On the Origins of Digital Species

On The Origin of Digital Species Digital Naturalism Benjamin Joﬀe| CEO, +8* NUS ISS| 2011.10

Introduc:on

Hi! @benjaminjoﬀe

10 years in Asia’s Digital Space 4 years 1 year 5 years

Best PracDces from Asia

100+ Keynotes in 17 Countries

Advisor to Startup Incubators

Investor in Global Startups in Asia

Since 2011 Samaritan Projects

When was it invented?

Europe Gutenberg | 1450 Korea Metal | 1230 China Wooden | 1040

What does it tell us? 1.  Things can be “invented” more than once 2.  Ideas have no na:onality 3.  Time gap can be bridged

Imagine!

Digital Naturalism

Naturalism? •  Observing local species •  Analyzing ecosystems •  Finding new species!

Digital species are IDEAS Ideas used to come from Muses

Understanding Digital Species DRIFTED YES ONLY ONE YES NATIVE NATURALLY? LOCATION? NO NO INTRODUCED INDIGENOUS YES WIDESPREAD? INVASIVE

Understanding Digital Species NATIVE INTRODUCED INDIGENOUS INVASIVE

Copy is the “natural dri^”

Quiz What Fosters Digital MutaDons?

5C’s of InnovaDon™ 1.  Copy 2.  CompeDDon 3.  Constraints 4.  CombinaDon 5.  Context

China’s Internet

China’s Internet in the Western Mind Censorship AcDvists 485m users Cyber-‐Abacks Internet Stocks Source: Top Google News on “China Internet”, 2011.08.16

What is missing? InnovaDon Users New concepts Startups

#1 Challenge: Preconcep:ons China InnovaDon Success

Quick Look at Ecosystems USA •  Large populaDon •  High GDP/capita •  Experienced entrepreneurs •  High development costs •  Vast investments resources •  Clear regulaDons RICH ECOSYSTEM

Quick Look at Ecosystems CHINA •  Very large populaDon •  Low GDP/capita •  Inexperienced entrepreneurs •  Low development costs •  Popular investment spot •  “In-‐progress” regulaDons TOUGH ECOSYSTEM

CompeDDon? Service No. Local Services Tencent (QZone, Pengyou) Facebook 5 Renren (IPO), Kaixin001, 51.com 1G: (dead) Twiber 3 2G: Sina (IPO), QQ, Sohu (IPO) 1G: Wealink, Tianji LinkedIn 4 2G: Ushi, Hengzhi YouTube 3 Youku (IPO), Tudou (IPO), QQ Yahoo 3 Sina, Sohu, QQ Groupon 1,000+ Lashou, Taobao, Meituan, etc.

TENCENT Endemic (Galapagos Penguin)

Tencent & QQ •  1998: Chinese “ICQ” •  Survival: Virtual goods in Avatars, Games (Korea) •  Today: social networks, microblog, e-‐commerce, search, internaDonal…

Tencent Usage •  IM acDve accounts 700 mln •  Qzone SNS 530 mln •  Pengyou SNS 130 mln •  Microblog 230 mln

Tencent Results (1H2011) •  Revenue 2 bln USD –  More than Facebook! –  Games 55% –  Ads 8% •  Net proﬁt 42% •  Paying users 11% Photo: Tencent’s new Headquarters in Shenzhen

JIAYUAN Endemic (ﬂightless cormorant)

Jiayuan | #1 Matchmaking site •  40 mln members •  Revenue 18 MEUR (loss) •  5 mln acDve •  IPO in May 2011 (“DATE”)

Jiayuan | #1 Matchmaking site •  Starving with ads •  100’s of events •  Sells “stamps” (0.4 SGD) –  Either sender or recipient must buy it

ZHENAI Endemic (Lonesome George)

Zhenai | #2 Matchmaking site

Zhenai | #2 Matchmaking site •  28M members •  VIP service •  “Dates manager” •  Feedback channel •  600 SGD/6 months

VANCL Endemic (swallow-‐tailed gull)

Vancl | #1 Online Apparel Store •  Original brand “Vancl” •  “Online-‐to-‐Oﬄine” (O2O) •  Started as online shirts •  200 MUSD in 2010 •  Expanded to apparel •  $5 bln ValuaDon

Vancl | #1 Online Apparel Store •  “Vancl Stars” show their styling ideas •  10% commission on sales from personal page

ONLINE GAMES Indigenous & Invasive (marine iguana)

>10 Online Game Giants! •  No game so^ware market (piracy) •  InspiraDon from Korea (virtual goods) •  All online! •  Online games = $5bln vs. $2bln in USA

Market Cap $53.5B 8 Unit: billion US$ 7 6.2 6 5 5 4.5 4 3 2.4 2 1.7 1.7 1.1 1 0.764 0.29 0.1 0.165 0 Tencent Shanda Shanda Netease Perfect Changyou Giant Kingso^ NetDragon CDC The9 Renren Game World InteracDve Source: Companies, 2011.04 except Renren, 2011.05

Who’s ahead?

Indigenous & Invasive SHANZHAI (“Bandit”) (Lava Cactus)

Apple Store in Kumming

Apple Store in Kumming •  Real products! •  Customer service •  (Some) staﬀ think it’s an oﬃcial store!

Awareness Test

This is a “FarmVille” bu0on There is a link to check your QQ Farm PHOTO: MOBILE PHONE, BEIJING, APRIL 2010 © Benjamin Joﬀe / Plus Eight Star Ltd.

QQ Farm

The First Social Farm Game was made in China!

“Shanzhai” Phones: Mass CustomizaDon •  4F’s of Shanzhai™ –  Fun –  Flashy –  Fast –  (almost) Free!

“Invasive” CommodiDzaDon? World’s Fastest Android CPU (1.5G) by Xiaomi Tech (220 EUR)

“Invasive” CommodiDzaDon? HaiPad Android 2.2, Dual camera by Haier (100 EUR)

“Invasive” CommodiDzaDon? World’s First Android 3.2 Tablet by Huawei

Introduced Species (cute puppies or voracious goats?)

ALL successful ones mutated •  Yahoo! Invested in Alibaba (40%) •  Google Failed •  Android Free! •  Angry Birds

Groupon War •  Hundreds of players •  Single digit margins •  No clear leader •  $110m funding for Lashou •  Hard Dme for Groupon US

Cmune (new hybrid)

UberStrike by Cmune Top 3D Game on Facebook, made from China!

#1 in Singapore on Mac OS > FREE Today!

Final Quiz! •  5C’s of InnovaDon •  4F’s of Shanzhai –  C… –  F… –  C… –  F… –  C… –  F… –  C… –  F… –  C…

The Future of Digital Species •  Study Ecosystems •  Discover new species •  Evolve •  Thrive! Cream-‐coloured Giant Squirrel (Indigenous to Singapore)

Tack så Thanks! mycket! @benjaminjoﬀe benjamin@plus8star.com www.slideshare.net/plus8star

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On the Origins of Digital Species

by Benjamin Joffe

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