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Biz Network as an Asset
UPSIDE VENTURES

1
1 Overview: BNaaA
2 Learning: Power of Network
3 Upside: Linear vs. Multiple
4 Opportunities: Invest vs. Create
5 Strategi...
OVERVIEW: BNAAA
3
Overview: BNaaS

Biz Network as an Asset (BNaaA)
 “Investment Properties” (e.g. Ichiba shop)
 Focus on building the netw...
LEARNING: POWER OF NETWORK

5
Power of Network
Billion Business – all built on a network

6
Power of Network
Social Network is about people, not Facebook which is just a platform
Facebook

Amazon

Rakuten

Professi...
Globalization Power of Network: Rakuten (Global)

More…
8
Power of Network: Rakuten (ecosystem)
・Shopping mall
・Auction

Common ID

Customer Flow

Rakuten Super Point
E-Commerce
E-...
Power of Network: Rakuten (empowerment)

[Major Global
E-commerce
Competitors]

Product Centric

[Rakuten Ichiba]
Shop Cen...
Power of Network: Rakuten (empowerment)

Japan’s largest and the World’s 3rd* Largest Internet Mall

Merchants

39,000 sto...
Power of Network: Rakuten (empowerment)
• Fashion is the largest genre on Rakuten Ichiba
• Top Genres: Bag, Shoes, Ladies ...
Power of Network: Rakuten (empowerment)
B2C vs. B2B2C
B2C

R
- Linear growth
- Hard to scale

B2B2C – Scalable on a networ...
How to win

Replicate the business model
 Simplify and adjust to different context
 Leverage existing infrastructure / s...
UPSIDE: LINEAR VS. MULTIPLE

15
Upside: Linear vs. Multiple
Business / career path
One-time ($$$)

Most services and retail
businesses are based on 1:1
re...
Upside: linear vs. multiple
Business / career path
Linear

Retailing

Multiple

Consulting

Investment
Banking

Business
N...
OPPORTUNITIES: INVEST VS. CREATE

18
Opportunities – Invest vs. Create
Ways to capture value (e.g.)
Open Stock Market

Private Investment

Create

Facebook
SNS...
Return: Linear vs. Multiple
Benchmark with S&P 500 Index Total return (12.06%) vs Apple (175.6%)

http://ycharts.com/analy...
Return: Linear vs. Multiple
Highest S&P 500 Return is 15.96%; vs FB and Apple of multiples

http://ycharts.com/analysis/st...
Investor: Value Proposition

Long Term Value

Risk / Stress

Return (Upside)

Scalability / Self-sustaining
(High quality ...
STRATEGIES: HORIZONTAL VS. VERTICAL

23
Strategies: Horizontal vs. Vertical
Retail

Horizontal

Shops
Singular

Vertical

Investors

Linear
DON’T focus on
“Warm n...
Retail: Product Strategy and Channel

Product Strategy

Selective Merchandising

Online Channels

Lifestyle Social EC

Sal...
Horitzontal: (retail) Product Strategy and Channel
Fab – designer lifestyle product social commerce

26
Horizontal: (retail) Product Strategy and Channel
Birchbox – membership subscription ecommerce

27
Horizontal: (retail) Co-branding items
Co-branding merchandising opportunities – additional revenue/marketing

28
Vertical: Network building

Investor

Invest microfund
(Form business entity by funding
new shops network and sales)

Shop...
Vertical: Network building
Establish strong foundation with highly motivated achievers and network

US

AP

JP

30
Vertical: Network building

Win-win-win
Initial
Capital

Biz Dev /
Owner

Fund / Share Profit

Investor
Convert into
downl...
Investment / Return

Invest

Define profit
target (30%48%)

Develop

Identify
market

Expand

Identify high
potential
sale...
Q&A
33
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Upside Ventures: Business Networks as an Asset

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Upside Ventures back new ventures as well as technology startup. At the same time, we also invest and build special and lucrative investment assets. It's because the upside potential is much higher than conventional investment or stock markets with transparent and manageable model with low risk and initial capital. This is a more long-term profitable path.

We seek qualified business and investment partners to join the venture.

Published in: Business, Economy & Finance
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Transcript of "Upside Ventures: Business Networks as an Asset"

  1. 1. Biz Network as an Asset UPSIDE VENTURES 1
  2. 2. 1 Overview: BNaaA 2 Learning: Power of Network 3 Upside: Linear vs. Multiple 4 Opportunities: Invest vs. Create 5 Strategies: Horizontal vs. Vertical 2
  3. 3. OVERVIEW: BNAAA 3
  4. 4. Overview: BNaaS Biz Network as an Asset (BNaaA)  “Investment Properties” (e.g. Ichiba shop)  Focus on building the network as an entity People to People (P2P)  Ongoing value growth while network expands to regenerate exponential return  Leverage existing and established business infrastructure and ongoing profit share model 4
  5. 5. LEARNING: POWER OF NETWORK 5
  6. 6. Power of Network Billion Business – all built on a network 6
  7. 7. Power of Network Social Network is about people, not Facebook which is just a platform Facebook Amazon Rakuten Professional Social Retail Retail 24B 115B 157B 14B User base 245M 1B 137M 100M Revenue 972M 1.584B 61B 4.74B Profit/Loss 21.6M -64M -39B 208M Linkedin Comparison Valuation Revenue/PL is based on FY2012 // Market Cap – Nov 8, 2013 7
  8. 8. Globalization Power of Network: Rakuten (Global) More… 8
  9. 9. Power of Network: Rakuten (ecosystem) ・Shopping mall ・Auction Common ID Customer Flow Rakuten Super Point E-Commerce E-Money eBook ・Credit Card ・Advertisement ・Streaming ・Downloading ・Recruitment ・Marriage Portal & Content Card Rakuten Membership Database Banking Travel ・Payment ・Consumer Loan Securities Telecom ・Stocks ・Bonds ・Trust Funds ・FX ・Hotels and Facilities ・Air Tickets ・Dynamic Packages ・Fixed IP Telephony ・Mobile IP Telephony 9
  10. 10. Power of Network: Rakuten (empowerment) [Major Global E-commerce Competitors] Product Centric [Rakuten Ichiba] Shop Centric The Rakuten “Empowerment” model is very unique and difficult to replicate 10
  11. 11. Power of Network: Rakuten (empowerment) Japan’s largest and the World’s 3rd* Largest Internet Mall Merchants 39,000 stores* Products 100 Million 2011 Sales 1 Trillion+ 楽天会員数 78 Million+ (as of June 30, 2012, in Japan* Global numbers higher) 11
  12. 12. Power of Network: Rakuten (empowerment) • Fashion is the largest genre on Rakuten Ichiba • Top Genres: Bag, Shoes, Ladies Fashion • In JP-only, 80M members Rakuten Ichiba 1 Trillion Yen Fashion Ichiba’s Largest Genre Global Strategy Vertical Expansion: - Biggest business potential - Most “portable” - Expand horizontially 12
  13. 13. Power of Network: Rakuten (empowerment) B2C vs. B2B2C B2C R - Linear growth - Hard to scale B2B2C – Scalable on a network key factor: highly driven merchants network Sales 1 Trillion Yen R <1K Account Mgr 40K Driven Merchants Massive 80M users 13
  14. 14. How to win Replicate the business model  Simplify and adjust to different context  Leverage existing infrastructure / setup  Focus on building network across different regions 14
  15. 15. UPSIDE: LINEAR VS. MULTIPLE 15
  16. 16. Upside: Linear vs. Multiple Business / career path One-time ($$$) Most services and retail businesses are based on 1:1 relationship with the clients or consumers. That demand much resources and time to grow and scale Investment Banking Consulting Linear Multiple Business Network Retailing Recurring 16
  17. 17. Upside: linear vs. multiple Business / career path Linear Retailing Multiple Consulting Investment Banking Business Network 17
  18. 18. OPPORTUNITIES: INVEST VS. CREATE 18
  19. 19. Opportunities – Invest vs. Create Ways to capture value (e.g.) Open Stock Market Private Investment Create Facebook SNS VC / PE Startups Rakuten Marketplace Real Estate SMB Linkedin network Invest Franchise Return “System” that generates value 19
  20. 20. Return: Linear vs. Multiple Benchmark with S&P 500 Index Total return (12.06%) vs Apple (175.6%) http://ycharts.com/analysis/story/ten_biggestcap_stocks_just_two_outperform_the_sandp_500 20
  21. 21. Return: Linear vs. Multiple Highest S&P 500 Return is 15.96%; vs FB and Apple of multiples http://ycharts.com/analysis/story/ten_biggestcap_stocks_just_two_outperform_the_sandp_500 21
  22. 22. Investor: Value Proposition Long Term Value Risk / Stress Return (Upside) Scalability / Self-sustaining (High quality products with Self generating business model) Min Risk / Stress free (Managed by top professionals; Full tranparency Profit / multiple (Low startup cost, Highly profitable by multiple) Team / Network Elite team and network (Highly selective elite network from top schools and professionals) 22
  23. 23. STRATEGIES: HORIZONTAL VS. VERTICAL 23
  24. 24. Strategies: Horizontal vs. Vertical Retail Horizontal Shops Singular Vertical Investors Linear DON’T focus on “Warm network” - Make this as a rule Exponential Grow the network Horizontal X Vertical 24
  25. 25. Retail: Product Strategy and Channel Product Strategy Selective Merchandising Online Channels Lifestyle Social EC Salesforce Global Distribution Partnerships Alliance / Community (Unique, high turnover and Vol, Strong Messaging) (Targeted & Mass Vol at Wholesale e.g. Fab, Birchbox, Clozette ) (Hire local “business dev associate” e.g. Philipines, Jamaica, East EU) Freshii / Forever Living 25
  26. 26. Horitzontal: (retail) Product Strategy and Channel Fab – designer lifestyle product social commerce 26
  27. 27. Horizontal: (retail) Product Strategy and Channel Birchbox – membership subscription ecommerce 27
  28. 28. Horizontal: (retail) Co-branding items Co-branding merchandising opportunities – additional revenue/marketing 28
  29. 29. Vertical: Network building Investor Invest microfund (Form business entity by funding new shops network and sales) Shop Owner Operate and build Biz Developer Manage and build (New shop for retail and expand The network (Expand downline network) Retail Sales Focus on retail sales (Through strong salesforce, Convert them into new downline) 29
  30. 30. Vertical: Network building Establish strong foundation with highly motivated achievers and network US AP JP 30
  31. 31. Vertical: Network building Win-win-win Initial Capital Biz Dev / Owner Fund / Share Profit Investor Convert into downline Ivy League Elancer Build Business Entity Retail Sales Identify downline UPSIDE VENTURE Drive Retail 31
  32. 32. Investment / Return Invest Define profit target (30%48%) Develop Identify market Expand Identify high potential sales Hire Sales Define resources Invest initial capital Develop network Concert into Downline Drive sales growth Build/Hire Re-Invest profit to hire sales (hands off) Or take over to grow network asset 32
  33. 33. Q&A 33
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