Presentation given to Dutch executives with the leadership training company De Baak in Beijing on March 2009. It's our first focused on "Chinese innovation", with our soon-to-be-famous "5C" (tm) and "LABL" (tm) models of Chinese innovation and what to do with it. A few examples of mobile and Internet services are given for illustration. Explaining why we selected them and what to do with them is the core of our business.

1. Web & Mobile Innovations in China
How China innovates
Why it’s worth mentioning
Benjamin Joffe, CEO | Plus Eight Star | Beijing, 2009.03

2. Benjamin Joffe
ベンジャミン
벤자민
本杰明

4. 4 years
1 year
4 years

5. www.plus8star.com

6. Cross-Market Consulting
Telecom & Internet Innovation
China | Japan | South Korea

7. 27 events | 101 speakers | 3,321 members | 1,452 companies

8. 30 minutes of Content
0. Before getting started
1. Can China NOT innovate?
2. Innovating = Gardening?
3. Sources of Innovation
4. Some things we think are cool
5. Final twist!
6. What to remember

9. 0.
Before getting started

10. [Media Framing]

12. Chinese inventions?

14. When was it invented?

15. Europe
Gutenberg | ~1450
Korea
Metal | ~1230
China
Wooden | ~1040

16. Compass

17. Paper

18. th
Italy (15 century) Ming vase?

22. What is innovation?

23. Technology?

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

25. Largely commoditized…

26. Makes money?

28. Tons of users?

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

30. Speak English?

31. Some things
going on here
And there There too

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

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

34. Alternative
Live in San Francisco

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

36. English-speaking LAN

37. 1.
Can China NOT Innovate?

38. Higher value in innovation
(many things already made in China)

39. Let’s mix
• 1.3 billion people
– 6 million university
graduates per year
– 300 million Internet users
– 650 million mobile
subscribers
• “Blue oceans”
– “xxx of China”
• Tons of venture capital

40. Have you noticed?

42. Architects
• The Absolute Tower,
Mississauga, Canada
(completion 2009)
• MAD office

45. “China Makes Historic Debut at
Paris Fashion Week”
2006.10

46. Artists
• 11 of the world's top 20
best-selling artists in
2008 were Chinese.
• Zhang Xiaogang raked in
$44 million at auction in
2008 alone.

47. Venture Capital in 2008
Region 2007 2008
Europe $7.6 (1,107) $6.5 (881)
China $2.8 (290) $4.2 (245)
Israel $1.6 (227) $1.9 (210)
India $842 (85) $864 (80)
TOTAL $12.8 (1,711) $13.5 (1,416)
USA $28.8 (2,550)
Dow Jones VentureSource, 2009

48. VCs are pragmatic too
“While the U.S. isn’t losing ground, the
globalization of innovation is underway.”
“The rest of the world is finding out what
they’re good at, and venture capitalists
recognize where those strengths lie.”
Mark Jensen, National Managing Partner
Deloitte and Touche LLP
Venture Capital Services, 2008

49. VCs are pragmatic too
“The venture capital industry continues to
rapidly globalize as investors are eager to find
and tap new areas of innovation, especially in
emerging economies like China and India.”
Dow Jones VentureSource, 2009

51. 2.
Innovating = Gardening?

53. Tao of Gardening
Seeds
Soil
Sun
Water
Lots of time
Loving hand of gardener
Sharing

54. Tao of Entrepreneurship
Ideas
Personal risk
Social risk
Market potential
Media attention

55. 3.
5C ™ of Chinese Innovation

56. Copy

57. “Benchmarking”
“Inspiration”
“Best practice”
“If I have seen farther it is only by standing on
the shoulders of Giants.”
(Isaac Newton)

58. IP and Innovation
“The Hollywood companies that are now
trying […] to hinder the evolution of the
Internet, are the very same independent
companies that 100 years ago moved to
Hollywood to be out of reach of Thomas
Edison’s agents.”
Source: www.azoz.com

59. Pragmatic Entrepreneurs
Innovation ROI?
“Blue oceans”

60. Entry barriers
Technology?
Capital?
Talent?
Intellectual Property?
Censorship?

61. 山寨文化
“Shanzhai culture”
“With enough marketing, the fake becomes the real”
From the movie “Big Shot’s Funeral” (大腕)

62. China

63. China is learning from the West
2008 | 179,800 students abroad
1978- 2008 | 1.39 million students
390,000 returned to China

64. ...$1 billion do not
Already in 2007
appear overnight
(We even published a report…)

65. Attention Threshold
=
$1 billion?

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

67. Combination

69. Will it blend?

70. Tencent (1998)

71. Registered users
175 mln 856 mln

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

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

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

75. Competition

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

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

78. Constraints

79. “Necessity is the mother of invention”
(Plato)

80. Low GDP/capita
Small transactions / making millions from cents

81. Limited advertising
Alternative business models / B2B to B2C

82. No credit cards
Alternative payment systems,
mobile, virtual currencies

83. No legacy industry
(is it a constraint?)

84. 4.
Some things we think are cool

85. Lihua | Order food over IM

86. Alimama | Ad exchange + Micro-retail

87. Babytree | Vertical for young parents

88. Huica | Mobile coupons

89. PPLive | P2P Internet TV

90. Hozom | Address book + SNS

91. iNezha | RSS-to-IM

92. Qifang | P2P Micro-lending

93. Digu | Twitter + Pics + Celebs

94. Lakoo | Appstore for non-iPhones

95. 5.
Final twist:
What if all this was irrelevant?

96. Innovation is everywhere!
(One example)
Partners
Founders
Team

97. 6.
What to remember

98. China not innovating?
Temporary anomaly
Western ignorance

99. Chinese Innovation
5C ™
of Chinese Innovation

100. What to do next with China?
Learn
Adapt
Blend
Leverage
LABL ™

101. About +8*

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

103. “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
– Regular speaker at events on mobile and Internet in Asia
– Fluent in English, Japanese, French with working knowledge of Mandarin, Korean and
Spanish

104. 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

105. Social Contribution
• Mobile Monday
– Founder of the Mobile Monday forum in Beijing since 2006 (3,000+
members, 27 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.
• 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.)

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