Building Relevant Local Companies
Having a Shot at Building a Global One
Examples from Asia’s Web Scene
Benjamin Joffe, CEO | Plus Eight Star | Singapore, 2009.05

Benjamin Joffe
ベンジャミン
벤자민
本杰明

4 years
1 year
4 years

www.plus8star.com

Unprepared?

Here is the plan
0. Unrelated examples
1. Let’s look at Asian markets
2. What is innovation?
3. Opportunities from differences
4. Asian companies expanding
5. Local & Regional advantages
6. Two examples

0.
Unrelated examples

1.
Let’s look at Asian markets

Alexa School Of Innovation | Top 10
USA China Japan Korea Singapore
#1 Google Baidu Yahoo JP / SB Naver Yahoo
#2 Yahoo QQ FC2 Yahoo Google SG
#3 Facebook Sina Google JP Daum Facebook
#4 YouTube Google China YouTube YouTube YouTube
#5 MySpace Taobao Rakuten Google Live
#6 MSN Netease Livedoor Cyworld Blogger
#7 Live Google Ameblo Nate Google
#8 Wikipedia Sohu Mixi Google KR MSN
#9 Craigslist Youku Wikipedia Live Friendster
#10 eBay Yahoo Goo Facebook Wikipedia

Alexa School Of Innovation | Top 20
USA China Japan Korea Singapore
#11 AOL Soso Google (error) Livejournal
#12 Blogger Ku6 MSN Tistory Go
#13 Amazon Kaixin001 Nicovideo JoongAn Ilbo ESPN
#14 Go Mop Amazon JP Chosun Ilbo Wordpress
#15 CNN Live 2 Channel MSN Tagged
#16 Twitter PCOnline Nifty Gmarket One Manga
#17 Microsoft 56.com Yourfilehost Paran DBS
#18 Flickr Yahoo CN Biglobe Auction Baidu
#19 ESPN Sogou Geocities JP Blogger Sing. Pools
#20 Photobucket Tom Online Infoseek JP Friendster Photobucket
Am I missing some?

2.
What is innovation?

Technology?

e.g. LAMP stack
(Linux / Apache / MySQL / PHP)
+ HTML / Flash / AJAX…

Largely commoditized…

Makes money?

Tons of users?

Most start with zero
(is innovation a popular vote?)

Speak English?

Some things
going on here
And there There too

Some things
going on here
And there There too
And of course in a lot
more places

“News is anything that happens to
or near publishers and their friends”

Alternative
Live in San Francisco

Internet Mobile
1.3 billion 3.3 billion
(Asia = US + Europe)
Source: Morgan Stanley, 2007

English-speaking LAN

3.
“5Cs of Innovation”™

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?

Copy can backfire!

Japan: Mayonnaise

China: Whipped Cream

Copycats often die
• Conditions are different
• Local market not sustainable
• Not enough capital
• Web 2.0 is no fun – it’s B2B ad sales!

China

Already in 2007 ...$1 billion do not
(We even published a report…) appear overnight

Attention Threshold
=
$1 billion?

Scale / Geography / Demography
make some services viable

Maybe the West is simply
not looking?
Happy life in a fish bowl

Combination

Will it blend?

Tencent (1998)

Registered users
200 mln 856 mln

Revenues 2008 (E)
1 BILLION DOLLAR
COMPANY YOU NEVER
HEARD OF?
350 mln 1 bln!

Profit margin (E)
- X? 40%
~400 MILLION DOLLAR
NET PROFIT

Market Capitalization
(March 2009)
3-15 bln? 15 bln
REAL MARKET CAP

Competition

What happens when you have
20 YouTube
10 MySpace
5 Match.com
4 Facebook
3 Yahoo
…
4 Twitter

Hard spots
“Concepts”
Sociology
Psychology
“Execution”
Marketing
Business models
Payment

Constraints

“Necessity is the mother of invention”
(Plato)

Low GDP/capita
Small transactions / making millions from cents

Limited advertising
Alternative business models / B2B to B2C

No credit cards
Alternative payment systems,
mobile, virtual currencies

No legacy industry
(is it a constraint?)

4.
Asian companies expanding?

West 1 – Asia 0
– SNS | Cyworld | Korea -> US, EU, China, Japan…
– SNS | Mixi | Japan -> China
– Search | Baidu (China -> Japan)
– Mobile content | Index (Japan -> West + China)
– Mobile content | For-Side (Japan -> West)

West 1 – Asia 0.1?
– Korean online game companies
– Chinese online game companies
– Some specialists
• Chinese PC & mobile software companies, mobile
search

Asia 1 – West 0
– SNS | MySpace | US -> China, Japan, Korea
– Search | Google | US -> Korea
– Ecommerce | eBay | US -> Japan, Korea, China
– IM | MSN | US -> Korea, China
– Portal | Yahoo | US -> Korea, China

Asia 1 – West 0.5?
– In a way, Yahoo | 40% of Alibaba for 1 billion USD)
– In a way, Yahoo | Leader in Japan with Softbank
– In a way, eBay | Bought Gmarket & Auction in Korea
– In a way, Google | Good results on mobile
– In a way, Facebook | Millions of users, no local team
– In a way, Facebook | Copycats are very popular!

Conclusion:
Fight the battles you can win!

5.
Local & regional advantages

Singapore’s advantages?
• Great IT infra
• Local multi-cultural talent
• Financing available

(Air conditioning)

Conclusion
Great position for a regional play!
Some chances for global
(Western LAN)

Pick your weapon
Service?
Platform?
Content?

6.
Two examples

1. Slideshare
• What is it?
– “The YouTube of Slideshows”
– Ads, moving toward lead generation
– “The Adsense of lead generation”?
• Team
– Most of the team is in India
– 1 American co-founder
– Office in San Francisco
• Is it a US company?

2. Cmune
• What is it?
– Next-generation social games
– 3D multiplayer games in browser / SNS / Widgets
– Virtual goods
• Team
– Based in Beijing
– 8 nationalities
– Most speak 2+ languages & lived in several countries

Building a regional or global champion
• Global idea (regional is fine too)
• Cross-cultural team
• Leverage resources globally

Contact Us
www.plus8star.com
benjamin@plus8star.com
+81 | Japan
benjamin0123 +82 | Korea
http://twitter.com/plus8star +86 | China
Telecom & Internet
www.linkedin.com/in/benjaminjoffe
+ Added Value
www.slideshare.net/plus8star * High quality

About +8*

There are more ideas
outside your country
than inside
Tom Kelley
CEO, IDEO
The 10 faces of Innovation

“Innovation Arbitrage”
• About us
– +8* | Plus Eight Star is the leading cross-market and cross-cultural consultancy in Asia.
– We provide local expertise & global perspective on mobile and Internet innovation from
China, Japan and South Korea to add value to and accelerate the development of our
clients’ businesses.
• Our services
– Analysis of proven best practices and business models from Asia
– Other services: executive study trips, market entry strategy, M&A advisory, partners
identification, negotiation support.
• Founder & CEO: Benjamin Joffe
– 9 years experience with mobile & Internet in Asia
– Selected among “China’s Top 100 mobile industry influencers” in 2007 and 2008
– Regularly quoted in international press and keynote speaker at numerous telecom and
Internet events
– Fluent in English, Japanese, French with working knowledge of Mandarin, Korean and
Spanish

Selected References
• Adidas | E-commerce strategy for China, Japan & Korea
• Bouygues Telecom | Cases studies of leading Asian Web 2.0 services
and virtual worlds
• Deutsche Telekom / T-Online | Benchmark of Korean mobile & Internet
convergence strategies
• Hemisphere | Analysis of mobile marketing best practices in Japan and
South Korea (Hemisphere is a leading digital advertising agency),
analysis of leading social platforms (SNS, virtual worlds, online games).
• Microsoft | Analysis of Japan’s key players and market catalysts for
mobile commerce market positioning in China
• DeNA | Case studies of the best practices of leading social networks in
China and South Korea (DeNA operates Mobile Game Town, Japan’s
leading mobile SNS service)
• China Mobile | Benchmark of Korean leading online communities
• Sands Capital Management | Evaluation of China’s investment
opportunities in social networks in China

Social Contribution
• Mobile Monday
– Founder of the Mobile Monday forum in Beijing since 2006 (3,000+
members, 28 events, over 100 presentations).
• Media
– Monthly column on Asian innovation for Asian Business Leaders
(one of the leading Chinese business magazines), numerous interviews in
international media such as The Economist, CNN.com, etc.
• Events
– Regular keynote speaker and moderator at Internet, Telecom, Media and
Investment events
e.g. eComm, ITU Asia, Asia Venture Capital Forum, China Mobility International
Summit, O’Reilly’s Graphing Social Patterns, Red Herring Asia, Media 08
Conference, Wireless Developer Forum, Open Web Asia, XMediaLab, Mobile
Monday Global Summit, etc.)

Thanks!