ngmoco:)
$400M
– Tencent
(China)
buys
Riot
Games
$400M
– Rakuten
buys
PriceMinister
&
Buy.com
$250M
each
– Gree
(Japan)
has
$250M
in
the
bank
This
is
just
the
beginning!

40. 4.
Foreign
Players

41. Foreign
Companies
in
Asia
Who
got
Tiger
Blood?

42. Group
A:
The
Valley
Darlings
+8*
|
www.plus8star.com
China
Japan
Korea
Google
FAIL
BI-­‐WIN
FAIL
Facebook
FAIL
(fail)
(win)
Twiler
FAIL
BI-­‐WIN
WIN
(JV
with
Digital
Garage)
Zynga
(win)
(win)
-­‐
(M&A
for
dev.)
(M&A)
Groupon
(fail)
(win)
(fail)
(but
hiring
150
staff)
Grades:
BI-­‐FAIL
|
FAIL
|
(fail)
|
(win)
|
WIN
|
BI-­‐WIN

43. Group
B:
The
Old
Guard
+8*
|
www.plus8star.com
China
Japan
Korea
eBay
BI-­‐FAIL
FAIL
WIN
(buy
leader
then
fail)
(M&As)
Amazon
FAIL
WIN
FAIL
YouTube
FAIL
(win)
(win)
Yahoo!
BI-­‐WIN
BI-­‐WIN
FAIL
(Alibaba
investment)
(JV
with
Soxbank)
Blizzard
(win)
-­‐
BI-­‐WIN
(license)
(cult)

44. Group
C:
The
Dark
Horses
+8*
|
www.plus8star.com
China
Japan
Korea
Skype
FAIL
FAIL
FAIL
LinkedIn
(fail)
(fail)
(fail)
Evernote
-­‐
BI-­‐WIN
-­‐
(deals
with
PCs,
Telcos)
Tumblr
-­‐
(win)
-­‐
MIH
(Naspers)
BI-­‐WIN
-­‐
-­‐
(Tencent
investment)

45. Group
D:
The
Mobile
Guys
+8*
|
www.plus8star.com
China
Japan
Korea
Apple
(win)
(win)
(win)
Android
BI-­‐WIN
BI-­‐WIN
BI-­‐WIN
(supported
by
telco)
(supported
by
telco)
(supported
by
telco)
Nokia
BI-­‐FAIL
FAIL
FAIL
(lead
then
dropped)
(never
grew)
(never
grew)
App
Developers
Not
many
foreign
Varied
Varied

46. Signs
of
True
GlobalizaQon
• NOT
Charlie
Sheen
• Tom
Cruise
on
Sina
Weibo
(local
Twiver)
• Rakuten’s
CEO
(Japan)
tweets
in
English
• Company
official
language
in
transiQon
to
English
• Who
tweets
in
Chinese
or
Japanese
in
the
West?
• First
step:
MyGengo
:-­‐)
?

47. Summary
• China:
No
company
won
a
direct
confrontaQon
• Japan:
More
open,
quality
&
persistence
pay
off
• Korea:
Advanced
models…
acquisiQons?

48. 5.
Local
InnovaMons

49. Mobile
Social
Gaming
Self-­‐published
+
Open
pla~orms
Some
ads
SNS
+
Free
games
+
Homepage
Virtual
goods

50. The
QuesQon
is…
NOT
“who
will
be
the
Facebook
of
XXX”
But
rather
“Who
will
be
the
Tencent
of…”
Indonesia
(#2
FB
populaQon),
India,
Vietnam,
Philippines,
Thailand,
Russia,
Brazil,…

51. Korea
surfing
Apple’s
Success

52. Shanzhai
InnovaQon:
Mass
customizaQon

53. InnovaQon
Awareness
Test

54. PHOTO:
MOBILE
PHONE,
BEIJING,
APRIL
2010
©
Benjamin
Joffe
/
Plus
Eight
Star
Ltd.

55. Hardware
InnovaMon:
“Shanzhai”
( )
PHOTO:
MOBILE
PHONE,
BEIJING,
APRIL
2010
©
Benjamin
Joffe
/
Plus
Eight
Star
Ltd.

56. PHOTO:
MOBILE
PHONE,
BEIJING,
APRIL
2010
©
Benjamin
Joffe
/
Plus
Eight
Star
Ltd.

57. QQ
Farm

58. Design
Your
Own
Mobile!
• Design
teams
<
10
people
• Factories
take
orders
from
5,000
units
• Cost
<
50
EUR

59. “Shanzhai”
Spirit?
• Cheap
• Fun
• Flashy
• Fast

60. 5.
Where
is
the
bacon?

61. Three
Main
Paths
Learn
Build
Compete

62. Learn
• China:
Entertainment,
post-­‐piracy
models
• Korea:
New
service
concepts
• Japan:
Mobile
+
alternaQve
models
Digital
goods:
$14B
in
Asia
already!
(USA=$2B?)

63. Build
• China:
Compare,
leverage
(app
bouQques…)
• Korea:
Case-­‐specific
• Japan:
For
local
market

64. Compete
• China:
Ultra-­‐compeQQve
• Korea:
Size
limited
• Japan:
Yeah!

65. Special
Case:
Singapore
(“the
red
dot”)
• Great
infra
• Everyone
has
a
smartphone
• Broadband
+
NaQonwide
free
WiFi
• MulQ-­‐cultural,
access
to
SE
Asia,
India,
Middle-­‐East,
etc.
• Ecosystem
growing
fast
• Barcamp,
Founder
InsQtute,
Startup
Weekend,
etc.
• Early
stage
funds,
Angels,
…
• Some
cool
companies
• Mig33
Mobile
SNS,
40M+
users
in
emerging
markets
• Viki
Crowdsourced
video
subQtling
community
• Foound
Group
communicaQon
service
• Eduardo
Co-­‐Founder
of
FB
(worth
$3B+)
lives
there

66. Conclusion
1. “There
is
no
Asia”
2. Learn
from
proven
successes
3. Enter
markets
cauMously
4. InnovaMon
is
everywhere!

67. Made
from
China
the
Cmune
Case
• Snapshot:
– www.facebook.com/uberstrike
– First
FPS
on
Facebook
– Made
in
Beijing
• Leverage
– Best
pracQces
of
Asia’s
free-­‐to-­‐play
– Best
distribuQon
(Facebook,
App
Stores,
Web)
• Result
– Organic
growth
– High
spending
/
user
– Largest
3D
social
game
(>500,000
MAU)

68. The
Sky
is
the
Limit!
@benjaminjoffe
|
www.slideshare.net/plus8star

69. Thanks!
More
about
“InnovaQon
Arbitrage”
www.plus8star.com
benjamin@plus8star.com
+81
|
Japan
benjaminjoffe
+82
|
Korea
+86
|
China
hvp://twiver.com/benjaminjoffe
Telecom
&
Internet
www.linkedin.com/in/benjaminjoffe
+
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Value
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