How does China compare to the Galapagos? Comparisons between China's digital species and the islands' Flora and Fauna. Talk given at Media Evolution Conference in Malmo, Sweden, on August 2011.

1. New
and
Improved
Species
from
China
Digital
Naturalism
@benjaminjoffe,
ceo,
+8*
Media
Evolu9on
Conference
|
Malmö,
Sweden
|
2011.08

2. Introduc;on

3. My
Voyage
• 11
years
in
Asia
(China,
Japan,
Korea)
• Research
on
“Local
Species”
• Innova9on
Arbitrage

4. Quiz

5. When
was
it
invented?

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

7. 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!

8. China’s
Internet

9. China’s
Internet
in
the
Western
Mind
Censorship
Ac9vists
485m
users
Cyber-­‐AZacks
Internet
Stocks
Source:
Top
Google
News
on
“China
Internet”,
2011.08.16

10. What
is
missing?
Innova9on
Users
New
concepts
Startups

11. #1
Challenge:
Preconcep;ons
China
Innova9on
Success

12. Innova9on
is
Everywhere!

13. Digital
Naturalism

14. Digital
species
are
IDEAS
Cute
ideas
visit
people
everywhere

15. Understanding
Digital
Species
• NATIVE
driaed
“naturally”
– ENDEMIC
1
loca9on
– INDIGENOUS
>1
loca9on
• INTRODUCED
not
naturally
• INVASIVE
widespread

16. Quick
Look
at
Ecosystems
USA
• Large
popula9on
• High
GDP/capita
• Experienced
entrepreneurs
• High
development
costs
• Vast
investments
resources
• Clear
regula9ons
RICH
ECOSYSTEM

17. Quick
Look
at
Ecosystems
CHINA
• Very
large
popula9on
• Low
GDP/capita
• Inexperienced
entrepreneurs
• Low
development
costs
• Popular
investment
spot
• “In-­‐progress”
regula9ons
TOUGH
ECOSYSTEM

18. Copy
is
the
“natural”
way

19. Muta9on
for
Survival

20. 5C’s
of
Innova9on™
1. Copy
2. Constraints
3. Combina9on
4. Compe99on
5. Context

21. Compe99on?
Service
No.
Local
Services
Tencent
(QZone,
Pengyou)
Facebook
5
Renren
(IPO),
Kaixin001,
51.com
1G:
(dead)
TwiZer
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,
etc.

22. Endemic
TENCENT
(Galapagos
Penguin)

24. Tencent
&
QQ
• 1998:
Chinese
“ICQ”
• Survival:
Virtual
goods
in
Avatars,
Games
(Korea)
• Today:
social
networks,
microblog,
e-­‐commerce,
search,
interna9onal…

25. Tencent
Usage
• IM
ac9ve
accounts
702
mln
• Qzone
SNS
530
mln
• Pengyou
SNS
130
mln
• Microblog
233
mln

26. 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

27. Endemic
JIAYUAN
(flightless
cormorant)

28. Jiayuan
|
#1
Matchmaking
site
• 40
mln
members
• Revenue
18
MEUR
(loss)
• 5
mln
ac9ve
• IPO
in
May
2011
(“DATE”)

29. Jiayuan
|
#1
Matchmaking
site
• Starving
with
ads
• 100’s
of
events
• Sells
“stamps”
(0.2
EUR)
– Either
sender
or
recipient
must
buy
it

30. Endemic
ZHENAI
(Lonesome
George)

31. Zhenai
|
#2
Matchmaking
site

32. Zhenai
|
#2
Matchmaking
site
• 28M
members
• VIP
service
• “Dates
manager”
• Feedback
channel
• 300
EUR/6
months

33. Endemic
VANCL
(swallow-­‐tailed
gull)

34. 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
Valua9on

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

36. Invasive
&
Indigenous
ONLINE
GAMES
(marine
iguana)

37. >10
Online
Game
Giants!
• No
game
soaware
market
• Inspira9on
from
Korea
• All
online!
• Online
games
=
$5bln
vs.
$2bln
in
USA

38. 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
Kingsoa
NetDragon
CDC
The9
Renren
Game
World
Interac9ve
Source:
Companies,
2011.04
except
Renren,
2011.05

39. Who’s
ahead?

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

41. Apple
Store
in
Kumming

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

43. Awareness
Test

44. PHOTO:
MOBILE
PHONE,
BEIJING,
APRIL
2010
©
Benjamin
Joffe
/
Plus
Eight
Star
Ltd.

45. PHOTO:
MOBILE
PHONE,
BEIJING,
APRIL
2010
©
Benjamin
Joffe
/
Plus
Eight
Star
Ltd.

46. Did
you
no9ce
that?
PHOTO:
MOBILE
PHONE,
BEIJING,
APRIL
2010
©
Benjamin
Joffe
/
Plus
Eight
Star
Ltd.

47. This
is
a
“FarmVille”
bu3on
There
is
a
link
to
check
your
QQ
Farm
PHOTO:
MOBILE
PHONE,
BEIJING,
APRIL
2010
©
Benjamin
Joffe
/
Plus
Eight
Star
Ltd.

48. QQ
Farm

49. By
the
way…

50. “Shanzhai”
Phones:
Mass
Customiza9on
• 4F’s
of
Shanzhai™
– Fun
– Flashy
– Fast
– (almost)
Free!

51. “Invasive”
Commodi9za9on?
World’s
Fastest
Android
CPU
(1.5G)
by
Xiaomi
Tech
(220
EUR)

52. “Invasive”
Commodi9za9on?
HaiPad
Android
2.2,
Dual
camera
by
Haier
(100
EUR)

53. “Invasive”
Commodi9za9on?
World’s
First
Android
3.2
Tablet
by
Huawei

54. Introduced
Species
(dogs
or
goats?)

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

56. Groupon
War
• Hundreds
of
players
• Single
digit
margins
• No
clear
leader
• $110m
funding
for
Lashou
• Hard
9me
for
Groupon
US

57. One
more
thing!
Cmune
(new
hybrid)

58. Made
From
China
Uberstrike
by
Cmune:
Top
3D
Game
on
Facebook

59. The
Future
of
Digital
Species
• Study
Ecosystems
• Discover
new
species
• Mutate
• Survive
• Thrive!
Gymnadenia
Runei
(Indigenous
Swedish
flower)

60. Tack
sså
mycket!
Tack
å
m ycket!
@benjaminjoffe
benjamin@plus8star.com
www.slideshare.net/plus8star