LJK Kesäseminaari Taaleritehdas

1. 6/18/2014
1
Future Growth
June 17, 2014
15 FINNISH ICT COMPANIES
2
0
500
1 000
1 500
2 000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Net Sales EUR 1520m in 2013
10-year growth 6.0%
4-year growth 1.0%
Market Cap Development
10-year return 1.7%.
0
500
1 000
1 500
2 000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

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GROWTH POSITIONING
3
0,0
1,0
2,0
3,0
4,0
5,0
6,0
-10% 10% 30% 50% 70%
AVERAGE EV/S MULTIPLES VS CAGR GROWTH
Proven Scalable / Self-serve SaaS
VC A/B rounds 2014: EV/S 4-5X
Proven SaaS / Software VC B-
rounds 2013: EV/S 2.3 – 2.7x
Listed ICT companies average
EV/S = 1.7
4
GROW FAST OR DIE SLOW

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GROWTH PARADIGM, software
5Source: McKinsey, 2014
6
LETS BUILD SMTHING BIG
FOUR STAGE MODEL

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STAGE 0
7
Vision
Entrepreneur
Innovation
Product Lovers
Constant Renewal
Excitement
Trend riding
OPPORTUNITY
FOR REVOLUTION
Startup Sector 5-yr Est. CAGR (2012-
2017)
Software 29%
Hardware 30.1%
Med Tech 6.3%
Big Data 34.2%
Dev. Platforms 17.9%
START-UP TRENDS
8
TrendsTrends
SoftwareSoftware
HardwareHardware
Med
Tech
Med
Tech
Big DataBig Data
Developer
Platforms
Developer
Platforms
SaaS, Enterprise, Big Data, Ed Tech, & Media Sharing
Internet of Things,
Natural UI,
3D Printing,
Wearable Tech
Patient/Doctor Platforms,
Pharmaceuticals, Medical
Devices, & Healthcare Services
Search, Cloud Computing,
Data Storage, Data Mining,
& Machine Learning
APIs, VoIP, Code
sharing/repositories,
Platform as a Service

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9
STAGE 1
10
Vision => Strategy, G-to-M
Entrepreneur => Management team, Execution
Innovation => Road-map, IPR, Scalability
Enablers Venture Funding
Business Partners, Corporate Support
Serious customer & user traction
100% focus on international set-up

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11
STAGE 2
12
Adapted from McKinsey, 2014
The right market = The BIG one
Monetization model enabling a full scale up
Rapid adoption, massive roll-out. Multiple customers instead
of one big one
Leadership capability, systems, ecosystem.

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STAGE 3
13Adapted from McKinsey, 2014
Expansion into new territories, dig everywhere.
Acquisitions with 100% strategic future fit, not the ones with
mere resource add-ons and size enhancers.
From Product to Platform.
REPEATING THE FINNISH B2B SUCCESS
14
TEKLA – acquired by Trimble for 400m in 2011
STONESOFT – acquired by McAfee/Intel for 300m in 2013
NAPA – acquired by ClassNK for 53m in 2014
DELTAMARIN – acquired by AVIC for 40m in 2012
Sensinode, Applifier, Rightware, Miradore…

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MOST LOW-TECH. AIRBNB.
15
In 2007
… roommates Chesky and Gebbia
made their living room into a bed
and breakfast, accommodating
three guests on air mattresses and
providing homemade breakfast.
In 2014
500 000 places for rent
33 000 cities, 192 countries
Valuation USD 10 billion …
16
PRIVATE MONEY
THE FUTURE GROWTH ENGINE

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How to pitch to VC’s
Pre-seed
Seed Start-up
Early-stage
Expansion
Target / Exit
 Idea generation & formulation
 Business plan
 Company establishment
 Pilot deals, references
 10-50 employees
 Strongest growth phase
 Venture capital funding
 International, GLOBAL
 Solid IPR
 500+ employees
 Worth 1000m
ENTREPRENEURSHIP BOOSTED BY
VENTURE CAPITAL

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10 elements to take care of
19
I What do you actually do?
- Which problem are you solving / what solution are you offering
- Why do you do it
- Why it’s important to potential customers
- What is your market potential mass / niche
II Where is the huge potential?
- The end game has to have huge potential
- Most companies will fail but if there is no such opportunity...
- Product/platform
- Roadmap for the future potential
10 elements to take care of
20
III True market size
- Market has to be there
- Big enough to be interesting
- You have to know your total addressable market
- Segments of the market
IV Secret ingredient – People
- People’s business – in early stage most important element
- No one man shows
- The role of each member – not just CVs of past achievments
- Strenghts & weaknesses – self awareness

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10 elements to take care of
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V Go-to-market Strategy
- Minimum viable product
- Path of least resistance to customers
- Channel strategy, you have to know the dynamics
- Who has the control of the entry
VI The stage where you are
- Be honest
- Have you already gained the proof & momentum
- KPI’s to support this
- Helps to make the decision
10 elements to take care of
22
VII Real competitive advantage
- Technology/IP, first mover, unique business model
- Long term understanding
- There are always competitors
- All ends up to execution
VIII Show the product
- Demo, easier to understand
- VC’s are not experts in every industry
- Focus where it solves the problem
- UI/UX

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10 elements to take care of
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IX Financials
- Believable projections
- Key drivers
- Both revenues & costs
- What you actually are going to do with the money
X The deal
- How much money you are going to raise
- What’s the plan for future financing
- Cap table
- Idea of the valuation
Finding the perfect partners for financing is crucial, but not easy!
Opportunities of tomorrow

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25
STAGE 3
Adapted from McKinsey, 2014

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Adapted from McKinsey, 2014
Future Growth