2013 / 5月
而NEC在愛評網上看到最光明的前景是網路線上到線下的「O2O（Online To Offline）」新營銷模式。未來愛評網要幫助店家架設雲端客戶關係管理系統（CRM），當消費者從網路上被引導進店裡去消費後，店家還可以持續追蹤客戶的屬性，做餐點調整，或是利用愛評網發出新訊息、優惠券給客人，製造回流率。
Profits from “Word of Mouth”
Eric Lin /photos courtesy of Jimmy Lin /tr. by Josh Aguiar and Phil Newell
When Japanese IT juggernaut NEC Corporation invested US$5 million this past January into iPeen, a Taiwanese online culinary review site, it sent a veritable shockwave through the world of Taiwanese venture capitalism. It was the first time in recent years that an Internet startup had attracted so large a sum.
The company’s Chinese name derives from the word “critique,” and the website’s purpose is none other than to provide a virtual space for the time-honored Taiwanese penchant for exchanging culinary opinions. At any time or any place, with just a click of a button, people can search for good restaurants, almost like having a Michelin Guide at one’s fingertips.
Although iPeen began as a way for founder Sky Ho to impress his foodie wife, seven years on it has matured into one of Taiwan’s most promising online enterprises. It’s a real-life fairy tale and testament to love’s power to motivate.
Walking into iPeen’s Roosevelt Road headquarters in Taipei, one is struck by the prominence given to the vibrant color red, in contrast to the aloof chic projected by most tech companies. Since to Chinese this is the color of happiness and wealth, the company exudes a welcoming confidence that seems to say, “We’re here to help you make you rich and happy!”
The company office occupies 400 square meters and is home to 64 employees whose average age is a mere 28 years old. CEO Sky Ho, who was born in 1979, with his swarthy features and slightly blonde-tinted hair, himself gives the impression of a fresh-faced college student. “I’m 34 this year, so I’m to blame for raising the average employee age!” he chuckles.Word of mouth
This office receives over 100 million visits per month via cyberspace. Simply by visiting the site one can immediately gain an understanding of the business approach of this, Taiwan’s largest food review website.
The colorful images and taglines on the homepage are enough to make one drool in anticipation. “Better than sex: fresh salmon and succulent roe!” reads one tagline describing sashimi. “Super-sweet mouthwatering cotton candy!” runs another, recommending the exotic flavors of a Moroccan restaurant.
At the top of the homepage is a navigation bar with multiple tabs: search, hot picks, coupons, and maps, amongst others. Eateries, consumers, and reviewers are all brought together under the same tent. Consumers can let the experience of others point them towards quality dining; if they become members themselves, they can post their own reviews.
According to company statistics, a person’s decision to patronize an establishment is based 20–50% on consumer feedback. Moreover, true foodies have an insatiable need to share their dining experiences with others. Over 200 reviews consisting of both pictures and write-ups are uploaded to the iPeen site every day, and the duration of the average visit to the site is an impressive 20 minutes, all of which points to its addictive nature.
Their success at seizing this “word-of-mouth” profit opportunity is propelled by three forces: collective creativity, centripetal force, and centrifugal force.
The first is the power of collective creativity. Through a variety of different culinary activities, iPeen now has a network of users who are pro-active, adventurous, and novelty-craving. These people turn the “virtual” dining experiences of the website into real consumer behavior, then return to the Internet to post their reviews, creating a cycle of “virtual to real to virtual to real”—a spinning power generator driven by collective creativity.
iPeen then creates customized and integrated marketing for various brands and restaurants, linking up different business channels and focusing attention and commentary on specific activities. That’s the centripetal part. Finally, the centrifugal part is to disseminate “the word” via smartphones, Facebook, plurk and other media. The result is a win-win-win situation for restaurants, the company’s online audience, and iPeen.The power of love
iPeen officially went online in 2006, initially just as a stunt on the part of founder Sky Ho to attract the attention of a young woman, Ye Huiting, who was then his coworker at Yahoo!Kimo.
Ho laughs as he recounts how growing up in the environs of Taipei’s Hulin Street, which has a mind-boggling array of fabulous foods for sale, had made Ye very picky about eating. Every date therefore had to include some kind of imaginative cuisine just to keep her interested.
While struggling to appease Ye’s epicurean cravings, it dawned on Ho that while Taiwan certainly had enough online food articles, they mostly just consisted of descriptions and pictures. There was not, however, a more practically oriented website dedicated to consumer reviews and detailed information like the American website Yelp or mainland China’s Dazhong Dianpingwang. He began to ponder the possibility of creating a platform specifically for Taiwanese diners.
He was initially reluctant to follow through on his idea, but his elementary-school classmate Zhang Jiaming, founder of the iPart dating site, inspired Ho with a version of the “if you build it, they will come” speech. Ho thus began drawing up his plans for the site, assisted by Huiting, her twin sister Huiqing, and an IT savvy friend, Chen Yicheng.
In the beginning they rented a tiny office space in a sheet-metal building in Tianmu. With no money for air conditioning, they used electric fans to keep the computers from overheating. It was rough going at first, but fortunately all four partners were still living at home with their parents and they were all in the habit of bringing their own lunches from home, enabling them to subsist on a meager NT$5000 per month.
Both Ho and Ye, who is now his wife, graduated from the Department of Library and Information Science at Fu Jen Catholic University. Putting their academic training to use, they set up searches on iPeen based on the “multiple key words” technique used for searching master’s and doctoral theses. They were thus able to structure and categorize what had been an undifferentiated mass of information, which quickly set iPeen apart from other dining websites and drew virtually all the traffic their way.
But how could they make a profit? Ho and Ye had no choice but to hit the pavement and go old-school on sales.
The first day, they chose a street in Xinzhuang (a district of New Taipei City) with many restaurants and shops and, taking a side of the street each, hit more than 100 storefronts before calling it quits. After an exhausting day, between them they had found only a single eatery willing to provide data for their website.
“We started out thinking we’d get data from restaurants, and they’d also pay us to provide extra services for them through the website. But we found it a real challenge just to get information, much less persuade owners to pay any fee. The only thing that kept us going in those days was that at least our Internet traffic was increasing over time. Then in the third year, when we had almost lost hope, Google came to us out of nowhere and said they wanted to form a strategic partnership,” says Ho. Yahoo!Kimo was not far behind with the same request. Then came investments from CyberAgent Ventures and NEC, and doors began to open one after another, culminating in the scale of operations we see today.Snowballing revenues
Many people wonder how, out of all the vast number of new Internet ventures created over the years, iPeen was able to attract the attention of international investors.
“It’s the database!” says Ho, cutting straight to the heart of the matter. Venture capital companies care about three numbers: the number of restaurants in the database, the monthly number of unique visitors, and the profit potential.
In terms of unique visitors, when CyberAgent Ventures invested in iPeen back in 2011, the figure was a bit over 3 million per month, prompting CyberAgent’s then-astonishing investment of US$1 million. By the time NEC invested in 2013, the number of unique visitors per month had more than doubled, reaching 7 million. This proves that the company’s original decision to put all their effort into traffic flow and number of members was the correct one.
NEC saw that iPeen’s greatest potential lay in the novel marketing model of O2O (“online to offline”). In the future iPeen will help restaurants to construct cloud systems for “consumer relationship management” (CRM), so that after consumers are attracted via the Internet to go into the actual eatery and spend money, the restaurant will be able to follow up on those consumers’ characteristics and adjust their menus accordingly.
iPeen has two types of members. One is restaurant owners or representatives, more than 200,000 of whom are now iPeen members islandwide, and some of whom are fee-paying members. The other is consumers, of whom there are 240,000 (a consumer membership is free of charge). What an eatery gets if it is a fee-paying member is that iPeen will send out a staff member to help the restaurant figure out and highlight those features that will give the place cachet and appeal. Then iPeen gives free gift certificates to review writers, who dine there and write their reviews, which in turn start generating buzz about the spot.Credit the parents
“Right now iPeen’s annual operating revenues are in excess of NT$40 million, and we have been in the black for a long time," says Ho. “We began to collect fees from restaurant members only in 2010, and though revenues from this source in the first year were only NT$1.5 million, in the second year they skyrocketed to NT$5.5 million and then all the way up to NT$12 million in the third year.”
An even more important source of income is food brands like Coca-Cola and Domino’s. iPeen does special ad pages and tailor-made marketing activities for them, with revenues from this source being double those from members.
Thinking back on the course of their entrepreneurial adventure, Ho says the real key to success has been his parents’ trust.
“People of the older generation don’t use the Internet, and so to them it seems like something impractical and kind of illusory,” says Ho. But because his father was himself an entrepreneur in his youth—founding a commercial photography studio—Ho’s Dad not only did not criticize them, he actually offered them encouragement when he saw how hard they were working. “People who start their own businesses always learn more than people who just get office jobs, and even if they lose money, they won’t lose in terms of life.”
The successful people in any era are those who can identify major trends and ride them. The folks at iPeen identified two—the second wave of Internet entrepreneurship and the spread of interest among foodies for hunting down and trying new or noteworthy dishes—and not only got out on the crest of both, but even created an entirely new business model.