20081126 opinno 22@_breakfast_v1_pml

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20081126 opinno 22@_breakfast_v1_pml

  1. 1. Internationalization strategies in the current economic scenario. Open Innovation alternatives for technology intensive companies Pedro Moneo, CEO Barcelona, November 26th, 2008 Spain Calle Plátano 14, 28029 – Madrid USA 1835 Vallejo St. #105 – San Francisco, CA 94123 pedro.moneo@opinno.com www.opinno.compedro.moneo@opinno.com · www.opinno.com 1
  2. 2. The speaker Pedro Moneo, CEO Pedro Moneo is currently: • Founder and CEO of Opinno, Open Innovation • CEO of the technology magazine Technology Review from MIT in Spain and Latin America • Strategic Advisor to Fedit, Spanish Network of Research and Technology Centers In the past, Pedro has been: • Corporate Strategy Director at Fedit • Strategy and corporate finance consultant at Accenture • Researcher at Argonne National Laboratory in Illinois, USA • M.Sc. graduate in Nuclear Engineering from the French Atomic Energy Commission • M.Sc. & Bachelors graduate in Mechanical & Energy Engineering from the Polytechnic University of Madridpedro.moneo@opinno.com · www.opinno.com 2
  3. 3. Agenda 1. Context 2. Opinno 3. Some advice 4. Opinno Corporate Presentation 5. Appendix 1. Analysis of the current economic situation 6. Appendix 2. Open Innovation additional informationpedro.moneo@opinno.com · www.opinno.com 3
  4. 4. Context New world economic landscapeThe profile of global economy is changing. The supremacy of the triad US - Europe - Japanis diluting. Emerging markets are creating a much more diverse landscape of powerfuleconomies • Today, the developing world represents 49% of the world GDP, whereas in 1990 it used to be only 39%This new landscape, characterized by multiple centers of prosperity and economic poweris commonly referred as multi-polar worldpedro.moneo@opinno.com · www.opinno.com 4
  5. 5. Context The poles of the multi-polar worldThe role of countries and regions is no longer as important as the role of innovation nodesChallenges for companies Which poles do you need to be at? How will you land and grow in those poles? How will you take advantage of the opportunities arising from that specific pole? How can you manage a multi-polar company? What can I do from home, what should I do outside?Challenges for governments You need to be the best in class in something. And the class is the world You need to specialize, taking into account your current situation and market trends You need to become a magnet, attract and breed the top performers You need to gain visibility and to interact with the most important polespedro.moneo@opinno.com · www.opinno.com 5
  6. 6. Context The new meaning of internationalizationInternationalization of business activities has become a much more complex. Exporting isnot enough anymore Today, internationalization is a global management attitude, and a two way road for sourcing and exchange of: 1. Talent and knowledge 2. Competitive, market and customer intelligence 3. Resources 4. Capital (public and private, from investors, VCs, banks, consumers) 5. New consumers 6. Geo-political advantagespedro.moneo@opinno.com · www.opinno.com 6
  7. 7. Context Hard times and great opportunities ahead2008 is the beginning of a new era. A time to learn from the past, and to quickly readaptto get over the dangerous threats and take advantage of enormous market opportunities 1973 1987 2001 2008pedro.moneo@opinno.com · www.opinno.com 7
  8. 8. Context Globalization spreads to financeThe progress, sophistication and diversification of technology that happened in the 90’shas spread to the world of finance 1. Low interest rates 2. Growth in securitizations 3. Leverage on those productsThree major problems have arisen: 1. Equity value not asset driven. Risk ratings are not sophisticated enough 2. Very high growth expectations. Appearance of intermediaries, inefficiencies 3. The flexibility of the financial market has pushed the consumer market, made prices go higher and deteriorated savings ratesThe current economic context will push us to GET REAL OR GO HOMEpedro.moneo@opinno.com · www.opinno.com 8
  9. 9. Context Financial realities and challenges The current scenario, will impose a series of new realities: • $15m raise @ $100m post valuation is gone • Series a will move towards series b. Series b/c will be smaller raises • Customer uptake will be slower • Cuts are a must • Need to become cash flow positive. Business plans need to be credible and show profit Also, this situation will introduce a series of increased challenges: • M&As will decrease • Prices will decrease. Valuations will be lower • Acquiring entities will favor profitable companies • IPOs will continue to decrease and will take longerpedro.moneo@opinno.com · www.opinno.com 9
  10. 10. Context A New Knowledge Based Economy Technological progress has produced important changes in the economic model. Most developed countries, and now many emerging economies traditionally living in a productivity based economy have already or will need to shift to a knowledge based economic model Nat. Resources based economy Productivity based economy Knowledge based economy 1. Quantity, quality and accessibility 1. Production costs – cost based 1. Innovation based product to natural resources (NR) product differentiation differentiation 2. Low value added transformation 2. Repeatability, mass production, 2. High risk and high value added product of NR long series, production capacity 3. Human resource and Intellectual 3. High profitability, low operational 3. Low man-hour costs capital as key competitive assets. costs 4. Subject to aggressive and 4. International intelligence as a key tool 4. Limited exploitation time unsustainable global competition to identify opportunities, sources of HR, to define strategies to attract, fix and 5. Difficulty to train high qualified 5. Automation increases productivity combine intellectual capacities personnel and to adapt but produces unemployment professionals to emerging sectors 5. Constant pressure on R&D intensity. 6. Strong investments on high technology infrastructures 7. Multilocalizationpedro.moneo@opinno.com · www.opinno.com 10
  11. 11. Context Open Innovation as a must Open Innovation is quickly growing as the most suitable strategy to take advantage of the new opportunities and overcome market threats 1. Talent and therefore ideas flow from one company to another in shorter times 2. Market cycles are shorter. Technologies become obsolete sooner 3. Knowledge intensity and therefore R&D intensity are increasingly important 4. Technical difficulties are too big to be faced all at the same time by a single company 5. Lower barriers to entry make competition very aggressivepedro.moneo@opinno.com · www.opinno.com 11
  12. 12. Context Open Innovation Open Innovation means that valuable ideas can come from inside or outside the company (industry) and can go to market from inside or outside the company (industry) as well Other firm´s market Licence, spin Our new out, divest market Internal technology base Internal/external Our current venture handling market External technology insourcing External technology base Henry Chesbrough, 2004pedro.moneo@opinno.com · www.opinno.com 12
  13. 13. Context The Challenge The challenge is to PLAY GLOBAL, PLAY REAL, PLAY OPEN and PLAY IN MULTIPLE DIMENSIONS 1 3 2 4 1. Talent and knowledge 2. Competitive, market and customer intelligence 3. Resources 4. Capital (public and private, from investors, VCs, banks, consumers) 5. New consumers 6. Geo-political advantagespedro.moneo@opinno.com · www.opinno.com 13
  14. 14. Agenda 1. Context 2. Opinno 3. Some advice 4. Opinno Corporate Presentation 5. Appendix 1. Analysis of the current economic situation 6. Appendix 2. Open Innovation additional informationpedro.moneo@opinno.com · www.opinno.com 14
  15. 15. Opinno Who are we Opinno is an open innovation network. We help technology intensive companies adopt an open innovation strategy and we help entrepreneurs bring their ideas to the market, mainly by bringing high tech startups from the lab to series A venture capital funding. Opinno has 5 business lines: 1. Corporate Innovation Strategy 2. Business Acceleration 3. Technology Review 4. Opinno Business Plan Competition 5. Entrepreneurs and Investors Clubpedro.moneo@opinno.com · www.opinno.com 15
  16. 16. Opinno How we play global Opinno is connected to the main innovation poles through a two way road We have physical presence in San Francisco, Madrid and Buenos Aires Through our alliance with MIT Technology Review, we have collaborating antennae in Boston, Munich, Paris, Rome, Bangalore and Shanghaipedro.moneo@opinno.com · www.opinno.com 16
  17. 17. Opinno How we play real In times of crisis, it makes sense to try and get extra revenues from your IP, by commercializing it in different ways, and also to reduce costs and time-to-market technology IP house, Investor, VC, intensive consultant, Angel Netw. company entrepreneur Intelligence Opinno Business acceleration Opinno plays real by sharing risk with entrepreneurs. We are not consultants. We are co-entrepreneurspedro.moneo@opinno.com · www.opinno.com 17
  18. 18. Opinno How we play open We play open by: 1. Working with clients specialized in different sectors and technologies 2. Sketching opportunities to maximize ROI on IP 3. Exchanging market insight and information with other Technology Review poles 4. Performing hands-on validation results, by interacting directly with potential clients and investors 5. A business plan competition that links us to many R&D Centers in Spain and to the top 50 business plan competitions in the world 6. An open entrepreneurs and investors club that holds informal meetings, presentations and other social activities 7. An open and social platform for our entrepreneurs, and open tools like blogs, mailing lists, document repositories and chatting applicationspedro.moneo@opinno.com · www.opinno.com 18
  19. 19. Context How we play multidimensional We play multidimensional by: 1. Direct access to talent from our business plan competition and its social platform 2. Direct contact with all agents in the value chain through www.technologyreview.com , www.younodle.com and www.opinno.com 3. Market insight and intelligence through our local offices and contact pointspedro.moneo@opinno.com · www.opinno.com 19
  20. 20. Agenda 1. Context 2. Opinno 3. Some advice 4. Opinno Corporate Presentation 5. Appendix 1. Analysis of the current economic situation 6. Appendix 2. Open Innovation additional informationpedro.moneo@opinno.com · www.opinno.com 20
  21. 21. Strategic advice for technology companies Readapt or die The economic cycle shift has been dramatic. Changes in cash burn rate intensive companies have to be agile in applying cost cuts or risk entering death spiral Death spiral: Slow demand creates less revenue. Less revenue imposes need for cost reduction or innovation. Both take time to reflect on price, which causes demand to slow more, putting company at riskpedro.moneo@opinno.com · www.opinno.com 21
  22. 22. Strategic advice for technology companies Manage what you can control Reflect the market growth assumptions in your strategic planning by managing what you can control: Impact on financial planning: Impact on Operations Strategy: Spending Engineering: decrease headcount for next version? Growth assumptions Product: what features are absolutely essential? Earnings assumptions Marketing: measuring & cutting what’s not working? Focus on quality Sales & bus dev: getting return on expense increase? Lower risk Pipeline: real probabilities of closing deals? Reduce debt Finance & cash burn: where can payments be deferred? G&A: what departments are essential?pedro.moneo@opinno.com · www.opinno.com 22
  23. 23. Strategic advice for technology companies Open Innovation in the current economic scenario Technology intensive companies should OPEN UP and try to make their IP a revenue source rather than a cost center. This will provide them with higher and more stable financing and also a better business model to seek and deploy new technologies 1. Identify New Growth Opportunities 2. Define & Implement New Innovation Strategies 3. Generate & Deliver Better Ideas 4. Renew Organizational Capabilitiespedro.moneo@opinno.com · www.opinno.com 23
  24. 24. Strategic advice for technology companies Focus on business model A Business model approach can lead to interesting strategies in the current situation: 1. Recycle knowledge and products with more creative business models 2. Adapt the business model to a “crisis situation”. Spain has been selling high tech in this low profile for a long time! 3. Consulting is dead. Focus on delivering tangible and measurable results 4. Include the Open Innovation pros and cons in your business model and b. plan 5. Reach out for the new customers globalization is bringing 6. Rethink your commercial strategy. We no longer sell products, we sell experiences. We no longer sell to clients, we sell to couples: Client + Situation = Experiencepedro.moneo@opinno.com · www.opinno.com 24
  25. 25. Strategic advice for technology companies Adopt a complete technology transfer strategy Companies should draw a strategy to optimize the strategic use of R&D&I outputs. All channels of technology transfer make sense and can be combined appropriately 1. Communicate 2. Teach and train 3. Perform R&D Vertical integration in Technology Transfer 4. Patent and license produces higher 5. Create and manage Joint Ventures returns but rapidly increases complexity 6. Create and manage spin-offs You don’t need to do everything yourself, especially if you are a newcomer!pedro.moneo@opinno.com · www.opinno.com 25
  26. 26. Strategic advice for technology companies Perform ROI calculations Performing ROI calculations can help companies improve all steps in the R&D and technology transfer value chains: 1. To talk to clients -> make R&D&I tangible. Talk in terms of profitability and risk 2. Talk to investors (public or private) -> defend your budget and complement your business plan. Make a solid budget proposal to the company’s Corporate center 3. Focus your R&D on customer needs and on market impact -> improve the market orientation and market insight capabilities of your R&D team 4. To measure your results -> strategic planning. Close the innovation cycle 5. Valuate your IP. Put a market price to your R&D workpedro.moneo@opinno.com · www.opinno.com 26
  27. 27. Strategic advice for technology companies Promises versus reality When launching a spin-off, companies should take into account that investors will seek tangible investment opportunities. VC markets will tighten. This means less players, more difficulty to get funded, less intermediates and tangible investmentspedro.moneo@opinno.com · www.opinno.com 27
  28. 28. Strategic advice for technology companies Summary of best practices This is a summary of best practices that companies in Spain can apply to themselves 1. Build a talent driven organization 2. Collaborate among technology companies and also with external agents 3. Intelligence: Develop intelligence. Perform situation analysis and ROI calculations 4. Management: Adapt quickly, reflect market imperatives in planning. Create alliances. Concentrate on high value added segments of the value chain 5. Finance: Use a zero-based budgeting approach. Spend every dollar as if it were your last. Make cuts. Review salaries. Bolster balance sheets . Become cash flow positive as soon as possible . Lower risk. Reduce debt. 6. Market approach: Establish solid revenue model. Study your client and its ability to pay. 7. Technology Transfer: Optimize Open Innovation channels for tech. transfer inwards and outwards. Start with a solid business plan, even before R&D occurs. 8. Sales: Employ a heavily commissioned sales structure. GET REAL OR GO HOME!!pedro.moneo@opinno.com · www.opinno.com 28
  29. 29. Agenda 1. Context 2. Opinno 3. Some advice 4. Opinno Corporate Presentation 5. Appendix 1. Analysis of the current economic situation 6. Appendix 2. Open Innovation additional informationpedro.moneo@opinno.com · www.opinno.com 29
  30. 30. Opinno Who are we Opinno is an open innovation network. We help technology intensive companies adopt an open innovation strategy and we help entrepreneurs bring their ideas to the market, mainly by bringing high tech startups from the lab to series A venture capital funding. Opinno has 5 business lines: 1. Corporate Innovation Strategy 2. Business Acceleration 3. Technology Review 4. Opinno Business Plan Competition 5. Entrepreneurs and Investors Clubpedro.moneo@opinno.com · www.opinno.com 30
  31. 31. Opinno Corporate Innovation Strategy Opinno is an innovation booster and a high-tech business accelerator. We work with technologies from the labs and optimize time-to-market and success ratio. • Opinno interacts with their customers as an outsourced department of open innovation. We establish long-term relationships to allow for business oriented planning of R&D. This implies: • Variable vs. fixed cost structure & immediate results: As a subcontractor, collaboration can start, stop and resize anytime. No learning period, Opinno delivers results from day 1. • Broad sector and technology insight: Multiple applications for one technology. Competitor view. • Our work with corporate clients is structured in three phases: 1. Protected by a confidentiality contract, Opinno and the client build a catalog of the client’s intellectual capital (IC) (R&D projects, patents, spin-offs, joint ventures, etc). 2. Opinno and the client then map a strategy for the monetization of the IC, ranging from the patenting and licensing strategy to inorganic venture capital growth and internationalization. 3. For the top 20% projects, Opinno launches a one-on-one hands-on acceleration, meaning that every project is managed from the door of the lab till it gets VC funding, gets licensed or sold.pedro.moneo@opinno.com · www.opinno.com 31
  32. 32. Opinno Business Acceleration Business Acceleration is the core business of Opinno. This service is applicable to startups that have received seed funding (300k€ or more) and that are seeking strong venture capital funding and multinational disruptive growth. Acceleration occurs in four steps: 1. Project validation and project back up: Opinno will work closely with the entrepreneurs to examine and improve their business model and business plan, adapting them to the US VC culture. We will also prepare proposals for back up public funds from ICEX, Neotec and Enisa or others if applicable (local government grants, some angel funding if needed). We will create support materials, as a video pitch, corporate web site or corporate image if necessary (logos, etc) 2. Project landing: Opinno will incorporate the company in the US, open virtual headquarters, and open bank accounts in the US. If necessary, we will start the paperwork for US investor visa. We will then concentrate on protecting IP with our allied attorneys, specialist in that particular technology. Simultaneously, we will perform a “hands on validation”, meaning that we will validate the technology, business model and market with local potential clients, venture capital firms and entrepreneurs. Last, Opinno will interview a series of professionals to provide around 10 candidates for the position of EIR, or Entrepreneur in Residence. An EIR is a professional that has wide experience in that technology area and that, as an entrepreneur, has participated in the launch of similar ventures in the recent past. This person is normally familiar with potential VCs, clients, partners, will become the CEO of the company and will bring along other important team members in the future.pedro.moneo@opinno.com · www.opinno.com 32
  33. 33. Opinno Business Acceleration Once completed the first two steps, the company is officially operating and actively looking for funding, clients, partners and team members: Phase 2 ends with a one week visit of the original team to Silicon Valley. This week will be an important milestone where the team will interview and select the final EIR candidate, and visit several venture capital firms and potential clients. 3. Project launch: The incorporation of the EIR will represent the official US project launch. The EIR will be the “eyes and ears” of the local team in the US and will work closely with them to create and improve the “business pitch” of the company to VCs and clients. EIR will work for a period of 4-7 months average to get the company funded and will then become its formal CEO. 4. Project funding and growth: The CEO will lead the company from now on and Opinno will cease its services (and service fees) on the date the funding occurs. Opinno’s compensation for services includes an upside in the companies equity, Opinno will continue close to its clients and will provide assessment on the management of the company free of charge and at its own interest.pedro.moneo@opinno.com · www.opinno.com 33
  34. 34. Opinno Technology Review Technology Review and Technologyreview.com are published by Technology Review Inc., an independent media company owned by the Massachusetts Institute of Technology (MIT). The oldest technology magazine in the world (est. 1899), Technology Review aims to promote the understanding of emerging technologies and to analyze their commercial, social, and political impacts. Our insight into innovation assists technology and business leaders -- CXOs, entrepreneurs, researchers, venture capitalists, and financiers -- as they drive the global economy. With international editions in Spain, China, Italy, and Germany, Technology Review reaches more than two million industry and R&D leaders around the world through its print magazine, website, newsletters, and live events. Opinno is the partner of MIT Technology Review en Spain and Latin America.pedro.moneo@opinno.com · www.opinno.com 34
  35. 35. Opinno Technology Reviewpedro.moneo@opinno.com · www.opinno.com 35
  36. 36. Opinno Business Plan Competition Opinno holds an annual business plan competition. Our competition is fueled by projects from universities, public and private research institutions, companies and independent entrepreneurs and has a national coverage. • The competition consists of two phases and has a prize of €100,000 for the winner, plus 50k€ and 25k€ prizes for those who finish second and third. • Projects that make it to the final round are automatically qualified for participation in the world’s top 50 Business Plan Competitions, out of which Opinno BPC is the only representative from Spain. This is done through Opinno’s alliance with Younoodle (San Francisco B. Plan management social network) • Our B. Plan competition features an outstanding team of judges and tutors, strong alliances with the best schools and labs in the country and a methodology that includes video pitching, business model building and a cutting edge technology to manage the whole competitionpedro.moneo@opinno.com · www.opinno.com 36
  37. 37. Opinno Entrepreneurs and Investors Club Opinno also runs an entrepreneurs and investors club. This initiative allows us to create and breed a community of outstanding people that will be a source of interesting ideas and business projects. We divide our activities in the group in two categories: Social activities: • Technology Wednesdays: Opinno regularly organizes talks and activities with outstanding characters that happen to visit us. We spread the word of our activities through our social community, our website and through our facebook group. • Entrepreneurial Fellows: Opinno encourages experienced entrepreneurs to look for young talent and provide their financial support and expertise under a philanthropic perspective. We have a social network of young and experienced entrepreneurs that we help to match. Business activities: • Opinno Investment Club: Ideas are presented to a panel of private investors, who pay a monthly fee and commit to a code of conduct. The presentation of ideas is done in regular meetings where the Opinno team presents the latest opportunities and also through entrepreneur pitches that happen during these meetings.pedro.moneo@opinno.com · www.opinno.com 37
  38. 38. Opinno Spillovers from being a client of Opinno Becoming a client of Opinno implies receiving spillovers from all business lines and joining a powerful network that will add incredible value to the company and its team • Technology Review and Web Opinno visibility: Opinno owns the version in Spanish of MIT’s Technology Review. This allows us to generate content about Spanish companies to be published in Spanish or even pushed to the global versions. We can also leverage important contacts in the industry, and also with investors, clients, and entrepreneurs, specially if they are related to the MIT. • Product prescription: Opinno only works with breakthrough technology and outstanding teams. Therefore if we work with you, we will believe in your product and will become your best prescriptors in the industry. • Contests and awards: Opinno is networked with many innovation contests and awards world wide and is always proud to encourage its clients to pursue these objectives, with enormous brand building capability. • Opinno community of entrepreneurs: Clients are automatically members of our community of entrepreneurs, which means tremendous networking opportunities. • Conferences, workshops and press: Opinno is a regular speaker at conferences and workshops in Spain and also in the US. We also organize this kind of event with our clients, sponsors (government, VC firms, private companies and individuals). Opinno showcases his clients at conferences and networks them by allowing them to participate in events. Opinno is a very active communicator and produces fresh innovation news that are very attractive to the press. We usually showcase our clients in press articles.pedro.moneo@opinno.com · www.opinno.com 38
  39. 39. Agenda 1. Context 2. Opinno 3. Some advice 4. Opinno Corporate Presentation 5. Appendix 1. Analysis of the current economic situation 6. Appendix 2. Open Innovation additional informationpedro.moneo@opinno.com · www.opinno.com 39
  40. 40. Appendix 2008, the beginning of a new bear market? The Financial crisis of 2007–2008‎has all the traits of the start of new global bear market A bull market tends to be associated with increasing investor confidence, motivating investors to buy in anticipation of future price increases and future capital gains. In describing financial market behavior, the largest group of market participants is often referred to, metaphorically, as a herd. A bear market is described as being accompanied by widespread pessimism. Investors anticipating further losses are often motivated to sell, with negative sentiment feeding on itself in a vicious circle. The most famous bear market in history was preceded by the Wall Street Crash of 1929 and lasted from 1930 to 1932, marking the start of the Great Depression. A milder, low-level, long-term bear market occurred from about 1973 to 1982, encompassing the stagflation of U.S. economy, the 1970s energy crisis, and the high unemployment of the early 1980s.pedro.moneo@opinno.com · www.opinno.com 40
  41. 41. Appendix Consumer ability to spend has grown significantlyIncreases in workforce and productivity, plus attractive financial products … … have fueled a nation of consumerspedro.moneo@opinno.com · www.opinno.com 41
  42. 42. Appendix Debt and foreign ownership of treasuries Local consumers buy fundamentally foreign goods and foreign companies buy local treasuries … as a result, debt balloons and foreign share on treasuries follows U.S. treasuries being easily injected in international financial markets through a huge amount of new financial securitiespedro.moneo@opinno.com · www.opinno.com 42
  43. 43. Appendix Consumer capability increases with liquidity on housing Liquidity easing spread to housing, causing unprecedented increases in house pricing … The new financial products took the place and risk of personal funds in these transactionspedro.moneo@opinno.com · www.opinno.com 43
  44. 44. Appendix A New Knowledge Based Economy .. putting pressure on property owners. Personal savings rate evaporated, at the time that real wages strongly eroded per consumption expenditurepedro.moneo@opinno.com · www.opinno.com 44
  45. 45. Appendix A New Knowledge Based Economy In the United States, during the dramatic rise in house prices MEW funded PCE 1.1 to 1.7% from 1991 to 2000, and almost 3% from 2000 to 2005. 2006 was the first symptom of stagnation The rate of MEW has been linked to Marginal propensity to consume (MPC), as measured by Personal Consumption Expenditure (PCE). Mortgage equity withdrawal (MEW) is the decision of consumers to borrow money against the real value of their houses. The real value is the current value of the property less any accumulated liabilities (mortgages, loans, etc.) Some authors also use equity extraction and include net payments received at time of house sale.[1] In this case the traditional usage of equitypedro.moneo@opinno.comofwww.opinno.com extraction is the purchase · a new house. 45
  46. 46. Appendix Derivatives take cover value and risk of the new transactions First the landlord owned the house. Now it’s the bank that owns it. The ability of the banks has been to turn access to high leverage and cheap credit into higher housing prices… but again, this separates the value of credit (passive) from the value of assetspedro.moneo@opinno.com · www.opinno.com 46
  47. 47. Appendix A booming future based new portfolio of financial products The booming of a new portfolio of sophisticated financial products was not limited to the housing sector and helped feed the global funding demandpedro.moneo@opinno.com · www.opinno.com 47
  48. 48. Appendix Structured products and regulatory changes compound these issues A booming financial and market causes the appearance of intermediaries, a subsequent valuation increase and no direct access to the measure of risk and real value. Structured products and regulatory changes compound these issues. • Growth in securitizations • Leverage on those structures • Increased leverage on bank’s balance sheets • Often miss-rated by agencies • Repeal of Glass-Steagall • Regulatory changes encouraging home ownership The Glass-Steagall Act of 1933 established the Federal Deposit Insurance Corporation (FDIC) in the United States and included banking reforms, some of which were designed to control speculation. Some provisions such as Regulation Q, which allowed the Federal Reserve to regulate interest rates in savings accounts, were repealed by the Depository Institutions Deregulation and Monetary Control Act of 1980. Provisions that prohibit a bank holding company from owning other financial companies were repealed on November 12, 1999, by the Gramm-Leach-Bliley Act,pedro.moneo@opinno.com · www.opinno.com 48
  49. 49. Appendix From virtuous to vicious cycle The stagnation of consumer spending capacity forced an abrupt mortgage reset, which acted as an initiator of a chain of events that may lead to a severe recessionpedro.moneo@opinno.com · www.opinno.com 49
  50. 50. Appendix Symptoms of recession Symptoms of a recession can already be noticed in different indicatorspedro.moneo@opinno.com · www.opinno.com 50
  51. 51. Appendix Problems related to the recession There are multiple problems related to the recession process explained before • Housing led recession, generalized, affecting the end consumer on most tangible asset • Over leveraged financials, forcing long time lags until market readjusts • Falling asset prices due to readjustment worsen asset coverage over debt • Frozen credit markets paralyze new investments • Weak household balance sheet • Globally synchronized slowing exacerbating all of above and causing a significant risk to gdp growth The cause of this recession can be summarized as “Credit not equity or asset driven” and the main characteristic is that it is “globally synchronized”pedro.moneo@opinno.com · www.opinno.com 51
  52. 52. Appendix A New Knowledge Based Economy High tech markets are correlated to the progress of national economy and also suffering an important decelerationpedro.moneo@opinno.com · www.opinno.com 52
  53. 53. Appendix A New Knowledge Based Economy This effect can be observed on PC and mobile handset sales, as well as on the progress of retail and advertisementpedro.moneo@opinno.com · www.opinno.com 53
  54. 54. Appendix Similarities with 2001 .com burst Impact on the high tech industry will be similar to 2001, with a longer recovery time, due to the already achieved competitiveness of the industry, and to the degree of impact and volume of the current crisispedro.moneo@opinno.com · www.opinno.com 54
  55. 55. Appendix Conclusions The current scenario, will impose a series of new realities: • $15m raise @ $100m post valuation is gone • Series b/c will be smaller raises • Customer uptake will be slower • Cuts are a must • Need to become cash flow positive Also, this situation will introduce a series of increased challenges: • M&As will decrease • Prices will decrease. Valuations will be lower • Acquiring entities will favor profitable companies • IPOs will continue to decrease and will take longerpedro.moneo@opinno.com · www.opinno.com 55
  56. 56. Agenda 1. Context 2. Opinno 3. Some advice 4. Opinno Corporate Presentation 5. Appendix 1. Analysis of the current economic situation 6. Appendix 2. Open Innovation additional informationpedro.moneo@opinno.com · www.opinno.com 56
  57. 57. Context Open Innovation vs. Closed Innovation Open Innovation allows for a full market orientation on all steps of the value chainpedro.moneo@opinno.com · www.opinno.com 57
  58. 58. Context Summary of best practices Open Innovation can and must occur in all phases of product developmentpedro.moneo@opinno.com · www.opinno.com 58
  59. 59. Context The logic of Open Innovation It is key to understand a few facts about Open Innovationpedro.moneo@opinno.com · www.opinno.com 59
  60. 60. Context Open Innovation and globalization This new model implies that, in the end, things will be done where they are done best! 1. On an average, about 15% to 20% of strategic 1. You can derive value from your R&D only if (blue-sky) R&D sees the light of day…the rest you execute them - put them to use; wither away on the shelf over time. (The commercialize them; and bring them to Aberdeen Group, Boston) market 2. Of all the applied R&D done under contract 2. The value of your contract research can be worldwide, almost all of them are underutilized exploited exponentially by making them by a vast percentage. (rdmag.com / Battelle) available for other commercial uses 3. All tasks around the globe will move where 3. While innovation must be done where it is they are done the best…and the smartest. done the best, it must be commercialized (Prof. Michael Treacy, MIT…restated) where it can be done so most effectively 4. Over 70% of startup businesses that fail, do so 4. World class startups must be smartly and not because they were bad ideas, but because adequately funded and lead by experienced of lack of smart capital, lack of strategy & entrepreneurs with domain expertise, improper execution. (Startup 101) experience, and best practicespedro.moneo@opinno.com · www.opinno.com 60
  61. 61. Context Product vs. Business model Innovation Business model based innovation starts and finishes on market approach. It shifts the organization towards the customer and its current and future needspedro.moneo@opinno.com · www.opinno.com 61
  62. 62. Context Best practices in Open Innovation Open Innovation allows us to identify the best in class in the different stages of innovation, learn from their practices, but also use them as partners in our innovation cycle Portfolio Operational Capabilities Open Dynamic Capabilities Capabilities Technology Capabilitiespedro.moneo@opinno.com · www.opinno.com 62
  63. 63. Opinno, Open Innovation Spain Calle Plátano 14, 28029 – Madrid USA 1835 Vallejo St. #105 – San Francisco, CA 94123 info@opinno.com www.opinno.compedro.moneo@opinno.com · www.opinno.com 63

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