Fast Growth Forum 2014


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  • Open source  GithubCreative - Youtube, Soundcloud, Wordpress, ShapewaysFunding - Kickstarter, Quirky, Funding CircleMetrics - Google, Facebook, Twitter, YouTubeOptimization - Chartbeat, Surveymonkey, Qualaroo, Kissmetrics
  • A way of describing the odds: Edmund Phelps, a Columbia economics professor and Nobel laureate, described the odds in his new book, “Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge and Change” as “from 10,000 business ideas, as 1,000 firms are founded, 100 receive venture capital, 20 go on to raise capital in an initial public offering, and two become market leaders.” 
  • US: A study by three students at Columbia business school looked at the expected rate of credit losses on banks’ loan portfolios and came up with a benchmark of sorts: For our sample (Q4:1996-Q2:2012), the average (median) ALLL is 1.54% (1.37%) of gross loans held for investment: ( EUROPE: According to the IMF, the level of non-performing loans as a share of total loans made in 2012 in Europe, was quite high– around 6% in the EU27.EU SMEs rely heavily on banks for funding. Around 75% of corporate financing in the EU is obtained from banks, compared to about 30% in the US. The EU crisis has now highlighted that this is a huge vulnerability for SMEs in Europe. KR: European banking report:
  • iPhoneSelf-driving carsHealth
  • According to the venture impact study, IHS Global Insight, originally VC-backed companies accounted for 11.87m jobs and over $3.1 trn in revenue in the US in 2011—accounting for 21% of GDP and 11% of private-sector employment. At Index, our portfolio companies alone have generated $4bn worth of revenue, while growing on average by more than 75%, creating 20k jobs with 1k positions currently openPeople say VC doesn’t add anythign but maybe when we look back on this cambrian explosion of innovation from 1960s (semis) to 2020s (cloud connected services in every sector) – the broadscale application and understanding of venture economics will be the true legacy of venture rather than Apple, Cisco, Facebook, Google, Microsoft, Salesforce, Skype and TwitterDATA:
  • What did these governments spend in a year on DEFENSE, EDUCATION, HEALTH:See google doc for this data:
  • ORIGINAL STUDY… years ago, in a paper in American Scientist, Herbert Simon and William Chase drew one of the most famous conclusions in the study of expertise:There are no instant experts in chess—certainly no instant masters or grandmasters. There appears not to be on record any case (including Bobby Fischer) where a person reached grandmaster level with less than about a decade's intense preoccupation with the game. We would estimate, very roughly, that a master has spent perhaps 10,000 to 50,000 hours staring at chess positions…KR: After Simon and Chase’s paper, for example, the psychologist John Hayes looked at seventy-six famous classical composers and found that, in almost every case, those composers did not create their greatest work until they had been composing for at least ten years. 
  • Fast Growth Forum 2014

    1. 1. Start ups need a child’s imagination
    2. 2. And a relentless desire to win
    3. 3. And some highly calculated risks
    4. 4. Prizes can be enormous
    5. 5. So how can you help yourself?
    6. 6. Understand Markets Watch for Demand Signals Study People
    7. 7. Mobile changes everything
    8. 8. Changes which markets we connect to
    9. 9. Even more in future
    10. 10. We live in a great place
    11. 11. London is on a roll
    12. 12. Learn to work on the network
    13. 13. New ways to tell stories
    14. 14. New ways to sell
    15. 15. New ways to work
    16. 16. New ways to raise money
    17. 17. 10k business ideas 1k firms started 100 VC funded 20 IPO 2 market leaders Nobel Prize in Economics 2006 Professor Edmund Phelps Less than 10% of business ideas even get started
    18. 18. 62% of venture investments are <1x 0 10 20 30 40 50 60 x<0.5 0.5<=x<1 x=1 1<x<2 2<=x<5 x>=5 % Cost % Value
    19. 19. Yes, start ups are really tough
    20. 20. You have no customers
    21. 21. No money
    22. 22. You and your team are fighting an imaginary war
    23. 23. Armed just with some big ideas
    24. 24. The extreme risk of 62% is definitely not for everyone, including many entrepreneurs and investors….. .
    25. 25. In fact a 2% loss ratio for banks lending to SMEs is already pushing the boundaries.
    26. 26. So if you feel comfortable managing risk, you might as well shoot for the moon
    27. 27. The capital which survives, creates businesses now accounting for 21% of US GDP….. 1978 1981 1987 1995 1995 1997 1999 1999 2005 and $1.4tn in new market value creating 440k new jobs with $545bn in new annual revenue serving >1bn customers Source: HIS Global Insight
    28. 28. And in Europe we are starting to build waves of similar dimensions
    29. 29. So what should you be thinking about when you are starting a business… Opportunity Others Ownership
    30. 30. How big is the opportunity….
    31. 31. Who are the others….
    32. 32. What level of ownership is available….
    33. 33. Pick a field big enough to change the world
    34. 34. Moving to Maslow’s Web Communications Clothing Discretionary Non-Discretionary Media Entertainment Shopping Travel Energy & Housing Education Food Finance Health Safety 1993-2003 2004-2012 2012+
    35. 35. And in Europe we have no shortage of willing talent….
    36. 36. Child’s imagination
    37. 37. Relentless desire to win
    38. 38. Highly calculated risks
    39. 39. No short cut to being a grandmaster “achievement is talent plus preparation.” - Malcolm Gladwell
    40. 40. You have to learn take risks Time Emotions Money
    41. 41. What should you focus on in the business…? Opportunity Others Ownership Customers Conversations Convenience Costs Competition
    42. 42. Maniacal focus on the customer….
    43. 43. Encourage conversations….
    44. 44. Offer new levels of convenience….
    45. 45. Leverage and manage cost structure…
    46. 46. Let the competition worry about itself…
    47. 47. So aim too high. The prize is huge and we all have an amazing start just by being here
    48. 48. Embrace your 62% @cape ♯risk62