The BitPinas Webcast: Dominating One Region Before Going Global
Shi Khai Wei and Yuji Kumagai join BitPinas Editor-in-Chief Michael Mislos to discuss how web3 startups can establish themselves within a niche and leverage geographical trends before going global.
BitPinas is the leading cryptocurrency publication in the Philippines, founded and led by Michael Mislos, to facilitate relevant and timely discussions on cryptocurrency in the country. Supporting this mission is The BitPinas Webcast, which serves as a platform for direct dialogue with leaders of the crypto landscape.
In this webcast, Michael was joined by Shi Khai Wei, co-founder of LongHash Ventures, a web3 fund and accelerator with investments in projects such as zkSync, Polkadot and Balancer, and Yuji Kumagai, the General Partner at Emoote, a web3 fund based in Singapore that has invested in organizations such as YGG Japan, BreederDAO and STEPN.
During the discussion, Shi Khai and Yuji talked about when web3 businesses should consider raising or reducing expenses, especially if they are not close to generating revenue and have only one year of runway. They also share various strategies for extending runway, such as taking on advisory roles in the same sector to gain new insights applicable to their current businesses. They also delved into the regulatory environment for crypto in Asia, highlighting the favorable stance in countries like Hong Kong, Singapore and Japan, which are providing licenses to exchanges.
The following excerpt features Michael discussing how Yield Guild Games (YGG) expanded its business from its foundations in the Philippines by partnering with a variety of games from different parts of the world. They also emphasize the importance of leaning into geographical advantages and user personas that define the initial user base, as seen with Axie Infinity and YGG leading the adoption of web3 gaming and GCash and Coins.ph playing a pivotal role in facilitating the remittances sector in the Philippines.
Listen to the full recording on YouTube.
The BitPinas Webcast: How Web3 Founders Can Raise Funds Amid The Bear Market
Michael (36:17): Now we go to the Philippines and also geographic trends. So my question here is that, for example, there are companies like YGG, which is a Filipino-founded company, but they have investments internationally, right? And, also, there are local companies with local investors. So in web3, are there geographic trends when it comes to how you invest? Or do you make sure that these companies are in Singapore? Or there's really no such position at all? Shi Khai, what's your answer to that?
Shi Khai (37:02): So there are two sides to the answer. On the one hand, crypto is fundamentally mostly digital and, therefore, by nature, global. But at the same time, everybody has their own unique positioning. Be it where you grew up, where you studied, where your network is, or who are the users that you're targeting? Your initial group of users that love your product — and so that has to start somewhere. Typically, it is better to be more focused on a particular niche or segment and be very dominant in that niche before you expand to the global scene. So in that sense, certainly, one way to focus is on a particular geography, if you have a very strong community or network or people from a particular country love you.
Let's say you're a Filipino founder, or let's say you used to run BitPinas, and now you incubate a new project, and it’s like, “Hey, this new project, I can immediately share it with the huge community that already knows me.” Then certainly, it's going to have an effect on the positioning of your project. Now, specifically for the Philippines, I think the audience and you will be very familiar that the main thing is we've seen huge adoption from the gaming sector, in particular, Axie and YGG, and then from there branching off to other games. And we also see that there's a huge remittance sector as part of the economy, and therefore, a natural use case for crypto is for overseas payments or transfers. And that's why you can see things like GCash or Coins.ph doing well in the Philippines.
So I would say that if you are focusing on or if your stronghold or your base is a particular geography, then tap into the natural advantage and the user persona of that geography and win that market. And from there, you can then go global. So certainly, if you're a Filipino founder, tap into this gaming trend, tap into the social trend, the payments and the familiarity with crypto. And that will certainly drive your growth and popularity, and from there, you can use that critical mass to then propel.
Michael (39:44): Alright, thank you so much, Shi Kai, that was very comprehensive. We have seen companies here, web3 or crypto companies, who have, as you mentioned, established a pace here and then leaped from Asia or somewhere else. Yuji, do you have anything to add? Does investing have any geographical restrictions?
Yuji (40:10): For us, one of the biggest keywords is enterprise. For example, Japanese or Korean enterprises, from the mobile game companies to the telecom companies or software hardware companies, they're very aggressive in getting in touch with web3 — after the FTX collapse, actually. So that will be the biggest chance, in the Asian perspective. They also invest in web3 projects even by the token round. So that's a good opportunity, and also to get in touch with more developed countries.
And of course, in the Philippines, you have GCash and Globe working with some of our portfolio companies as well. That's a very big chance for startups to acquire more web2 users or more mass users. So that's another perspective. Probably five years ago, in the last cycle, there were no enterprises, only crypto natives, right? It's the biggest difference and also the biggest chance.
You can watch the full recording on X.
The YGG Web3 Games Summit (W3GS) has just kicked off! Catch Shi Khai, Yuji and Michael at the conference on November 21-22, 2023, at Shangri-La The Fort, Manila, or watch the livestream on the YGG YouTube channel.
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