Inspiring Route - Startup & The New Entrepreneurs

1. STARTUP & THE NEW ENTREPRENEURS 04.04.2014 INSPIRING ROUTE

2. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Where does this story start? 2

3. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Natbat, sept 13. This is the story of Natalie & Simon From idea to exit 3

4. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Dissapore, aug 2012; La Stampa, jul 2013. The history of Eataly From microwave to Culatello 4

5. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Testo slide What do they have in common? 5 They are STARTUPS

6. INSPIRING ROUTE - STARTUP & ENTREPRENEURS What is a “startup”? 6

7. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Eric Ries 7 Source: Lean Startup, 2010.. A human institution designed to deliver a new product or service under conditions of extreme uncertainty.

8. INSPIRING ROUTE - STARTUP & ENTREPRENEURS 8 IT’S NOT ABOUT DIGITALINDUSTRYSIZE

9. INSPIRING ROUTE - STARTUP & ENTREPRENEURS RISKINNOVATIONPEOPLE 9 IT’S ABOUT

10. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Google Trends, 2013. Media, blog, social, TV, newspaper, magazine... A skyrocketing interest 10 “startups” but is it just a buzzword?

11. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Whitehouse, feb 2009. 11 The future of our economy relies on the imagination of our entrepreneurs Barack Obama

12. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Wikipedia, 2013; Geekwire, sept 2011. Long story short Ok, but what's new around here? 12 1998-2000 dot-com Bubble 2004-today The “new wave” 1973-1998 The golden age 1950-1970 The early days There’s something new (and more)

13. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Wikipedia, nov 2013; Forbes, nov 2013; Doppiozero, oct 2013. 3 drivers 13 Economic • Economic Crisis • Youth unemployment • Failure of the traditional business models • Economic pressure from emerging markets Technological • Exponential growth in various technologies • Know-how sharing • Development of a global real-time communication network Cultural • Mixture of counterculture utopias and neo- capitalism optimism • Loss of authority of the institutions • Craving for meaning and realization • Cult of failure • Emergence of role model

14. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Where everything was born The reasons why Silicon Valley was (and is) the epicenter 14 Colleges Research centers Labs Ultraliberalism Hippie culture Technology as a religion Cult of failure “Do than discuss” Technology Venture capital Lean juridical system “Resources”ValuesPlace

15. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: 15 A global community of people who, relying on their creativity, skills and commitment, create new organizations as a tool to disrupt conservative paradigm, solve global problems and create value for themselves and the community itself.

16. INSPIRING ROUTE - STARTUP & ENTREPRENEURS The new paradigm 16 #vision #disruption #explorationfrom execution to from management to from retention to #valuefrom proﬁt to

17. INSPIRING ROUTE - STARTUP & ENTREPRENEURS How does it work? 17

18. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Market Revolution, nov 2013. An highly connected ecosystem The startup framework 18

19. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Entrepreneur.com, 2013. Colleges, research labs, business schools, foundations, public institutions Where ideas and people come from Institutions 19

20. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Founders, coders, designers, makers, mentors, angels Networking is the Word Community 20

21. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Websites, blogs, magazines, webzines Not only the specialized ones Media 21

22. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Where you get to know and be known Events 22 Fairs, events, competition, hackathons, demo days

23. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Finance, legal, administration skills and services to run a company Services & support 23

24. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Coworking, fablabs Where companies are built and can share ideas, experiences, skills and network Spaces & places 24

25. INSPIRING ROUTE - STARTUP & ENTREPRENEURS INVESTMENT & CORPORATE Let’s focus on 25

26. INSPIRING ROUTE - STARTUP & ENTREPRENEURS 26 Source:Paul Graham, nov 2005. Paul Graham 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.

27. INSPIRING ROUTE - STARTUP & ENTREPRENEURS two friends, an idea Let's start a company 27 This girl This guy

28. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Paul Graham, nov 2005. Let’s follow the story of a (imaginary) startup called: 28 COOLBOX

29. INSPIRING ROUTE - STARTUP & ENTREPRENEURS The ﬁrst funding aimed at company set up, prototyping and living expenses Pre-seed round 29 Goal: - Fine tuning of the idea - Build the prototype ! Timing: 3 months Pre-seed Early stage Seed A-B-C round Late stage COOLBOX

30. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Funders and Founders, may 2013. Friends & Family Pre-seed round 30 Pros: easy to ﬁnd, no interferences. Cons: mix together business and personal life, no business network, not accredited as investors. ≈15k 5% of the equity 20% Option pool

31. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Grants & Competitions Pre-seed round 31 Pros: smart money, visibility and PR, few constraints. Cons: no business network.

32. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Startupbro, 2013. Crowdfunding Pre-seed round 32 Pros: no constraints, awareness and PR. Cons: hard to get, no business network, high expectations.

33. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Investopedia, 2013; Paul Graham, nov 2005. 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. Key concepts Pre-seed round 33

34. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Techinasia, dec 2012. The ﬁrst boost to build the company Seed round 34 Goal: concept validation - Minimum Valuable Product - Business plan: value proposition, target, maket size, revenue model, competitors, competitive advantage ! Timing: 3-6 months Pre-seed Early stage Seed A-B-C round Late stage COOLBOX

35. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Funders and Founders, may 2013. Firms that offer small amounts of funding, working spaces, business and technical advisorship, staff services (PR, lawyers, accountants, etc), networking. Incubators/accelerators Seed round 35 Goal: profitable disinvestment of the shares People Main focus Big batch Model 15-100K Funding 5-30% Equity

36. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Forbes, apr 2012, Startup Weekend, 2013. Incubators/accelerators Seed round 36 Cons: Small funding, strong competition for “brands”, lower commitment. Pros: low control over the startup, easy to reach, standardized investment process, personal relationship, access to VC network.

37. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Bernardi, nov 2013. Organizations which internally generate ideas for new startups and hire people to develop them. Startup foundries Seed round 37

38. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Investopedia, 2013; Business Model Generation, 2013; Grasshopperherder, 2013; Lean Startup, 2010; Investment law group, 2013. 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. Key concepts Seed round 38

39. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Techinasia, dec 2012. It’s time to make things seriously Early stage round 39 Goal: customer validation - Generate traction - Generate revenue - Hiring staﬀ ! Timing: 12-18 months Pre-seed Early stage Seed A-B-C round Late stage COOLBOX

40. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Paul Graham, nov 2005. Rich people who invest in new companies. Goal: invest in startups with high-speed growth Angel investors Early stage round 40 market captivity Main focus 15-20% Equity up to 200k Funding Cons: potential issues for subsequent rounds, push to exit, less reputation to protect, involved in the management. Pros: SME, networking, mentoring, less investment constraints.

41. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Paul Graham, nov 2005; Investopedia, 2013. 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. Key concepts Early stage round 41

42. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Techinasia, dec 2012; Wikipedia, 2013. Grow. And keep growing. Series A-B-C round 42 Goal: from revenue to proﬁt - Scaling business - International expansion - Hiring executive ! Timing: 1-2 year Pre-seed Early stage Seed A-B-C round Late stage COOLBOX

43. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Paul Graham, nov 2005. 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) Venture capital Series A-B-C round 43 Exit Focus Mgmt fee Model > 1 million Funding 10-40% Equity

44. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Paul Graham, nov 2005. Venture capital Series A-B-C round 44 Cons: control on the management, strict regulation on investment. Pros: capital, experience, network.

45. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Paul Graham, nov 2005; Investopedia, 2013; Investopedia, 2013. 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. Key concepts Series A-B-C round 45

46. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Wikipedia, nov 2013, Crunchbase, nov 2013; Business Insider, nov 2013. Get bought or go public Later stage round 46 Goal: cash-out - Solid growth - Acquisition - Financial stabilization ! ! Timing: 3-4 years Pre-seed Early stage Seed A-B-C round Late stage COOLBOX

47. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Startup Italia, nov 2013. Acquisition Later stage 47 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.

48. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Wikipedia, nov 2013, Crunchbase, nov 2013; Business Insider, nov 2013. IPO Later stage 48 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.

49. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Forbes, apr 2013; Crunchbase, nov 2013. Testo slide Large private company Later stage 49 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. Today, GoPro evaluation is $2.25 billion. The estimated revenues in 2013 are more $900+ million.

50. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Who’s ﬁnancing who 50 Pre-seed Early stageSeed A-B-C round Late stage Self-ﬁnancing Grant Crowdfunding Incubator Accelerator VCs Angel Investors Companies Some examples

51. INSPIRING ROUTE - STARTUP & ENTREPRENEURS (Some) ﬁgures and data 51

52. INSPIRING ROUTE - STARTUP & ENTREPRENEURS The global start-up ecosystem 52 http://multisite-blog.digital.telefonica.com.s3.amazonaws.com/wp-content/uploads/ 2013/01/Startup-Eco_14012013.pdf The startup output index represents the total activity of entrepreneurship in the region, controlling for population size and the maturity of startups in the region Silicon Valley Tel Aviv Los Angeles New York Boston London Toronto Vancouver Sydney Sao Paulo Moscow Paris Berlin Singapore Melbourne Bangalore Santiago Waterloo total activity of entrepreneurship controlling for population size and the maturity of startups Source: Start-up Ecosystem Report 2012 , Telefonica

53. INSPIRING ROUTE - STARTUP & ENTREPRENEURS VC investment in the US 53 Source: PricewaterhouseCoopers and the National Venture Capital Association (NVCA),2012 Total VC investment in 2012: $8.6 billion Seed 725 million dollars 274 companies Early stage 7800 million dollars 1638 companies

54. INSPIRING ROUTE - STARTUP & ENTREPRENEURS VC investment in the EU 54 Source: PricewaterhouseCoopers and the National Venture Capital Association (NVCA),2012 Total VC investment in 2012: $1.9 billion Seed 138 million dollars 353 companies Early stage 1792 million dollars 1796 companies

55. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Million euros in 2012 VC investment in the EU 55 477 355 274 56 28 in 2013

56. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: OECD, 2013; Che Future, oct 2013. Far from the average yet (0.02%) % of GDP in venture capital 56 ISRAEL USA %0.5 %0.2 ITA %0.004

57. INSPIRING ROUTE - STARTUP & ENTREPRENEURS How many startups? 57 23 Number startup per 1.000 working age people 1112 16 Source:World Bank, 2012

58. INSPIRING ROUTE - STARTUP & ENTREPRENEURS U.S.-based companies initially funded by venture capital between 2006 and 2011 How many survive? 58 Source: The Venture Capital Secret: 3 Out of 4 Start-Ups Fail, 2012. 6.613 startup founded 5.555 operating independently 727 were acquired or made initial public oﬀerings 66 currently in IPO registration

59. INSPIRING ROUTE - STARTUP & ENTREPRENEURS 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 What can stop them? 59 Source: Global Entrepreneurship Research Association (GERA)

60. INSPIRING ROUTE - STARTUP & ENTREPRENEURS And what about Italy? 60

61. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Gazzetta Ufficiale, june 13. I requisiti ‣ la maggioranza del capitale sociale e dei diritti di voto nell’assemblea ordinaria deve essere detenuto da persone fisiche al momento della costituzione e per i successivi 24 mesi; (requisito soppresso dal d.l. n. 76/2013) ‣ la società deve essere costituita e operare da non più di 48 mesi; ‣ deve avere la sede principale dei propri affari e interessi in Italia; ‣ il totale del valore della produzione annua, a partire dal secondo anno di attività, non deve superare i 5 milioni di euro; ‣ non deve distribuire o aver distribuito utili; ‣ deve avere quale oggetto sociale esclusivo o prevalente, lo sviluppo, la produzione e la commercializzazione di prodotti o servizi innovativi ad alto valore tecnologico; ‣ non deve essere stata costituita per effetto di una fusione, scissione societaria o a seguito di cessione di azienda o di ramo di azienda. La “start-up innovativa” è società di capitali, costituita anche in forma cooperativa, di diritto italiano oppure Societas Europea, le cui azioni o quote non sono quotate su un mercato regolamentato o su un sistema multilaterale di negoziazione. Il Decreto Startup d.l. n. 76/2013 61

62. INSPIRING ROUTE - STARTUP & ENTREPRENEURS ‣ Deroghe al diritto societario e riduzione degli oneri per l’avvio ‣ Esenzione da imposta di bollo, diritti di segreteria e diritto annuale ‣ Remunerazione con strumenti finanziari della start-up innovativa e dell’incubatore certificato ‣ Incentivi all’investimento in start-up innovative ‣ Raccolta diffusa di capitali di rischio tramite portali online (crowdfunding) ‣ Sostegno all’internazionalizzazione ‣ Gestione della crisi nell’impresa startup innovativa e attività di controllo I vantaggi Il Decreto Startup d.l. n. 76/2013 62 Source: Gazzetta Ufficiale, june 13.

63. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: StartupItalia, 2013. Testo slide 1 startup every 4 minutes 63

64. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Testo slide Milan, startup capital 64 Source: StartupItalia, 2013.

65. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: StartupItalia, 2013. Testo slide 4 out of 5 are services 65

66. INSPIRING ROUTE - STARTUP & ENTREPRENEURS What’s going on in Italy 66 300 k 29 mln 5,3 mln 3,5 mln 1456 Internet Users Would invest in start-ups Would invest much money in start-ups Know where to invest Create an innovative startupStartuppers Wanna-be Startuppers Committed Wanna-be startuppers Potential Startuppers Source: Human Highway per Italia Startup, 2012

67. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Who is who, nov 2013. Sottotitolo slide Italy by numbers 67 113 Funded startup 97 Incubators / accelerators 40 Science parks 32 Institutional investors 65 Coworking spaces 33 Startup competitions 20 Associations

68. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Who is who, nov 2013. 30 sicialian startups 68

69. INSPIRING ROUTE - STARTUP & ENTREPRENEURS “from a business point of view” models, strategy, consequences 69

70. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: 70 What’s going on?

71. INSPIRING ROUTE - STARTUP & ENTREPRENEURS What Companies Want 71 THEMSELVES Get noticed in a highly competitive industry INDUSTRY Find the next big idea INTERNALLY Smart talented employees Increase eﬃciency and eﬀectiveness

72. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: The next big idea How can startups help? 72 Source: Harvard Business Review, dec 2008; Wikipedia, nov 2013. Open innovation It’s not convenient to innovate on its own. ! Find and access to new ideas and paths to market through partenership and collaborations. “The boundaries between a ﬁrm and its environment have become more permeable; innovations can easily transfer inward and outward.”

73. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Steve Blank 73 Source: Steve Blank, jan 2010.. A temporary organization formed to search for a repeatable and scalable business model.

74. INSPIRING ROUTE - STARTUP & ENTREPRENEURS 3 company-incubator model 74 Corporate Business Incubator PartnershipSponsorship

75. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: GV.com, 2014; TechCrunch, nov 2011; TechCrunch, dec 2013. In 2013: 75 new investments 9 exit +$300 million of venture funding From “corporate venture investment” to “private VC” GOOGLE 75 4 year from now: 225 funded companies $1.2 billion of capital under management

76. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source:: Fortune, jun 2013; Nike Fuel lab, 2014. An acceleration program dedicated to running companies which are given tools, resources and support to create products or solutions integrated with NikeFuel platform. Supporting the creation of an innovation ecosystem NIKE 76 • 10 startups • 12 weeks • $50.000 grant for each startup • Business and technology mentorship with executives and developers from Nike • Training • Full access to NikeFuel platform

77. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Techcrunch, feb 2014; Disney Accelerator, 2014. An immersive mentorship and seed investment program to develop ideas and build new products related to Disney existing assets and property The startup accelerator for innovative services and entertainment experiences DISNEY 77 • 10 weeks • $120.000 grant for each startup • Full access to the stories, characters, resources and networks of The Walt Disney Company • Mentorship by Disney executives, entertainment industry experts, venture capitalists, entrepreneurs. • Coworking space @ Disney HQ

78. INSPIRING ROUTE - STARTUP & ENTREPRENEURS 78 Source: Privco,2012 The TOP 10 Acquirers of 2012 1 2 3 4 5 6 7 8 9 10 16 16 12 10 10 9 8 7 6 6 Number of acquisitions in 2012

79. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Nymag, 2013 Get noticed in a highly competitive industry 79 PR & Reputation “A 17-year-old whiz kid who sold his company to Yahoo for $30 million” ! like BEST STORY EVER for PR. How can startups help?

80. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Smart talented employees 80 ACQ-HIRE Source :Fortune,2013 How can startups help?

81. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source Wikipedia, nov 2013: Increase eﬃciency and eﬀectiveness 81 NEW MANAGERIAL METHODS LEAN STARTUP: a set of methodologies and tools for developing businesses and products ! Validated learning, minimum viable product, actionable metrics, pivoting. How can startups help?

82. INSPIRING ROUTE - STARTUP & ENTREPRENEURS The dark side of startup revolution 82

83. INSPIRING ROUTE - STARTUP & ENTREPRENEURS What are the risks? 83 Startup Ecosystem Corporate

84. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Focus on hyped but with little value segments For startups Can I be sexy too? 84 Especially for social and consumer internet

85. INSPIRING ROUTE - STARTUP & ENTREPRENEURS Source: Infoworld, nov 2013; Instagram, jan 2013; Businessweek, nov 2013. For the ecosystem Are we in a new bubble? 85 $100m investmet nov 2012 ≈$1b acquisition apr 2012 ≈$3b evaluation nov 2013

86. INSPIRING ROUTE - STARTUP & ENTREPRENEURS How can a speculative system foster breakthrough innovation that create new markets and at the same time destroy others? for the ecosystem Don’t you mind if we disrupt? 86

87. INSPIRING ROUTE - STARTUP & ENTREPRENEURS for corporate Well, it is not my job! 87 Discover, communicate, acquire, integrate and collaborate with startups require a whole new set of skills and processes.

88. INSPIRING ROUTE - STARTUP & ENTREPRENEURS 88 Startup revolution is not a passing hype but it's a growing movement that is changing the way people and businesses

89. info@marketrevolution.itwww.marketrevolution.it 89

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