A smoothie of Ecosystems, Innovation and Culture. Talk given at IDEAS Show in July 2013 in Taipei.

1. The FATES of DIGITAL SOCIETIES
BENJAMIN JOFFE
GUNS,
GERMS, AND
STEEL

2. BENJAMIN JOFFE
• 13y in CJK+SEA+SV"
• Digital Naturalist, +8*"
• Startup Guy, Cmune"
• Angel investor"
• Mentor, 500 Startups,
Chinaccelerator, etc."
• Speaker, Columnist"

3. HAVE YOU HEARD OF THIS BOOK?

4. THE QUESTION IT ASKS IS
WHY IS THE WEST DOMINANT?
AND THE ANSWER IS UNUSUAL

5. SUITABLE ANIMALS & CROPS

6. SUITABLE LATITUDE & CLIMATE

7. NOT “SMARTS”

8. CONCLUSION #1
YOU’RE (POTENTIALLY) JUST AS SMART
(AND MORE ATTRACTIVE)

9. THERE ARE TWO WIDESPREAD BIASES

10. BIAS #1
EVERYTHING FROM THE U.S.
IS GREAT
(AND GLOBAL)

11. “A
billion
dollar
so-ware
company
is
founded
every
3
months
in
the
USA”
–
Ron
Conway

12. BIAS #2
EVERYTHING
FROM ASIA
IS WEIRD
(AND LOCAL)

13. YET…

14. $1B COMPANIES OUTSIDE THE US
• Europe " "Skype, Spotify, Rovio, SuperCell, Unity!
• Japan " "Softbank, Rakuten, DeNA, GREE, CyberAgent, Kakaku,"
" " " "Gungho, LINE"
• Korea " "NHN, Nexon, KakaoTalk!
• China " "Tencent, Baidu, Alibaba, Qihoo, Sina, Sohu, VIPShop, YY,"
" " " "Shanda, Giant Interactive, 360Buy, Youku Tudou, Netease,"
" " " "NetDragon, KingSoft, Ctrip, Xiaomi, Lightinthebox…"
! ! ! !(Sogou, Qunar, Vancl, UCWeb, Cloudary, Dianping, Xunlei,)!
• Russia " "Yandex, Mail.ru"
• Brazil " "MercadoLivre, Peixe Urbano"
• India" " "MakeMyTrip, FlipKart!
Note:
Not
all
are
strictly
$1B
or
public,
but
in
the
ballpark

15. CONCLUSION #2
INNOVATION IS EVERYWHERE!

16. TABLE OF CONTENT
"
CONCLUSION: GUNS, GERMS AND STEEL FOR STARTUPS!
"
1. ON ECOSYSTEMS"
2. BEING GLOBAL"
3. FINDING USERS"
4. RAISING MONEY"
5. ON ACCELERATORS"
6. THE CULTURAL OS"

17. 1. ON ECOSYSTEMS

18. DEFINING ECOSYSTEMS

19. ECOSYSTEM MODEL
Market"
Infrastructures"
"
Capital"
Talent"
"
Regulations"
Entrepreneurial Culture"

20. USA
CHINA
SINGAPORE

21. ANNA KARENINA PRINCIPLE
• “Happy families are all alike; every unhappy
family is unhappy in its own way.”"
Anna Karenina, Tolstoi"
"
Also true for Startups?
• Deficiency in any one of a number of factors
dooms it to failure."
– Check your ecosystem!"

22. CONCLUSION #3
DIFFERENT ECOSYSTEMS GIVE BIRTH
TO DIFFERENT SPECIES

23. CONCLUSION #4
SIMILAR ECOSYSTEMS CAN HAVE
SIMILAR SUCCESSES

24. EBAY IN CHINA?
!
“eBay was trying to land advanced jets
in muddy rice paddies.”!
– Jack Ma, Alibaba"
Yoda can help you out!

25. (MORE DETAILS IN OTHER TALKS)
ECOSYSTEMS 101
DIGITAL NATURALISM

26. AND IN MY TC COLUMN
hCp://techcrunch.com/2012/09/01/ecosystem-­‐101-­‐the-­‐six-­‐necessary-­‐categories-­‐to-­‐build-­‐the-­‐next-­‐silicon-­‐valley/

27. MYTH
“INNOVATION” & “ENTREPRENEUR”
ARE AMERICAN THINGS

28. (LET’S REMIND EVERYONE THAT
“ENTREPRENEUR” IS A FRENCH WORD)

29. AND INNOVATION IS GENERALLY
DISMISSED WHEN NOT
(1) FIRST WORLD
(2) TECHNICAL
AND SIMPLY “INCREMENTAL”
WHERE DO YOU DRAW THE LINE?
WHO DECIDES?

30. MYTH
“TWO GUYS IN A GARAGE”

32. THAT WORKS BETTER IF YOU’RE A
STANFORD CS GRAD AND YOUR
GARAGE IS IN PALO ALTO
(LIKE THE HP GUYS ON THE PHOTO)

33. CONCLUSION #5
ECOSYSTEM MATTERS…

34. COROLLARY #1
…EVEN FOR HANDSOME TAIWANESE…
Like Jerry Yang @ Yahoo

35. COROLLARY #2
…BUT NATIONALITY DOES NOT.
EVEN IN SILICON VALLEY, A VAST
NUMBERS ARE FROM “OUTSIDE”
IT’S A MINDSET

36. CASE OF CMUNE AND UBERSTRIKE
• 3D Multiplayer Shooter on Facebook"
• High tech, first in the world"
CHECK IT OUT > WWW.FACEBOOK.COM/UBERSTRIKE

37. WHAT IS THE NATIONALITY OF CMUNE?
• Team" " " "10 nationalities"
• Founders " "French + Australian"
• Investors " "Europe + US (and their LPs?)"
• Market " " "US is #1, but not "
• Company " "Based in Beijing and Berlin"
DOES NATIONALITY MATTER HERE?

38. CONCLUSION #6
NATIONALITY IS A BRAND
WHO CARES ANGRY BIRDS ARE FROM
FINLAND? USE IT IF YOU CAN.

39. 2. BEING GLOBAL

40. CAN YOU BE GLOBAL?
• USA = English only"
• China = Chinese only + Hyper-competitive"
• Russia? Japan? Other?"
BEING GLOBAL IS NOT SO SIMPLE…

41. Western!
Latin American!
African!Orthodox!
Indian!
Muslim!
Japanese!
Chinese!
YOU CAN LOOK AT THE WORLD AS “CIVILIZATIONS”
Buddhist!
Source:
The
Clash
of
CivilizaRons,
Samuel
HunRngton

42. WHEN TO EXPAND?
1. Platforms give reach (FB, Apple, Google)"
2. Users already there (best case, build on it)"
3. No choice (small home market)"
OFTEN, EXPANDING EARLY IS NOT GOOD ROI ON
MANAGEMENT BANDWIDTH (THE SCARCEST RESOURCE)

43. CONCLUSION #7
“GLOBAL” & “ASIA” MEAN NOTHING
PICK MARKETS & PLATFORMS

44. “ASIAN” COMPANIES ABROAD
Zheng He, Explorer

45. THE WESTERN FRONT
• Recent"
– Japan: DeNA, GREE, Rakuten"
• Casualties"
– Japan: Index, For-Side"
– Korea: Daum"
• Same mistakes as Western firms in Asia"

46. TYPICAL MISTAKES
• “Landing jet fighters in rice paddies”"
• Assuming ecosytems are similar enough"
– Payment, internet speed, devices, logisitics…"
• Ignorance of local competitors"
• Ignorance of must haves of local users"
• No autonomy to local team"
ENTERING A LARGE MARKET IS OFTEN MORE
LIKE CREATING A NEW STARTUP

47. SOME ARE GOING “UNDERCOVER”
• Tencent + Riot Games (LoL)"
– Most players probably don’t know the “new
World of Warcraft” is now a Chinese property"
• AppAnnie!
– HQ in Beijing, French CEO!"
• Dolphin Browser!
– Entire team is Chinese"

48. ALTERNATIVE: LICENSING OR LONG-TERM
• Especially suitable for Asian firms entering
Non-Western markets"
– Ecosystems closer to China’s (India, Brazil,
Indonesia, Russia)"
• Gaming companies"
– Nexon in China via licensing"
– NHN in Japan took many years"
– Chinese companies & emerging markets"

49. CONCLUSION #8
ECOSYSTEM DIFFERENCES
MAKE THINGS HARD

50. CONCLUSION #9
THERE IS MORE THAN ONE STRATEGY
TO EXPAND

51. YOUR
AMAZING
APP
GOES
HERE
3. FINDING USERS

52. MYTH
GREAT PRODUCTS ALWAYS FIND
THEIR AUDIENCE

53. REALITY
1. Most great products die in oblivion"
2. Great = 10 bad then 1 good-to-great"
3. Distribution, Monetization, Funding"

54. WITH PLATFORMS
• Apple, Google, Facebook, Amazon"
• eBay, Taobao, WeChat, LINE, Kakao…"
• Ideally"
– Have IP"
– Use new features"
– Have connections with platforms"

55. BY YOURSELF?
• Figure out what is left of “Viral”"
• Retention = Do Proper Cohort Analysis"
– Week-on-week growth"
– 1d, 7d, 30d retention"
– Lifetime value"
– This is VERY OFTEN DONE WRONG"

56. CONCLUSION #10
MAGIC BULLETS
DON’T LAST LONG

57. 4. RAISING MONEY

58. GOOD
IDEAS
BAD
IDEAS
GOOD
IDEAS
THAT
LOOK
BAD
BAD
IDEAS
THAT
LOOK
GOOD
STARTUPS
ARE
HERE

59. DEFAULT ANSWER IS NO!

60. SO MANY REASONS TO SAY NO
1. No traction"
2. Wrong sector"
3. Not Delaware C Corp"
4. Team can’t execute"
5. Limited exit options"
6. Can’t understand you"
7. No money"
8. Don’t like or trust you"
9. Spouse against"
10. Not cool enough"
And
one
is
enough!

61. EXAMPLE: ELYSIUM SPACE
(SPACE BURIALS)
• Background"
– Space Burials"
– NASA founder"
• Fundraising"
– Pitched dozens of angels and early-stage VCs"
– VCs want TRACTION"
• Result of first round: Friends"
MY NASA FRIEND IS RAISING A ROUND FOR
HIS STARTUP. IT’S NEVER EASY.

62. GETTING ATTENTION
• ONE clear phrase about the PROBLEM"
• Your BEST FOOD FORWARD"
– TRACTION TRUMPS EVERYTHING"
– Crazy high retention?"
– Figured out viral?"
– Interviewed 100 clients?"
– Ex-Google?"
– Sold a startup?"
– Users pay?"

63. STATISTICALLY AMONG INVESTORS:

64. CONCLUSION #11
FOCUS ON THOSE WHO “GET IT”
DON’T WASTE YOUR TIME CONVINCING
THOSE WHO DON’T CARE OR HATE IT

65. CONCLUSION #12
PREPARE FOR SURVIVAL
DOING THE WORK IS GOING TO
TAKE A WHILE

66. COROLLARY #3
BETTER PICK A MARKET &
CUSTOMERS YOU LOVE
YOU’RE GOING TO SERVE THEM FOR A LONG TIME.
YOU NEED EMPATHY WITH THEM TO DO IT WELL.

67. CONCLUSION #13
YOU WILL NEED ALL THE HELP!
ALWAYS BE PITCHING
(I PITCHED BOTH CMUNE & ELYSIUM SPACE
IN THIS PRESENTATION ;-P)

68. 5. ON ACCELERATORS

69. ACCELERATORS ARE STARTUPS
Source:
hCp://emergentbydesign.com/2013/02/28/62-­‐top-­‐startup-­‐accelerators-­‐us-­‐canada/

70. 3 TYPES OF STARTUPS?
STARS
WILL SUCCEED
REGARDLESS
?
MIGHT MAKE
IT WITH HELP
BOMB
NO AMOUNT
OF HELP WILL DO
IF YOU’RE AN INVESTOR, HOW DO YOU SPEND YOUR TIME?
FINDING MORE STARS!

71. ADDED-VALUE OF ACCELERATORS
• (Money is generally small)"
• Connections " "Still your job to charm them"
• Environment " "Focus & Distraction"
• Demo Day " " "One opportunity on the road"

72. ACCELERATORS ARE SPRINTS WITHIN MARATHONS
• Market access"
• Take a long-term view"
• Do the work"

73. 6. THE CULTURAL OS

74. CULTURAL OS
Career/Money"
"
Family"
Society"
"
Culture"
Spirituality"
Physical Appearance"

75. FRANCE’S DEFAULT SETTINGS

76. (MORE DETAILS IN OTHER TALK)
YOUR HAT
LOOKS FUNNY
“THE SLIDESHARE SENSATION
WITH OVER 20,000 VIEWS”
RATE YOUR CULTURAL OS TOO!

77. FOUNDERS NEED TO SEDUCE!
CO-FOUNDERS, TEAM MEMBERS,
INVESTORS, CUSTOMERS

78. PICK-UP ARTIST VS. STARTUP FOUNDER
• Leader " " " "= Own Vision & Decisions"
• Assertive " " "= Speak Up"
• Adventurous" "= Risk-taking"
• Easygoing" " "= Empathy & humor"
• Sexual " " " "= Success-driven"
Source:
Aura
DaRng
Blog

79. ARE “ASIAN VALUES” IN YOUR WAY?
• Leader " " " "Follow the Crowd"
• Assertive " " "Modesty, Respect, Hierarchy"
• Adventurous" "Risk-Averse, Responsible"
• Easygoing" " "Serious, Diligent"
• Sexual " " " "Repressed, Dependent"

80. The FATES of DIGITAL SOCIETIES
BENJAMIN JOFFE
CONCLUSION
GUNS,
GERMS, AND
STEEL

81. GUNS? GERMS? STEEL?
GOOGLE
FB
Y!
GOOGLE, FB, Y! ENABLE ECOSYSTEMS
BUT SUCK LIFE OUT OF THEM TOO!

82. GET YOUR OWN GUNS, GERMS AND STEEL!
• Increase your skills (it’s a long-term
investment)!
• Understand distribution at scale (don’t let
your product die alone)"
• Figure your ecosystem strengths (and
weaknesses- and adapt to it or move)!

83. PICK WISELY, THEN WORK
“A good team in a strong market will beat
an excellent team in a bad market”!
– Song Li (ChinaHR, Zhenai.com)"
• So:"
– Pick a good market"
– Customers you love"
– Learn fast"
– Be patient"

84. www.slideshare.net/plus8star
BENJAMIN@PLUS8STAR.COM
THANK
YOU!