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Marketrevolution stayhungrystayupdated-startupentrepreneurs-131205053654-phpapp01 Marketrevolution stayhungrystayupdated-startupentrepreneurs-131205053654-phpapp01 Presentation Transcript

  • STARTUP & THE NEW ENTREPRENEURS 28.11.13
  • Where does this story start? MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 2
  • From idea to exit This is the story of Natalie & Simon Source: Natbat, sept 13. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 3
  • From microwave to Culatello The history of Eataly Source: Dissapore, aug 2012; La Stampa, jul 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 4
  • What do they have in common? Testo slide They are STARTUPS Source: MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 5
  • A skyrocketing interest Media, blog, social, TV, newspaper, magazine... “startups” but is it just a buzzword? Source: Google Trends, 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 6
  • The future of our economy relies on the imagination of our entrepreneurs Barack Obama Source: Whitehouse, feb 2009. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 7
  • Ok, but what's new around here? Long story short 1950-1970 The early days 1973-1998 The golden age 1998-2000 dot-com Bubble 2004-today The “new wave” There’s something new (and more) Source: Wikipedia, 2013; Geekwire, sept 2011. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 8
  • 3 drivers Economic • • • • Economic Crisis Youth unemployment Failure of the traditional business models Economic pressure from emerging markets Cultural • • • • • Mixture of counterculture utopias and neocapitalism optimism Loss of authority of the institutions Craving for meaning and realization Cult of failure Cooperative practices Technological • • • Exponential growth in various technologies Know-how sharing Development of a global real-time communication network Source: Wikipedia, nov 2013; Forbes, nov 2013; Doppiozero, oct 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 9
  • The reasons why Silicon Valley was (and is) the epicenter Where everything was born Place Values “Resources” Ultraliberalism Colleges Research centers Labs Hippie culture Technology Technology as a Venture capital religion Cult of failure Lean juridical system “Do than discuss” Source: MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 10
  • What is the startup revolution? MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 11
  • A global community of people who, relying on their creativity, skills and commitment, create new TITOLO organizations as a tool to disrupt conservative paradigm, solve global problems and create value for themselves SOTTOTESTO and the community itself. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 12
  • The new paradigm from execution to #exploration from management to #vision from retention to #disruption from profit to #value MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 13
  • What is a “startup”? MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 14
  • A human institution designed to deliver a new product or service under conditions of extreme uncertainty. Eric Ries Source: Lean Startup, 2010.. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 15
  • IT’S ABOUT PEOPLE INNOVATION MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS RISK 16
  • IT’S NOT ABOUT SIZE INDUSTRY MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS DIGITAL 17
  • How does this work? MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 18
  • The startup framework An highly connected ecosystem Source: Market Revolution, nov 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 19
  • Institutions Where ideas and people come from Colleges, research labs, business schools, foundations, public institutions Source: Entrepreneur.com, 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 20
  • Community Networking is the Word Founders, coders, designers, makers, mentors, angels Source: MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 21
  • Media Not only the specialized ones Websites, blogs, magazines, webzines MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 22
  • Events Where you get to know and be known Fairs, events, competition, hackathons, demo days MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 23
  • Services & support skills and services to run a company Finance, legal, administration MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 24
  • Spaces & places Where companies are built and can share ideas, experiences, skills and network Coworking, fablabs MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 25
  • INVESTMENT & CORPORATE Let’s focus on MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 26
  • Venture funding works like gears. A typical startup goes through several rounds of funding. A each round you take just enough money to reach the speed where you can shift into the next gear. Paul Graham Source:Paul Graham, nov 2005. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 27
  • Let's start a company two friends, an idea This guy This girl MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 28
  • Let’s follow the story of a (imaginary) startup called: STARTUPPERWARE Source: Paul Graham, nov 2005. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 29
  • Pre-seed round The first funding aimed at company set up, prototyping and living expenses Late stage Goal: - Fine tuning of the idea - Build the prototype A-B-C round Early stage Timing: 3 months Seed Pre-seed MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS STARTUPPERWARE 30
  • Pre-seed round Friends & Family ≈15k 20% 5% of the equity Option pool Pros: easy to find, no interferences. Cons: mix together business and personal life, no business network, not accredited as investors. Source: Funders and Founders, may 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 31
  • Pre-seed round Grants & Competitions Pros: smart money, visibility and PR, few constraints. Cons: no business network. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 32
  • Pre-seed round Crowdfunding Pros: no constraints, awareness and PR. Cons: hard to get, no business network, high expectations. Source: Startupbro, 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 33
  • Pre-seed round Key concepts Burn rate - monthly cost of mantainance of the company. Tells you when you are running out of cash. Option pool - Shares of stock reserved for employees of a private company. Are used to attract talents. The amount of stock an employee gets decreases polynomially with the age of the company. Source: Investopedia, 2013; Paul Graham, nov 2005. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 34
  • Seed round The first boost to build the company Goal: concept validation - Minimum Valuable Product - Business plan: value proposition, target, maket size, revenue model, competitors, competitive advantage Late stage A-B-C round Early stage Timing: 3-6 months Seed STARTUPPERWARE Pre-seed Source: Techinasia, dec 2012. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 35
  • Seed round Incubators/accelerators Firms that offer small amounts of funding, working spaces, business and technical advisorship, staff services (PR, lawyers, accountants, etc), networking. People 15-100K Main focus Funding Big batch 5-30% Model Equity Source: Funders and Founders, may 2013. Goal: profitable disinvestment of the shares MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 36
  • Seed round Incubators/accelerators Pros: low control over the startup, easy to reach, standardized investment process, personal relationship, access to VC network. Cons: Small funding, strong competition for “brands”, lower commitment. Source: Forbes, apr 2012, Startup Weekend, 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 37
  • Seed round Startup foundries Organizations which internally generate ideas for new startups and hire people to develop them. Source: Bernardi, nov 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 38
  • Seed round Key concepts Equity - stocks or any other security representing an ownership interest. For a startup is one of its main assets. Business model - how an organization creates, delivers and captures value (economic, social, cultural, or other forms). Pivoting - structured course correction designed to test a new fundamental hypothesis about the product, strategy and engine of growth. Track record - the percentage return of invested assets. Source: Investopedia, 2013; Business Model Generation, 2013; Grasshopperherder, 2013; Lean Startup, 2010; Investment law group, 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 39
  • Early stage round It’s time to make things seriously Goal: customer validation - Generate traction - Generate revenue - Late stage Hiring staff A-B-C round Early stage STARTUPPERWARE Timing: 12-18 months Seed Pre-seed Source: Techinasia, dec 2012. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 40
  • Early stage round Angel investors Rich people who invest in new companies. Goal: invest in startups with high-speed growth market captivity up to 200k 15-20% Main focus Funding Equity Pros: SME, networking, mentoring, less investment constraints. Cons: potential issues for subsequent rounds, push to exit, less reputation to protect, involved in the management. Source: Paul Graham, nov 2005. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 41
  • Early stage round Key concepts Accredited investors - people with over a million dollars in liquid assets or an income of over $200,000 a year. Evaluation - “in early stage investing, valuations are voodoo” Exit strategy - is the way of "cashing out" an investment. Source: Paul Graham, nov 2005; Investopedia, 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 42
  • Series A-B-C round Grow. And keep growing. Goal: from revenue to profit - Scaling business - International expansion - Late stage Hiring executive A-B-C round STARTUPPERWARE Early stage Timing: 1-2 year Seed Pre-seed Source: Techinasia, dec 2012; Wikipedia, 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 43
  • Series A-B-C round Venture capital Investment firms that manage, either private or general funds, in equity stakes of high-risk/high-return ventures. Goal: cash-out with a strong multiplier (2-3x) Exit > 1 million Focus Funding Mgmt fee 10-40% Model Equity Source: Paul Graham, nov 2005. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 44
  • Series A-B-C round Venture capital Pros: capital, experience, network. Cons: control on the management, strict regulation on investment. Source: Paul Graham, nov 2005. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 45
  • Series A-B-C round Key concepts Term sheet - summary of what the deal terms will be when and if they do a deal. Due diligence - the background check of the business, technological, financial and legal aspects of the company. Diluition - reduction in the ownership percentage of a share of stock caused by the issuance of new stock. Source: Paul Graham, nov 2005; Investopedia, 2013; Investopedia, 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 46
  • Later stage round Get bought or go public Goal: cash-out - Acquisition - STARTUPPERWARE Solid growth - Late stage Financial stabilization A-B-C round Early stage Timing: 3-4 years Seed Pre-seed Source: Wikipedia, nov 2013, Crunchbase, nov 2013; Business Insider, nov 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 47
  • Later stage Acquisition EOS is an italian biopharmaceutic startup, founded in 2006 with private capital and investment of Sofinnova Partners and Principia. In 2010 created their flagship innovative product: Lucitanib. The 2012 it’s licensed for using in US, Japan and China markets. Few days ago was acquired by Clovis, U.S. biopharmaceutic al company, for $ 400 million in cash + shares. It’s (perhaps) the biggest exit of the history of Italian startup. Source: Startup Italia, nov 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 48
  • Later stage IPO After 7 years and $1.16B of funding, on November 6, 2013, Twitter was listed on the New York Stock Exchange (NYSE). 70 million shares were priced at US $26. Twitter raised $1.82B. In the first day of trading, shares closed at US $44.90 for $31b evaluation. In one day Twitter created 1,600 new millionaries. Source: Wikipedia, nov 2013, Crunchbase, nov 2013; Business Insider, nov 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 49
  • Later stage Large private company GoPro was founded in 2004 by Nick Woodman to capture and share our lives’ most exciting moments in high definition. Over the years received funding from several investors. The latest was in 2012 from Foxconn of $200 million. Testo slide Today, GoPro evaluation is $2.25 billion. The estimated revenues in 2013 are more $900+ million. Source: Forbes, apr 2013; Crunchbase, nov 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 50
  • Who’s financing who Some examples Companies VCs Angel Investors Incubator Accelerator Crowdfunding Grant Self-financing Pre-seed Seed MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS Early stage A-B-C round Late stage 51
  • (Some) figures and data MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 52
  • The global start-up ecosystem London Toronto Vancouver Berlin Waterloo Boston Silicon Valley Los Angeles Moscow Paris Tel Aviv New York Bangalore Singapore total activity of entrepreneurship controlling for population size and the maturity of startups Sao Paulo Sydney The startup output index represents the total activity of entrepreneurship in the region, controlling for Melbourne Santiago http://multisite-blog.digital.telefonica.com.s3.amazonaws.com/wp-content/uploads/ population size and the maturity of startups in the region 2013/01/Startup-Eco_14012013.pdf Source: Start-up Ecosystem Report 2012 , Telefonica MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 53
  • How many startups? Per 1.000 working age people 12 11 6 1 3 2 Source:World Bank, 2012 MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 54
  • What’s going on in Italy 29 mln Internet Users Potential Startuppers 5,3 mln Would invest in start-ups Wanna-be Startuppers 3,5 mln Would invest much money in start-ups Committed Wanna-be startuppers 300 k Know where to invest Startuppers 1.227 Create an innovative startup Sourcce: Human Highway per Italia Startup, 2012 MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 55
  • What can stop them? Fear of Failure Rate Percentage of 18-64 population with positive perceived opportunities who indicate that fear of failure would prevent them from setting up a business Source: Global Entrepreneurship Research Association (GERA) MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 56
  • Italian Startup ecosystem 604 42 450 35 194 20 INNOVATIVE STARTUPS INCUBATORS & ACCELERATORS Source: Italia Startup, 2013 MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 57
  • VC investment in the US Seed 725 in 274 Early stage 7.800 in 1.638 million dollars companies Source: PricewaterhouseCoopers and the National Venture Capital Association (NVCA),2012 MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 58
  • Seed & early stage investment UK 477 274 France 1.900 Germany 355 56 Italy EUROPEAN UNION Million euros in 2012 (28m 2013) UNITED STATES 8.600 Million dollars in 2012 Source:European Private Equity and Venture Capital Association; PricewaterhouseCoopers and the National Venture Capital Association (NVCA),2012 MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 59
  • How many survive? U.S.-based companies initially funded by venture capital between 2006 and 2011 6.613 operating independently 5.555 were acquired or made initial public offerings 727 66 currently in IPO registration Source: The Venture Capital Secret: 3 Out of 4 Start-Ups Fail, 2012. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 60
  • “from a business point of view” models, strategy, consequences MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 61
  • What’s going on? Source: MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 62
  • What Companies Want INTERNALLY Smart talented employees Increase efficiency and effectiveness THEMSELVES INDUSTRY Get noticed in a highly competitive industry Find the next big idea MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 63
  • How can startups help? The next big idea It’s not convenient to innovate on its own. Find and access to new ideas and paths to market through partenership and collaborations. Open innovation “The boundaries between a firm and its environment have become more permeable; innovations can easily transfer inward and outward.” Source: Harvard Business Review, dec 2008; Wikipedia, nov 2013. Source: MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 64
  • A temporary organization formed to search for a repeatable and scalable business model. Steve Blank Source: Steve Blank, jan 2010.. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 65
  • The TOP 10 Acquirers of 2012 1 16 6 9 2 16 7 8 3 12 8 7 4 10 9 6 5 10 10 6 Number of acquisitions in 2012 Source: Privco,2012 MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 66
  • How can startups help? Get noticed in a highly competitive industry PR & Reputation “A 17-year-old whiz kid who sold his company to Yahoo for $30 million” like BEST STORY EVER for PR. Source: Nymag, 2013 MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 67
  • How can startups help? Smart talented employees ACQ-HIRE Source :Fortune,2013 MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 68
  • How can startups help? Increase efficiency and effectiveness LEAN STARTUP: a set of methodologies and tools for developing businesses and products Validated learning, minimum viable product, actionable metrics, pivoting. NEW MANAGERIAL METHODS Source Wikipedia, nov 2013: MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 69
  • The dark side of startup revolution MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 70
  • What are the risks? Startup MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS Ecosystem Corporate 71
  • Can I be sexy too? For startups Focus on hyped but with little value segments Especially for social and consumer internet MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 72
  • Are we in a new bubble? For the ecosystem $100m investmet nov 2012 ≈$1b acquisition apr 2012 ≈$3b evaluation nov 2013 Source: Infoworld, nov 2013; Instagram, jan 2013; Businessweek, nov 2013. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 73
  • Don’t you mind if we disrupt? for the ecosystem How can a speculative system foster breakthrough innovation that create new markets and at the same time destroy others? MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 74
  • Well, it is not my job! for corporate Discover, communicate, acquire, integrate and collaborate with startups require a whole new set of skills and processes. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 75
  • Startup revolution is not a passing hype but it's a growing movement that is changing the way people and businesses work and create value. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 76
  • Speakers Stefano Daelli | Associate Consultant at FUTUREBERRY on new business models, marketing and digital strategy topics. He’s project manager of Market Revolution, a blog about trends and business strategies, and co-founder of IMBIK, startup incubator based in Milan. He worked at the Accenture Customer Innovation Center in Milan. He graduated in Philosophy at Università Statale degli Studi di Milano and has been resident student of Collegio di Milano. He is professor at IED Management. Cinzia Malerba | Analyst Business Analyst at Orange Network, on marketing and change management. She’s coordinator of Market Revolution, a blog about trends and business strategies. She previously worked in brand management and trade marketing in apparel and fashion, in Luxottica and Valentino. She holds a master in Management at Bocconi University and she has been exchange student at Louis Pasteur University in Strasbourg, France and Asian Institute of Management in Manila, The Philippines. MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 77
  • www.marketrevolution.it 78 info@marketrevolution.it