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Y Combinator Startup Class #5 : Competition is for losers

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Slide utilisé dans le cours n°5 de la Y Combinator Startup Class de Standford (http://startupclass.samaltman.com/) donné par Peter Thiel

Publiée sur slideshare pour pouvoir être intégrée à l'article http://startupeers.co/y-combinator-startup-class-5-business-strategy-and-monopoly-theory/

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Y Combinator Startup Class #5 : Competition is for losers

  1. 1. COMPETITION IS FOR LOSERS OCTOBER 7, 2014
  2. 2. OUTLINE 1.  capturing value 2.  lies people tell 3.  how to build a monopoly 4.  last mover advantage 5.  history of innovation 6.  psychology of competition 2
  3. 3. CAPTURING VALUE A business creates X dollars of value and captures Y% of X. X and Y are independent variables
  4. 4. BIG PIECE OF A SMALL PIE 2012 revenue: $195.6B 2012 profit margin: 0.2% 2012 revenue: $50.2B 2012 profit margin: 21.0% Market capitalization: $112.4B Market capitalization: $393.8B All United States airline carriers combined 4
  5. 5. PERFECT COMPETITION psychologically unhealthy irrelevant in a dynamic world preempts question of value conspros easy to model efficient in a static world politically salable 5
  6. 6. MONOPOLY lower output, higher prices price discrimination stifle innovation tying conspros incentive to innovate stable, long-term planning deeper project financing symptomatic of creation 6
  7. 7. OUTLINE 1.  capturing value 2.  lies people tell 3.  how to build a monopoly 4.  last mover advantage 5.  history of innovation 6.  psychology of competition 7
  8. 8. reality: majorperceived: minor firm A perfect competition monopoly firm B DIFFERENCES UNDERESTIMATED 8
  9. 9. non-monopolies “we’re in a narrow market” monopolies “we’re in a huge market” relevant market: A ∩ B ∩ C relevant market: A υ B υ C NARRATIVES 9
  10. 10. BRITISH FOOD IN PALO ALTO 10
  11. 11. College football star... joins elite group of hackers... ...to catch the shark that killed his friend BLOCKBUSTER MOVIE 11
  12. 12. teen hackers sharks hometown hero IS THE INTERSECTION VALUABLE? 12
  13. 13. STARTUP VERSION
  14. 14. THE SEACH MARKET 14
  15. 15. Global advertising $495B US advertising $150B US online advertising $37B US search advertising $17B THE ADVERTISING MARKET 15
  16. 16. Global consumer technology $964B televisions automobiles smartphones social networks infrastructure “The Internet is incredibly competitive, and new forms of accessing information are being utilized every day.” ---Eric Schmidt US search advertising $17B THE TECHNOLOGY MARKET 16
  17. 17. Google Apple Microsoft Amazon $98B $45B $52B $10B cash 40% gross margin 65% 78% 14% EVIDENCE OF NARROW MARKETS 17
  18. 18. OUTLINE 1.  capturing value 2.  lies people tell 3.  how to build a monopoly 4.  last mover advantage 5.  history of innovation 6.  psychology of competition 18
  19. 19. THE RIGHT SIZE 19 start small and monopolize it’s easier to dominate a small market than a large one if you think your initial market might be too big, it almost certainly is
  20. 20. “We believe there's a tremendous opportunity ahead across the $5 trillion retail market globally.” - Jeff Bezos START SMALL AND EXPAND 20
  21. 21. “Build a platform – prepare for the unexpected…you’ll know you’re successful when the platform you’ve built serves you in unexpected ways.” - Pierre Omidyar START SMALL AND EXPAND 21
  22. 22. START SMALL AND EXPAND 22 THEN NOW 148mm active accounts $1 in $6 spent on e-commerce globally is spent with PayPal
  23. 23. START BIG AND SHRINK 23
  24. 24. OUTLINE 1.  capturing value 2.  lies people tell 3.  how to build a monopoly 4.  last mover advantage 5.  history of innovation 6.  psychology of competition 24
  25. 25. CHARACTERISITICS OF MONOPOLY proprietary technology network effects economies of scale branding 25
  26. 26. VALUE OF THE FUTURE 26 Discounted Cash Flows GROWTH GROWTH RATE > DISCOUNT RATE DURABILITY GROWTH RATE < DISCOUNT RATE 2010’s 2020’s, 2030’s • EASY TO MEASURE • SHORTER TIME HORIZON • HARD TO MEASURE • LONGER TIME HORIZON 10-25% 75-90%
  27. 27. OUTLINE 1.  capturing value 2.  lies people tell 3.  how to build a monopoly 4.  last mover advantage 5.  history of innovation 6.  psychology of competition 27
  28. 28. TECHNOLOGICAL INNOVATION 28 18th 19th 20th 21st 1712 Steam engine 1764 Spinning jenny 1800 Battery 1804 Railway locomotive 1838 Morse code 1856 Refrigeration 1876 Telephone 1877 Phonograph 1879 Light bulb 1902 Air conditioning 1903 Airplane 1923 Electric refrigeration 1945 Atomic bomb 1947 Transistor 1969 Man on the moon 1971 Microprocessor 1973 Xerox graphical user interface 1975 Internet protocol suite 1984 First mobile phone 1991 World Wide Web 1996 Deep Blue 2004 Facebook 2007 iPhone 2012 Tesla Model S
  29. 29. SCIENTIFIC INNOVATION 29 18th 19th 20th 21st 1745 First capacitor (von Kleist) 1751 lightning is electrical (Franklin) 1763 Bayes' theorem 1787 Law of ideal gas (Charles) 1789 Conservation of mass (Lavoisier) 1804 Morphine (Sertürner) 1843 Law of Conservation of energy (Joule) 1848 Absolute Zero (Kelvin) 1859 Evolution (Darwin) 1865 Laws of inheritance, genetics (Mendel) 1869 Periodic table (Mendeleev) 1895 X-rays (Röntgen) 1913 Model of the atom (Bohr) 1915 General relativity (Einstein) 1927 Big Bang Theory (Lemaître) 1928 Penicillin (Flemming) 1951 First cancer line (Gey) 1952 First polio vaccine (Salk) 1953 Double helix (Watson & Crick) 1994 Fermat's Last Theorem proof 1997 Dolly the sheep cloned 2001 Human genome mapped 2006 Existence of Dark Matter 2008 Water on Mars
  30. 30. CAPTURING VALUE A business creates X dollars of value and captures Y% of X. X and Y are independent variables 30
  31. 31. SUCCESS CASES Vertically integrated complex monopolies Ford, Standard Oil, Tesla, SpaceX Software economies of scale, low marginal cost, high adoption rate 31
  32. 32. OUTLINE 1.  capturing value 2.  lies people tell 3.  how to build a monopoly 4.  last mover advantage 5.  history of innovation 6.  psychology of competition 32
  33. 33. MIMETIC PREFERENCES 33
  34. 34. COMPETITION AS VALIDATION education career paths investments business decisions 34
  35. 35. COMPETITION IS FOR LOSERS OCTOBER 7, 2014

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