4
years
1
year
5
years

•  CEO,
Plus
Eight
Star
|
www.plus8star.com

–  Best
prac/ces
from
Asia’s
digital
space

–  Research,
Strategy
&
“Innova/on
Arbitrage”

Angel
Investor,
Advisor,
Keynote
Speaker

•  Speaker

100+
talks
in
16
countries

•  Advisor

•  Investor
in
Asia-‐based
global
companies

My
Interests

•  Technology,
Sociology
and
Anthropology

•  Virtual
economies

•  Digital
third
places

•  Ar/ﬁcial
ar/ﬁcial
intelligence
(AAI)

•  Online
social
dynamics

The
Myths

1.  Entrepreneurs
have
original
ideas

2.  It’s
all
about
execuEon

3.  The
vision
is
clear
from
day
1

4.  Entrepreneurs
make
millions

5.  Innova/on
always
wins

Bonus:
the
West
does
it
beaer

Innova/on’s
Cultural
Bias

Common
Assump/on
#1

Everything
from
USA
is
great

Common
Assump/on
#2

Everything
from
Asia
is
strange

Common
Assump/on
#2

Everything
from
Asia
is
strange
(and
some/mes
funny)

Western
Framing

of
Innova/on

Famous
Examples

•  Ceramics

(“Deleware?)

•  Prin/ng
Press

(Gutenberg?)

Arts,
religion,
poli/cs…

•  “Innova/on”

•  “Democracy”

•  “Roman/c
love”

•  “Chris/anity”

•  “Freedom”

•  “Crea/vity”

•  etc.

Thee
of
history!

•  The
Western
reframing

even
convinced
Asia!

Magniﬁcent
Seven
Seven
Samurai

(1960)
(1954)

The
Matrix
Ghost
in
the
Shell

(1999)
(1989/1995)

Kimba
the
White
Lion
The
Lion
King

(Japan,
1965)
(US,
1994)

“Even
our
lawyers
are
not
that
good”

–
a
Disney
animator
(rumor)

It’s
not
always
simple
copies…

Ideas
go
back
and
forth!

•  Nike
(USA)
and
Asics
(Japan)

•  Feiyue
(China)
popular
in
Europe!

California
Rolls

(now
served
in
Japan
too!)

Beard
Papa’s

•  “Fresh’n
natural
cream
puﬀs”

•  250
stores
in
Japan,
300+
worldwide

•  1999
|
First
store
in
Osaka,
by
Yuji
Hirota

•  Stores
in
Japan,
China,
Korea,
Taiwan,

Indonesia,
Australia,
Singapore,
Malaysia,

Canada,
UK,
US,
El
Salvador,
Guam
–
Italy
and

Saudi
Arabia
coming
soon!

•  “Wired”
–
ranking
by
“Wired”
in
June
2008

BreadTalk

•  Bakery
founded
in
Singapore
in
July
2000

•  24
retail
outlets
in
Singapore

•  13
countries,
300
bakeries,
5,000
employees

•  Singapore
(24),
Indonesia
(14),
China,
Kuwait,

Oman,
Philippines,
Malaysia,
Hong
Kong,

India,
Thailand,
South
Korea,
Vietnam,
Bahrain

•  Maintains
80%
of
its
product
range
and
adapts

20%
to
the
local
palate

Strip
–
Ministry
of
Waxing

Strip
–
Ministry
of
Waxing

•  Body
waxing
concept
store
founded
by
The

Spa
Esprit
Group
with
HQ
in
Singapore

•  Founded
in
2002

•  27
stores
in
7
ci/es
(Singapore,
NYC,
Jakarta,

KL,
Bangkok,
Manila,
London,
Shanghai,
HK)

•  HSQ:
Hygiene,
Speed,
Quality

•  Thelma
&
Louise,
Batman
&
Robin
combos

•  2
million
bushes
and
coun/ng…

Summary

•  Ideas
are
everywhere!

•  Asia
contributes
too

•  Stereotypes
get
in
the
way

If
you
missed
the
previous
episode…

3
Stages
for
Innova/on

Entrepreneur

Inventor

(Business)

Idea
(Prototype)

(e.g.
Durian
+
Strudel)

Digital
Evolu/on
or
“ Techno-‐Darwinism”

a)  Replica/on

b)  Muta/on

c)  Natural
Selec/on

Dodo
(extinct)

Ecosystem
Factors
for
Evolu/on:
5C’s

1.  Copy

2.  Compe//on

3.  Combina/on

4.  Constraints

5.  Context

Who’s
Success?
Iden/ty
Crisis

15th
Century
Entrepreneur

郑和 |
Zheng
He

Chinese
(Muslim)
Entreprenaute
(1371-‐1435)

1.

Zheng
He
Sells
His
Boat

2.

Much
later…

Replace
old
boards,
mast,
sails…

Everything!

Zheng
He’s
“Renovated”
Ship

Replace
old
boards,
mast,
sails…

Everything!

3.

Later
again…

Replace
old
boards,
mast,
sails…

Everything!

Re-‐use
old
boards,
mast,
sails…

Everything!

Zheng
He’s
“Refurbished”
Ship

Replace
old
boards,
mast,
sails…

Everything!

Re-‐use
old
boards,
mast,
sails…

Everything!

Ques/on

Which
is
Zheng
He’s
Ship?

Replace
old
boards,
mast,
sails…

Re-‐use
old
boards,
mast,
sails…

Everything!
Everything!

…Or
Zheng
He’s
New
Ship?

Examples
from
Asia

#1
SNS
in
Korea
#2
SNS
in
China
#1
SNS
in
Japan

US$100M
in
2009
Raised
US$500M
US$200M
in
2009

Changing
riders

#1
SNS
in
Korea
#2
SNS
in
China
#1
SNS
in
Japan

Yong
Hyoung

Founder

Cyworld

Changing
riders

#1
SNS
in
Korea
#2
SNS
in
China
#1
SNS
in
Japan

Yong
Hyoung

Founder

Cyworld

Gave
most

shares
to

keep
going

Changing
riders

#1
SNS
in
Korea
#2
SNS
in
China
#1
SNS
in
Japan

Wang
Xing

Founder

Xiaonei

Changing
riders

#1
SNS
in
Korea
#2
SNS
in
China
#1
SNS
in
Japan

Wang
Xing

Founder

Xiaonei

Sold
for
US
$2mln

in
2006

Wang
Xing’s
Projects

2005
2007
2008
2009

Ques/ons

1.  What
did
he
do
in
2006?
(no
company
created!)

2.  What
went
wrong?

3.  How
did
he
select
his
models?

4.  What
kind
of
changes
did
he
make?

5.  Is
it
going
to
work
this
Eme?

Changing
riders

#1
SNS
in
Korea
#2
SNS
in
China
#1
SNS
in
Japan

Batara
Eto

CTO

Mixi

Changing
riders

#1
SNS
in
Korea
#2
SNS
in
China
#1
SNS
in
Japan

Batara
Eto

CTO

Mixi

Started
Mixi

as
an
intern!

Changing
riders

#1
SNS
in
Korea
#2
SNS
in
China
#1
SNS
in
Japan

Batara
Eto

CTO

Mixi

Now
invests

in
Indonesia

What
is
a
Caucus
Race?

From
“Alice
in
Wonderland”

•  Why,
said
the
Dodo,
the
best
way
to
explain
it
is
to
do
it.

•  First
it
marked
out
a
race-‐course,
in
a
sort
of
circle,
(the

exact
shape
doesn't
maWer,
it
said,)

•  and
then
all
the
party
were
placed
along
the
course,

here
and
there.

•  There
was
no
One,
two,
three,
and
away,

•  but
they
began
running
when
they
liked,
and
lee
oﬀ

when
they
liked,
so
that
it
was
not
easy
to
know
when
Dodo
the
race
was
over.
(extinct)

•  […]
At
last
the
Dodo
said,
EVERYBODY
has
won.

Winner
Bias

They
talk
but
don’t
race

Winner
Bias

We
don’t
keep
track
of
how
many
start

DNA
Bias

“You
don’t
change
horses
mid-‐race”

He
changed
his
ride!

DNA
Bias

“You
don’t
change
horses
mid-‐race”

(and
started
mid-‐race!)

DNA
Bias

“You
don’t
change
horses
mid-‐race”

(This
one
has
no
rider)

DNA
Bias

“You
don’t
change
horses
mid-‐race”

Nobody
knows
the
track’s
shape

Changing
diet

#1
Mobile
SNS
in
Japan

US$1
billion

in
2010!

Ini/al
business
model?
Ads
CPA
Virtual
goods

Changing
playorm
+
business
model!

#2
Mobile
SNS
in
Japan

US$400M
in
2009

S/cking
to
it

Tencent

#1
SNS
in
China

US$1.8
bln
in
2009

90%
From
Virtual
Goods

(40%
Net
Margin)
Market
cap

US$43
bln

(more
than
eBay)

S/cking
to
it

Tencent

#1
SNS
in
China

US$1.8
bln
in
2009

90%
From
Virtual
Goods

(40%
Net
Margin)
Market
cap

US$43
bln

(more
than
eBay)

IM
was
not
making
money
and
our

compe/tors
moved
to
other

ventures.
I
did
not
have
other
ideas

Pony
Ma

so
I
stuck
to
it.
Founder
&
CEO

Tencent
(QQ)

Alibaba
|
China’s
#1
e-‐Commerce
Playorm

•  1999
Alibaba
by
Jack
Ma
+
17
others

–  Mission:
“ To
make
doing
business
easy”

•  2001
Savio
Kwan
hired
as
COO

–  17
years
GE
Medical
Systems

–  Target:
“Sustainable
long-‐term
cash
ﬂow”

•  2010
More
GE
than
GE?

–  “The
GE
spirit
is
alive
and
well
at
Alibaba”

David
Wei,
CEO
of
Alibaba.com

Myths
of
Entrepreneurship

The
Myths
of
Innova/on

1.  How
many
talked
but
did
not
start?

2.  How
many
started?

3.  Change
in
product/service

4.  Change
in
business
model

5.  Change
in
market
condi/ons

6.  Change
in
ownership!

Quiz:
Who
Created
the
First
Farm
Game?

•  Game

MAU

Dev.

Country

•  FarmVille
61.6M
Zynga
USA

•  Farm
Town
18.6M
Slashkey
USA

•  Country
Story

8.1M
Playﬁsh
UK

•  Barn
Buddy

6.8M
TheBroth
USA

•  Happy
Farm

2.5M
5
Minutes
China

•  Happy
Harvest

.6M
Elex

China

Source:
Appdata
and
Facebook,
2009.10.26

Answer:
“It’s
Complicated”

1.  Five
Minutes
(China)

2.  Slashkey
(US)

3.  Zynga
(US)

4.  Playﬁsh
(UK),
Elex
(China),
etc.

The
Mother
of
all
Farming
Games?

or
“where
is
the
innovaBon?”

•  Harvest
Moon
(1996)

–  On
Super
NES,
by
Victor
Interac/ve

–  Inspired
Happy
Farm

•  Sim
Farm
(1993)

–  On
PC,
by
Maxis

•  Where
is
the
innova/on?

•  Not
in
the
game
concept,
but
in
viral

&
social
mechanics

The
Mother
of
all
Farming
Games?

or
“where
is
the
innovaBon?”

•  Harvest
Moon
(1996)

–  On
Super
NES,
by
Victor
Interac/ve

–  Inspired
Happy
Farm

•  Sim
Farm
(1993)

–  On
PC,
by
Maxis

•  Where
is
the
innova/on?

–  Not
in
the
game
concept,
but
in

viral
&
social
mechanics

Quotes
from
Elex

•  High
producEvity

–  “Anyone
is
able
to
develop
social
games
at
Playﬁsh

level”

•  12
languages
versions

–  “We
can
localize
our
game
in
diﬀerent
language

versions
in
1
day”

Conclusion

•  Aggressive
teams
can
do
it!

•  “Ramen
Proﬁtability”
reachable

•  “Fast
followers”
can
trump
innovators
I’m
loving
it!

Shanzhai
Innova/on:
Mass
customiza/on

Innova/on
Awareness
Test

Hardware
commodi/za/on

•  Change
your
iPod
into
a
phone!

“Shanzhai”
Spirit?

•  Cheap

•  Fun

•  Flashy

•  Fast

UberStrike
|
World’s
First
Social
FPS!

www.facebook.com/paradisepaintball

www.cmune.com

The
straight
story

•  FPS
make
billions

•  Nobody
has
made
an
FPS
on
Facebook

•  “Let’s
make
one
and
make
billions!”

Startups
are
not
straight
stories

•  Our
star/ng
point
in
2008
was…

“Online
3D
collaboraEon
made
simple”

Go
that
way…
Really
Fast

Cmune’s
Evolu/on

1.  Powerpoint
stage

2.  Technology
selec/on

3.  From
ideas
to
prototypes

4.  Valida/ng
concepts

5.  Finding
the
business

6.  Building
the
service

7.  Evalua/ng
markets

Powerpoint
stage

•  Showing
around
to
people
and
friends

•  Get
feedback

•  Get
started!

Technology
Selec/on

•  Our
CTO
wrote
the
reference
book
on
Virtools

•  Evalua/on
of
tech
features
&
licensing

–  Browser-‐based?

–  Per-‐desk?

–  B2B
or
B2C
focused?

–  Cool
team?

•  Eventually
pick
of
the
young
“Unity3D”
tech

Prototyping

•  Social
network
visualizer

•  Virtual
space
(TED
scene!)

•  Web-‐based
apartment

•  And…
a
small
FPS
game

Showing
around:
Business

•  Adver/sing
agencies

–  “We
could
use
that
cool
3D
thing.”

–  Upside:
people
are
interested,
but
it’s
a
gimmick

–  Downside:
reference
price
=
Flash

•  Virtual
world
companies

–  “Let’s
use
your
tech
to
build
a
prototype.”

–  Upside:
validates
tech,
ﬁnances
team

–  Downside:
slows
down
and
distracts

•  Investors
&
Experts

–  “I
don’t
see
your
business.”
“And
the
tech,
is
it
Flash?”

–  Upside:
show
the
need
explain
beaer
&
ﬁnd
market.
Puts
on
radar.

–  Downside:
no
money,
/me
consuming
if
too
oeen

Showing
around:
Users

•  FPS
put
on
Apple.com
as
a
widget…

•  #1
worldwide
in
1
week!

•  Do
we
have
a
winner?

Pick
your
market!

Service
Market
scale
(MUSD)
Business
model

3D
Tools
1
x
B2B

Virtual
worlds
&
Spaces
10
x
B2B,
B2C

Social
networks
&
games
100
x
B2C

Online
games
1,000
x
B2C

Pivot:
Clariﬁed
purpose

•  Mission:
“digital
third
place”

–  First
place:
your
home

–  Second
place:
your
workplace

–  Third
places:
crea/ve
&
social
places

•  Is
the
market
ready?

–  Only
gaming
is

–  Path
of
least
resistance

Which
game?

•  3D
has
to
make
sense!

•  FPS

•  Racing
game

•  Dance
/
Music
game

Our
pick:
FPS

•  Limited
assets:
2
guys
and
a
gun
^_^

•  Huge
market

–  Billions!

•  But…
most
diﬃcult
technically

–  Lag

–  Fun

How
to
build
an
FPS

•  Benchmark!

•  Free-‐to-‐play
FPS
from
Korea
successful

•  Best
prac/ces
in
dual
currency
&
pricing

•  Business
model
&
virtual
economy
were

(almost)
no
brainers

Valida/ons
Summary

•  Tons
of
users,
many
passionate

•  No
compe//on

•  Huge
FPS
market,
untapped
in
the
browser

•  Tech
partners
impressed

•  Presenta/ons
at
events

Evalua/ng
markets

•  GDP/capita

•  Channels

•  Usage

•  IT
infra

•  Payments
systems

•  Cultural
peculiari/es
(FPS
in
Japan?)

Results

•  Game
portals
>
Social
networks

•  Korea,
Japan,
Russia
>
China

•  Convincing
social
gamers
<<
Aarac/ng
gamers

1.

Inspira/on
is
everywhere

2.

Innova/on
is
acceleraEng

3.

Global
success
can
be
built
in
Asia!

1.

…
leverage
proven
models?

2.

…
make
use
of
the
“Shanzhai”
spirit?

3.

…
and
create
your
own
success!

Thanks!

More
about
“Innova/on
Arbitrage”

www.plus8star.com

benjamin@plus8star.com

+81
|
Japan

benjaminjoffe
+82
|
Korea

+86
|
China

hap://twiaer.com/benjaminjoffe

Telecom
&
Internet

www.linkedin.com/in/benjaminjoffe

+
Added
Value

*
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quality

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