Mobile and Web Innovation in China


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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.

Published in: Economy & Finance, Business
  • talking about innovation, you should look up a book written by Simon Winchester about Joseph Needham - the man who wrote the encyclopedia on Chinese innovation. Fascinating book about a fascinating man fascinated by a fascinating country
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  • @zunguri | Thanks for taking the time to reply. Sorry if I misinterpreted your initial 1-liner and came across in an unpleasant way; tones and intention are not always clear in writing. I take from the ' ;-) ' that we can actually have a conversation ^_^

    I will explain better some of the slides and the intention for the presentation:

    'Until then, I hope never to see another back-handed compliment such as fireworks or printing as examples of Chinese innovation.'
    --> Please keep in mind that in addition to a silent slideshow, there was over 30 minutes of talk to explain what was shown. The introduction is a half-joke to help people step back from the usual stereotypes, not really to marvel at China's inventiveness. More, my personal view is that innovation does not have a nationality: the slide 96 is a case of a Beijing-based startup whose founders, team and partners are all over the world. They just happen to be +located+ in Beijing - does that make them Chinese?

    Among the old inventions, there is one particular case: I mention specifically the movable type for three reasons:
    1- It was likely invented in China 400 years before it was re-invented in Europe (= China innovates)
    2- Europe (and US, etc.) would probably look very different if it had printed its first documents 400 years earlier (= value in accelerating innovation transfer)
    3- Though with Internet the problem of learning about innovations might seem solved, many concepts and models still take years to migrate. The Silicon Valley is now very upbeat with digital goods and iPhone app store - both models have been working very well for close to 10 years in Japan (i-mode), Korea and China (micro-transactions). This means a large lost potential - especially the WAP/mobile portal debacle and Web 2.0 ad-based models. (= looking outside your country for innovation can bring valid models even during the 'Information age')

    'When presented clearly, these absolutely speak for themselves.'
    --> This was exactly the point of my presentation but the 'clearly' part is probably the most challenging part, and often poorly done in mass media and even on serious tech blogs. In a way, innovation needs clear spokespersons. The cases of web and mobile innovations I presented +and explained+ during the session all have innovative concepts and business models. Sadly, I do not do voice cast over the slides, which leaves a lot of room for interpretation.

    'All you need in this life is ignorance and confidence; then success is sure.'
    --Mark Twain

    Fun one :-) The 'winner bias' certainly applies to the way media deals with entrepreneurs (in addition to hedge funds).
    I'm happy to get in touch for further discussion benjamin [a][t]
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  • I didn't expect a passive-aggressive response. ;-) Keep in mind that when Hamlet was written the usage of 'protest' in context would be closer to 'insist'. I'll be more blunt...

    There are many contemporary examples of innovation coming from China that better serve to disprove stereotypes than simplistic and mundane (not to mention hackneyed) 'historical' references. When presented clearly, these absolutely speak for themselves. There isn't a week that goes by that I don't talk with Chinese inventors every bit as insightful and brilliant as the guys in Toyko, Seoul, or back in the valley. The fact that they have to deal with a different set of inhibiting factors than their equivalents in Korea, Japan, US, etc., doesn't change the fact that they do innovate. These factors contribute to a slowing or blocking of innovation from reaching the end user, however, reaching the end user is NOT a requirement to prove that innovation is occurring.

    Within a few years the amount of new IP coming out of China will dwarf what comes out of the traditional hotbeds of innovation. The math insists upon this. I look forward to the day when the 'China just copies' mantra is finally put to rest just as it was for Japan and Korea. Until then, I hope never to see another back-handed compliment such as fireworks or printing as examples of Chinese innovation.

    'All you need in this life is ignorance and confidence; then success is sure.'
    --Mark Twain
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  • good job, very interesting!
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  • @zunguri - I would like to agree with your sweeping statement but found over the past 10 years in Asia that the idea that 'innovation speaks for itself' is delusional at best, and sometimes dangerous in the business world. As an 'end user' this assumes you always get served with the BEST product, but defining what is best for a user is often misaligned with the economics behind it. 'There's none so blind as those who will not see' - cheers.
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Mobile and Web Innovation in China

  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
  3. 4 years 1 year 4 years
  5. Cross-Market Consulting Telecom & Internet Innovation China | Japan | South Korea
  6. 27 events | 101 speakers | 3,321 members | 1,452 companies
  7. 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
  8. 0. Before getting started
  9. [Media Framing]
  10. Chinese inventions?
  11. When was it invented?
  12. Europe Gutenberg | ~1450 Korea Metal | ~1230 China Wooden | ~1040
  13. Compass
  14. Paper
  15. th Italy (15 century) Ming vase?
  16. What is innovation?
  17. Technology?
  18. e.g. LAMP stack (Linux / Apache / MySQL / PHP) + HTML / Flash / AJAX…
  19. Largely commoditized…
  20. Makes money?
  21. Tons of users?
  22. Most start with zero (is innovation a popular vote?)
  23. Speak English?
  24. Some things going on here And there There too
  25. Some things going on here And there There too And of course in a lot more places
  26. “News is anything that happens to or near publishers and their friends”
  27. Alternative Live in San Francisco
  28. Internet Mobile 1.3 billion 3.3 billion (Asia = US + Europe) Source: Morgan Stanley, 2007
  29. English-speaking LAN
  30. 1. Can China NOT Innovate?
  31. Higher value in innovation (many things already made in China)
  32. 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
  33. Have you noticed?
  34. Architects • The Absolute Tower, Mississauga, Canada (completion 2009) • MAD office
  35. “China Makes Historic Debut at Paris Fashion Week” 2006.10
  36. 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.
  37. 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
  38. 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
  39. 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
  40. 2. Innovating = Gardening?
  41. Tao of Gardening Seeds Soil Sun Water Lots of time Loving hand of gardener Sharing
  42. Tao of Entrepreneurship Ideas Personal risk Social risk Market potential Media attention
  43. 3. 5C ™ of Chinese Innovation
  44. Copy
  45. “Benchmarking” “Inspiration” “Best practice” “If I have seen farther it is only by standing on the shoulders of Giants.” (Isaac Newton)
  46. 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:
  47. Pragmatic Entrepreneurs Innovation ROI? “Blue oceans”
  48. Entry barriers Technology? Capital? Talent? Intellectual Property? Censorship?
  49. 山寨文化 “Shanzhai culture” “With enough marketing, the fake becomes the real” From the movie “Big Shot’s Funeral” (大腕)
  50. China
  51. China is learning from the West 2008 | 179,800 students abroad 1978- 2008 | 1.39 million students 390,000 returned to China
  52. ...$1 billion do not Already in 2007 appear overnight (We even published a report…)
  53. Attention Threshold = $1 billion?
  54. Maybe the West is simply not looking? Happy life in a fish bowl
  55. Combination
  56. Will it blend?
  57. Tencent (1998)
  58. Registered users 175 mln 856 mln
  59. Revenues 2008 (E) 1 BILLION DOLLAR COMPANY YOU NEVER HEARD OF? 350 mln 1 bln!
  60. Profit margin (E) - X? 40% ~400 MILLION DOLLAR NET PROFIT
  61. Market Capitalization (March 2009) 3-15 bln? 15 bln REAL MARKET CAP
  62. Competition
  63. What happens when you have 20 YouTube 10 MySpace 5 4 Facebook 3 Yahoo … 4 Twitter
  64. Hard spots “Concepts” Sociology Psychology “Execution” Marketing Business models Payment
  65. Constraints
  66. “Necessity is the mother of invention” (Plato)
  67. Low GDP/capita Small transactions / making millions from cents
  68. Limited advertising Alternative business models / B2B to B2C
  69. No credit cards Alternative payment systems, mobile, virtual currencies
  70. No legacy industry (is it a constraint?)
  71. 4. Some things we think are cool
  72. Lihua | Order food over IM
  73. Alimama | Ad exchange + Micro-retail
  74. Babytree | Vertical for young parents
  75. Huica | Mobile coupons
  76. PPLive | P2P Internet TV
  77. Hozom | Address book + SNS
  78. iNezha | RSS-to-IM
  79. Qifang | P2P Micro-lending
  80. Digu | Twitter + Pics + Celebs
  81. Lakoo | Appstore for non-iPhones
  82. 5. Final twist: What if all this was irrelevant?
  83. Innovation is everywhere! (One example) Partners Founders Team
  84. 6. What to remember
  85. China not innovating? Temporary anomaly Western ignorance
  86. Chinese Innovation 5C ™ of Chinese Innovation
  87. What to do next with China? Learn Adapt Blend Leverage LABL ™
  88. About +8*
  89. There are more ideas outside your country than inside Tom Kelley CEO, IDEO The 10 faces of Innovation
  90. “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
  91. 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
  92. 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.)
  93. Contact Us +81 | Japan benjamin0123 +82 | Korea +86 | China Telecom & Internet + Added Value * High quality