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Creating Japan’s Open Internet – Kaneto Kanemoto

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The content of this article first appeared on Disrupting Japan. It has been reproduced by The Bridge with the approval of Disrupting Japan and the article’s author Tim Romero. Tim is a Tokyo-based entrepreneur, podcaster and author who has started four companies and led Japan market entry for others since coming to Japan more than 20 years ago. Tim hosts the Disrupting Japan podcast and is deeply involved in Japan’s startup community as an investor, founder and mentor. Kaneto Kanemoto founded OKWave to address a problem that was unique to the Japanese internet in the mid-1990’s. Most of the country felt the situation was inevitable, even natural, but Kanemoto-san knew it had to change. Although Japanese people are exceptionally polite in day-to-day interaction, due to the anonymous nature of the Internet, people behaved very differently online. In the early days, the mood was one of bullying, hostility and exclusion. Kanemoto-san founded OKWave to address these problems on the Internet in particular and in society in general, and he has succeeded remarkably at both. The Internet is a far more helpful and much more welcoming place thanks to him and OKWave. Tim: For those who don’t know, can you explain what…

tim-romero
Tim Romero

The content of this article first appeared on Disrupting Japan. It has been reproduced by The Bridge with the approval of Disrupting Japan and the article’s author Tim Romero.

Tim is a Tokyo-based entrepreneur, podcaster and author who has started four companies and led Japan market entry for others since coming to Japan more than 20 years ago. Tim hosts the Disrupting Japan podcast and is deeply involved in Japan’s startup community as an investor, founder and mentor.


kaneto-kanemoto-startup-founder-okwave
OKWave founder Kaneto Kanemoto

Kaneto Kanemoto founded OKWave to address a problem that was unique to the Japanese internet in the mid-1990’s. Most of the country felt the situation was inevitable, even natural, but Kanemoto-san knew it had to change.

Although Japanese people are exceptionally polite in day-to-day interaction, due to the anonymous nature of the Internet, people behaved very differently online. In the early days, the mood was one of bullying, hostility and exclusion.

Kanemoto-san founded OKWave to address these problems on the Internet in particular and in society in general, and he has succeeded remarkably at both. The Internet is a far more helpful and much more welcoming place thanks to him and OKWave.


Tim: For those who don’t know, can you explain what OKWave does?

OKWave is Japan’s largest Q&A community. We have over 40 million active users who come to ask and answer questions about work and life, and even about love.

Tim: Really, people talk about their love life?

Sure. People ask “I’m in love with my boss. What should I do?” or “I’m having trouble getting pregnant, what can I do?” When we first started, we had a lot of IT-based questions, but as more and more non-technical people started using the Internet, there were more and more questions about everyday life.

Tim: OKWave is doing very well today, and you went from founding to IPO in only six years, but most people don’t realize what a hard time you had building the company.

I think my company built me as much as I built my company. I’m Japanese, but I was born in Japan with Korean nationality. No one knew or said anything about it until my parents changed my nationality in childhood. After that happened, my classmates leaned that I was not a natural-born Japanese, and I have a very hard time. I was bullied badly, even by kids that I thought were my good friends.

Tim: It must be hard for a child to understand what’s going in a situation like that.

Yes, I was 10-years-old then and I could not really image what prejudice was until I experienced it. My parents wanted the best for me, but no one knew about my nationality until after I become Japanese.

Tim: Many people say the being an outsider helps you think differently and can be an advantage as an entrepreneur. Was that the case?

I don’t think so. In my case I think it just made it hard to trust other people. I went to an Arts college and got a job as a designer at a good company, but I wasn’t happy there. I felt like they did not really appreciate or understand my design, so I left to find work in Tokyo. At the time I really wanted to work at Sofmap.

Tim: How did that work out?

Not well. My wife was very against the move and even threatened to divorce me. I left for Tokyo by myself, and due to my own mistakes in judgement, I ended up not getting the job, and I was actually living in a park for six months?

Tim: You were homeless for six months?

Yes. I was until I met a Chinese women who had moved to Japan and was trying to find work. I told her my story, but she didn’t feel sorry for me. In fact, she scolded me for being so weak. For not appreciating how easy I had things. For using little challenges and other people’s opinions as excuses for not trying. I was shocked at first, but I realized she was right. The next day I made some phone calls and got a very, very low-paying freelance job as a designer, but that was the start.

okwave-global-edition_screenshot
Image credit: OKWave

Tim: The start? How did that lead to OkWave?

I was soon designing web pages, but I didn’t really know how to do the job, so I went online to ask people basic questions. It’s seems natural today, but in the mid-1990s, people were upset. People told me to go away and said I had no right to waste their time with such basic questions.

Tim: That’s one thing that amazes me. Japanese people are very polite, but when they are anonymous on the Internet they can be pretty horrible.

That’s true, and it used to be worse. I decided then that I wanted to make a site where anyone could ask questions safely. At that time, no one thought it would work. Venture capitalists and private investors told me that there was no incentive for anyone to answer questions for free on the internet.

Tim: So you decided to use your own money?

Sort of. I went back to visit my wife who had stayed behind in Aichi for the past two years. I wanted to apologize and tell her all the details of my life in Tokyo, and maybe start over together. I told her about my plan. She thought about it, and gave me the money she had been saving those two years. It was enough to launch OKWave back in 2000.

Tim: Wow! That’s a lot of pressure. It’s one thing to lose investor’s money, but your wife’s savings?

Yes. [Laughs] Failure was not an option. Fortunately, the site grew quickly after we launched. People were attracted to a place where members were friendly and they could ask questions freely. After investors saw the model working, they understood it and Rakuten invested. Growth continued steadily and we were able to IPO. From outside it might look like we were able to IPO very quickly, but it was actually a very long road to get there.


It’s hard to believe that back in 1997 Japanese VCs could not even imagine the internet becoming an open and friendly place where people are willing to take the time to answer questions simply because they’ve been asked.

Most assumed the Internet would evolve to mirror Japanese business culture at that time, a collection of tightly-knit alliances and closed communities. The open internet is an obvious reality to us today, but Kanemoto-san deserves credit for not only seeing it before others did, but committing his life to making it happen.

The happiest company in the world – Yuka Fujii

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The content of this article first appeared on Disrupting Japan. It has been reproduced by The Bridge with the approval of Disrupting Japan and the article’s author Tim Romero. Tim is a Tokyo-based entrepreneur, podcaster and author who has started four companies and led Japan market entry for others since coming to Japan more than 20 years ago. Tim hosts the Disrupting Japan podcast and is deeply involved in Japan’s startup community as an investor, founder and mentor. Yuka Fujii considers Famarry to be the happiest company in the world, and looking at who her customers are, I think she just might be right. But behind this happy company is an aggressive plan to disrupt a cartel of photo studios that have dominated the Japanese market for decades. Changes in technology and demographics have opened up a small crack in this wall, and Famarry plans on using it to gain a foothold and then to change the entire industry for the better. Tim: Can you explain a what Famarry does? It’s basically crowd-sourcing of photographers, and we’ve started with pre-wedding photography. About 70,000 couples get married in Japan every year, and about half of them do pre-wedding photography. That’s the…

tim-romero
Tim Romero

The content of this article first appeared on Disrupting Japan. It has been reproduced by The Bridge with the approval of Disrupting Japan and the article’s author Tim Romero.

Tim is a Tokyo-based entrepreneur, podcaster and author who has started four companies and led Japan market entry for others since coming to Japan more than 20 years ago. Tim hosts the Disrupting Japan podcast and is deeply involved in Japan’s startup community as an investor, founder and mentor.


yuka-fujii-statup-founder-famarry
Famarry founder Yuka Fujii

Yuka Fujii considers Famarry to be the happiest company in the world, and looking at who her customers are, I think she just might be right.

But behind this happy company is an aggressive plan to disrupt a cartel of photo studios that have dominated the Japanese market for decades. Changes in technology and demographics have opened up a small crack in this wall, and Famarry plans on using it to gain a foothold and then to change the entire industry for the better.

Tim: Can you explain a what Famarry does?

It’s basically crowd-sourcing of photographers, and we’ve started with pre-wedding photography. About 70,000 couples get married in Japan every year, and about half of them do pre-wedding photography. That’s the initial market we are focusing on.

Tim:  So they go to a romantic spot with a beautiful back drop and take pictures?

Exactly. The wedding photographer is usually arranged by the venue, so the couple has no choice, but people find pre-wedding photographers by word of mouth or by searching online.

Tim: How have you marketed to this audience?

We’ve had great success using Instagram. It’s nearly a perfect fit for us since it’s all about sharing photos. We run promotions, of course, but most of our customers want to share their own photos, so it’s a more modern version of word-of-mouth. It makes it easy for people to hear about us and to find a photographer they really like.

Tim: On thing that worries me about this business is that you will have very few repeat customers. Since most people only get married once, you would always need to be recruiting new customers.

We plan to build on that. A wedding is the start of a family, so naturally our customers will soon want baby pictures and then family pictures. In the future we’ll be offering these other kinds of photography services so we can grow with our clients.

Tim:  You mentioned before that the photography business is changing in Japan?

The industry is becoming more accessible. Quality camera equipment used to be very expensive, but that’s not the case any more. There are many more skilled photographers with high-quality equipment than their used to be. Also, until recently, the studios controlled just about everything. They had a set of standard backdrops and poses and the customer mostly did what they were told to do. People are now starting to see photography differently. More and more people want something that suits their own character and tastes.

Tim: So there is more independence in the industry now?

There will be. It’s much easier for a photographer to be independent these days, and we try to match those photographers up with clients who suit their style. In the future, it will be very hard for the photography studios to stay in business using their current business model. Independent photographers can deliver higher quality at a lower cost and with a style customized to the customers’ personal tastes.

famarry-porfolio-photos
Image credit: Famarry

Tim: What made you target the wedding market? With Japan’s aging population, it does not seem particularly attractive.

The overall market may be shrinking from year to year in Japan, but it’s still a huge market. Not much has changed recently, so it’s a market that’s ready for disruption. As you said, the market is not growing, and many Japanese companies are trying to grow business overseas rather than innovate at home, which makes it easer for us.

Tim: Do you think being a women entrepreneur has made things easier or harder for you?

A bit of both, I suppose. Being different makes it easier to get press attention, but it can make it harder to do certain deals. With a startup you have to just deal with whatever advantages or disadvantages you have. I don’t think too much about it. In our case, however, most of our customers are women, so perhaps I can relate to them better.

Tim: I thought they were couples.

They are, but the woman generally take control of the wedding, and they are the ones who make the decisions about things like pre-wedding photography.

Tim: That makes sense. And even when it comes time for baby pictures or family portraits, it will be the wives driving the process.

Exactly.

Tim: What surprised you most about running your own business?

Both how hard it was and how fun it was. I knew it was going to be hard, but I guess you don’t really understand something until you go through it. I’m not complaining. It was just harder than I expected it would be. But I was also surprised ho much I enjoy interacting with both our staff and our customers. It’s a very happy business. To hear the voices of our customers every day and how happy they are with our service is a very encouraging thing.

Tim: I had not thought of that, but actually you are working with people at some of the happiest times of their lives. I can see how interacting with these people every day would be wonderful, and put you and your staff in a good mood as well.

Yes. that’s true. It’s also a pleasure working with the photographers. They are artists who are happy to be chosen to work with couples who like their style. Everyone is really nice, and I really want to help them. I think that we are doing a very good thing here.


I love the fact that Fujii-san considers Famarry to be the happiest business in the world, and she just might right about that.

Famarry, however, also represents a text book example of a beneficial disruptive businesses. The fundamental structure of Famarry results in their costs being much lower and their flexibility being much higher than traditional photography studios. The studios will be forced to either change the way to do business or go out of business.

Hopefully, Famarry will remain a happy business as they continue to grow.

Project Mistletoe launched – Taizo Son becomes mainstay for young entrepreneurs

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See the original story in Japanese. There will be a new hub being set up within Tokyo’s startup scene. The hub is named Mistletoe and offered by Taizo Son, the remarkable Japanese serial entrepreneur who has survived the chaotic dawn of Japan’s internet industry. Son explained the reason why he has named it so. A mistletoe tree produces a lot of berries, which is an ideal food for birds during winter. Birds eat mistletoe berries and deface the forest, but then new trees will sprout from the ground and expand the forest. It is better not to position the Mistletoe program as an incubation initiative. It’s neither the pure investment efforts we often saw a few decades ago on Japan’s emerging company market nor a seed accelerator inspired by Y Combinator. Son described the project as a vehicle for co-founding businesses but the fact is that it is not so easy to express in simple terms. I recently had a chance to hear more about the new project from Son. Mistletoe program concept The Mistletoe project is not a so-called incubation program for entrepreneurs but operated in the form of co-founding a business with the business founders having a core…

mistletoe_logo

See the original story in Japanese.

There will be a new hub being set up within Tokyo’s startup scene. The hub is named Mistletoe and offered by Taizo Son, the remarkable Japanese serial entrepreneur who has survived the chaotic dawn of Japan’s internet industry.

Son explained the reason why he has named it so.

A mistletoe tree produces a lot of berries, which is an ideal food for birds during winter. Birds eat mistletoe berries and deface the forest, but then new trees will sprout from the ground and expand the forest.

It is better not to position the Mistletoe program as an incubation initiative. It’s neither the pure investment efforts we often saw a few decades ago on Japan’s emerging company market nor a seed accelerator inspired by Y Combinator. Son described the project as a vehicle for co-founding businesses but the fact is that it is not so easy to express in simple terms.

I recently had a chance to hear more about the new project from Son.

Mistletoe program concept

taizo-son-at-mistletoe
Taizo Son in the Mistletoe office
Photo by Takeshi Hirano, The Bridge

The Mistletoe project is not a so-called incubation program for entrepreneurs but operated in the form of co-founding a business with the business founders having a core idea or technology. Unlike conventional acceleration programs that typically have a specified time-period or an investment ratio, every project participating in the program will be handled under different case by case criteria.

Son explained:

Under the concept of this program, we will launch a business with its founders together. They need to bring a core technology and idea, but we will found a business with them, set a valuation for it, then work together on product development, fundraising and business development. That’s why we can’t just deal with a few projects per year. If we continue for five years, we would be able to work with more or less around 20 projects at most. […]

We’ll be doing a startup studio business. There’s a startup studio company called Expa in Silicon Valley, which we see as our role model. The company’s founder Garrett Camp is famous for having invested in Uber, and he has curated powerful people leveraging his network to propose the concept: a company which creates new companies.

This method may be close to EIR (entrepreneur-in-residence), intrapreneurship or other similar styles that Japanese tech incubator Beenos (TSE:3328) has adopted, where startups are based in an incubator’s venue and nourished upon receiving mentorship from designers and programmers at the incubator.

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Son and his team has rented a 1,300 square meters venue to make the studio possible. He said:

Many of the topics we’re dealing with are still in stealth mode so we can’t disclose them. When launching a business, many of us will do something a half step ahead from now, right? VC firms carry things out one step ahead.

However, our Startup Studio wants to work on things 1.5 to 2 steps ahead. For example, Fintech or Adtech businesses are a half step ahead business. Artificial intelligence and robotics are one step ahead. That’s why we must go beyond these.

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The Mistletoe office’s floor plan (upper floor)
Image credit: Mistletoe
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The Mistletoe office’s floor plan (lower floor)
Image credit: Mistletoe

While Son says the program will be processed on an issue-driven basis, I was told that it will address people’s bottom line problems such as global food-supply issues, low birthrate and aging society, in addition to logistics issues.

He continued:

We will support novel ideas and entrepreneurs aiming to solve problems from an oblique angle over a mid- or long-range period. That’s why our main focus will be on the research and development businesses. I think an investment amount per project will be larger here than other typical cases.

These are description in text about the Mistletoe program. It’s obviously interesting as content. However, what’s more important here is that the program is conducted by Taizo Son himself.

How on earth can the team change the world gradually? In order to better understand the core context of their strategies, let’s look back at the roots of the project before it was born.

Indigo and Taizo Son

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Taizo Son and his team at Indigo (From Newsweek’s coverage of Indigo via Taizo Son’s Blog)

Many of our readers may recall how Son started being involved in the startup community. Son encountered Yahoo co-founder Jerry Yang when attending the University of Tokyo, which led him to get involved in a project to launch Yahoo Japan. To prepare for it, Son launched a company called Indigo (currently known as Asian Groove) with ten of his classmates in 1996.

Regarding Indigo, Son was quoted in a book covering the early days of Japan’s internet industry back in 1990s to 2000s. He was as young as 27 years old when this book (Bit Valley Beat) was published.

In 2000, Son says “I’ll launch at least 10 companies this year”. Launching venture businesses in a systematic approach is Indigo’s primary business. Not only big companies but also individuals can bring their ideas to the company. Indigo invests their know-how and funds in prominent ideas.

What do you say? Yes, you see that Son started working on somewhat the original form of the Mistletoe program more than ten years ago.

One companies born out of Indigo is Onsale, currently known as Gungho Online Entertainment (TSE:3765). Having experienced the collapse of the dotcom bubble in early 2000s, he revived the business and IPO-ed the company with hugely popular titles like Puzzle & Dragons and Ragnarok Online by uniting efforts with Kazuki Morishita, the current president and CEO of Gungho.

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In my previous interview with Son, he raised Andreessen Horowitz and Alphabet as rivals to Mistletoe. These two companies have a different approach from Mistletoe because they are focused on investment but the three companies have many points in common in terms of illuminating the global community as a new business breeder.

Many of our readers are also familiar with Marc Andreessen and Ben Horowitz, the founders of Andreessen Horowitz, through Ben’s authored book “The Hard Thing about Hard Things.” Netscape and Loudcloud are symbolic entities from the dot-com bubble in the US while Marc and Ben had overcome hardships; meanwhile there is Son in Japan. I can’t help feeling an indescribable charm of life in the fact that these entrepreneurs are working on the same topic at the same period after experiencing the same hardships.

Movida Japan and Taizo Son

An event of Movida Japan in its early days
An event of Movida Japan in its early days
Photo by Takeshi Hirano, The Bridge

Let’s get back to the original topic. Several years have been passed since the launch of Indigo Project where Son and his team were aiming of launching venture businesses successively in a systematic approach. Then he joined his brother’s company Softbank Group, and subsequently got back into the limelight with the launch of Movida Japan in 2011.

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Looking back at the time, Japanese internet giant Digital Garage (TSE:4819) and its affiliate companies launched Open Network Lab advocating the creation of Y Combinator in Japan while several other VC firms were starting similar acceleration programs. Movida Japan was among these and had been providing a several-month intensive incubation program in cohort batches. In an interview with Japanese business magazine Nikkei Business, Son described how he had launched Movida Japan.

I’ve been dashing forward to gain results while looking at my brother Masayoshi and at the people’s sense of values. […] However I suddenly realized I’m already just before 40 years old. Confucius says one has no doubts at forty. However, I had been always puzzled in my busy minute-by-minute schedule. […] What the heck I should do?

Spending two years, my conclusion was transferring my experience to young entrepreneurs. In addition, I decided to form a startup ecosystem surpassing Silicon Valley in East Asia by 2030.

I asked Son what on earth Movida Japan was. He responded:

What’s the most we have learned through it was having a place rather than us just providing mentoring or support young entrepreneurs. That was where people were polishing each others, aiming to go forward and higher. It was big for us to experience something small from the Silicon Valley startup ecosystem. I was working for Softbank Group during the same period where I could gain much experience and build my network.

When we speak with Son, he often uses this diagram (see below). That was so when I interviewed him at the launch of Movida Japan.

mistletoe-fostering-ecosystem-diagram
Image credit: Mistoetoe

I’ve been using this diagram before launching Movida Japan. Yet I was wondering what we should start with. But I thought it would sprout out from seeds here (Movida Japan). On the side, in discussions with Fumihara-kun (CEO of Nana Music) over an offline fan meeting, I was conducting billion dollar M&A deals. Such a major gap gave me a great input.

I spent almost three years doing various things from scratch, and could finally organize my thoughts. That’s Mistletoe.

Mistletoe orchestrates innovations

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Image credit: Mistletoe

Looking back at what he had been doing at Indigo and Movida Japan, what he’s trying to do won’t change a lot at Mistletoe neither. That’s to create new power and solve social issues. As he mentioned, his thoughts were well organized and his activities slightly upgraded at Mistletoe, where they will ‘integrate’ entrepreneurs with each others.

Son explained:

Every entrepreneur really needs his or her focus to gain success. But solving a big problem is difficult for a single entrepreneur. That’s why we are planning to integrate their skills in solving problems with each others.

Meta Entrepreneur, a superordinate concept that Son addresses, is called “Orchestrates Innovations” at the Mistletoe program. They aim to solve big problems through “chemical reactions” resulting from combining various technologies and expertise. To make these possible, Mistletoe is to provide human resources, goods and capital.

He continued:

Finally we have fixed onto what we want to do. Two missions, orchestrating innovations and forming an ecosystem to accelerate them — that’s just what we should do.

I believe this approach is now possible because the Japanese startup scene has a deeper talent pool of entrepreneurs and investors who have been nourished by Son and the Japanese market these days.

taizo-son-at-mistletoe-2
Photo by Takeshi Hirano, The Bridge

Son will celebrate his 20th anniversary this year since launching his first company while attending university. Concluding the interview, I asked him if he has anything unchanged since then. He replied:

I’ve been often expressing a “metaball” company. Appears to be like a globular cluster nebula. They are several objects, they look like one cluster when seen from a distance. At my company Indigo, there was no boundary defining inside or outside the team but everyone was located randomly around me and continued working.

Some people have come to us and then sped away like Halley’s Comet, others are still revolving around us. I’m told that’s the form of a company I had beem aiming for. It may not have changed a lot since my early days.

Translated by Masaru Ikeda
Edited by “Tex” Pomeroy

Boasting over 1.3M users, Japan’s Eureka tackles online dating with data-driven approach

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See the original story in Japanese. Japanese startup Eureka has an office in Ebisu, Tokyo. Since its launch in 2008, the company has provided mobile apps like Pairs and Couples. We recently visited the office to hear from the company’s CEO Yu Akasaka and COO Jun Nishikawa. Boasting over 1.3 million users In July, Akasaka and Nishikawa co-founded a company focused on incubating and investing in startups in Japan and the rest of the world, called Eureka Ventures. In association with DeNA and other companies, Eureka Ventures participated in a $500,000 investment round in East Meet East, a New York-based online dating service for Asian people. Eureka expects that the partnership through this investment help their business grow further while exploring a business synergy between the North American and Asian markets. Since its launch two years ago, the Pairs app has acquired over 1.3 million downloads from the Japanese and Taiwanese markets to date, with about 500,000 users users coming from Taiwan. Given the high penetration rate of Facebook and a pro-Japanese attitude, they attempted to focus on marketing in Taiwan, becoming a big success. Akasaka explained what prompted them to start developing the Pairs app: There are many online…

eureka-founders-e1408543021636
Eureka CEO Yu Akasaka (right) and Jun Nishikawa (left)

See the original story in Japanese.

Japanese startup Eureka has an office in Ebisu, Tokyo. Since its launch in 2008, the company has provided mobile apps like Pairs and Couples. We recently visited the office to hear from the company’s CEO Yu Akasaka and COO Jun Nishikawa.

Boasting over 1.3 million users

In July, Akasaka and Nishikawa co-founded a company focused on incubating and investing in startups in Japan and the rest of the world, called Eureka Ventures. In association with DeNA and other companies, Eureka Ventures participated in a $500,000 investment round in East Meet East, a New York-based online dating service for Asian people. Eureka expects that the partnership through this investment help their business grow further while exploring a business synergy between the North American and Asian markets.

Since its launch two years ago, the Pairs app has acquired over 1.3 million downloads from the Japanese and Taiwanese markets to date, with about 500,000 users users coming from Taiwan. Given the high penetration rate of Facebook and a pro-Japanese attitude, they attempted to focus on marketing in Taiwan, becoming a big success.

Akasaka explained what prompted them to start developing the Pairs app:

There are many online dating services in the North American and North European markets. But we thought this sector is not yet well established and still had much space for growth. Typical online dating sites may give you a negative impression, so we understood the importance of changing the culture to improve it.

After shutting down two mobile apps

Eureka has actually introduced four apps to date: Online dating and marriage hunting app Pairs, memory sharing app Couples, app discovery app Peepapp and its antecedent Pickie. But the latter two services have already been shut down.

Following other users, Peepapps allowed you to peep what apps they were using. But it was too early because there was no trend among people exploring a new app on a social basis. Regardless of support from a big company or a big promotion budget, we learned through our experience that a service not in step with the times would be never accepted.

After shutting down the two services, Eureka had been exploring the next business to take on while handling cultivation of contracted software development businesses. Nishikawa subsequently came up with an idea for an online dating service:

When it comes to a new business idea, we wanted to create one which is obviously monetizable. The online dating sector is becoming integrated and has a solid revenue model. I believed a huge potential is out there because I saw many friends around me using such service when I was abroad to study.

Adopting a data-driven approach

Despite the fact that the Asian region is considered a ‘Blue Ocean’ market for them, there are many competitors in the online dating sector. What is a key advantage behind their steady growth?

The two co-founders have strong backgrounds in marketing through their experience working with e-commerce businesses. They attach much importance to metrics like customer acquisition cost, lifetime value or conversion rate, and are adjusting the service in line with the data-driven approach that they have learned from their previous business experiences. Akasaka elaborated:

We keep seeing metrics and improving the app every day. In addition to various metrics and user feedback, we’re sharing figures like how many times the app has crashed in our entire team so we can run a PDCA cycle very quickly.

Improving user experience to satisfy user needs

pairs-new-profile-men-e1408543129921 pairs-new-profile-women-e1408543110877

Akasaka pointed out that both the product itself and the promotion effort combined make a big success. These are directly linked with behavior which they have been developing the app toward, from the user’s perspective.

Akasaka explained how they are making efforts to improve the app:

We launched a new version of the Pairs app for iOS and Android on August 21, where we rolled out various improvements. For example, typical online dating apps show you square-shaped profile photos but we changed it to round-shaped ones, which shows less numbers of candidates in a first view screen. This is a very minor change but creates a world view different from that of conventional dating sites, which makes users easier to sign up.

Nishikawa added:

While our desktop version looks like Facebook, the iOS app has adopted a similar interface to Line. Considering apps that our users are using most often, we are improving interfaces of the service for devices accordingly.

We can see their thoughtfulness in the well-designed interface. For example, they use an elaborate design in the app screen so you will not have to worry about a peep even when you are using the app in a crowded train. That’s from considering Japanese women’s typical concern that they hate anyone knowing about them using an online dating app.

Educational activities needed in any markets

The Pairs has acquired over 8 million Facebook likes, over 1 million monthly active users, and matched over 4 million couples in total.

However, once a user finds a good partner on the Pairs app, he or she will quit the app shortly. How did the team address this issue? In a response to my question, Akasaka explained:

It doesn’t matter. If a couple step into the next phase, they will start another of our apps, Couples. Even if their relationship doesn’t work out, they will get back to us and start using the Pairs app again.

As Akasaka now thinks that they can grow the service tenfold, he aims to educate people and improve their negative stereotype about encounters through online dating services. Nishikawa explained how they will proceed from here:

We invested in New York-based online dating service East Meet East a month ago. In a recent discussion with the team, they told us even Western couples are not willing to unveil that they have met each others using an online dating service. So this education process will be needed globally. We’ll be devoting ourselves to it.

Japanese news curation startup Gunosy earns seven-digit dollar figures every month

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See the original story in Japanese, part of our coverage of the Infinity Ventures Summit Sapporo 2014. Our readers may recall that Japanese news curation startup Gunosy raised about $12 million back in March. The company recently started distributing ads on its news app, and we’re told they generate several millions of US dollars monthly from the advertising sales. We spoke with the company’s co-CEO Shinji Kimura at the Infinity Ventures Summit to find out more. The Bridge: We heard that your business has been rapidly growing after you starting broadcasting a TV commercial. What kind of download numbers are you seeing? Kimura: We had acquired 1.8 downloads as of March 15th, but we’re going to hit 4 million downloads pretty soon. The Bridge: So you’ve been doing very well in the last two months since the commercial started. On the other hand, some people were disappointed with some unexpected changes. Kimura: We are sorry for the users who have been using the app since launch. But some users pointed out that the personalization feature we initially adopted results in many duplicate articles. Furthermore, curated content includes many longer articles, which can be tiring to read especially on weekends. So…

gunosy-shinji-kimura

See the original story in Japanese, part of our coverage of the Infinity Ventures Summit Sapporo 2014.

Our readers may recall that Japanese news curation startup Gunosy raised about $12 million back in March. The company recently started distributing ads on its news app, and we’re told they generate several millions of US dollars monthly from the advertising sales.

We spoke with the company’s co-CEO Shinji Kimura at the Infinity Ventures Summit to find out more.

The Bridge: We heard that your business has been rapidly growing after you starting broadcasting a TV commercial. What kind of download numbers are you seeing?

Kimura: We had acquired 1.8 downloads as of March 15th, but we’re going to hit 4 million downloads pretty soon.

The Bridge: So you’ve been doing very well in the last two months since the commercial started. On the other hand, some people were disappointed with some unexpected changes.

Kimura: We are sorry for the users who have been using the app since launch. But some users pointed out that the personalization feature we initially adopted results in many duplicate articles. Furthermore, curated content includes many longer articles, which can be tiring to read especially on weekends.

So we adjusted the app to provide users with lighter content, and that resulted in a boost in our daily active users.

The Bridge: We also know that the demographic of our readers would be very limited if we focus too much on startups. So when you think of business opportunities, it must be difficult to determine how wide-ranging to set your scope.

Kimura: Yes, advertising opportunities are also limited if you persist in a niche. For instance, female users don’t like our app. Even my wife used to use SmartNews. I realized we had to change it. (Laughs) Now she uses Gunosy. So we think our adjustment was successful. […] About 10 million people launch our apps every day, and almost 30% of them do it to check out news articles in morning. So we can publish articles written by professional writers exclusively for our readers.

The Bridge: In Japan, there are quite few platforms, including Yahoo News Bylines, where professional or independent writers can write articles and get paid.

Kimura: I think monetization is important. Driving traffic back to media companies is sort of meaningless without monetization opportunities. But we know there’s opportunity out there in smartphone ads.

The Bridge: We’re told that your monthly revenue has reached around several million US dollars. It this true?

Kimura: I can’t disclose details but it seems like that, yes.

The Bridge: So now you can give some benefit back to media from which you’re curating articles?

Kimura: Typical media give you as little as $US 0.02 per page view. But I think our platform will be able to pay you as much as one US dollar. Considering that we can make our platform open to contributors in the future, if you can write an article earning 300,000 page views, you can earn 3,000 US dollars from us. I think we need to establish a content distribution ecosystem that helps creators or authors make a living.

The Bridge: How can you achieve such high profitability?

Kimura: It’s because of smartphone ads. The existing types of ads on desktop websites don’t effectively keep the attention of their audience. A smartphone ad is placed in a limited space and has higher visibility. This was proved by Facebook. One of the reasons why TV commercials perform well is because they are inserted right in the middle of a program.

The Bridge: But because ads are inserted between articles, some people feel it’s annoying.

Kimura: I know that. So we’re thinking more carefully about how to insert ads. We’re also planning to provide a full-page ad package. If we start it, I think our users will not hate it. Because we’ve been conducting A/B tests many times to find out what kind of ads users are comfortable with.

The Bridge: Thank you for your time.

Cerevo to set up $20M fund to accelerate Japan’s hardware startup ecosystem

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See the original story in Japanese, part of our coverage of the Infinity Ventures Summit Sapporo 2014. Tokyo-based Cerevo, the Japanese startup best known for its Cerevo Cam and IoT crowdfunding site Cerevo Dash, announced today that it will invite Osamu Ogasahara to the company’s board pending approval at their board meeting on June 2nd. We had a chance to speak with the company’s co-founder and CEO Takuma Iwasa, as well as Ogasahara, at the Infinity Ventures Summit 2014 happening right now in Sapporo, Japan. Ogasahara is the co-founder of Japanese internet service provider Sakura Internet as well as owner for the popular entrepreneur hub Awabar and co-working space Nomad New’s Base [1]. The Bridge: Since it’s a complicated topic, would you like to clarify what’s happening with your company right now? Iwasa: Sure. As we published on our blog, Ogasahara will join our board pending approval at our board meeting on June 2nd. Shares of our company held by Inspire Technology Innovation Fund, Neostella Capital, Voyage Ventures, and Inova [2] will be handed over to Ogasahara. We’re also planning a big funding round as well. The Bridge: Your company has developed consumer electronics like Cerevo Cam and enterprise hardware…

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From the left: Takuma Iwasa, Osamu Ogasahara

See the original story in Japanese, part of our coverage of the Infinity Ventures Summit Sapporo 2014.

Tokyo-based Cerevo, the Japanese startup best known for its Cerevo Cam and IoT crowdfunding site Cerevo Dash, announced today that it will invite Osamu Ogasahara to the company’s board pending approval at their board meeting on June 2nd.

We had a chance to speak with the company’s co-founder and CEO Takuma Iwasa, as well as Ogasahara, at the Infinity Ventures Summit 2014 happening right now in Sapporo, Japan. Ogasahara is the co-founder of Japanese internet service provider Sakura Internet as well as owner for the popular entrepreneur hub Awabar and co-working space Nomad New’s Base [1].

The Bridge: Since it’s a complicated topic, would you like to clarify what’s happening with your company right now?

Iwasa: Sure. As we published on our blog, Ogasahara will join our board pending approval at our board meeting on June 2nd. Shares of our company held by Inspire Technology Innovation Fund, Neostella Capital, Voyage Ventures, and Inova [2] will be handed over to Ogasahara. We’re also planning a big funding round as well.

The Bridge: Your company has developed consumer electronics like Cerevo Cam and enterprise hardware like LiveShell. How does the funding and the change of the board member influence your plans?

Iwasa: First, we’ll step up marketing of our brand and accelerate global expansion. Second, we’ll have an incubation project focused on hardware startups.

The Bridge: Your business heavily depends on international sales, right?

Iwasa: Yes, some of our products receive over 40% of all orders from overseas. We will try to raise this to 80%. We also plan to expand our range of products, especially in the IoT and ‘high amateur’ spaces.

The Bridge: What do you mean when you say ‘high amateur’ space?

Iwasa: It’s difficult to explain since it’s a relatively new concept. It means a series of products ranging in a space where professional and hobbyist use overlap. Our video and still camera products are categorized there.

I know the market can grow explosively where low-end products for professional use and high-end products for hobbyist use intersect. That’s what I mean by ‘high amateur’ space. It’s not a huge market because it targets a niche. Successful examples in this area include DJI’s Phantom 2 and GoPro.

The Bridge: Your company is a 10-person team but we heard you’re planning to enlarge it to about four times that.

Iwasa: We’re planning to increase our head count up to 50. Our strategy is to target niche markets and produce a variety of products. […] We think our business is scalable as long as we have a sufficient number of talented people. We are hiring engineers in many fields like electrical engineering, design, mechatronics, app development, and infrastructure.

The Bridge: Let’s talk about the incubation project. Regarding the IoT fund you are planning, who will be in charge of forming this? We heard that Cerevo got money from an investment fund. Is that correct?

Ogasahara: I am the general partner of the fund. We’ll be forming a fund worth $20 million this coming summer, and will invest in Cerevo from that. It’s sort of like a growth fund that I was eager to raise money from when I founded my internet service provider company many years ago.

The Bridge: So you will invest not only in Cerevo but also in other hardware startups. You also have another investment initiative at ABBALab, where you have specifically invested in startups which have succeeded in raising money on crowdfunding sites. How are the funds different?

Ogasahara: For that initiative, we’ll keep seeking young entrepreneurs and help them create prototypes and launch their businesses in a hands-on manner. People are unlikely to create hardware products as easily as they would create smartphone apps. ABBALabs aims to remove the financial or environmental obstacles for ambitious entrepreneurs.

The Bridige: So what does Cerevo expect by launching this incubation business?

Iwasa: Our main focus is to help crowdfunding efforts in Japan and the rest of the world, and to help crowdfunding project owners manufacture their products. We’ll set up a garage and shared office in Akihabara, and we are also planning to organize hardware-focused workshops and hackathon events too.

Ogasahara: By giving knowledge of mass production to entrepreneurs who already succeeded in creating their products, we really want to eliminate barriers for them. I believe it can really help a lot of people.

Iwasa: Looking at posts on bulletin boards, you can see that many entrepreneurs succeed in raising money on Kickstarter, but many of them run into difficulties in mass production. But the biggest obstacle for them will come after production. We help them sell, we support them, and we encourage them to develop the next model of their product. This is where our experience can help.

Ogasahara: We’re running a site called DMM.make in partnership with The Bridge, as you know. This is also part of our effort to encourage businesses to create hardware products. We want to provide opportunities where people can learn, make, share, sell, and buy what they create.

Iwasa: So if you’re interested in this space but don’t know what to do, don’t hesitate to come and join us.

The Bridge: Thanks for your time.


  1. Disclosure: The Bridge has a business partnership with Nomad, the company that Ogasahara has managed. We are providing selected articles to DMM.make, a news curation site by Japanese internet company DMM. 
  2. Inova is a fund focused on investing in electronics manufacturing startups and was formed by three Japanese companies: Thine Electronics (TSE:6169), Chip One Stop (TSE:3343), and Ant Capital Partners.

Fujitsu unveils retail store analytics solution to visualize customer movement

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The folks over at Tech-On have reported about some clever infrared sensor technology from Fujitsu that visualizes the movements of shoppers in a store. By using the recorded data, a store manager can gain insights into whether or not their product displays are effective or find out information about their in-store queues. The solution sounds somewhat similar to that of startup Locarise, which instead determines foot traffic metrics based on wi-fi signals collected from customers’ smartphones. Our readers may recall that Locarise was a special award winner at last October’s OnLab Demo Day. Via TechOn

fujitsu
Photo via Tech-On

The folks over at Tech-On have reported about some clever infrared sensor technology from Fujitsu that visualizes the movements of shoppers in a store. By using the recorded data, a store manager can gain insights into whether or not their product displays are effective or find out information about their in-store queues.

The solution sounds somewhat similar to that of startup Locarise, which instead determines foot traffic metrics based on wi-fi signals collected from customers’ smartphones. Our readers may recall that Locarise was a special award winner at last October’s OnLab Demo Day.

Via TechOn

Leap Motion CEO on expected Asia business expansion

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At the Global Mobile Internet Conference 2014 in Beijing this week, we had a chance to speak with Leap Motion co-founder & CEO Michael Buckwald. As many of our readers are likely aware, Leap Motion is a gesture-based motion controller that lets users interact with a computer by making gestures in a given space over the Leap Motion sensor. Since its launch back in 2011, the company has raised a total of $44 million over several rounds. Companies here in Japan like Kadinche and Cinemacraft have already been working on new ways to use Leap Motion. Buckwald tells us that while about 50% of all their product orders come from the US, they also see many pre-orders from Japan, China, and South Korea. One of the biggest reason he attended GMIC is to build a reliable distribution channel in China. We’re making a different market approach in every single country. In Japan, we have partnered with companies like Softbank and Yodobashi Camera, and are expecting them to facilitate distribution channels to reach out our potential users better. In Korea, we have several partners but are conducting a [more] direct approach than what we are doing in the Japanese market. In…

At the Global Mobile Internet Conference 2014 in Beijing this week, we had a chance to speak with Leap Motion co-founder & CEO Michael Buckwald. As many of our readers are likely aware, Leap Motion is a gesture-based motion controller that lets users interact with a computer by making gestures in a given space over the Leap Motion sensor. Since its launch back in 2011, the company has raised a total of $44 million over several rounds. Companies here in Japan like Kadinche and Cinemacraft have already been working on new ways to use Leap Motion.

Buckwald tells us that while about 50% of all their product orders come from the US, they also see many pre-orders from Japan, China, and South Korea. One of the biggest reason he attended GMIC is to build a reliable distribution channel in China.

We’re making a different market approach in every single country. In Japan, we have partnered with companies like Softbank and Yodobashi Camera, and are expecting them to facilitate distribution channels to reach out our potential users better. In Korea, we have several partners but are conducting a [more] direct approach than what we are doing in the Japanese market. In China, we have no formal partnership with any company for now, but we think it’s significant for us to find a way to expose our actual product.

In order to encourage third-party developers to create Leap Motion apps using the company’s SDK, Leap Motion has set up an app market called AirSpace where the developers can publish their apps. Buckwald tells us the market has about 200 apps for now, and about 50% of them are paid, with many gaming apps ranked among the top downloads.

We understand that the company has launched an incubation program called LEAP.AXLR8R in San Francisco (of course, in partnership with Shenzhen-based HAXLR8R), where several startups are committed to developing Leap-integrated apps. The first class from the program will be graduating in just a few months. A number of unofficial meetups are being organized by the company and its developer communities in cities in the world. Buckwald expects such efforts will really help establish user/developer ecosystem based around their device.

Young entrepreneur develops an app to support Muslims living in Japan

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See the original article, written in Japanese With Tokyo chosen as host for the 2020 Olympics, the city is likely to get more and more attention from tourists. Of course among the many tourists expected to come to Japan, many will be Muslim. Tokyo International Airport recently opened a prayer room for Muslims, but there are other issues to work on. One such issue is food. For example, when I spend time with Muslim friends in Tokyo, it can be difficult to find alcohol-free soy sauce and menus which don’t contain pork. But one entrepreneur has stepped up to try to solve this problem. Fukuoka-based Kyushu Lab has launched an Android app called HalalMinds. It enables users to scan the bar code of any product to identify if it is halal, or permissable for Muslims to eat. The app also has a Qibla Compass feature, which lets Muslims to determine the right direction for performing prayers. Japan already has a Muslim population of about 150,000, and about the same number live in South Korea too. Nearly 1.2 million Muslims visit Japan every year either for sightseeing or for business. Kyushu Lab wants to help serve this demographic as potential users…

halalminds_featuredimage

See the original article, written in Japanese

With Tokyo chosen as host for the 2020 Olympics, the city is likely to get more and more attention from tourists. Of course among the many tourists expected to come to Japan, many will be Muslim. Tokyo International Airport recently opened a prayer room for Muslims, but there are other issues to work on. One such issue is food. For example, when I spend time with Muslim friends in Tokyo, it can be difficult to find alcohol-free soy sauce and menus which don’t contain pork. But one entrepreneur has stepped up to try to solve this problem.

Fukuoka-based Kyushu Lab has launched an Android app called HalalMinds. It enables users to scan the bar code of any product to identify if it is halal, or permissable for Muslims to eat. The app also has a Qibla Compass feature, which lets Muslims to determine the right direction for performing prayers.

Japan already has a Muslim population of about 150,000, and about the same number live in South Korea too. Nearly 1.2 million Muslims visit Japan every year either for sightseeing or for business. Kyushu Lab wants to help serve this demographic as potential users or HamalMinds.

The app was developed by Indonesian student Agung Pambudi, a member of Kyushu Lab who has lived in Taiwan, South Korea, Malaysia, and Finland. Along with his doctoral studies in Kyushu University, he put a lot of effort into developing this app. He explained:

As a Muslim, we need to live our everyday lives with halal food and drink. But it is hard to find such products in Japan because some processed foods contain pork or alcohol. Also, we even recognize meat not processed in a permissible way as non-Halal. We developed HalalMinds with the aim to of bringing it to not only Japanese users, but to users around the world.

Considering the overall size of Muslim population, even here in Japan, I think there is much potential to monetize such an app. I recall a team of university students who designed an app called C@ndy, a sort of Craiglist for Muslims.

Singapore-based startup Bitsmedia launched an app called Muslim Pro which lets you find halal restaurants and read the Koran. That app achieved 4 million downloads in March 2014.

HalalMinds released its Android app early this month, and an iOS version will follow at the end of this month.

Inside Tencent: What lies ahead for China’s internet giant?

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See the original article written in Japanese Some might suppose that Chinese internet companies would have their headquarters in the capital Beijing. But they don’t. Alibaba is headquartered in Hangzhou, while the country’s top game company Shanda is in Shanghai. And Shenzhen in the south is the home of Tencent. I recently had an opportunity to visit Shenzhen to attend Infinity Venture Partners’ LP Summit 1, during which I had a chance to visit to Tencent. The company’s headquarters are located in the Science and Technology Park in the western part of the city, inside 37-story skyrise. Surprisingly, this gigantic building is a little small for Tencent, and they’re now building another 55-story, two-tower facility. That building (a model of which you can see below) is scheduled to open in 2016, and it will house 12,000 employees. The building is designed by NBBJ, also the designers of Amazon headquarters building in Seattle. On the second floor there is a big screen that displays real-time access to Tencent’s QQ instant messaging software (see below). I saw over 170 million users accessing the service, which was probably light considering that it was a weekday morning. Also on that floor was Ubox, a…

tencent

See the original article written in Japanese

Some might suppose that Chinese internet companies would have their headquarters in the capital Beijing. But they don’t. Alibaba is headquartered in Hangzhou, while the country’s top game company Shanda is in Shanghai. And Shenzhen in the south is the home of Tencent.

I recently had an opportunity to visit Shenzhen to attend Infinity Venture Partners’ LP Summit 1, during which I had a chance to visit to Tencent. The company’s headquarters are located in the Science and Technology Park in the western part of the city, inside 37-story skyrise. Surprisingly, this gigantic building is a little small for Tencent, and they’re now building another 55-story, two-tower facility. That building (a model of which you can see below) is scheduled to open in 2016, and it will house 12,000 employees. The building is designed by NBBJ, also the designers of Amazon headquarters building in Seattle.

tencent-exhibition3b

On the second floor there is a big screen that displays real-time access to Tencent’s QQ instant messaging software (see below). I saw over 170 million users accessing the service, which was probably light considering that it was a weekday morning.

tencent-exhibition1b

Also on that floor was Ubox, a vending machine where people can buy things by paying with their mobile, either using AliPay (by Weibo) or TenPay (by Tencent). Here in Japan, there are an increasing number of vending machines accepting electronic money. In China, it seems services like Weibo and QQ are helping drive that trend too.

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Virtual credit cards

Early in March, Tencent and Alibaba announced virtual credit cards within their apps WeChat and AliPay Wallet (respectively). WeChat and AliPay Wallet can be used for some things like taxi service Didi Dache and at some retail stores as well. The companies were both very excited about the launch, hailing it is an innovation in the credit card industry. But soon after launch, government authorities made them shut down the service. Tencent has made efforts to the launch its service by tying up with major banks in China. The background of the authority’s decision is not clear, but some sources say certain banks and credit-card companies were threatened by the rapid increase of virtual credit cards and may have put pressure on government.

Regarding its future strategy, Tencent aims to make financial services more accessible to general consumers by expanding to platforms like WeChat and QQ. The financial services they mention include not only credit cards but also stock exchange and other financial products. In such a big country, cities that have branch offices of a bank or financial services are still limited. So it would be a natural development for mobile apps to fill the void.

Tencent aims to provide financial services for WeChat users in China (where it’s known as Weixin), and so far has no plan to expand that to its overseas users.

Mobile app distribution

There are many homegrown mobile app distribution services catering to the Chinese market. Tencent’s MyApp has a 12% in the share in this space, falling just short of the top three, behind Baidu (38%), Qihoo (28%), and Wandoujia (15%) (as of December 2013).

Tencent’s top priority in this field is to surpass the top three players, and Tencent Open Platform represents its core strategy for doing so. Monkey Hou (pictured below) is the vice president of the Tencent Open Platform, and he brought us up to speed on their current situation.

According to him, Tencent has opened incubation spaces in 10 cities across China with the aim to incubate mobile app startups and bring more appealing apps to their platform. As part of the incubation programs, Tencent offers various benefits such as discounted cloud service, funding, and mentoring. The benefits change depending on the number of downloads for a given app.

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Tencent Open Platform, vice president Monkey Hou

In China there are over 10 mobile app distribution platforms. Some wonder why an internet giant like Tencent cannot catch up other players. But Hou explained to us that there is no player with a majority share and China’s market is still really big. He seemed confident they would soon break into the top three.

In February, Japan’ Mixi partnered with Tencent to bring its popular Monster Strike game to China. This is one example of Tencent’s efforts to gain recognition as an app distribution platform. Although it requires localization changes, the Japan’s popular mobile games have good chances to do well in China. I think more and more Chinese platforms will actively try to partner with Japanese game developers in the future.


  1. You may remember my report on HAXLR8R, the Shenzhen accelerator specializing in hardware startups. ↩