Digital Innovation in Asia


                  Benjamin Joffe | CEO, Plus Eight Star
Institute of Systems Science, Nationa...
Introduction
@benjaminjoffe
4 years   1 year   5 years
• CEO, Plus Eight Star | www.plus8star.com
  – Best practices from Asia’s digital space
  – Research, Strategy & “Innovati...
Angel Investor, Advisor, Keynote Speaker
         • Speaker
             100+ talks in 16 countries




         • Advisor...
My Interests


•   Technology, Sociology and Anthropology
•   Virtual economies
•   Digital third places
•   Artificial ar...
Plan
1. Introduction

2. Orientation
   – Definition
   – Why foreign companies fail in Asia
   – Why Asian companies fail...
Orientation Test
Question #0


Define “Innovation”
Definitions




                                         Entrepreneur
                            Inventor       (Business...
Question #1


Something innovative from Asia?
Question #2
Google is the world’s largest search engine.
 Its market share is 1.5% in Korea. Explain.




                ...
Question #3
    Why Did Japanese Handset Makers Fail Overseas?




(Where are Sharp, Panasonic, Fujitsu, NEC, Sanyo, Mitsu...
Background on Innovation
1. Misleading Appearances




          Aggressive?
Quiz: Top 10 websites?
      USA    China   Japan   Korea
 #1
 #2
 #3
 #4
 #5
 #6
 #7
 #8
 #9
#10
Alexa Ranking
        USA            China         Japan        Korea
 #1    Google          Baidu     Yahoo JP / SB     N...
Are you on Facebook?
More than Facebook and USA
•   Facebook
•   LinkedIn
•   QQ (Tencent)
•   Qzone
•   RenRen
•   Kaixin001
•   Xiaonei
•   5...
Billion Dollar Brands
                         $B                  $B
•   Facebook
•   LinkedIn              $B           ...
Market Caps (2010.10)

        $780M




        $3.3B




        $4.2B




        $43B
Simplification vs. Understanding
The Appearance

• Naver = “Google of Korea”?

• Rakuten = “Amazon of Japan”?

• Tencent = “Facebook of China”?
The Reality
• No real equivalent

• Powerful ideas get overlooked

• It’s all in the details!

• More concepts not yet por...
2. Techno-Darwinism
Charles Darwin




“The Origin of Species”
        (1859)
Voyage of “The Beagle”
“Diverging” from common ancestors
150 years later…
IT Infrastructure
           100%

                                                    Avg. 7 Mbps
           80%

       ...
“Japan’s cellphones are like the
endemic species that Darwin
encountered on the Galápagos
Islands — fantastically evolved
...
Internet      Mobile
1.3 billion   3.3 billion




                     Source: Morgan Stanley, 2007
Digital Population



   Country         USA       China      Japan    Korea
  Population     300 mln   1,300 mln   130 ml...
Why did those countries diverge?
3. Innovation Catalysts
What do you think?
Key Catalysts

• IT infrastructure

• Market potential

• Talent

• Capital
4. The 5Cs of Innovation
5Cs of Innovation

1.   Copy
2.   Competition
3.   Constraints
4.   Combination
5.   Context
1. Copy

            Entry barriers

               Technology?
                 Capital?
                  Talent?
      ...
2. Combination

       Will it blend?




           Tencent
            (US$1bln)
3. Competition

What happens with
    4 Facebook
    20 YouTube
   10 MySpace
   5 Match.com
      3 Yahoo
     4 Twitter
...
4. Constraints




 Low GDP/capita

Limited advertising

 No credit cards

No legacy industry
5. Context




Scale / Geography / Demography
   make some services viable
1. Some Asian species
  are fit for global markets

2. Learn from them to evolve
         successfully
Question #4
When was it invented?
Europe
Gutemberg | ~1450

     Korea
  Metal | ~1230

     China
 Wooden | ~1040
Who came first?
The Arbitrage Opportunity

        1. Identify

        2. Analyze

        3. Leverage
5. Some Examples
Looking more closely
         Zhenai.com vs. Match.com
• “On the shoulders of giants”
   – Started as Match.com
   – Raise...
Rest of Asia
Time-Shifted Markets
• Vietnam
   – ~$150M from online games
   – 86 million people
   – 4-5 years behind china

• Indones...
Mig33


“We have decided we want to be like QQ for
mobile in the rest of the emerging world.”
                            ...
Mig33
                                           Made in China



“We have decided we want to be like QQ for
mobile in the...
About Mig33
• Nationality
     • Founders from Australia
     • Moved to Silicon Valley
     • Relocated to Singapore


• ...
From Asia to the World



                 Durian Strudel (Singapore)
Paradise Paintball by Cmune
• World’s first FPS on social networks!



• Over 500,000 users in open beta

   – “Paradise P...
Paradise Paintball | World’s First Social FPS!




www.facebook.com/paradisepaintball               www.cmune.com
Conclusions
• Yes, you can!

• Asia is a tremendous growth market

• Inspiration from everywhere

• From Asia to the world!
Questions?
Thanks!
   More about “Innovation Arbitrage”

www.plus8star.com

benjamin@plus8star.com
                                  ...
Digital Innovation in Asia
Digital Innovation in Asia
Digital Innovation in Asia
Digital Innovation in Asia
Digital Innovation in Asia
Digital Innovation in Asia
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Digital Innovation in Asia

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Bridging the cognitive and image deficit of Asia - innovation from outside Silicon Valley!

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Digital Innovation in Asia

  1. 1. Digital Innovation in Asia Benjamin Joffe | CEO, Plus Eight Star Institute of Systems Science, National University of Singapore | 2010.10
  2. 2. Introduction
  3. 3. @benjaminjoffe
  4. 4. 4 years 1 year 5 years
  5. 5. • CEO, Plus Eight Star | www.plus8star.com – Best practices from Asia’s digital space – Research, Strategy & “Innovation Arbitrage” • Clients
  6. 6. Angel Investor, Advisor, Keynote Speaker • Speaker 100+ talks in 16 countries • Advisor • Investor in Asia-based global companies
  7. 7. My Interests • Technology, Sociology and Anthropology • Virtual economies • Digital third places • Artificial artificial intelligence (AAI) • Online social dynamics
  8. 8. Plan 1. Introduction 2. Orientation – Definition – Why foreign companies fail in Asia – Why Asian companies fail overseas 3. Background on Innovation 1. Misleading appearance 2. Techno-Darwinism 3. Innovation catalysts 4. 5Cs of Innovation 5. Innovations in web & mobile 4. Q&A
  9. 9. Orientation Test
  10. 10. Question #0 Define “Innovation”
  11. 11. Definitions Entrepreneur Inventor (Business) Idea (Prototype) (e.g. Chocolate + Hemp)
  12. 12. Question #1 Something innovative from Asia?
  13. 13. Question #2 Google is the world’s largest search engine. Its market share is 1.5% in Korea. Explain. (here)
  14. 14. Question #3 Why Did Japanese Handset Makers Fail Overseas? (Where are Sharp, Panasonic, Fujitsu, NEC, Sanyo, Mitsubishi…?)
  15. 15. Background on Innovation
  16. 16. 1. Misleading Appearances Aggressive?
  17. 17. Quiz: Top 10 websites? USA China Japan Korea #1 #2 #3 #4 #5 #6 #7 #8 #9 #10
  18. 18. Alexa Ranking 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
  19. 19. Are you on Facebook?
  20. 20. More than Facebook and USA • Facebook • LinkedIn • QQ (Tencent) • Qzone • RenRen • Kaixin001 • Xiaonei • 51.com • Mixi And more… • Mobile Game Town • Gree • Cyworld • Friendster
  21. 21. Billion Dollar Brands $B $B • Facebook • LinkedIn $B $B • QQ (Tencent) • Qzone $B $B • RenRen • Kaixin001 • Xiaonei • 51.com • Mixi $B And more… • Mobile Game Town • Gree • Cyworld • Friendster
  22. 22. Market Caps (2010.10) $780M $3.3B $4.2B $43B
  23. 23. Simplification vs. Understanding
  24. 24. The Appearance • Naver = “Google of Korea”? • Rakuten = “Amazon of Japan”? • Tencent = “Facebook of China”?
  25. 25. The Reality • No real equivalent • Powerful ideas get overlooked • It’s all in the details! • More concepts not yet ported
  26. 26. 2. Techno-Darwinism
  27. 27. Charles Darwin “The Origin of Species” (1859)
  28. 28. Voyage of “The Beagle”
  29. 29. “Diverging” from common ancestors
  30. 30. 150 years later…
  31. 31. IT Infrastructure 100% Avg. 7 Mbps 80% Avg. 15 Mbps 60% 3G users 40% C hi n 20% a Avg. 4 Mbps www.plus8star.com 0% 0% 20% 40% 60% 80% % of Internet connections measured above 5Mbps (Source: Akamai, 4Q08)
  32. 32. “Japan’s cellphones are like the endemic species that Darwin encountered on the Galápagos Islands — fantastically evolved and divergent from their mainland cousins” Takeshi Natsuno Inventor of i-mode
  33. 33. Internet Mobile 1.3 billion 3.3 billion Source: Morgan Stanley, 2007
  34. 34. Digital Population Country USA China Japan Korea Population 300 mln 1,300 mln 130 mln 50 mln Internet users 225 mln 400 mln 100 mln 35 mln Mobile users 260 mln 700 mln 100 mln 45 mln x5 Total x2 x3
  35. 35. Why did those countries diverge?
  36. 36. 3. Innovation Catalysts
  37. 37. What do you think?
  38. 38. Key Catalysts • IT infrastructure • Market potential • Talent • Capital
  39. 39. 4. The 5Cs of Innovation
  40. 40. 5Cs of Innovation 1. Copy 2. Competition 3. Constraints 4. Combination 5. Context
  41. 41. 1. Copy Entry barriers Technology? Capital? Talent? Intellectual Property? Censorship?
  42. 42. 2. Combination Will it blend? Tencent (US$1bln)
  43. 43. 3. Competition What happens with 4 Facebook 20 YouTube 10 MySpace 5 Match.com 3 Yahoo 4 Twitter ?
  44. 44. 4. Constraints Low GDP/capita Limited advertising No credit cards No legacy industry
  45. 45. 5. Context Scale / Geography / Demography make some services viable
  46. 46. 1. Some Asian species are fit for global markets 2. Learn from them to evolve successfully
  47. 47. Question #4 When was it invented?
  48. 48. Europe Gutemberg | ~1450 Korea Metal | ~1230 China Wooden | ~1040
  49. 49. Who came first?
  50. 50. The Arbitrage Opportunity 1. Identify 2. Analyze 3. Leverage
  51. 51. 5. Some Examples
  52. 52. Looking more closely Zhenai.com vs. Match.com • “On the shoulders of giants” – Started as Match.com – Raised capital – Business model issue • “Each new user costs us money!” • Develop new model – 350 people call center – VIP service – Metrics & analysis
  53. 53. Rest of Asia
  54. 54. Time-Shifted Markets • Vietnam – ~$150M from online games – 86 million people – 4-5 years behind china • Indonesia – #3 on Facebook! – 238 million people! – Behind Vietnam • Other places: Thailand (66M), Philippines (92M), etc. Virtual Goods Time Machine • Biggest potential: online games & mobile SNS
  55. 55. Mig33 “We have decided we want to be like QQ for mobile in the rest of the emerging world.” – Steven Goh, CEO Source: VentureBeat, March 2010
  56. 56. Mig33 Made in China “We have decided we want to be like QQ for mobile in the rest of the emerging world.” – Steven Goh, CEO Not iPhone! Not rich countries! Source: VentureBeat, March 2010
  57. 57. About Mig33 • Nationality • Founders from Australia • Moved to Silicon Valley • Relocated to Singapore • Users • India, Indonesia, Bangladesh, Vietnam, South Africa…
  58. 58. From Asia to the World Durian Strudel (Singapore)
  59. 59. Paradise Paintball by Cmune • World’s first FPS on social networks! • Over 500,000 users in open beta – “Paradise Paintball – you feel like you’re playing a console game.” - Gareth Davis, Games Platform Manager, Facebook – “Abandoned my clan, crops have withered and my cafe has gone bankrupt. Thank you for creating the first real game on Facebook!” – Facebook user
  60. 60. Paradise Paintball | World’s First Social FPS! www.facebook.com/paradisepaintball www.cmune.com
  61. 61. Conclusions • Yes, you can! • Asia is a tremendous growth market • Inspiration from everywhere • From Asia to the world!
  62. 62. Questions?
  63. 63. Thanks! More about “Innovation Arbitrage” www.plus8star.com benjamin@plus8star.com +81 | Japan benjaminjoffe +82 | Korea +86 | China http://twitter.com/benjaminjoffe Telecom & Internet www.linkedin.com/in/benjaminjoffe + Added Value * High quality www.slideshare.net/plus8star
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