upside ventures: business networks as an asset
DESCRIPTION
Upside Ventures back new ventures as well as technology startup. At the same time, we also invest and build special and lucrative investment assets. It's because the upside potential is much higher than conventional investment or stock markets with transparent and manageable model with low risk and initial capital. This is a more long-term profitable path. We seek qualified business and investment partners to join the venture.TRANSCRIPT
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Biz Network as an Asset
UPSIDE VENTURES
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1 Overview: BNaaA
2 Learning: Power of Network
3 Upside: Linear vs. Multiple
4 Opportunities: Invest vs. Create
5 Strategies: Horizontal vs. Vertical
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OVERVIEW: BNAAA
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Overview: BNaaS
Biz Network as an Asset (BNaaA) “Investment Properties” (e.g. Ichiba shop)
Focus on building the network as an entityPeople to People (P2P)
Ongoing value growth while network expands to regenerate exponential return
Leverage existing and established business infrastructure and ongoing profit share model
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LEARNING: POWER OF NETWORK
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Power of Network
Billion Business – all built on a network
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Power of Network
Social Network is about people, not Facebook which is just a platform
Valuation
User base
Profit/Loss
Revenue
Linkedin Facebook
Comparison
Rakuten
RetailProfessional Social
21.6M 208M-64M
24B 115B 14B
Revenue/PL is based on FY2012 // Market Cap – Nov 8, 2013
972M 1.584B
Amazon
Retail
-39B
157B
100M1B
61B 4.74B
245M 137M
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Power of Network: Rakuten (Global)Globalization
More…
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Power of Network: Rakuten (ecosystem)
E-Commerce
E-Money eBook
Card
Banking
Securities Telecom
Travel
Portal&
ContentRakutenMembership
Database
・ Shopping mall・ Auction Customer Flow
・ Hotels and Facilities
・ Air Tickets・ Dynamic Packages
・ Stocks・ Bonds・ Trust Funds・ FX
・ Advertisement・ Streaming・ Downloading・ Recruitment・ Marriage
・ Credit Card
Rakuten Super Point
・ Payment・ Consumer Loan
Common ID
・ Fixed IP Telephony・ Mobile IP
Telephony
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Power of Network: Rakuten (empowerment)
[Major Global E-commerce Competitors]
Product Centric[Rakuten Ichiba]
Shop Centric
The Rakuten “Empowerment” model isvery unique and difficult to replicate
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Power of Network: Rakuten (empowerment)
Japan’s largest and the World’s 3rd* Largest Internet Mall
Merchants 39,000 stores*
Products 100 Million
2011 Sales \1 Trillion+
楽天会員数 78 Million+
(as of June 30, 2012, in Japan*
Global numbers higher)
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Power of Network: Rakuten (empowerment)
Rakuten Ichiba
1 Trillion Yen
Fashion Ichiba’s
Largest Genre
Global Strategy -
Vertical Expansion:- Biggest business
potential- Most “portable”- Expand
horizontially
• Fashion is the largest genre on Rakuten Ichiba• Top Genres: Bag, Shoes, Ladies Fashion• In JP-only, 80M members
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Power of Network: Rakuten (empowerment)
B2C vs. B2B2C
B2C
B2B2C – Scalable on a networkkey factor: highly driven merchants network
Massive 80M users
40K Driven Merchants
<1K Account Mgr
R
R
- Linear growth- Hard to scale
Sales 1 Trillion Yen
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How to win
Replicate the business model
Simplify and adjust to different context Leverage existing infrastructure / setup
Focus on building network across different regions
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UPSIDE: LINEAR VS. MULTIPLE
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Upside: Linear vs. Multiple
Business / career path
Retailing
Investment Banking
Consulting
Business Network
One-time ($$$)
Multiple
Recurring
Linear
Most services and retail businesses are based on 1:1 relationship with the clients or consumers. That demand much resources and time to grow and scale
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Upside: linear vs. multiple
Business / career path
RetailingInvestment
BankingConsulting
BusinessNetwork
MultipleLinear
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OPPORTUNITIES: INVEST VS. CREATE
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Opportunities – Invest vs. Create
Ways to capture value (e.g.)
Open Stock Market
Linkedinnetwork
Startups
RakutenMarketplace
CreatePrivate Investment
FacebookSNS
SMB
Franchise
VC / PE
Real Estate
“System” that generates value
ReturnInvest
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Return: Linear vs. Multiple
Benchmark with S&P 500 Index Total return (12.06%) vs Apple (175.6%)
http://ycharts.com/analysis/story/ten_biggestcap_stocks_just_two_outperform_the_sandp_500
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Return: Linear vs. Multiple
Highest S&P 500 Return is 15.96%; vs FB and Apple of multiples
http://ycharts.com/analysis/story/ten_biggestcap_stocks_just_two_outperform_the_sandp_500
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Investor: Value Proposition
Long Term Value
Risk / Stress
Return (Upside)
Scalability / Self-sustaining(High quality products with Self generating business model)
Min Risk / Stress free(Managed by top professionals; Full tranparency
Team / Network
Profit / multiple(Low startup cost, Highly profitable by multiple)
Elite team and network(Highly selective elite network fromtop schools and professionals)
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STRATEGIES: HORIZONTAL VS. VERTICAL
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Strategies: Horizontal vs. Vertical
Linear
Exponential
Singular
Horizontal Vertical
Retail
Investors
Shops
Horizontal
Vertical
Grow the network
DON’T focus on “Warm network”- Make this as a rule
X
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Retail: Product Strategy and Channel
Product Strategy
Online Channels
Salesforce
Selective Merchandising(Unique, high turnover and Vol, Strong Messaging)
Lifestyle Social EC(Targeted & Mass Vol at Wholesalee.g. Fab, Birchbox, Clozette )
Partnerships
Global Distribution(Hire local “business dev associate”e.g. Philipines, Jamaica, East EU)
Alliance / CommunityFreshii / Forever Living
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Horitzontal: (retail) Product Strategy and Channel
Fab – designer lifestyle product social commerce
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Horizontal: (retail) Product Strategy and Channel
Birchbox – membership subscription ecommerce
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Horizontal: (retail) Co-branding items
Co-branding merchandising opportunities – additional revenue/marketing
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Vertical: Network building
Investor
Shop Owner
Biz Developer
Invest microfund(Form business entity by fundingnew shops network and sales)
Operate and build (New shop for retail and expandThe network
Retail Sales
Manage and build(Expand downline network)
Focus on retail sales(Through strong salesforce,Convert them into new downline)
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Vertical: Network building
Establish strong foundation with highly motivated achievers and network
US JPAP
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Vertical: Network building
UPSIDE VENTURE
InvestorBiz Dev /Owner
Elancer
DriveRetail
Ivy League
Build Business
Entity
RetailSales
InitialCapital
Fund / Share Profit
Win-win-win
Identify downline
Convert into downline
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Investment / Return
Define profit target (30%-48%)
Define resources
Invest initial
capital
Identify market
Hire Sales
Develop network
Identify high potential sales
Concert into
Downline
Drive sales growth
Re-Invest profit to hire sales
(hands off)
Or take over to grow
network asset
Invest Develop Expand Build/Hire
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Q & A