H.E.R.O.’s Journey in Tech (16 October 2018) – Trend Micro Redefines Endpoint Security with Trend Micro Apex One + Jeff Bezos: ”You have to find something where your particular life path has led you to see something in a particular way where you can pursue it and contribute to society.”

H.E.R.O.’s Journey in Tech (16 October 2018) – Trend Micro Redefines Endpoint Security with Trend Micro Apex One + Jeff Bezos: ”You have to find something where your particular life path has led you to see something in a particular way where you can pursue it and contribute to society.”


  • Trend Micro Redefines Endpoint Security with Trend Micro Apex One (BI)
  • Toyota and Line to offer voice-controlled AI navigation next summer (Japan Times)
  • Mitsui O.S.K. Lines joined forces with Weathernews to launch the Fleet Optimal Control Unified System (FOCUS), a project that will gather and apply ship operation data to ensure safer, more environmentally friendly ocean transport. (Ajot)
  • Cochlear’s next big breakthrough: 24/7 hearing for the profoundly deaf (AFR)

BATTSS – Baidu, Alibaba, Tencent, TSMC, Softbank, Samsung

  • Baidu leads new funding in NetEase Music (Technode)
  • Alibaba steps on investment pedal in India, eyeing expanding online retail; Chinese e-commerce firm to pump in more money into Info Edge’s Zomato (Nikkei)
  • SoftBank’s Son risks running short of good investments; Dull WeWork investment highlights dearth of shiny high tech targets (Nikkei)

FAANNMG – Facebook, Amazon, Apple, Nvidia, Netflix, Microsoft, Google

  • Apple buys music analytics company Asaii: Axios (Reuters)
  • Is Google’s search function about to end? Its push into AI suggests so. (AFR)
  • Google CEO says China search engine would serve 99 per cent of queries, takes a swipe at Baidu (SCMP)
  • Bond bears stalk a FANG, short Netflix debt (Reuters)

Asia Tech & Innovation Trends

  • China emerges as center of thriving used smartphone trade (Nikkei)

Global Tech & Innovation Trends

  • Cloud software firm Twilio to buy SendGrid in $2 billion deal (Reuters)
  • Adobe Remains a Creative Software King (Morningstar)
  • Walmart Plans Competitor to Amazon’s Video Marketplace (Bloomberg)
  • Airbnb bill may limit short-term rentals in U.S. capital (Reuters)
  • This Company is Fast Becoming the Warby Parker of Scrubs; Figs, a five-year-old startup has upended the medical apparel industry with direct-to-consumer scrubs and splashy marketing campaigns. This year, it’s on track to make $100 million in revenue (WSJ)
  • Robot Solves a Problem Kids Can’t: Cleaning Their Rooms; Tokyo-based Preferred Networks plans to sell robots that could handle tidying up and other household tasks (WSJ)
  • AI Driving Nearly All Emerging Technology, Gartner Says (WSJ)
  • 5G offers world’s biggest mobile market a gateway to the industrial internet (SCMP)


  • Jeff Bezos: ”You have to find something where your particular life path has led you to see something in a particular way where you can pursue it and contribute to society.”
  • Apple’s Jony Ive on the unpredictable consequences of innovation (Wired)
  • How to Become Obsessed with Your Goals and Demolish All Your Excuses (Ascent)
  • From start-up to scale: A conversation with Box CEO Aaron Levie (McKinsey)
  • If Humility Is So Important, Why Are Leaders So Arrogant? (HBR)

H.E.R.O.’s Journey in Tech (15 October 2018) – 5G will force cybersecurity to evolve, Trend Micro says + How to Be Free: An Ancient Guide to the Stoic Life by Epictetus (

H.E.R.O.’s Journey in Tech (15 October 2018) – 5G will force cybersecurity to evolve, Trend Micro says + How to Be Free: An Ancient Guide to the Stoic Life by Epictetus (


  • 5G will force cybersecurity to evolve, Trend Micro says (GN)
  • En-Japan introduces hiring tools (AIM)
  • Top player Yizhibo sold to Weibo as China’s live streaming frenzy cools down (Technode)
  • Afterpay, Zip await ASIC critique of buy now pay later (AFR)

BATTSS – Baidu, Alibaba, Tencent, TSMC, Softbank, Samsung

  • Baidu demonstrates self driving buses in China as the technology moves closer to commercialisation (SCMP)
  • Baidu Waimai rebrands as Star.Ele to target at higher-end food delivery market (Technode)
  • Tencent hit as China’s freeze on new video game titles continues; Revenues set to suffer with approvals not expected to resume until next year (FT)
  • Short Sellers Missed Tencent’s $250 Billion Party; They left a lot of money on the table as the Chinese technology behemoth slumped 44 percent from its peak. (Bloomberg)

FAANNMG – Facebook, Amazon, Apple, Nvidia, Netflix, Microsoft, Google

  • Apple buys music analytics company Asaii: Axios (Reuters)

Asia Tech & Innovation Trends

  • Chinese tech fundraising under pressure amid market turmoil; Investors expect slower and smaller IPO launches as valuations shrink (Nikkei)
  • India’s $5bn no-frills hotel start-up Oyo Rooms targets China; Founder says he runs world’s ‘most advanced hotel system’ but analysts warn on expansion (FT)
  • Relentless selling savages ASX tech stocks (AFR)


  • How to Be Free: An Ancient Guide to the Stoic Life by Epictetus (Amazon)
  • SFC chairman Carlson Tong exits after dishing out nearly HK$4 billion in penalties; Six-year tenture saw the former head of KPMG in mainland China casting the regulatory spotlight firmly on corporate fraud, insider dealing, poor new listings (SCMP)

Mainichi Comnet (TSE: 8908), Japan’s leading student dorm & student life online-to-offline platform – H.E.R.O. Innovators Insights from CEO Mamoru Ito

Mainichi Comnet (TSE: 8908), Japan’s leading student dorm & student life online-to-offline platform – H.E.R.O. Innovators Insights from CEO Mamoru Ito | H.E.R.O. HeartWare | 15 October

Searching for the right student residence apartment where you can get a sense of belonging and community when you are away from the safety and comfort of home can be challenging. In Japan, international student dormitories established by the universities are only 20% of the total number of foreign students and around 100,000 college student entrants journeyed from the regional areas to the Tokyo metropolitan area every year to also consider employment after graduation, putting further pressure to the supply-demand gap in the student residence market. Compounded to student’s headache is the search for a fulfilling student life and the search for a job after graduation.

Founded in 1979 by Mamoru Ito, Mainichi Comnet (“Maicom”) (TSE: 8908) operates Japan’s leading student dormitory online search & media platform under the websites 学生マンション.com/ “” (, 学生寮.com/ ”” (, 学生会館.com/ ”” (, 賃貸マンション.com/ ( and 全国一人暮らし.com/ “” ( which provides room search for over 330,000 student apartments and dormitories nationwide in cooperation with major real estate companies. The online platform is an integral part of Maicom’s unique integrated online-to-offline recurring revenue business model in “real estate solution” (73.5% of sales/79.9% of operating profit) and “student life solution” (26.5% of sales/20.1% of operating profit).

At its real estate solution business, Maicom manages and operates its own 9,200 rooms in 195 buildings located around the university (of which 84% or 7,550 units are rented by the sublease system vs 6,491 units in 2016, 8% are management consignment, 4% for in-house sales, and 4% are Maicom’s own fixed asset) in 10 major cities nationwide, though largely in metropolitan Tokyo where it claims a 51% market share, and it also deals with the resident recruitment of 18,300 students in 231 student halls throughout Japan. Maicom’s real estate solution business is relatively unaffected by economic trends with a solid revenue model to support a committed dividend payout ratio of 35% (2.6% dividend yield) and has achieved 100% occupancy rate for 13 consecutive years due to its:

(1) underlying strong demand for student apartments in the Tokyo metropolitan area, including from female college students and international student exchange programs, as compared to the small supply volume of student apartments,
(2) comprehensive online search & media platform for student resident recruitment,
(3) reputation for developing and designing quality, comfortable housing at convenient locations near the university/ schools,
(4) providing comprehensive services from solid security services and female-only dorms to daily meal services, etc, and
(5) partnership with 242 universities, junior colleges, vocational schools and preparatory schools in the Tokyo metropolitan area. KJ Holdings, the holding company for Kawaijuku, one of the three major Jap preparatory schools, became a strategic shareholder in 2011 and owns 23.95% of Maicom.

The high occupancy rate is also predictable in advance of the student resident’s withdrawal time, and there is also a special characteristic that Maicom can take enough time for resident recruitment, but it boils down to Maicom’s comprehensive know-how from real estate development to student resident recruitment to rental property management. Maicom has collaborated with University of Tokyo in the Mizutai International Student Dormitory large-scale project which is scheduled to be completed in the fall of 2019 and capable of accommodating 1,000 students and Maicom is responsible for the operation management after completion and this project is expected to be a flagship example highlighting Maicom’s knowhow to win other university dorm projects.

Maicom’s obsessive focus that is centered on the student originated from its Student Life business in extracurricular activities solution where it claims the overwhelming top share in the Tokyo metropolitan area in the niche travel field of training camp via its operating website 合宿旅行.com/ “” ( that allows users to search carefully selected camping facilities by individual purposes or by area. Maicom has recurring transactions with 100 universities nationwide and about 3,000 organizations in the university student market and handled 500,000 nights in training camps per year for total number of passengers and 7,000 vehicles for charter bus service per year.

Maicom expanded into supporting the recruitment of students to companies and providing employment recruitment information services through its wholly-owned subsidiary Works Japan ( Works Japan also support to create websites and pamphlets used by companies when hiring students; to hold briefings and events; and to provide a system to manage interactions with students who have applied. Works Japan also launched a “Campus Career” smartphone app in Sep 2018 to support its Campus Career website ( Most of Work Japan’s 750 customers are listed companies and could expand to medium-sized enterprises.

Mamoru Ito, founder of Maicom, shared his thoughts on the ennobling purpose of the company to support the youth to lead the future of the nation through his focused services for them from entrance (offering student apartment) to student life and exit (employment and recruitment support service): “Our company has been developing business that meets the needs of students, universities, business and society for a quarter of a century. We receive a great deal of trust not only from students, but also from universities, companies and real estate owners seeking effective use of real estate. Our business is born by matching the needs and solving the problem by providing a ‘one-stop student life solution’. We will seek to realize an increase in corporate value by drawing out the potential value of ‘real estate’. Mainichi Comnet is a coined word combining ‘communication’ and ‘network’ and expresses the basic attitude of our business. The services that we offer students is not just ‘living’ or ‘travel’ but for them to experience an active student life and to be active in society in the next few years. At first glance, the business domain of the Mainichi Comnet Group is seen as a collection of real estate, travel, online media, and human resources business categories, but what is common to all businesses is ‘youth who is responsible for the future of Japan’. That is the value our company produces and it is also what our student life solution business aimed at. We have consistently focus on students since our establishment and we have grown to be the only company supporting students from the entrance (offering student apartment) to student life (club activity related service) and exit (employment and recruitment support service). Our mission is to pursue the challenge to create new value for young people who will lead the future of Japan and those who cherish them, and aim to become a company that contributes to the regional economy and society. We aim to create a service that supports the youth who is responsible for the future of Japan and that which is a mission of our employees, and my role is to preserve such employees.”

With the compellingness and community edge in its unique integrated services in solving headaches for its customers in students, parents, universities and corporates, Maicom achieved a 75% and 92% absolute increase in sales and operating profit in the recent 5 years to US$157.2m and US$17.4m respectively for its latest 12 months results with a ROE (= EBIT/Equity) of 24%, propelling a 192% increase in market value over the past five years to US$146m, and a 858% rise since its JASDAQ listing in 2002. Maicom’s listing was promoted to the 2nd section of the Tokyo Stock Exchange in May 2018. On 5 Oct 2018, Maicom announced its 1Q (Jun-Aug) results in which sales increased 18.9% yoy to 5.244bn yen and operating profit rose 34.2% yoy to 711m yen as operating margin improved from 12% to 13.6%. Management medium-term business plan set the target sales of 18bn yen and ordinary income of 2bn yen on 31 May 2020. In December 2017, Maicom also signed a 10 billion yen credit line agreement with Mizuho Bank to secure long-term stable acquisition funds for future property acquisition in line with its medium-term management plan of adding 5,000 new units.

CEO Ito conveyed his confidence on his outlook for the student residence market and the company’s human resource solution business: “Despite being one of the world’s leading economic powers, the living environment of Japanese students is actually extremely poor, and the international student dormitories established by the country and universities are only 20% of the total number of foreign students which is around 240,000 currently studying in Japan. Based on the 300,000 international students planned by the government by 2020, the university is promoting globalization to be selected by international students, but the infrastructure development of international student residence is behind compared with Europe and the United States. Furthermore, about 100,000 college student entrants go from the regional areas to the metropolitan area every year to also consider employment after graduation, and they are starting to live by themselves. We believe that the social significance of private infrastructure development for young people who will be responsible for the next generation is great, we have been doing business with flexible ideas and actions. For example, in order to support the life of students who are forced to search for rooms in a short period of time after deciding to go to university in March, we established an online network that can search for a room smoothly, including a system that updates the vacancy status of each room. “Our plan ahead is to (1) accelerate the development of student real estate properties nationwide to add 5,000 new units, (2) promote collaboration and partnership with lease management company in each region, including M&A, (3) expansion in our human resource solution business to sales of 5 billion yen with more than 2,000 customers from the current 750 companies, (4) creation of new business areas, including the construction of a nationwide student network.”

We were intrigued that Maicom is able to win large-scale university dormitory projects, especially the upcoming international dorm of the University of Tokyo with 1,000 units in fall 2019 that will ensure a healthy jump in quality earnings, which differentiates it from its rivals such as JSB (TSE: 3480) and Kyoritsu Maintenance (TSE: 9616). CEO Ito commented: “The university has entered the era of entrance, the competition for acquiring students is intensifying. Among them, attracting international students is an urgent issue for universities. The costs and risks for universities themselves to prepare land, design and build buildings, and manage and operate university dormitory put pressure on university management. Even if the university side can provide students as much high-quality room at a reasonable price as possible, it was very challenging to create a mechanism of continuous business earnings. Maicom has supported the development and operation management of student dormitories developed by the university. We also participated in major projects such as Kyoritsu Women’s University dormitory (243 units) in 2005, Keio University Tsunashima Student Dormitory (125 units), Rikkyo University Shiina Town International Dormitory (71 units) and Tokyo National University of the Arts student dormitory (300 units) in April 2014 for 30 years in which we discuss rent revisions every two years. The design and functionality of the Tokyo National University of the Arts dormitory is compatible for the students as a place where communication and community are born, complete with exchange salon, a music practice room, an atelier, and a soundproof room where you can practice the piano in your room. We create new value beyond the traditional dormitory image. As a remarkable project in the future, the Mizutai International Dormitory of the University of Tokyo is scheduled to be completed in the fall of 2019. This international student dormitory is a huge project capable of accommodating about 1,000 people, developed mainly by the University of Tokyo, and Maicom is responsible for the operation management after completion. We expect it as a flagship example supporting university’s advanced efforts by developing, acquiring and operating know-how of Maicom. The 21st National Strategic Project for the revival of Japan in the 21st century, which was decided by the Cabinet in 2010, has the goal of “PFI (Private Finance Initiative) project to 10 trillion yen scale”, and there are business opportunities of 86 national universities nationwide. We are also considering participating in the PFI business of the national university student dormitory in cooperation with real estate management company nationwide, and the utilization of public land for our company will become a new promising market.”

When asked about his entrepreneurial journey and how he came to start Maicom, CEO Ito said reflectively: “I was born in Yokohama in 1951. After graduating from the department of sociology at Rikkyo University, I could not find a proper job. I found work at a transportation firm which I quit in two weeks, and I joined Yamazaki Bread. I decided to become a model employee who does not quit. I also reward myself by buying a stereo system with monthly installment. I left after some time because I was depressed. Maybe because you are doing something that is not suitable. Later I worked as a resort hotel manager for over two years. Together with my Rikkyo University friend Toshinori Hara, we started the company when I was 28 in the spring of 1979 with borrowings from my friends in the travel industry specializing in campus training for metropolitan college students. In the early 1980s, the tennis sports became a boom, and the need for campus training where female students also participated increased. I started with a niche business that I can become number one if I try hard. We developed a ‘student life solution business’ that expanded our business field from extracurricular activities support to support new graduates recruitment and development of rental housing for students. Our company’s strategy is developing and finding business opportunities for student needs. While studying the need in campus training for Tokyo metropolitan college students, we went on to do the planning and management of sports and music events, while expanding into business activities such as part-time job information and employment support services for new graduates, all the while building student networks that are unparalleled. Later we expanded into the development and management of student apartments that we did as our core business. We opened our first direct-run student apartment ‘Crest Maison’ in 1988. Currently, we provide effective solution not only for students but also for universities to streamline management and strengthen student services, and corporates and real estate owners to consider effective use of real estate. We listed the stock on the JASDAQ market in 2002.”

Being the only company in the industry to achieve the highest profit margin and ROE and a 100% occupancy rate (and consistently for a period of 13 consecutive years!), Maicom has proven its capabilities that the real estate solution business is not simply about the pouring of tangible capital but is more about the intangible know-how and innovation. CEO Ito elaborated on the real estate estate solution business: “Our real estate solution business is supported by student demand from a stable and increasing university entrance rate even in the case of declining birthrate, and there is an orientation towards metropolitan areas from regional areas as students consider employment after graduation. We have achieved a 100% occupancy rate for our self-managed property 13 consecutive years. For example, searching for a room for those who decided on a university by recommendation entrance starts from the fall of the previous year. We grasp accurately the number of graduates who are to leave next spring by grasping the year of graduation of student apartment residents, and start resident recruitment activities from September of the previous year. It is a fine-grained service that responds to student needs that can be realized only by specializing in the student market. Since contracts connect with parents of students, and a separate joint guarantor is required, the risk of unpaid delinquency is low and the rent collection rate also achieves almost 100%. This is a strength that we can realize a stable rental business with ‘rent guarantee’ to owners as a means of effectively utilizing the real estate in metropolitan areas and realize the monetization of owned real estate because the owner is released from the troublesome work of leasing business and can form good rental assets. The property acquisition is the method of borrowing or leasing all the rooms in bulk, and a method of guaranteeing rent for the owner for 10 years. As soon as the building is completed, we conclude a lease agreement with the leasing company for ten years and we have set conditions to buy buildings in 10 years. Rental income of the lease land is expected for the first 10 years, and as the depreciation of the building progresses, it is possible to buy the building cheaply after 10 years. The rent per unit area is higher than the family-type apartment, and the inquiries from landowners are increasing rapidly. For residents, ‘safe and secure’ is more important than anything else, especially for female students. Our student apartment is very popular because it is more than the typical one-room apartment in which you do not know what kind of people live next door. Also, student apartments with meals are popular because they wipe out worries on the health side that parents are concerned about.”

Real estate giants are also attracted to Maicom’s comprehensive strength in student residence recruitment through its online platform and its knowhow in managing the asset. Noteworthy in the corporate development of Maicom is that real estate giant Mitsui Fudosan (TSE: 8801) announced its first student dormitory project “College Court Heiwadai” in March 2017, which has 178 rooms on seven floors, and that it will lease all of them to the proven Mainichi Comnet who will operate and manage them. Mitsui Fudosan also announced its plan to build about 500 student dormitories in metropolitan Tokyo area in collaboration with Maicom.

On expansion outside the metropolitan Tokyo area, CEO Ito commented: “Although we have student apartments concentrated in the Tokyo metropolitan area, we are expanding nationwide. We have student apartments in Nagoya in March 2016, Kyoto in January 2017, Hiroshima in March 2017, Hokkaido in September 2017. Three dormitory properties, ‘College Court Kyoto Shodoguchiguchi (63 units)’, ‘College Court Hiroshima University (127 units)’ and “College Court Kyoto Kamogawa (76 houses)’ started in April 2017 and are going well. During the first half of the year ended May 2018, we acquire 3 properties in Tokyo, 1 property in Kawasaki City, 1 property in Hiroshima City. Furthermore, in the spring of 2018, ‘College Court Hiroshima University North’, the student dormitory with meals, is completed and has started operation.”

On the Student Life Business, CEO Ito commented: “College life is a place of learning for students to absorb various expertise, and it is also a place to experience communication with classmates and seniors of diverse values. The student life support business deals with about 3,000 organizations of 100 universities in the metropolitan area in outsourcing services essential for university life such as planning and arrangement of training camps, sports competitions and music events, overseas travel arrangements, costumes for rent, driver’s licenses, futsal court management, etc. We are working on creating a place where students who act actively through clubs, circles, seminars and other activities can self-grow as better workers and we help create career opportunities for hiring students. We emphasize the influence of extracurricular activities obtained at learning sites such as training camps. We have the overwhelming top share in the Tokyo metropolitan area in the niche travel field of training camp which has a clear purpose in practice and learning and not for sightseeing purpose, and the expertise required is different from general travel.”

CEO Ito also shared that they have expanded into the training camp driving school business: “We started a student recruiting business to the training camp driving school in Dec 2012. Although the number of acquirers of automobile driver’s license is decreasing compared to 10 years ago, it is now about 710,000 people per year. Among them, the number of acquirers including high school students and university students accounts for over 80% of the total. Furthermore, about 30% of them are residents of the Tokyo metropolitan area, so we can see that the target group overlaps with our group of customers. There are many students who think that it is necessary to acquire a driver’s license in job hunting activities and many companies require acquisition of driver’s license by the time they join the company and the proportion of students acquiring driver’s licenses by the time they graduate from university is expected to further increase. Therefore, we develop our own sales strategy by collaborating with our current student customer network and universities, and will proactively work as a growth strategy product of the student life support business. We also operate the website 合宿免許.com ( to strengthen Internet sales.”

When asked about the plan and prospects of the human resource solution business, CEO Ito commented: “We are promoting ‘Public Relations Project’ to encourage university students to understand enterprises and foster interests, We do the planning and production of websites, and the planning and operation of matching events to meet the demands of human resources required. Companies that want to widely convey specific corporate image at an early date have increased, and opportunities for our PR planning proposal have increased significantly. Our credibility as a company has improved significantly as the administrative secretariat of the ‘Nikkei College Café Academy’ conducted by Nihon Keizai Shimbun. This early career-supported course is aimed at students to communicate the appeal of work by social lecturers who are active in various fields and to train students’ view of their work. Sales of large-scale events (2,500 students, 100 companies) held thereafter and sales of small-scale seminar services, which are characteristics of our company, also performed well. Recruitment events and company briefing sessions by major companies will be held throughout the country. In order to effectively promote corporate understanding for students, it is of utmost importance to increase real dialogue opportunities such as exchange meetings with employees and site visits. Our recruitment outsourcing solution includes the automatic setting of the interview schedule, online exchange and matching of information and documents, in order to create opportunities for human resources and companies to fully face each other.”

“In Sep 2018, we released a new cloud-based support system on subscription service model called e2R PRO (, which is based on the new graduate recruitment screening management platform offered by our company. It provides unified management of all recruitment work with system service that optimizes application, selection and evaluation in hiring activities. We are aiming to support the improvement of the recruitment capabilities of essential companies by realizing operational efficiency. Application documents  such as resume, transcript, are efficiently managed online. As the opening rate of email is lowered, and the No. 1 communication tool for students is LINE, e2R PRO reliably delivers messages such as information briefings and application guidance with LINE. We will automatically calculate the selection schedule for each time and candidate object and realize timely recruitment management. Activity analysis becomes possible based on various indices such as academic, regional, application route, interviewer.”

Overall, while Maicom is not a pure-play prop-tech company like Zillow (NASDAQ: ZG), Redfin (NASDAQ: RDFN), Realogy (NYSE: RLGY), Lifull (TSE: 2120), REA Group (ASX: REA), Domain Holdings (ASX: DHG), Fang Holdings (formerly Soufun) (NYSE: SFUN), Rightmove (LSE: RMV), Scout24 AG (DB: G24), we believe that its unique integrated online-to-offline recurring revenue business model with compellingness competitive edge in serving a huge supply-demand gap is a bastion of stability in a red sea of hyper-competitive prop-tech landscape vulnerable to transactional volume declines and sentiments with rising interest rates, unlike Maicom.

We are impressed by the clear focus and obsessiveness of founder Mamoru Ito in centering the entire business model around well-being of the student from entry to student life and exit. Visionary founder bring about important experiences and make critical choices early in the organization’s history that leaves a lasting organizational imprint in the insurgent mission. This imprinting of experiences and values into the ethos and culture of the organization often initiates a development trajectory that produces persistent outcomes in our HERO Innovators. As summed up by CEO Ito who once experienced a loss of purpose before starting Maicom, having the emotional courage to act and serve the community is the essence of their philosophy since founding: “Our philosophy and code of conduct of 3C 4P (Chance, Change, Courage, Purpose, Possibility, Position, Priority) was forged when we were founded in 1979. ‘Chances are brought about by self-change (Change) and courage to act (Courage)’. Have a goal by themselves, act towards that goal and achieve. Employees themselves feel, think, create what will serve the customer. And the idea is sought from society, and it becomes business. This is the way of thinking. Mainichi Comnet respects employees who challenge with venture spirit. Even if it fails, employees who have continued their challenge and efforts are now active at various stages. We are looking for friends who can work hard together as our employees.”

Intrigued and want to read more? Download this week’s H.E.R.O. HeartWare: Weekly Asia Tech News with brief highlights of the inspiring entrepreneurial stories of tech leaders in Asia whom we have been monitoring over the past decade in our broader watchlist of over 200 listed Asian tech companies and our focused portfolio of 40 HERO Innovators who reveal their problems and successes behind building the company. Inspired by Brandon Stanton’s photo-journalistic project Humans of New York which collects and highlights the street portraits and moving stories of people on the streets around us who were doing things that changed lives and made a difference in the city but often went unnoticed, we have curated a collection of Hear the Heart of the H.E.R.O. stories on our website which we aim to update with refreshing and uplifting new stories weekly. Please check them out and give us your valuable feedback so that we can improve to make them better for you.

It started with rethinking a few questions. Question No. 1: Can the megacap tech elephants still dance? Or is this the better question: Is there an alternative and better way to capture long-term investment returns created by disruptive forces and innovation without chasing the highly popular megacap tech stocks, or falling for the “Next-Big-Thing” trap in overpaying for “growth”, or investing in the fads, me-too imitators, or even in seemingly cutting-edge technologies without the ability to monetize and generate recurring revenue with a sustainable and scalable business model? How can we distinguish between the true innovators and the swarming imitators?

Question No. 2: What if the “non-disruptive” group of reasonably decent quality companies with seemingly “cheap” valuations, a fertile hunting ground of value investors, all need to have their longer-term profitability and balance sheet asset value to be “reset” by deducting a substantial amount of deferred innovation-related expenses and investments every year, given that they are persistently behind the innovation cycle against the disruptors, just to stay “relevant” to survive and compete? Let’s say this invisible expense and deferred liability in the balance sheet that need to be charged amount to 20 to 30% of the revenue (or likely more), its inexactitude is hidden; its wildness lurks and lies in wait. Would you still think that they are still “cheap” in valuation?

Consider the déjà vu case of Kmart vs Walmart in 2000s and now Walmart vs Amazon. It is easy to forget that Kmart spent US$2 billion in 2000/01 in IT and uses the same supplier as Walmart – IBM. The tangible assets and investments are there in the balance sheet and valuations are “cheap”. Yet Kmart failed to replicate to compound value the way it did for Walmart. Now Walmart is investing billions to “catch up” and stay relevant. Key word is “relevancy” to garner valuation.

We now live in an exponential world, and as the Baupost chief and super value investor Seth Klarman warns, disruption is accelerating “exponentially” and value investing has evolved. The paradigm shift to avoid the cheap-gets-cheaper “value traps”, to keep staying curious & humble, and to keep learning & adapting, has never been more critical for value investors. We believe there is a structural break in data in the market’s multi-year appraisal (as opposed to “mean reversion” in valuation over a time period of 2-5 years) on the type of business models, the “exponential innovators”, that can survive, compete and thrive in this challenging exponential world we now live in. Tech-focused innovators with non-linear exponential growth potential are the most relevant multi-year investment trend and opportunity.  

During our value investing journey in the Asian capital jungles over the decade plus, we have observed that many entrepreneurs were successful at the beginning in growing their companies to a certain size, then growth seems to suddenly stall or even reverse, and they become misguided or even corrupted along the way in what they want out of their business and life, which led to a deteriorating tailspin, defeating the buy-and-hold strategy and giving currency to the practice of trading-in-and-out of stocks. On the other hand, there exists an exclusive, under-the-radar, group of innovators who are exceptional market leaders in their respective fields with unique scalable business models run by high-integrity, honorable and far-sighted entrepreneurs with a higher purpose in solving high-value problems for their customers and society whom we call H.E.R.O. – “Honorable. Exponential. Resilient. Organization.”, the inspiration behind the H.E.R.O Innovators Fund, (surprisingly) the only Asian SMID-cap tech-focused fund in the industry.

The H.E.R.O. are governed by a greater purpose in their pursuit to contribute to the welfare of people and guided by an inner compass in choosing and focusing on what they are willing to struggle for and what pains they are willing to endure, in continuing to do their quiet inner innovation work, persevering day in and day out. There’s a tendency for us to think that to be a disruptive innovator or to do anything grand, you have to have a special gift, be someone called for. We think ultimately what really matters is the resolve — to want to do it, bring the future forward by throwing yourself into it, to give your life to that which you consider important. We aim to penetrate into the deeper order that whispers beneath the surface of tech innovations and to stand on the firmer ground of experience hard won through hearing and distilling the essence of the stories of our H.E.R.O. in overcoming their struggles and in understanding the origin of their quiet life of purpose, who opened their hearts to us that resilience and innovation is an art that can be learned, which can embolden all of us with more emotional courage and wisdom to go about our own value investing journey and daily life.

As the only Asian SMID-cap tech-focused listed equities fund in the industry, we believe we are uniquely positioned as a distinctive and alternative investment strategy for both institutional and individual investors who seek to capture long-term investment returns created by disruptive forces and innovation without herding or crowding to invest in the highly popular megacap tech stocks, and also provide capital allocation benefit to investors in building optionality in their overall investment portfolio.

The H.E.R.O. HeartWare Weekly highlights interesting tech news and listed Asian emerging tech innovators with unique and scalable wide-moat business models to keep yourself well-informed about disruptive forces and innovation, new technologies and new business models coming up, and the companies that ride on and benefit from them in some of the most promising areas of the economy in Asia as part of our thought leadership for our ARCHEA Asia HERO Innovators Fund to add value to our clients and the community. Hope you find the weekly report to be useful and insightful. Please give us your candid feedback and harshest criticisms so that we can improve further to serve you better. Besides the BATTSS (Baidu, Alibaba, Tencent, TSMC, Softbank, Samsung), do also tell us which Asian tech entrepreneurs & CEOs whom you admire and respect and why – we will endeavor to do up profiles of them for sharing with the community. Thank you very much and have a beautiful week ahead.

Warm regards,
KB | | WhatsApp +65 9695 1860

H.E.R.O.’s Journey in Tech (13 October 2018) – Delta Electronics September revenues hit record + Y Combinator’s Daniel Gross: Dreams and Determination

H.E.R.O.’s Journey in Tech (13 October 2018) – Delta Electronics September revenues hit record + Y Combinator’s Daniel Gross: Dreams and Determination


  • GoerTek has become the first of Apple’s leading equipment suppliers to confirm plans to shift production out of the country to avoid being caught up in the escalating trade war between Washington and Beijing. (Nikkei)
  • Chinese Medical Cosmetology Platform SoYoung Seeks For US IPO (CMN)
  • Delta Electronics September revenues hit record (Digitimes)
  • Singapore-based VHQ Media purchased a 70% stake in Beijing Jupiter Cultural Media; the extension into TV dramas through the US$25.1m deal would help it leverage its strengths in movie production, special effects, post-production and 3D animation (Taipei Times)
  • Afterpay, Zip await ASIC critique of buy now pay later (AFR)

BATTSS – Baidu, Alibaba, Tencent, TSMC, Softbank, Samsung

  • Alibaba merges food delivery units and Koubei amid price war with Meituan in China’s on-demand market (SCMP); Alibaba announces a challenger to newly-listed Meituan (memo included); New lifestyle platform is here to bring up the stakes in China’s food delivery space. (KRA)
  • TSMC to be only supplier of Apple A13 chips in 2019 (Digitimes)

FAANNMG – Facebook, Amazon, Apple, Nvidia, Netflix, Microsoft, Google

  • How Netflix Expanded to 190 Countries in 7 Years (HBR)

Asia Tech & Innovation Trends

  • Indonesia’s Bukalapak connects kiosk shoppers to the web (Nikkei)

Global Tech & Innovation Trends

  • Where Fitbit’s Next Round of Growth Will Come From (Barron’s)
  • Cokes, smokes and clicks: How Oxxo corner stores are cashing in on Mexican e-commerce (Reuters)
  • A tech boom in Pittsburgh brings hope and angst (Reuters)
  • French startup offers Asia an AI weapon against knockoffs; Forgery-proof tabs let consumers check authenticity, from luxury bags to wine (Nikkei)
  • The Key to Autonomous Driving? An Impossibly Perfect Map; Self-driving cars may eventually work together to create nearly real-time maps. But we’re not there yet. (WSJ)
  • In Fintech’s Race for Customers, Adyen Lands Gap’s EU Business (Bloomberg)


  • Y Combinator’s Daniel Gross: Dreams and Determination (DP)
  • This Texas Finance Professor Sifts Data for Signs of Rigged Markets (Bloomberg)

H.E.R.O.’s Journey in Tech (12 October 2018) – Trend Micro Brings Its Unified Threat Management Solution to North America + Time Horizon vs. Endurance

H.E.R.O.’s Journey in Tech (12 October 2018) – Trend Micro Brings Its Unified Threat Management Solution to North America + Time Horizon vs. Endurance


  • Trend Micro’s four pillars of cybersecurity strategy (SB); Trend Micro Brings Its Unified Threat Management Solution to North America (BW)
  • UK-based Orion Electrotech announced it is has completed the sale of a majority stake in the business to TechnoPro Holdings Inc., a Japan-based technology-focused staffing and services company (SI)
  • Tencent Music will reportedly postpone IPO due to global market sell-off (CNBC)
  • Chinese streaming platform NetEase signs copyright license agreement with Loen Entertainment (PI)
  • Flexium revenues surge in 3Q18 (Digitimes)
  • Australia’s Crime Stoppers has appointed Citadel Group to build out its safety management platform, Keep Us Safe vResponder, specifically around the needs of Crime Stoppers and its network (ZDnet)

FAANNMG – Facebook, Amazon, Apple, Nvidia, Netflix, Microsoft, Google

  • Amazon Owes Wikipedia Big-Time; Smart speakers are taking advantage of the free labor of Wikipedia volunteers. (Slate)
  • The high-risk, high-reward world of selling stuff on Amazon (CNN)
  • How Amazon Is Disrupting These 6 Sectors (Barron’s)
  • Netflix Isn’t Invincible (AA)

Asia Tech & Innovation Trends

  • GoGoVan CEO says whoever adopts autonomous vehicle technology first will dominate logistics; Autonomous driving technology will enable more efficient and affordable delivery of goods (SCMP)
  • India’s Flipkart confident of bumper sales season; says Amazon losing relevance (Reuters)

Global Tech & Innovation Trends

  • ANGI Homeservices to Buy Handy to Dominate Home Renovations (Bloomberg)
  • Bumble Owner Targets Nasdaq IPO to Become World’s Top Matchmaker (Bloomberg)
  • US startup steals march on Amazon with grab-and-go shopping in Japan; Standard Cognition touts ‘much cheaper’ AI-based solution amid labor shortage (Nikkei)


  • Time Horizon vs. Endurance (Morgan Housel)
  • Costco’s secret weapon: Food courts and $1.50 hot dogs (CNN)

H.E.R.O.’s Journey in Tech (11 October 2018) – Altium Disrupts PCB Design + Delisting of 23 Chinese firms due to accounting fraud etc in Korea costs investors W270b

H.E.R.O.’s Journey in Tech (11 October 2018) – Altium Disrupts PCB Design + Delisting of 23 Chinese firms due to accounting fraud etc in Korea costs investors W270b


  • Uniqlo-owner Fast Retailing to invest $885 mln in warehouse automation and teams up with logistics firm Daifuku (Reuters)
  • China Lithium King Tanks in Hong Kong Debut Amid Stocks Rout (Bloomberg)
  • Altium Disrupts PCB Design (EEJ)

BATTSS – Baidu, Alibaba, Tencent, TSMC, Softbank, Samsung

  • Tencent’s Worst Investment Has Been Its Own Shares; The Internet giant has lost an annualized 85 percent over the course of its six-week-long buyback adventure. (Bloomberg)
  • Tencent VC Arm Is Said to Seek a New Fund of Over $650 Million (Bloomberg)
  • SoftBank in danger of over-WeWorking itself (Reuters); WeWork and SoftBank Need Each Other; One of these companies enjoys growth, the other has money. Both are heavily reliant on faith. (Bloomberg)

FAANNMG – Facebook, Amazon, Apple, Nvidia, Netflix, Microsoft, Google

  • The Battle for the Home (Stratechery)
  • Apple to buy part of supplier Dialog’s business in $600 million deal (Reuters)
  • Apple streaming-TV service to be free for device users: report (MW)
  • Chipmaker Nvidia to supply computer for Volvo’s upcoming vehicles (Reuters); Nvidia aims to woo business analysts with new software (Reuters)

Asia Tech & Innovation Trends

  • China’s grip on electronics manufacturing will be hard to break; Will the supply chain bifurcate, between East and West? (Economist)
  • Music education platform Finger wins RMB 100 million Series B to expand into offline market; Finger, launched in December 2015, offers online courses of more than ten instruments. (KRA)
  • Chinese lidar maker RoboSense raises US$45m in biggest fundraising round among local peers (SCMP)
  • Education, enterprise-oriented services and AI are recession resistant: says the investor behind Didi & Ofo Allen Zhu (KRA)
  • Infographic | GGV on investing education tech startups (KRA)
  • Snapdeal 2.0 faces a new world order in Indian e-commerce (qz)
  • Bridestory launches Parentstory, an online marketplace for kids activities (e27)
  • Go-Jek and its tech expansion strategy in SEA; How Go-Jek uses a feedback loop process to build and collate data to understand consumers needs and launches 18 verticals. (KRA)
  • Online payments still a challenge for Southeast Asia’s tech players (SCMP)

Global Tech & Innovation Trends

  • Zuora Plans a Partnership With Amazon Pay (Barron’s)
  • Boss Talk: Slack’s CEO Wants to Unshackle You From Email; Slack, valued at $7 billion in a recent fundraising round, has resisted going public-though that could change; Stewart Butterfield talks about how he works (WSJ)
  • The untold story of Stripe, the secretive $20bn startup driving Apple, Amazon and Facebook; Patrick and John Collison have democratised online payments – and reshaped the digital economy in the process (Wired)
  • Walmart Cuts Online Video Deals in Bid to Become Entertainment Hub; Retail giant teams up with MGM and a video startup in its rivalry with Amazon; first up is a remake of ‘Mr. Mom’ (WSJ)
  • Snap Is Making a Big Bet on Grabbing Eyeballs With Original Content (Barron’s); Snapchat announces new scripted shows to win over users (Reuters)
  • Uber’s Junk Bond Is an Entree to the Main Event (Bloomberg)
  • Tech’s $900 Billion Rout Is Price of Earnings Becoming Ordinary (Bloomberg)
  • Chipmaker Micron to invest $100 million in artificial intelligence companies (Reuters)


  • Delisting of 23 Chinese firms due to accounting fraud etc in Korea costs investors W270b (Investor)
  • A proposal by HKSE that listed companies suspend share trading immediately if auditors refuse to give their financial statements a clean bill of health could lead to an increase in tensions between firms and auditors (SCMP)
  • Hong Kong markets watchdog to sue 60 companies and individuals for corporate fraud in first half of 2019 (SCMP)

H.E.R.O.’s Journey in Tech (10 October 2018) – Trend Micro is a AWS Marketplace vendor partner that has been instrumental in helping AWS create the latest Consulting Partner Private Offers + Borges on Turning Trauma, Misfortune, and Humiliation into Raw Material for Art

H.E.R.O.’s Journey in Tech (10 October 2018) – Trend Micro is a AWS Marketplace vendor partner that has been instrumental in helping AWS create the latest Consulting Partner Private Offers + Borges on Turning Trauma, Misfortune, and Humiliation into Raw Material for Art


  • AWS Marketplace Now Empowering Authorized Partners To Create Custom Software Solutions; Trend Micro is a AWS Marketplace vendor partner that has been instrumental in helping AWS create the latest Consulting Partner Private Offers. (CRN)
  • Looking for the music in Tencent Music (Midia)

BATTSS – Baidu, Alibaba, Tencent, TSMC, Softbank, Samsung

  • China’s Banking Showdown: WeChat vs. 3 Million Bank Tellers (Bloomberg)
  • SoftBank Discusses Taking Majority Stake in WeWork; Investment could total between $15 billion and $20 billion and would likely come from SoftBank’s Vision Fund (WSJ)

FAANNMG – Facebook, Amazon, Apple, Nvidia, Netflix, Microsoft, Google

  • All the ways Amazon’s AI brought me the socks I am wearing right now (CNN)
  • Google launched new mobile and home gadgets aimed at ensuring the voice-controlled Google Assistant is never out of shouting distance. (WSJ)

Asia Tech & Innovation Trends

  • Clouds gather over Chinese tech start-ups’ convertible debt sales; What was once a sure-fire arrangement could end up with investors writing off bets (FT)
  • Yunfeng, Advantech Lead $300M Round In China’s Airbnb Copycat (CMN)
  • Chinese game which simulates what it’s like to be a parent tops Steam charts, beating Grand Theft Auto (SCMP)

Global Tech & Innovation Trends

  • Spotify Has Upside, but Not Where the Market’s Looking (Barron’s)
  • Lyft will pay you to ditch your car. will it work? (Wired)
  • Why It’s Less Hip To Be Square; The payments company, along with fintech peers, is priced for near perfection despite the likelihood of complications to its lending model (WSJ)
  • Snap Is ‘Quickly Running Out of Money,’ Analyst Says (Bloomberg)


  • Borges on Turning Trauma, Misfortune, and Humiliation into Raw Material for Art (BP)
  • Disney’s secret: marketing mindset, storytelling and trust (AFR)
  • Three Ways To Use The Power Of Persuasion In Marketing (Forbes)
  • The Hero In All Of Us (Medium)
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