Slides presented at the Webrazzi Summit 2012 in Istanbul presenting some of the things that Accel learned after speaking to dozens of internet and ecommerce companies in the region. I summarized these learnings into 5 “Mantras” that are developed in the presentation: 1.“Me too” is not enough: don’t be the 50th private shopping club or Groupon clone. There is no room for you in the market. Think “differentiation” 2.eCommerce is not a cheap journey: be prepared! Most successful ecommerce companies raise more than $50m during their lifetime, so watch every penny you spend and pay specific attention to (1) Inventory and working capital and (2) marketing costs (in particular a repeat basket is not free!) 3.Run your business with numbers: eCommerce is all about numbers and doing a 100 small things right 4.Build your brand by focusing on user experience: a strong brand is necessary to reduce your CAC and increase your profitability and the best way to build it is to focus on providing a great user experience (product, service and payments) 5.Mobile will be bigger than you think: mobile will represent 20%+ of you sales before you realize it!

1. The Accel 5 “Mantras” of Ecommerce
in Turkey
Philippe Botteri
Webrazzi Summit
October 4th 2012, Istanbul

2. Disclaimer
This document has been prepared by Accel Partners Management LLP (hereinafter Accel). Accel
is a limited liability partnership incorporated in England and Wales with registered number
OC303424, having its registered office at 16 St James’s Street, London, SW1A 1ER. Accel is
authorised and regulated by the Financial Services Authority (the "FSA") and is entered on the
FSA register with registration number 222503.
This document is provided for information purposes only and does not constitute an offer or a
recommendation to purchase or sell any security or service. It is not intended for distribution,
publication, or use in any jurisdiction where such distribution, publication, or use would be
unlawful.
This document forms part of a presentation to persons who have been invited to attend such
presentation and must be read and considered in the context of that presentation only.
This document does not contain personalized recommendations or advice and is not intended to
substitute any professional advice on investment in financial products. Before entering into any
transaction, an investor should consider carefully the suitability of a transaction to his/her
particular circumstances and, where necessary, obtain independent professional advice in respect
of risks, as well as any legal, regulatory, credit, tax, and accounting consequences.
This document is the property of Accel and is addressed to its recipient exclusively for their
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other purpose without the prior written permission of Accel.
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3. We mean “Global”
Track record of 225+ exits
• Founded in 1983 • Over 500 companies
- 100+ public offerings
• $9 billion in capital under
- 125+ mergers or sales
management
• Stage agnostic • Added-value partner
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4. Key trends we are betting on
Big Data
& Cloud Computing
Gaming
Mobile
Social
Next Generation
ecommerce &
marketplaces
Emerging Markets
(Turkey is next!)
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5. Turkey is next
Strong Macro • 2011 GDP growth 8.1%
Trends • GDP per capita grew from $6k in 2001 to
$14k in 2011
• 5th European country by internet users (38m)
Good
Infrastructure • Mobile penetration rate of 90%+ Large and fast
• Strong logistics and payments infrastructure growing Internet
market, but
• Very high credit card penetration (45M+)
underpenetrated
• 3rd most engaged online audience in Europe
Attractive (hours spent)
Demographics
• Extremely social demographics
(no. 5 country on Facebook, no. 8 on Twitter)
• Young population
(half of the population below 30)
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6. The Accel Five Mantras of
eCommerce in Turkey
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7. 1 “Me too” is not enough
Stay Away from the “Clone War”
Number of clones created in Turley
• To be successful, you
150 need to be clearly
differentiated:
− Product
− Segment
− User acquisition
70 channels
• Competition drives
margin down: Gross
Margin in Turkey usually
½ of what we see in
EU/US for comparable
1 2 businesses
Source: Forbes
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8. 2 eCommerce is not a cheap
journey: be prepared!
Successful ecommerce companies have
raised $45m+
Institutional capital raised to date, USD
174
Key drivers of cash
consumption:
104 • Working Capital:
building inventory is
79
65 costly
45
• Marketing costs: second
or third baskets are
usually NOT FREE
Source: Accel Analysis, Ventur Source, TechCrunch
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9. 3 Run your business with numbers
eCommerce is all about numbers and doing a 100 small things right
Customer • CAC (Customer Acquisition Cost): by channel, for 1st basket, 2nd
metrics basket…
• CLTV (Customer Lifetime Value): revenue - all direct costs – CAC 1st
basket – CAC 2nd basket…
Website • CPC by channel
metrics • Google Quality score
• Conversion rate: ratio visitors/ buyers
• Traffic sources: evolution of traffic by channel, paid vs. non paid…
Financial • Gross Margin/ Contribution margin
metrics • EBITDA
• Working Capital and Inventory: % of inventory write-off, days payables,
% of sales through inventory/consignment, cost of storage by SKU…
Source: Accel Analysis
• Cash flow
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10. 4 Build your brand by focusing on
user experience
The strength of your brand will
define your profitability
Build your brand by
providing an outstanding
user experience:
More
Stronger
Volume
Brand • Product: choice,
easiness to use, social
features…(measured by
conversion)
• Service: Fast delivery &
Higher Free responsive customer
Profitability Traffic service
• Payment: Variety of
Lower payments and financing
CAC options
Source: Forbes
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11. 5 Mobile will be bigger than you
think
Mobile already a significant share of … and mobile penetration is quite
traffic & transactions in EU/US… high and growing fast
Accel Portfolio Examples % of population
• Blablacar: Mobile phone
• 15% of transactions booked via ~92% penetration expected
mobile app to be >100% by 2014
• 20%+ of trips posted via mobile
app
• US ecommerce: 40%+ of Holiday season
traffic coming from tablets
• EU ecommerce: 20%+ of sales coming
~25%
from mobile app
…and this is just the beginning as
smartphone and tablet sales are still
soaring! 1
Mobile phone 2
Smartphone
Source: ComScore, IPSOS, Google, Informa, Accel Portfolio
penetration penetration
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12. Accel 5 “Mantras” for ecommerce
in Turkey
1 “Me too” is not enough
1.
2 eCommerce is not a cheap journey: be prepared!
2.
3 Run your business with numbers
3.
4 Build your brand by focusing on user experience
4.
5 Mobile will be bigger than you think
5.
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13. Thank you!
Follow me on Twitter @pbotteri
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