An Introduction to CyberAgent

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slide deck for CAV Taiwan's intro to CA Group talk held on 4.25.13

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An Introduction to CyberAgent

  1. 1. 與創業者對話 ∣ A Series of TalksIntroduction to CyberAgentCatherine Chang / CyberAgent Ventures, VP4/25/13CyberAgent Ventures, Inc. 1
  2. 2. Who we are…CyberAgent Inc. is one of Japan’s leadinginternet services conglomerates.About us: 1998, established in Tokyo, Japan. 2000, IPO on Tokyo Stock Exchange (Mothers), 4751. Headquartered in Shibuya, Tokyo. 2,600 full-time employees.Products & Services: Internet advertising agency Internet media businesses Smartphone contents and services InvestmentCyberAgent Ventures, Inc. 2
  3. 3. 3What we do…Based on the concept of “start small, develop big,” CyberAgent hasestablished and developed a wide network of group businesses from theground up, without any strategic M&As.Online Ad Mobile Ad/ MediaOnline MediaPC & Mobile GamesE-Commerce Finance and InvestmentSEM operation managementAd network and targeting adsSEOBuzz marketingPR AdsCelebrities’ promotionMobile Ad agencyReward adsAgency for national clientsWomen’s media adsBlog and virtual communityPrice comparison media“Groupon” serviceAvatar communityWedding information mediaOnline gamesMobile social appsSmartphone appsSmartphone apps Smartphone appsMobile social apps Smartphone apps and adsMen’s apparelForeign currency exchange Venture capital
  4. 4. 44Highlights: Ameba Since launch in 2004 as a blogging service, Ameba has grown to become one ofthe largest diversified social media platforms in Japan, offering avatars and games. 20 million registered members, 30 billion monthly PV, more than 10,000 celebrity users.Blog serviceAvatar service 「Ameba Pigg」Monthly PV GrowthUsers communicate and socialize with their own avatarsin a virtual world.Mobile PVsPC PVs
  5. 5. 5ADVERTISEMENT CONTENTS MEDIACA旗下日本最大的手機廣告代理公司CAMobile與全球最大的app ad network公司tapjoy合作CyberAgent與DeNA合資的專注于智能手機廣告的子公司。CA旗下專注于智能手機的子公司。佔據日本智慧手機廣告市場70%的市場份額PC與手機社交遊戲中Reward廣告代理公司APPstore中用戶量最大的介紹APP的媒體Free APP KingLBS應用 外匯應用Highlight: Smartphone Services
  6. 6. 6Highlight: Mobile Games CyberAgent Inc. and subsidiaries produce and operate 300+ unique mobiletitles, making us one of the largest mobile content providers in Japan. “Rage of Bahamut” leadingJapanese card battle gamedeveloped by CyberAgentsubsidiary Cygames, Inc.,ranked consistently on iOS topgrossing in numerous countries US$15 million revenue / month
  7. 7. 7 72012 financial performanceSales: JPY 141 billion (US$1.5 billion )Operating profit : JPY 17 billion (US$183 million)Sales Performance
  8. 8. CyberAgent Ventures, Inc. 8Overview of Investment Activities
  9. 9. CyberAgent Ventures – regional offices9Network of 10 offices across 7 countries, Pan-Asia focus with US coverage
  10. 10. 10Taipei team
  11. 11. CyberAgent Ventures, Inc. 11Alice has more than 15 years of VC experience inTaiwan and China, focusing on electronic,manufacturing, tech and IT, with a track record of 25+investments and 8 successful IPOs. Alice received herMBA in international business from University of Toledo.Alice joined CyberAgent Ventures in 2010.Catherine is a Bay Area native and UC Berkeley graduatewith a background in legal studies. She worked on severalprivate equity deals in Asia before joining CyberAgentVentures in 2011.Alice Fang /General ManagerCatherine Chang / VPLight Lin / AdviserLight is a serial entrepreneur and angel investor. While stilla student at Chiao Tong University, he co-foundedwretch.cc, which became the largest blogging service inTaiwan and was later acquired by Yahoo in 2007. His latestproject is Flying V, a Taiwan-based crowd-funding platform.
  12. 12. CyberAgent Ventures, Inc. 12Technology moves fast, so we don’t tryto do everything ourselves.Invest in local talent, leverage our know-how to grow leading internet businessesin emerging markets.Why we invest…
  13. 13. CyberAgent Ventures, Inc. 13 Identify emerging markets with growth potentialin the tech sector; Narrow down untapped segments and services; Seek out teams with local expertise andexecution ability; Work together to deploy proven business modelsin these markets.How we invest…
  14. 14. CyberAgent Ventures, Inc. 14Win me over as a user (first and foremost)!How we evaluate…Does your product… Fulfill a latent market demand? Show a clear competitive advantage?Is your team… Able to adjust quickly to market feedback? Cohesive and responsive?
  15. 15. CyberAgent Ventures, Inc. 15Japan’s largest recipesharing media 1.2 million recipes 15 million MAU 4% premium users (as% of MAU)Business model: Banner ads Tie-up ads Premium usersBusiness model reference: CookpadFinancials: US$40 million sales (FY2011) US$11 million net profit (FY2011) 60% of revenue comes from premium users
  16. 16. 16Portfolio companies in Taiwan
  17. 17. CyberAgent Ventures, Inc. 17What is “incubation?” Identify goals Set KPI to meet goals Repeat as necessary
  18. 18. CyberAgent Ventures, Inc. 18Grow User acquisitionPV, DAU, MAU,membersTraction EngagementRetention rate,time on site,task completionMonetize Business ModelAdvertising,premium fees,ARPUGOAL KPI
  19. 19. CyberAgent Ventures, Inc. 19Examples of false positives:User acquisition: MAU high vs. member/MAU ratioEngagement: PV high, long time on siteBusiness Model: paid downloads vs. freemium
  20. 20. CyberAgent Ventures, Inc. 20Example 1: content / info portal2013 2014 2015CPM 5 10 15banner 5 7 10ARPU (NT$) 300,000 350,000 400,000campaign 3 5 72013 1Q 2013 2Q 2013 3Q 2013 4Q 2014 1Q 2014 2Q 2014 3Q 2014 4QMAU 3,000,000 3,150,000 3,307,500 3,472,875 3,828,845 4,020,287 4,221,301 4,432,366PV/MAU 7.5 7.5 8 8 9 9 10 10Monthly PV 22,500,000 23,625,000 26,460,000 27,783,000 34,459,602 36,182,582 42,213,013 44,323,663banner 67,500 70,875 79,380 83,349 147,684 155,068 180,913 189,959campaign 2,700,000 2,700,000 2,700,000 2,700,000 5,250,000 5,250,000 5,250,000 5,250,000total ad sales 2,767,500 2,770,875 2,779,380 2,783,349 5,397,684 5,405,068 5,430,913 5,439,959clicks clicks/mo. 22,500 23,625 26,460 27,783 34,460 36,183 42,213 44,324conv. 10% 2,250 2,363 2,646 2,778 3,446 3,618 4,221 4,432ARPU 300item sales 2,025,000 2,126,250 2,381,400 2,500,470 3,101,364 3,256,432 3,799,171 3,989,130OperationAdsAffiliateIdentify goals and KPI for relatively mature content / info portal, ready tomonetize. Goals: Monetize Business Model: Affiliate sales KPI: PV, click rate and conversion rate
  21. 21. CyberAgent Ventures, Inc. 21Example 1: content / info portalFalse positives• High PV, but not translating to high conversions• Breakdown PV by channel and time of access, found that users were notaccessing the main channel with embedded affiliate links• Adjust content placement across channels, gradually direct users toaffiliate channelIncrease Click Rate• Change UI and placement of “buy” button on content with affiliate links• 30% increase in referral clicks in 1-month periodIncrease Conversion• User behavior analysis – push content to match user’s search history andneeds
  22. 22. CyberAgent Ventures, Inc. 22Takeaways: High PV is meaningless, because it was concentrated in the wrongplace. Unable to monetize this traffic. Could have executed ad-model, but overlooked more promisingaffiliate model. Attention to user needs and behavior and simple redesign offeatures and UI successfully drove PV to desired channel, andincreased click + conversion rates.Example 1: content / info portal
  23. 23. Example 2: SNSCyberAgent Ventures, Inc. 232011 2012 2013Register users 4,875,000 7,932,000 9,372,000MAU 1,828,125 2,974,500 3,748,800DAU 609,375 991,500 1,249,600No. of employees 11 30 34   developers 7 15 15Total cost 491,800 2,289,610 2,533,035Salary 232,800 1,453,380 2,002,035Servers cost 0 355,230 0bandwidths 114,000 370,000 400,000Marketing 2,000 21,000 25,000rental 15,000 60,000 66,000Others/Financing cost 128,000 30,000 40,000Sales 175,061 2,337,820 5,350,750Revenue stream - 1 175,061 1,017,926 1,558,942Revenue stream - 2 0 960,000 2,520,000Revenue stream - 3 0 359,893 1,271,808Profit -316,739 48,210 2,817,715Cost+expensesSalesKPI
  24. 24. User AcquisitionNew Register user RemarkOrganic growth 1,350,000 X new users daily * X days * X monthsNew user from mobile 780,000 App services in iOS & Android to reach new users,New user integrating from other sites 850,000 FB Fans; Cross acquisition of potential new user and convert theminto register users through integration with other SNS and medias.New users contributing from newfeatures1,020,000 Conversion rate from visitor to new user is at X% when newfeatures launchingTotal 4,000,000CyberAgent Ventures, Inc. 24Example 2: SNS
  25. 25. Cost StructureCyberAgent Ventures, Inc. 25Example 2: SNSQ3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013員工数 7 11 20 27 29 30 33 33 34 34核心人員数 2 2 3 4 4 4 4 4 5 5核心人員月工資 6,000 7,000 8,050 8,050 8,050 8,050 9,258 9,258 9,258 9,258一般技術人員数 5 7 12 15 15 15 15 15 15 15一般技術人員月工資 3,400 4,200 4,830 4,830 4,830 4,830 5,555 5,555 5,555 5,555其他員工数 - 2 5 8 10 11 14 14 14 14其他員工月工資 - 2,600 2,600 2,600 2,600 2,600 2,990 2,990 2,990 2,990人力成本小計 87,000 145,800 285,330 376,350 391,950 399,750 486,623 486,623 514,395 514,395需要服務器数 - - 15 15 10 5購入服務器数 - 15 15 10 5購入服務器單价 - 7,894 7,894 7,894 7,894服務器成本小計 - - 118,410 118,410 78,940 39,470 -帶寬成本 57,000 57,000 80,000 90,000 100,000 100,000 100,000 100,000 100,000 100,000推廣成本 - 2,000 4,000 5,000 7,000 5,000 5,000 6,000 8,000 6,000租金 7,500 7,500 15,000 15,000 15,000 15,000 16,500 16,500 16,500 16,500其他管理費用/融資費用 3,000 125,000 6,000 8,000 8,000 8,000 10,000 10,000 10,000 10,000其他成本小計 67,500 191,500 105,000 118,000 130,000 128,000 131,500 132,500 134,500 132,500總成本 154,500 337,300 508,740 612,760 600,890 567,220 618,123 619,123 648,895 646,895
  26. 26. iPartment.com.tw (愛情公寓)Investment date:Oct. 2006, Nov. 2007Model: Avatar SNS(advertising+ subscription fee)CyberAgent Ventures, Inc. 26
  27. 27. Back to the basics, identify the team’s strong pointsCalmly, objectively analyze and pinpoint the user’smotivation, figure out where the service’s valueproposition truly liesDesign features and business model based uponthis core value propositionEstablish mutual trust with management teamCyberAgent Ventures, Inc. 27CAV’s value-add:
  28. 28. KPI:UUPOI with review coverageCyberAgent Ventures, Inc. 28iPeen.com.tw (愛評網)
  29. 29. 29Annual Portfolio Conference Bring together all portfolio companies across regions, create uniqueopportunities for teams to establish business alliances. Share CyberAgent Group’s know-how in various areas. Discuss dataanalysis techniques, HR and organizational structure, and othermanagement issues.Incubation Events
  30. 30. CyberAgent Ventures, Inc. 30Social Application Conference (Jan 2010, Beijing) Introduce the trend of “open-social” in Japan to Chinese developers CyberAgent, Mixi, and DeNA participated in the conferenceSmartphone Applications Developers Conference (May 2011, Shenzhen) Introduce latest trends in smartphone apps in China, Japan and the US Sina/Tencent/Alibaba from China, and CyberAgent/DeNA from Japangave presentations with more than 400 Chinese developers inattendanceIncubation Events
  31. 31. CyberAgent Ventures, Inc. 31STARTUP BASE CAMP – CyberAgent Ventures’ Tokyo incubation center. 50+person co-working space, est. in Feb. 2012, largest of its kind in Japan.SBC provides access to mentor network of established IT/tech professionals in Japan,on-site HR/legal/accounting advice and pitch events in front of active investors.
  32. 32. CyberAgent Ventures, Inc. 32Incubation at CAV: Takeaways Not about hard “resources.” Tell it like it is. Identify problems and goals from an objective POV. Timing. Focus on one achievable crucial KPI givenfinancial restraints, and push to achieve within a short span of time. Work out growing pains. Leverage CA’s experience growing fromstartup to 2500+ employees, help portfolio manage org. structure,HR and other managerial issues. Trust is everything. KPI. Figure out what is most important at company’s current stage.

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