Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Entrepreneurship in silicon valley vs in turkey, ges, march 2011

329 views

Published on

Entrepreneurship in Silicon Valley, Ziya Boyacigiller

  • Be the first to comment

Entrepreneurship in silicon valley vs in turkey, ges, march 2011

  1. 1. Entrepreneurship in Silicon Valley vs. in Turkey GES 22 March, 2011 This presentation was created and given by Ziya Boyacigiller who was leading Angel Investor and a loved mentor to many young entrepreneurs in Turkey. We have shared it on the web for everyone’s benefit. It is free to use but please cite Ziya Boyacigiller as the source when you use any part of this presentation. For more about Ziya Boyacigiller’s contributions to the start-up Ecosystem of Turkey, please go to www.ziyaboyacigiller.com
  2. 2. Entrepreneurship in Silicon Valley vs. in Turkey Ziya G. Boyacıgiller Sabanci University Faculty of Management Angel Investor
  3. 3. Ziya G. Boyacigiller (c) 2005 EMBA 3 Bumblebee can’t fly!
  4. 4. Ziya G. Boyacigiller (c) 2005 EMBA 4 Flying bumblebee…
  5. 5. Ziya G. Boyacigiller (c) 2005 EMBA 5  Started in 2004  CEO, CTO from USA (does reverse brain drain - %15 returned from USA)  Structured as a Silicon Valley startup  Using business practices common in Silicon Valley  2007 sales $45M+, market share in Turkey 70%, growing over 50% per year  2007 Expanding to Greece, Ukrain, Russia, Kazakistan, …  Preferred vendor for Turkish Telekom winning bids, even when not the lowest  World Class innovations – Wireless IPTV  Got US VC investment (2010) for global expansion
  6. 6. Ziya G. Boyacigiller (c) 2005 EMBA 6 Entrepreneurship won’t work in Turkey…  Whatever works in USA won’t work here…  No one will invest here in a new business…  Big holding companies will destroy you once your business becomes significant enough…  There is no legal protection, intellectual property rights…  They will copy your business model, all your creative efforts will go to waste…  Government will back their supporters, will damage you if you don’t work with them…  You can’t overcome the government bureaucracy…  When there is corruption, the mafia, you can’t be in business honestly… If you don’t use bribes you can’t survive.  If you are a minority partner, they will cheat you…  Etc. etc. etc.
  7. 7. Ziya G. Boyacigiller (c) 2005 EMBA 7 A Question? How did the following companies start and become successful in Turkey?  Hedef Alliance? (pharma distributor)  Dizayn Group? (plastic irrigation pipes)  Mavi Jeans? (fashion blue jeans)  Logo Yazilim? (enterprise software)  Gantek? (systems integrator)  Kariyerim.com? (job site)  GittiGidiyor.com? (local eBay – acquired)  ….
  8. 8. Ziya G. Boyacigiller (c) 2005 EMBA 8 … it is easy to be an entrepreneur in the US? And who says…
  9. 9. Ziya G. Boyacigiller (c) 2005 EMBA 9 Spin-Off Companies…  In 2000, there were 454 spinoffs, within all American academic institutions, pp57  In 2000, average was 4.2% spinoffs-to-disclosures ratio within 26 selected universities (~37% of total with spinoffs) in USA. Pp68  During 1980-1996, MIT spinoffs = 134, went public = 24, 18% public ratio to spin-off, pp19 & pp30  Using 4.2% and 18%, we get 0.3%. This means only 3 spinoffs for each 1,000 disclosures succeed to go public (IPO). (Note that this ratio is for MIT and is much higher than non- academic success rates. However, the rate for VC backed companies is 100 times worse!)  Moreover, during 1980-1996, average years to IPO for 24 MIT spinoffs equaled 4.5 pp30
  10. 10. Why does one become an entrepreneur? money fun power fame work social contribution knowledge challenge
  11. 11. Ziya G. Boyacigiller (c) 2005 EMBA 11 Who are the Entrepreneurs in Turkey?  Result of opportunity 32%  Result of necessity 15%  Men 73%  Women 27%  Most have below-college-level education  Early-stage entrepreneurs are young & educated  Opportunity seeking entrepreneurs are more educated (college and above), higher income
  12. 12. Ziya G. Boyacigiller (c) 2005 EMBA 12 Financial Support For seed and early-stage:  Own savings 44%  Friends 17  Banks 15  Family 11  Coworkers 9  Government 4  Business Angels 3 (developing countries 5.57%, GEM 3.93%)
  13. 13. Ziya G. Boyacigiller (c) 2005 EMBA 14 Four Factors Effecting Success 1. Intelligence (If you don’t have enough, form a team) 1. Competitiveness/Motivation (Guns, Steel, and Germs…Jared M. Diamond factor) 2. Patience (Success is 1% inspiration, 99% perspiration) 1. Luck (Luck smiles on the prepared…Knowing when…)
  14. 14. Ziya G. Boyacigiller (c) 2005 EMBA 15 World’s Top 10+ Billionaires Source: 2007 Forbes Rank Name Citizenship Age Net Worth ($B) Residence 1 William Gates III United States 51 56 United States self made MICROSOFT 2 Warren Buffett United States 76 52 United States self made finance 3 Carlos Slim Helu Mexico 67 49 Mexico self made telecom 4 Ingvar Kamprad & family Sweden 80 33 Switzerland self made IKEA 5 Lakshmi Mittal India 56 32 United Kingdom inherited & growing steel 6 Sheldon Adelson United States 73 26.5 United States self made hotels, casinos 7 Bernard Arnault France 58 26 France inherited & growing luxury good 8 Amancio Ortega Spain 71 24 Spain self made ZARA 9 Li Ka-shing Hong Kong 78 23 Hong Kong self made diversified 10 David Thomson & family Canada 49 22 Canada inherited media 11 Lawrence Ellison United States 62 21.5 United States self made ORACLE 12 Liliane Bettencourt France 84 20.7 France inherited L'Oreal 13 Prince Alwaleed Bin Talal Alsaud Saudi Arabia 50 20.3 Saudi Arabia self made investing 14 Mukesh Ambani India 49 20.1 India inherited & growing petrochemicals 15 Karl Albrecht Germany 87 20 Germany self made Aldi supermarket
  15. 15. Ziya G. Boyacigiller (c) 2005 EMBA 16 25 Turks listed in the Richest of the World (Forbes)  Among the world's 946 billionaires, 25 are from Turkey, according to a recent survey by Forbes magazine.  Husnu Ozyegin was ranked the world's 249th richest man with $3.5 billion.  Mehmet Emin Karamehmet followed him with $2.4 billion, the 390th-richest person.  Third and fourth place in Turkey were Sevket Sabanci and Erol Sabanci with $2.1 billion. They both ranked 458th in the Forbes list.  There are now more billionaires in Turkey than there are in Japan.
  16. 16. Ziya G. Boyacigiller (c) 2005 EMBA 23 Factors Effecting Entrepreneurship General Country Infrastructure •Economic •Technological Entrepreneurship Infrastructure •Human Resources •Finance •Legal •Social, cultural, political infrastructure •Entrepreneurship support and encouragement mechanisms Newly Started Companies Economic Development 3 Ts: The Rise of the Creative Class, Richard Florida
  17. 17. Ziya G. Boyacigiller (c) 2005 EMBA 24 What is changing in Turkey?  EU forcing structural changes  Economic reforms (IMF)  Government encouraging entrepreneurship – Technoparks, taxing  EU supporting entrepreneurship in Turkey  Turkic and ex-soviet markets  EU and USA have difficulty working in Middle East  Middle East – improved relationships  Reverse brain-drain !  Interest Rates moving down  IRR
  18. 18. Ziya G. Boyacigiller (c) 2005 EMBA 25 Entrepreneurship is a Strong Driver of Economy  Approximately 4% of US labor force is involved in starting a new company every year.  Business owners in US is 13% of nonagricultural labor force.  All this, despite the odds  40% of new businesses started in US live over a year, only 25% survive for 8 years.  Why is Nigeria the most entrepreneurial country?
  19. 19. Ziya G. Boyacigiller (c) 2005 EMBA 26 Benjamin Graham  Value Investing = Warren Buffet
  20. 20. Ziya G. Boyacigiller (c) 2005 EMBA 27 Turkey offers better opportunity in Value Investing then USA: - No corporate tax for 10 years in Technoparks, - No tax for R&D workers, - No income tax on stock options held over 2 years!
  21. 21. Ziya G. Boyacigiller (c) 2005 EMBA 28 Top 10 List of Factors Affecting Entrepreneurship in Turkey 1. 4.06 A new or growing business can reach communication tools with ease 2. 3.89 Successful entrepreneurs are well respected in society 3. 3.86 Entrepreneurs are perceived as skillful, capable people 4. 3.83 Media frequently covers stories of successful entrepreneurs 5. 3.78 Starting a new business is perceived as a good way to get rich 6. 3.74 A new business can obtain power, water, natural gas services within a month with ease 7. 3.56 Within the last 5 years, opportunities for starting new business has significantly increased 8. 3.47 Consumer goods and services market is growing significantly year to year 9. 3.46 Women and men are presented equal opportunities to start a new business 10. 3.33 Cost of communications (phone, internet, etc.) is not very high for a new company.
  22. 22. Ziya G. Boyacigiller (c) 2005 EMBA 29 Bottom 10 List of Factors Affecting Entrepreneurship in Turkey 1. 1.52 For new and growing companies venture capital is not available 2. 1.59 For new and growing companies IPO financing is not available 3. 1.63 Tax burden is significant for new and growing companies 4. 1.70 New and growing companies cannot compete in high- technology 5. 1.72 For new and growing businesses equity funding is not feasible 6. 1.78 Illegal copies of CD, DVD, computer programs is rampant 7. 1.82 New companies cannot obtain required permits within a short time period. 8. 1.85 Government policies do not support new companies 9. 1.91 Local governments are insufficient in their support of new companies
  23. 23. Ziya G. Boyacigiller (c) 2005 EMBA 30
  24. 24. Ziya G. Boyacigiller (c) 2005 EMBA 31
  25. 25. Ziya G. Boyacigiller (c) 2005 EMBA 32
  26. 26. Ziya G. Boyacigiller (c) 2005 EMBA 33 Flying bumblebee…

×