Venturing at Sanoma - presentation for LIME CFO at Sanoma Media Matters 2014

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Presentation by Herman Kienhuis about innovation at Sanoma by SanomaVentures and SanomaLab for LIME CFO audience at Sanoma's Media Matters event. July 11, 2014, Hoofddorp, The Netherlands.

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Venturing at Sanoma - presentation for LIME CFO at Sanoma Media Matters 2014

  1. 1. Venturing @ Sanoma Herman Kienhuis, director SanomaVentures Hoofddorp, 11 juni 2014
  2. 2. chemical engineering / mckinsey / mba / sanoma finance & strategy / digital product development / venture capital family-man / music-maker / vintage-lover / internet-geek
  3. 3. Innovation = doing new things “the embodiment, combination, or synthesis of knowledge in original, relevant, valued new processes, products, services or business models”
  4. 4. “I’ll be happy to give you innovative thinking. What are the guidelines?”
  5. 5. Innovation = discovering the unknown “a messy business which creates novel solutions to important problems”
  6. 6. Collapse of newspaper advertising
  7. 7. Boom of mobile consumption 0% 10% 20% 30% 40% 50% TV Online Radio Print Mobile US Consumer Media Consumption Share 2009 2010 2011 2012 2013 Source: eMarketer, Aug. 2013
  8. 8. Explosion of tablet adoption 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% UK France Germany Spain Italy Tablet user penetration (% of population) 2010 2011 2012 2013 2014 Source: eMarketer, May 2014
  9. 9. Rapid shift to automated ad trading Source: MagnaGlobal, Oct. 2013
  10. 10. The Next Big Thing?
  11. 11. $3bln $2bln
  12. 12. Technological change Organizational change The Speed of Change ?
  13. 13. Strategy under uncertainty requires experimentation
  14. 14. Defend and extend core businesses Build emerging businesses Create options for future growth Addressing all three horizons of growth Time Value
  15. 15. @ Sanoma
  16. 16. Sanoma activities across the three growth horizons 2nd horizon: Expansion 3rd horizon: Exploration Current business optimization Key Growth Projects (“Oaks”) SanomaLab Optimizing/ consolidating Subsidiaries M&A SanomaVentures 1st horizon: Exploitation InternalExternal •  Building on existing (in- house) assets and expertise •  Deliver leads (prototypes) for Growth projects •  Building on (external) entrepreneurial talent and innovation outside current core •  Deliver leads (minority interests) for M&A Revenue growth Speed of execution Discovery Cost of experimenting EBIT Marketshare
  17. 17. SanomaLab Internal accelerators & venture projects
  18. 18. Train staff in lean development
  19. 19. Supporting intrapreneurs
  20. 20. Collaborate
  21. 21. Trial & error
  22. 22. Move fast, break things
  23. 23. 1. The Kickoff
  24. 24. 1. The Webinars 2. Webinars
  25. 25. 3. The Bootcamp
  26. 26. SanomaLab internal venture projects: Funneling ideas into businesses Discovery & Testing of opportunity for initial validation. Four sources of ideas: Accelerators, Existing Business, Partnership or SanomaLab. Hypothesis phase & establishing a Venture. Work on continuous validation, with a number of pivots expected. Prototypes built only for testing purposes. No product dev. Product building phase. Venture working on continuous delivery of product while still testing riskiest elements of funnel (metrics: acquisition, activation, retention, revenue, referral). Acceleration phase after proven demand. Continuous building of product with clear product backlog and low maintenance. Venture has been proven and the startup has become a business with substantial revenues. Standards enforced, transfer to business unit.
  27. 27. Criteria 1.  The (wo)man and The Plan 2.  Ability to Execute 3.  Unfair Advantage 4.  Fit for Sanoma
  28. 28. SanomaVentures External start-up investments
  29. 29. Access to unrestricted innovation and entrepreneurial talent
  30. 30. Reducing cost of experimentation
  31. 31. 11 juni 2014 Presentation name35 Create alternative options for future growth
  32. 32. Creating value from expertise, network and media as investment currency
  33. 33. 11 juni 2014 Presentation name37 Right time: growing entrepreneurial activity, less bank financing
  34. 34. SanomaVentures objectives R&D: Create access to external talent and innovations and substantially reduce cost of experimentation; aiming at 24 investments in 3 years Growth: Create options for future growth; execute sufficient quantity and quality investments, and build up a portfolio generating >€20 mln revenues in 2017 Value creation: Support startups with expertise, network and sell media as an investment currency; Manage portfolio companies towards positive growth and return and create 5 ‘exits to Sanoma’ (acquired) in 6 years Transformation: Facilitate knowledge exchange, bringing new insights into our organization, supporting Sanoma’s transformation to digital PR: Help build Sanoma’s innovation and growth story towards advertising market, labour market and capital market
  35. 35. SanomaVentures investment strategy: geographies SanomaVentures investment strategy: geographies
  36. 36. SanomaVentures investment strategy: geographiesSanomaVentures investment strategy: scope Consumer Media •  Consumer web services •  Mobile & Tablet publishing •  Online Video & connected TV E-commerce •  Advertising & marketing services •  Lead generation & Marketplaces •  Commerce services Education •  Pre-school educational apps •  K12 ecosystem •  Personal/professional development
  37. 37. capitalneed(EURx1000) >20.000 20.000 10.000 5.000 2.500 1.000 500 250 100 50 25 Incubators/ accelerators/ angel investors start development phase friends & family venture capital Sanoma Ventures (€0.1-1.0m) pre-seed seed early-stage / venture growth later-stage •  Very difficult to screen (no metrics available) •  Low success rate •  5-7 years for return •  Competition from VC’s •  Limited ability to acquire >15% stakes •  Much capital required •  Less investors, lower valuations •  User metrics available •  3-5 years for return sweetspot SanomaVentures investment strategy: investment stage
  38. 38. 4.DECISION MAKING 5.EXECUTION 1.SCOUTING 2.ASSESSMENT 3.NEGOTIATIONS
  39. 39. Criteria 1. Team 2. Product 3. Plan 4. Sanoma value-add 5. Deal structure
  40. 40. ROOMLR SOCIAL SHOP
  41. 41. “The difficulty lies not in the new ideas, but in escaping the old ones” John Maynard Keynes
  42. 42. get started @kienhuis #smm14 Questions?

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