Patrick Grove’s South-East Asian gamble on VOD

 By Karamjit SinghMar 17, 2015
  • Partner Evolution Media Capital brings strong film industry clout
  • Content licensing structures, funding to determine success of iflix

SELF-confessed news junkie Patrick Grove of Catcha Group is used to taking calculated risks. He has successfully parlayed his simple belief that any Internet business model that has traction in the United States can be ported to South-East Asia, into being regarded as among the leading Internet entrepreneurs in Asia.

And while the financial performance of the four listed Internet companies he has stakes in – RevAsia, iProperty, iCar and Ensogo (previously iBuy) are nothing to shout about yet – it is undeniable that they are well-positioned to capture growth in their respective verticals.

For instance, despite its recent troubles, Ensogo has greatly strengthened its hand in the past two weeks by welcoming two new investors, raising a total of US$12.5 million.

If nothing else, the deals attest to Grove’s ability to get investors to take the long view with his South-East Asia-focused businesses.

He also recently strengthened iProperty’s position in Thailand by acquiring one of the leading property portals there.

But now Grove is about to take his biggest gamble. Where he has previously been unshakeable in his belief that consumers will not pay for content online, he is now about to go against that core belief and charge consumers “a price you can’t say ‘No’ to,” for his video on demand venture, iflix.

It is aimed at the South-East Asian market, with a particularly mobile-focused business model.

“It is the next frontier but the question is, when will it arrive?” poses a Los Angeles-based movie distributor when asked about the chances of success for such a service in this region.

“I would be scared to do this now. In three to five years, maybe, but it is a gamble now,” says the distributor.

Interestingly, Grove (pic) pulls out some data that shows what the market size in four years will likely be. From a 2013 Google-commissioned Our Mobile Planet report, he draws attention to data which projects the number of South-East Asian smartphone users and households with fixed-line broadband will grow to in excess of 240 million and 55 million respectively by 2018.

He has not revealed what portion of this will be the market he is targeting. With logic dictating that it will be those with disposable incomes, then 81 million households already fall under this “consuming class” as recent data from management consultants McKinsey & Co reveals.

Those familiar with Grove’s entrepreneurial exploits know that being early in the game suits him as it allows him to build a brand and customer base in the market, and to grow with the market while capturing a bigger share by virtue of being among the earliest players.

And while he is fond of talking about the need to pivot constantly to get the right model, don’t expect any of that here as this is a game where money talks – you need to pay for the content you want to license, and those agreements are not open to any pivots … not without a cost, at least.

In this regard, expect him to raise some significant money for this venture because playing in the content game is expensive, and of course, you can expect him to make some acquisitions along the way in South-East Asia.

He has missed out on the acquisition of Maaduu, a Malaysian-operated video on demand site specialising in Korean content. In August 2014, the site was acquired by a UK-listed company, SyQic Plc, for up to RM5.5 million (US$1.5 million) and 60,000 shares in SyQic.

In terms of partnerships, Grove is already in talks with the Media Prima Group, the largest owner of local content in Malaysia, to license some of its content.

In fact, the amount of money he can raise will be a significant factor in determining whether he succeeds, say two content players I spoke to.

“It will show you how much money they are willing to lose before a sustainable revenue stream kicks in,” said the US-based distributor.

“The determinant will be their ability to pay for enough content to make the service attractive for long enough to reach critical mass. This is going to be a function of how much investment or support they get from their backers,” says a Kuala Lumpur-based content provider.

Equally important to the amount raised will be the type of licensing deals Grove can cut with content owners, especially those based in the United States.

This is where Catcha’s iflix partner comes in. New York-based Evolution Media Capital is a boutique investment bank and advisory firm that specialises in media, sports and entertainment deals.

It is a powerhouse player in the content space and according to a 2012 article in the Los Angeles Times, has had a hand in deals worth US$15 billion.

“A large part of the content distribution business is based on relationships. Depending on how well the content studios know you and trust you, you can cut deals with them that allow you to minimise upfront license payments and do revenue share.

“Though I have to say, the large Hollywood studios are not known to cut anyone good deals as they prefer to be paid upfront for their content,” says the Los Angeles-based distributor.

Catcha is likely depending on Evolution Media and its relationship with US studios to cut it favourable deals. Clearly this is a coup for Grove, to be able to sell the value of iflix and the South-East Asian market to Evolution Media.

Besides relying on Evolution Media, Grove is not entirely without any content pedigree himself, with family ties to the Hong Kong based Shaw family, which incidentally was also his first investor when he launched Catcha.com back in 1998.

But it is the partnership with Evolution Media that totally changes how I now view iflix versusSingtel’s Hooq service, the Singapore telco’s Asia-focused over the top (OTT) video service that it will launch by the end of March, with Hollywood studios Warner Brothers and Sony Pictures as equity partners.

While Singtel’s Hooq is focused on the Asian markets where it has a market presence, this still brings it into direct competition with iflix in at least three markets: Indonesia, the Philippines and Thailand.

How iflix differentiates itself from Hooq, and for that matter any other video service focusing on South-East Asia, will determine its takeup and success.

The top two factors are going to be the variety of content available, and the cost of the service. Factors like ease of use and quality of viewing experience are going to be secondary, though Grove cites these two factors, along with the price of his service, as being the key attractions that will draw viewers to iflix.

That, and the entrepreneurial zeal of the 85-strong team he has built across the region to market and sell iflix.

For while some in the content industry feel that the secret sauce is going to be in the nature of the content deals that iflix signs with the studios, Grove himself believes that it lies in his and his team’s entrepreneurial zeal, as his Facebook status update on March 12 showed.

“Whilst we don’t have the cash balance of Singtel (Singapore Government), I firmly believe our hustle, balls, perseverance, entrepreneurial spirit and ROCKSTAR team will let us lead the entertainment revolution across Asia!” he posted.

Online video just got a lot more interesting in South-East Asia. Even if you don’t use any of the services, watch this space.

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KICKSTARTER CEO: “WE DON’T EVER WANT TO SELL OR GO PUBLIC”

CROWDFUNDING SITE KICKSTARTER ANNOUNCED IT IS REINCORPORATING AS A PUBLIC BENEFIT CORPORATION.

On Sunday, Kickstarter made a decision that appears to be in stark contrast to the usual trajectory of investment-chasing tech companies. The crowdfunding platform has elected to become a “public benefit corporation”—in other words, a company that is legally bound to prioritize its societal impact, and must be transparent about its progress year after year.

“We don’t ever want to sell or go public,” Kickstarter CEO Yancey Strickler told the New York Times. “That would push the company to make choices that we don’t think are in the best interest of the company.”

Instead, Kickstarter has moved one step beyond its designation as a B corporation—a title held by companies like online marketplace Etsy and eyewear startup Warby Parker. While Etsy, for example, is beholden to rules set by the B Lab organization, Kickstarter is now accountable to state laws. As B Lab cofounder Andrew Kassoy toldFast Company last year, “Benefit corporation is a legal status—like a C Corp or S Corp or LLC or partnership—conferred by a state.”

Opting to become a benefit corporation is still uncommon, in part because the designation is fairly new. In a blog post, the Kickstarter cofounders explain that their company is one of only a few that are prioritizing social responsibility over valuation:

Benefit Corporations are for-profit companies that are obligated to consider the impact of their decisions on society, not only shareholders. Radically, positive impact on society becomes part of a Benefit Corporation’s legally defined goals.

Kickstarter is excited to join a growing list of forward-thinking organizations — like Patagonia and This American Life — that have taken the big step to become a Benefit Corporation. While only about .01% of all American businesses have done this, we believe that can and will change in the coming years. More and more voices are rejecting business as usual, and the pursuit of profit above all.

Adopting a different strategy than Kickstarter, B corp Etsy went public in April at avaluation of $3.5 billion (though the company’s stock prices have since plunged, falling below even the IPO price tag of $16 per share). While socially minded, Etsy is unlikely to follow Kickstarter’s example; no public company has made the leap to designating itself a benefit corporation, likely because they are answerable to shareholders. Two years ago, baby food company Plum Organics did, however, come close: It became a benefit corporation under the watch of public parent company Campbell’s.

[via New York Times]

Number Of New Corporate VCs Set For New High In 2015

newcvcgrouplogos

2014 saw 28% year-over-year growth in corporate venture groups making their first investment.

First Data, Simon Property Group, Ping An Insurance, and Wipro are just a few of the large corporations globally that recently launched venture units to invest in startups. And they’re far from alone.

In the first 8 months of 2015, more than 50 corporate VCs have already made their first investment, more than 50 corporate VCs have already made their first investment, including Twitter Ventures and Workday Ventures, according to CB Insights data. That puts 2015 on pace to overtake 2014, when 70 new corporate VC units globally made their first investment.

The chart below shows the annual growth since 2009 of corporate venture groups by year of first investment. 2014 saw 28% year-over-year growth and 208% growth from 2010′s figure.

newcvcgroups

U.S. corporations make up nearly half of new CVCs since 2014

Breaking down the corporate VC groups that made their first investment since the start of last year, we see that 45% of the firms were made up of US-headquartered corporates. Japan- and Germany-headquartered companies rounded out the top three, with new CVCs including Line Ventures and Dentsu Ventures in Japan, and Bauer Ventures and CommerzVentures, among others, in Germany.

cvcgeonew

11 Early-Stage Southeast Asian Startups To Watch

cover photo seasia startups to watch

We used CB Insights Company Mosaic to find some of the hottest early-stage companies in Southeast

While China and India dominate the Asian tech landscape, startups in the region’s other emerging markets are increasingly being funded and gaining noticeable traction.

We used CB Insights Company Mosaic — which algorithmically assesses companies based on a variety of metrics including financing, hiring data, news sentiment, and more — to identify 11 hot early-stage (Angel and Series A) companies in Southeast Asia. The majority of these companies are focused on e-commerce or online marketplaces, including KFit, which provides multi-gym memberships, similar to the US-based ClassPass; as well as Pomelo, a fast fashion women’s apparel brand and marketplace focused on emerging Asian markets. In addition to the prevalence of e-commerce related companies, 7 of the 11 are based in Singapore.

The focus on e-commerce makes sense, since mobile is helping digital buying and internet penetration increase and proliferate throughout Asia. As these marketplaces and brands grow, the “picks and axes” companies (or providers of e-commerce/marketplace infrastructure and services) will grow with them. That’s the role of aCommerce, a Thailand-based end-to-end e-commerce platform. There’s also inventory-management startup TradeGecko as well as Ninja Logistics, a next-day delivery service company.

See below for the full list.

11 Emerging Early-Stage Southeast Asian Startups

Company Description Country Total Disclosed Funding ($M) Select Investors
Kfit Multi-gym membership platform Malaysia $3.3 500 Startups, Global Founders Capital, Sequoia Capital, SXE Ventures
TradeGecko Cloud-based inventory management software Singapore $7.2 Golden Gate Ventures, JFDI.Asia, Jungle Ventures, NSI Ventures
aCommerce End-to-end e-commerce platform Thailand $18.8 Ardent Capital, Asia Pacific Digital, CyberAgent Ventures, Inspire Ventures, JL Capital
BitX Bitcoin platform featuring wallet, exchange, and merchant services Singapore $4.8 Ariadne Capital, Bitcoin Opportunity Corp., Digital Currency Group, Naspers
Pomelo Fast fashion women’s apparel brand and marketplace Thailand $1.6 500 Startups, Fenox Venture Capital, Jungle Ventures, QueensBridge Venture Partners
ZipMatch Real estate marketplace Philippines $3.5 500 Startups, IdeaSpace Foundation, IMJ Investment Partners, Monk’s Hill Ventures
99.co Real estate marketplace Singapore $2.2 500 Startups, East Ventures, Fenox Venture Capital, Golden Gate Ventures, Sequoia Capital China
AppInTop System Mobile ad campaign management platform Singapore $6.0 Run Capital
DocDoc Online portal for rating, researching, and booking doctors Singapore $11.2 500 Startups, Hong Leong Financial Group, Jungle Ventures, SparkLabs Global Ventures
Ninja Logistics Next-day delivery services for e-commerce companies Singapore $2.5 Monk’s Hill Ventures
Pie Enterprise chat application Singapore $2.0 GREE Ventures, Publicis Groupe, Wavemaker Partners

BRINGING A SILICON VALLEY START-UP ATTITUDE TO THE JAPANESE MARKET

Jay Trinidad, McDonald's Japan
Before he took on the role of McDonald’s Vice President of Digital for Japan, Jay Trinidad worked at a series of small internet start-ups. He thrived on the fast pace, working in small groups and playing a big part in start-up success stories.

When the job possibility opened up, the Philippines-born Trinidad was excited at the potential of working for the biggest restaurant in the world but not entirely sure the fit would be right.

“Coming from start-up land, one of my biggest concerns was the pace of innovation,” he said. “It’s a big company.”

But he was intrigued by the possibilities of working for one of the world’s biggest brands. He relished the thought of working on projects of a massive scale, where one small idea can be implemented to have an enormous positive impact worldwide.

“I was also attracted to using online skills to drive offline business,” says Trinidad. “It’s new territory that hasn’t been 100 percent cracked yet.”

And he had a personal attachment: wonderful memories of McDonald’s where he ate his first-ever hamburger as a child. As he was growing up in Hawaii and later California, McDonald’s meant rewards for getting good grades at school, birthday parties and get-togethers with friends.

So he took the job and as it turns out, the role of McDonald’s Digital Lead for Japan feels like running a start-up within a larger corporation.

The Start-Up Atmosphere

“I’ve found that it’s moving as fast – if not faster – as my start-up life,” he said, having worked at Square, Gengo and Google. “Every week is a new week.”

Trinidad’s role is to look after McDonald’s digital properties in Japan, from mobile apps to internet presence and social media. This includes its website for mobile, tablet and PC, and social properties such as Facebook, Twitter and Line – all of which have huge markets in Japan.

Keeping up with Japan’s highly mobile-connected consumers is a big part of the job. It’s a market saturated with state-of-the-art phones and a place where people spend large amounts of time on the move, commuting on trains and using their mobile phones to stay connected. The mobile wallet, while new in many other markets, is a long-accepted and widely used payment method in Japan.

Taking the Digital Experience to the Next Level

Since his arrival in April, Trinidad oversaw the launching of the McDonald’s App that is now number one in the Food and Beverage category in Japan’s Apple App Store, with more than 10 million users – also making it the largest mobile app for any restaurant in Japan.

The McDonald’s mobile app has three core functions: a news function that allows users to read content and learn about new products and services; a promotion function where offers and discounts are distributed; and a store locator. The ability to pre-order and pay via the app is under development.

Next-generation offerings that he is working on include in-store, self-order kiosks – which are already common in Japanese ramen shops and other restaurants – and augmenting McDonald’s offerings, such as a digital Happy Meal that links toys with digital games and experiences.

McDonald’s Push for Mass Personalisation

McDonald’s push for ‘mass personalisation’ in customer service creates an overarching vision for the digital team. “McDonald’s is laser-focused on the customer-first experience. It’s about creating convenience at their fingertips and developing locally relevant and engaging apps.”

He adds, “Digital is fundamentally transforming the concept of convenience and speed. Digital marketers are constantly competing against time, in making online transactions faster and more intuitive.”

Trinidad thrives on the pace of the work.

Keep Experimenting & Learning

Leading the digital side of McDonald’s in Japan means keeping up with new and localised burgers, drinks and shakes. “There’s always something new – like a black squid ink burger, a teritama burger, a tsukimi burger, a McFizz, or a McShake. If you’re not used to that pace, it can be pretty daunting. To succeed, you need to embrace the pace and be constantly ready to take on new challenges. I find it very exciting.”

Just like in start-ups, Trinidad gets to build a digital team in McDonald’s Japan. “I get to start from scratch. For me, zero to one is a lot more interesting than 1000 to 2000.”

Also, he enjoys the freedom to try new things and experiment with fresh ways of delivering on the customer-first mission.

“To bring that Silicon Valley methodology and that three-month-old start-up feeling to a company that has been in Japan for 45 years, that’s the exciting part – and the challenging part.”

Tony Robbins has taught this productivity trick to clients ranging from Bill Clinton to Serena Williams

tony robbins

Courtesy of Tony Robbins

Tony Robbins.

Tony Robbins may be the most successful life coach on the planet.

He’s sold millions of books, videos, and audio recordings, as well as millions of tickets to his seminars. He’s personally coached everyone from former President Bill Clinton to tennis icon Serena Williams to revered hedge fund manager Paul Tudor Jones.

Although every coaching session is personalized, we asked Robbins for the top productivity trick he teaches clients.

He explained that “most people mistake movement for achievement,” thinking that writing up a long to-do list at the start of the day is the first step to success. “I teach people to become obsessed with outcomes instead of activities,” he said. He’s developed a simple process called the Rapid Planning Method (RPM) that anyone can use.

It consists of asking yourself the following three questions:

What do I want?

You’re setting yourself up for failure if you start with a step-by-step plan of action, Robbins said. You need to first determine what you’re setting out to achieve.

He illustrated his point with the example of his consultation with Clinton, who he first coached in 1993, when Clinton was about to be impeached in late 1998.

Robbins said Clinton told him his impeachment was going to happen, and he wanted advice on how to conduct himself. Robbins said he replied by saying “What should I do?” was the wrong question.

He said he told the President, “The question is, ‘What do you want?’ What is your outcome? Is your outcome to stay in office? Is your outcome to have a political legacy? Is your outcome to inspire people with what’s real? … What’s the result you’re after?”

Determine your objective before getting “bogged down in all the to-dos,” he said.

Why do I want it?

The next step is finding the reason why you want what you do.

“You can have all these things that you want, but if you don’t want them equally and you don’t have strong enough reasons, you’re just going to have these targets,” Robbins said. “Then you’re going to have no fuel to get there.”

Wealth-X estimates Robbins’ net worth to be about $440 million, but he grew up poor in downtown Los Angeles. He’s frequently said that the time his family received a donated Thanksgiving meal when he was a child was a pivotal moment in his life that showed him the positive impact an individual could have on other people.

He explained that when he decided as a young man that he wanted to become wealthy, the idea of the novelty of being rich would never have been a sufficient motivator. Instead, he defined his reasons for wanting the power of money, such as wanting to buy his mother a nice house,donate millions of meals to families who were in the situation he was once in, and enjoy a life where he didn’t need to worry about the last $20 in his pocket.

“I always tell people purpose is more powerful than the object,” he said.

What’s my massive action plan?

Only after determining the “what” and “why” can you move onto the “how,” which Robbins calls setting a “massive action plan.”

Robbins recommends creating a list of things to accomplish, and then editing it down to a point where it’s as tight as possible. He follows the Pareto principle, which states that 20% of actions are responsible for 80% of a plan’s effects. Creating a massive action plan entails cutting any minor benchmarks or instructions in your initial plan that will only hamper your progress moving forward.

Robbins said that the RPM process isn’t just for long-term planning, but rather becomes a way of life.“We’re just drowning in information; we’re starving for wisdom,” he said. “And the wisdom comes when you start getting clear about what you want and why you want it.”

approaching your work. It becomes especially clear when a myriad of distractions pull your attention in every direction on a daily basis.

“We’re just drowning in information; we’re starving for wisdom,” he said. “And the wisdom comes when you start getting clear about what you want and why you want it.

FOLLOW UP – A Key To The Largest IPO In The History Of The World

I met Scott Cutler through a friend IN THE EARLY 2000’S. When we first became acquainted, he was early in his career as an investment banker. I could tell immediately that Scott was an up and comer. He was based in New York city, a member of our mutual faith, a fellow lover of the game of golf and someone who was going to carve his name in the annals of business history. That was over a decade ago. Today, he has clearly done that.

On September 19, 2014, Alibaba – the Chinese Internet and Media giant went public on the New York Stock Exchange. Their stock was valued at over $200 Billion dollars. It was the most valuable IPO EVER.

And the man that got the call from Alibaba to make it happen – SCOTT CUTLER.

It was not that long ago that the call to take a tech company public on the NYSE would have never happened. It the 80’s and 90’s and into the early part of the 21st Century, the De Facto Stock Exchange for hot tech companies was NASDAQ. Scott Cutler helped change all of that for the New York Stock Exchange. And to be honest, I am not surprised.

Scott exemplifies all of the Six UP Principles that I espouse in my book –  “Up Your Game, 6 Timeless Principles for Networking your Way to the Top.” However, the thing that I have known Scott for best is his ability to Follow UP – principle #3 in my book.

I write there about how the ability to follow up is a lost art.  In our new world of social media, our ability to reach out and connect with thousands has improved like never before, but only a few FOLLOW UP. This new age of digital information increases our ability to make an initial connection, but it is the art of following up on that introduction which so many people fail to do.

Follow Up and Up Your Game

As I have watched Scott’s career blossom to become Executive Vice President and Head of Listings at the NYSE, I believe it is Scott’s ability to “Follow Up” that has been essential to his success. I cannot think of a time over the years of our interactions when it took more than a day to hear back from Scott on any issue. This is true despite the fact that Scott has a large family, is an active member of the Young Presidents’ Organization, Vice-Chairman of the Board of the NYC Mental Health Association, Board member of the Council of the Americas and the British American Business Council, and holds important roles in his church.

Scott is a great example of the adage: “When you want something done ask a busy person.”

From golf outings to political fundraisers to events on the floor of the New York Stock Exchange, Scott is always there and always following up. So when Fusion-io was thinking about going public, we thought of Scott and could not envision going with any of the other exchanges. Scott made our experience of going public truly one of the most memorable days of my life by ensuring that ALL details were attended to. He also is careful to remember folks. In the summer of 2013, he invited me to a golf outing with Steve Stricker the day after the PGA Golf championship. It was a great day…but then Scott went the extra mile. Within several weeks of the event held at Whistling Straits in Wisconsin, I received an absolutely gorgeous Photo Book from Scott containing dozens of photos of the day.

So when Alibaba needed a U.S. Stock exchange to make their shares available to members of the general public, they called Scott. And not surprisingly, he Followed UP, got the listing secure for the NYSE which led to this signature explosion of value. Here is a link to Scott Cutler talking about the seamless launch of Alibaba on the NYSE.

http://www.bloomberg.com/video/nyse-s-scott-cutler-alibaba-trading-debut-was-seamless-Mv~lXvZmRHKHmMyWNKAhYA.html 

Lesson: If you want to succeed in your career, be part of the select group of maybe 5% of the populace that follows up.  Further, make your follow up meaningful, memorable, and personal. And do it within 24 hours. Rediscover the art of the Follow Up and you can win in business.

Lesson: If you want to succeed in your career, be part of the select group of maybe 5% of the populace that follows up.  Further, make your follow up meaningful, memorable, and personal. And do it within 24 hours. Rediscover the art of the Follow Up and you can win in business.

http://www.davidbradford.com/largest-ipo-in-history/