Entrepreneurship: Global Transformation Engine


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The Internet Revolution is the Industrial Revolution of our time. With social, mobile and cloud technology, disruption is coming to every single industry. Anyone, anywhere can create the next great high growth company; and entrepreneurship is truly becoming a global phenomenon. With the massive changes coming to early stage capital markets, today's entrepreneurs will be more powerful and more disruptive than we can imagine.

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Entrepreneurship: Global Transformation Engine

  1. 1. Entrepreneurship: Global Transformation Engine
  2. 2. Industrial Revolution Age of Steam and Railways Age of Steel, Electricity and Heavy Engineering Age of Oil, Automobiles and Mass Production Age of Technology The Internet Revolution At every turn, Entrepreneurs have been the main instrument of change
  3. 3. In the Internet Revolution, entrepreneurs will be more powerful and more disruptive than we can imagine. “The Internet Revolution is in fact the Industrial Revolution of our time. It’s a sweeping social disruption that brings with it not only new inventions and scientific advances, but perhaps most importantly revolutionizes both the methods of work and we the workers ourselves.” Forbes, 2012
  4. 4. FACT: We are nearing a time when anyone, anywhere can create the next massively high growth company
  5. 5. It’s Cheaper to get Started Declining initial startup costs • • The Cloud, open source, online distribution platforms, shift to Lean Startup methods and “minimum viable products”, etc. It no longer costs $1 to 5M dollars to start a new company like it did when founders started up ten or fifteen years ago.
  6. 6. But More Expensive to Scale Increasing scaling costs • • Companies that achieve product market fit will often kick their growth into high gear by ramping up their budgets. Separately, customer acquisition channels tend to become saturated which further increases costs at the scaling stage.
  7. 7. No One is Alone -• Supports for entrepreneurs exist around the globe • Startup America, Startup Canada, Startup Britain, Startup Chile, Startup Brazil…support local (city level), entrepreneur-led initiatives to create hubs of vibrant entrepreneurial activity • Locally - solve challenges + develop model for what “better” looks like • Highlight / reward best practices to encourage emulation • Connect the leaders to each other for peer-to-peer sharing --- created the beginnings to what can become a true global startup ecosystem
  8. 8. Entrepreneurship Demystified • Best selling books sharing philosophies, fundamentals, methodologies – Lean Startup (Eric Ries), Startup Owners’ Manual (Steve Blank, Bob Dorf), Startup Communities (Brad Feld). The authors travel and speak globally. • Blogs (by top VC’s and successful entrepreneurs) read by a global audience (Fred Wilson, Chris Dixon, Mark Suster, etc.) • Global participation in top accelerator programs such as Y Combinator, 500 Startups, Tech Stars. Graduates frequently return home rather than staying in the US. • Collegiate level entrepreneurship programs – in the US, there are over 2,000 full-time entrepreneurship programs in existence now versus just 16 in 1970 • Anyone, anywhere can participate, engage, learn and use the best practices of high growth entrepreneurship.
  9. 9. New Hubs of Entrepreneurship “Everywhere Else” New ecosystems are successfully evolving in a fraction of the time that it took Silicon Valley or Boston to emerge Ecosystem Within Four Walls Co-working spaces with embedded incubators, accelerators, and capital are quickly becoming the epicenters for their local startup communities Entrepreneurs digging wherever there is gold Entrepreneurial mobility – Entrepreneurs are not starting / staying where they are from, not loyal to any single community Cross-community Collaboration Initiatives like the Startup Federation enable entrepreneurs to virtually and physically circumnavigate the globe
  10. 10. FACT: Entrepreneurship is a global phenomenon
  11. 11. Beyond the Valley • Through the trade, foreign direct investment, political idea exchanges, capital flows, migration, the spread of technology, and elimination of barriers (tech, communication, travel), the world’s markets and businesses are increasingly connected and interdependent. • The vast majority of global GDP growth is happening in developing and emerging markets like China, India, Brazil, Russia, Indonesia, Turkey, and Mexico.
  12. 12. Startups are De-clustering • Technology advances have made it entirely feasible to build highly complex solutions from anywhere • This pushes against the traditional notion that startups need to cluster together around a physical center of commerce. • Traditional centers of entrepreneurship will remain, but we are seeing the rise of “everywhere else”
  13. 13. Competing on the Global Stage • Globally-minded investors aggressively pursuing “the best possible deals in the world” • 500 Startups - one new investment somewhere on the planet about every three days. • Challenge Cup – global competition in 16 cities to find the most promising startups in education, health, energy, smart cities
  14. 14. FACT: Early stage venture investing is undergoing massive disruption (in favor of entrepreneurs!)
  15. 15. Entirely New Approaches “Venture Capital is open to attack by disruptive new business models and technology.” Naval Ravikant
  16. 16. Out with the old… • Investors no longer taking a board seat -- unbundling of advice, control and money • Financing terms are increasingly being standardized • Convertible notes are becoming the norm at the early stage • Fundraising rounds are trending to continuous, rather than discrete, rounds (no fixed amounts, no closings) • Prices are beginning to float • Herd mentality is stronger than ever in early stage rounds today (something entrepreneurs can easily leverage) • Rise of “super angel” / small bets
  17. 17. In with the new… Transparency • Leveling the playing field between investors and entrepreneurs (but raising the bar for everyone) • Platforms like AngelList now allow entrepreneurs to follow investors, see who they’re following, which startups they’re interacting with and more • Massive amounts of information available to entrepreneurs online: • Demo day live streams • Sample pitch decks • Standard terms sheets • VC 101 • Entrepreneurs can easily evaluate the investor and decide if they want to let them in the deal.
  18. 18. Quantified Startup • Using data to make better investment decisions • Everything from social metrics to real-time user and accounting data to how many code commits the developers make • Real-time tracking and dash boarding of data to quickly identify (and potentially shed) lagging portfolio companies • Enables a shift from an opaque and semi-closed system to a transparent and open environment which more merit based than it has ever been. • Emergence of platforms and tools -- Dashboard.io (Paul Singh of 500 Startups), Mattermark (“where big data meets venture capital”)
  19. 19. Entirely New Approaches to early stage investing Crowdfunding: • Over 1M crowdfunding campaigns globally in 2012, raising over $2.7B • Only 4% were equity campaigns • As more countries allow equity crowdfunding, expect these figures to grow exponentially • Platforms like Funder’s Club, wefunder, and CircleUp driving significant interest in equity crowdfunding Syndicates: • Any accredited investor on AngelList can create, lead and collect carry for a fund of angel money for a specific startup. • “If I were young & wanted to be in VC I would…set up shop on AngelList organizing syndicates.” (Fred Wilson, Union Square Ventures)
  20. 20. FACT: Socially-driven Disruption Is Upending Every Industry (opportunities are everywhere!)
  21. 21. Socially-driven Disruption • Rise of the social web is creating peer-to-peer models of social business disrupting numerous industries • In media, content producers can connect directly with their audience upending traditional models • In manufacturing, platforms like Etsy help creators monetize their services without having to go through the usual channels or middlemen • In services, such as hotels and taxis, which can be easily socialized companies like Uber, Lyft, Hailo, Airbnb, SideCar and TaskRabbit are succeeding
  22. 22. Internet 2.0: Socially Impactful Disruption “The first revolution started in the '90s with the release of the web and consumer email. The goal was to get everyone online and make the Internet part of everyday life. That goal has largely been achieved. Now that the Internet is ubiquitous and mobile, we've entered the second revolution, which will improve education, health care, energy and transportation.” ---- Steve Case • Socially-driven disruption is now moving through the rest of the economy • Key targets are education, healthcare and other service sectors which are ripe for disruption, where social “pull” can drive structural industry change
  23. 23. Good for the World; Good for Investors Consumer Web: $70b Health: $1,067b Education: $869b Energy: $1,200b
  24. 24. In the Internet Revolution, entrepreneurs will be more powerful and more disruptive than we can imagine. 1. We are nearing a time when anyone, anywhere can create the next massively high growth company 2. Entrepreneurship is a global phenomenon – anyone can build highly complex solutions from anywhere 3. Early stage venture investing is undergoing massive disruption (in favor of entrepreneurs!) 4. Socially-driven Disruption Is Upending Every Industry (opportunities are everywhere!), especially in important arenas like education, healthcare, energy and transportation
  25. 25. Shifting Global Economic Mindset It’s a whole different world out there… Local Corporate Global Entrepreneurial Hierarchical Closed Networked Transparent Transactional Transformational
  26. 26. In the Internet Revolution, entrepreneurs will be more powerful and more disruptive than we can imagine.
  27. 27. Donna Harris Cofounder @dharrisindc