SlideShare a Scribd company logo
11
Leveraging Data to Drive Business Growth
Twitter:
@CircleUp
@AmandaBurrWood
2
Consumer private market investing is an important,
large sector, yet inefficient and under-served
Our approach is to use data and machine learning, so
investing and lending is scalable, effective and
meritocratic
Our Data Science platform Helio analyzes 1.3 million
consumer brands to predict future business success
Helio is reshaping capital formation, thus helping
entrepreneurs thrive
Early-Stage Consumer Market: Real Life Impact
3
Early-Stage Consumer Investing: A Long,
Manual, Inefficient Process
4
Expo West
Fancy Food
Early-Stage Consumer Market: Real Life Impact
Source: 1 Mintel; 2 Rabobank Industry note #491 (May 2015); 3 Facebook (Feb 2015)
5
Early-Stage Consumer Market: Straightforward
Measures of Success
6
- Similar business models
- Simple valuation
- Lots of publicly available data (consistent and
comparable across companies)
- Yields repeatable valuation process
Consumer Market is Massive
7
$15.6T
$10.0T
$9.3T
$4.9T $4.9T
$3.4T
$2.8T
$1.9T
$1.3T
Source: S&P Capital IQ
(3%)
(2%)
(3%)
(7%)
(19%)
+3%
+1%
+3%
+11%
+19%
Share points lost
by large brands
Restaurants ³
Health & Beauty ²
Food & Beverage ¹
Yogurt 4
$7.1 bn
Coffee 5
$25 bn
Bath/shower
$7.2 bn
Skin care
$13 bn
Quick service
$163 bn
SEISMIC SHIFT IN MARKET SHARE
Share points gained
by emerging brands
Category &
Market Size
Source: 1,2 Euromonitor International (Sept 2014); ³ QSR Magazine, Wells Fargo Securities; ⁴ 2013 Yogurt Market via Statista Yogurt Dossier;
5Specialty Coffee Association of America (Dec 2014); 6 Boston Consulting Group, Information Resources, Inc. (April 2016) and Catalina (Sept 2015)
$18 billion
In market share shifted away
from large CPG companies to
smaller players during 2011-20156
$7.5 billion
In market share was gained by
the very small emerging brands
during 2011-20156
90%
of Top 100 CPG Brands lost
market share in 2015 and 62 had
declining sales 6
Early-Stage Consumer Market: Shifting
Preferences
8
Source: Mintel1 ; Reuters (April 2017)2
9
• Shift in consumer preference
towards e-commerce2
• New direct channels to reach
the consumer
• Distribution economics (e.g.
slotting fees) of traditional retail
are changing due to consumer
demand for emerging brands
• Social media more efficient,
lower cost consumer targeting
which allows for an increasing
number of emerging brands to
participate
• 5M+ active Facebook
advertisers (most SMBs)
2
• 75M+ Millennials making
purchasing decisions based on
preference for emerging brands
• ~30x the number of new
packaged goods introduced
today versus in 1965
1
PERSONALIZATION OF
CONSUMER
MARKETING
DISTRIBUTION
CHANNELS
Shifting Consumer Preferences and Channels
Lower Barriers to Entry for Emerging Brands
HUMANS MISS DIFFERENCES THAT MACHINE LEARNING CAN IDENTIFY
LESSER EVIL GARY POPPINS OOGIE’S
When Human Heuristics are Required,
Guesswork Can Be Inaccurate, Misleading….
10
11
THE HUMAN EYE MISSES DIFFERENCES THAT MACHINE LEARNING CAN IDENTIFY
Many companies pass the “eye-test” while Helio finds fundamental differences
LESSER EVIL
Brand Score: Top 10%
Distribution Score: Top 10%
....While Data and Technology Provide a Clear
Picture
GARY POPPINS
Brand Score: Top 70%
Distribution Score: Top 30%
OOGIE’S
Brand Score: Top 50%
Distribution Score: Top 40%
12
Early Stage Consumer: Brands Produce an
Abundance of Data, But It’s All Unstructured
Helio: Machine Learning For Private Investing
1.3 million
Companies analyzed in Helio
~200
Data sources
>1 Billion
Disparate data points analyzed
per company
Private
Data
CircleUp
Data
Public
Data
Helio
13
Transforming a Human Intensive Process Into a Scalable Solution
How Helio Works: Predicting Future Business Success
14
A Series of Machine Learning Algorithms and Data Sets For Evaluating Consumer Businesses
15
Team Brand
Distribution
Dollar growth ($) is defined as the difference between revenue earned last year and revenue earned this year
Sample size for team is 680 companies, brand is 1,634 companies, distribution is 498 companies, and sourcer is 576 companies
8.4x 33.9x
3.2x
Ranking System: Models are Correlated With Business Success
Helio: Predictors of Future Revenue Growth
Over time, Helio grows more valuable, able
to prescribe changes that shape outcomes
Source: Gartner, Data Sophistication Journey
Difficulty
Value
Predictive
Analytics
What will happen?
Descriptive
Analytics
What happened?
Diagnostic
Analytics
Why did it happen?
Prescriptive
Analytics
How can we make
it happen?
16
Helio: Reshaping Capital Formation
More Meritocratic: entrepreneurs evaluated based on
business data—not what they look like, who they know or where
they’re based
More Innovation: an efficient private market catalyzes
innovation for some of the most important products
Consumer as the ideal entry point: quant investing can
and should move to other private markets
17
Thank you!
Twitter:
@CircleUp
@AmandaBurrWood
18

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Amanda Wood, CircleUp, LEVERAGING DATA TO DRIVE BUSINESS GROWTH

  • 1. 11 Leveraging Data to Drive Business Growth Twitter: @CircleUp @AmandaBurrWood
  • 2. 2 Consumer private market investing is an important, large sector, yet inefficient and under-served Our approach is to use data and machine learning, so investing and lending is scalable, effective and meritocratic Our Data Science platform Helio analyzes 1.3 million consumer brands to predict future business success Helio is reshaping capital formation, thus helping entrepreneurs thrive
  • 3. Early-Stage Consumer Market: Real Life Impact 3
  • 4. Early-Stage Consumer Investing: A Long, Manual, Inefficient Process 4 Expo West Fancy Food
  • 5. Early-Stage Consumer Market: Real Life Impact Source: 1 Mintel; 2 Rabobank Industry note #491 (May 2015); 3 Facebook (Feb 2015) 5
  • 6. Early-Stage Consumer Market: Straightforward Measures of Success 6 - Similar business models - Simple valuation - Lots of publicly available data (consistent and comparable across companies) - Yields repeatable valuation process
  • 7. Consumer Market is Massive 7 $15.6T $10.0T $9.3T $4.9T $4.9T $3.4T $2.8T $1.9T $1.3T Source: S&P Capital IQ
  • 8. (3%) (2%) (3%) (7%) (19%) +3% +1% +3% +11% +19% Share points lost by large brands Restaurants ³ Health & Beauty ² Food & Beverage ¹ Yogurt 4 $7.1 bn Coffee 5 $25 bn Bath/shower $7.2 bn Skin care $13 bn Quick service $163 bn SEISMIC SHIFT IN MARKET SHARE Share points gained by emerging brands Category & Market Size Source: 1,2 Euromonitor International (Sept 2014); ³ QSR Magazine, Wells Fargo Securities; ⁴ 2013 Yogurt Market via Statista Yogurt Dossier; 5Specialty Coffee Association of America (Dec 2014); 6 Boston Consulting Group, Information Resources, Inc. (April 2016) and Catalina (Sept 2015) $18 billion In market share shifted away from large CPG companies to smaller players during 2011-20156 $7.5 billion In market share was gained by the very small emerging brands during 2011-20156 90% of Top 100 CPG Brands lost market share in 2015 and 62 had declining sales 6 Early-Stage Consumer Market: Shifting Preferences 8
  • 9. Source: Mintel1 ; Reuters (April 2017)2 9 • Shift in consumer preference towards e-commerce2 • New direct channels to reach the consumer • Distribution economics (e.g. slotting fees) of traditional retail are changing due to consumer demand for emerging brands • Social media more efficient, lower cost consumer targeting which allows for an increasing number of emerging brands to participate • 5M+ active Facebook advertisers (most SMBs) 2 • 75M+ Millennials making purchasing decisions based on preference for emerging brands • ~30x the number of new packaged goods introduced today versus in 1965 1 PERSONALIZATION OF CONSUMER MARKETING DISTRIBUTION CHANNELS Shifting Consumer Preferences and Channels Lower Barriers to Entry for Emerging Brands
  • 10. HUMANS MISS DIFFERENCES THAT MACHINE LEARNING CAN IDENTIFY LESSER EVIL GARY POPPINS OOGIE’S When Human Heuristics are Required, Guesswork Can Be Inaccurate, Misleading…. 10
  • 11. 11 THE HUMAN EYE MISSES DIFFERENCES THAT MACHINE LEARNING CAN IDENTIFY Many companies pass the “eye-test” while Helio finds fundamental differences LESSER EVIL Brand Score: Top 10% Distribution Score: Top 10% ....While Data and Technology Provide a Clear Picture GARY POPPINS Brand Score: Top 70% Distribution Score: Top 30% OOGIE’S Brand Score: Top 50% Distribution Score: Top 40%
  • 12. 12 Early Stage Consumer: Brands Produce an Abundance of Data, But It’s All Unstructured
  • 13. Helio: Machine Learning For Private Investing 1.3 million Companies analyzed in Helio ~200 Data sources >1 Billion Disparate data points analyzed per company Private Data CircleUp Data Public Data Helio 13 Transforming a Human Intensive Process Into a Scalable Solution
  • 14. How Helio Works: Predicting Future Business Success 14 A Series of Machine Learning Algorithms and Data Sets For Evaluating Consumer Businesses
  • 15. 15 Team Brand Distribution Dollar growth ($) is defined as the difference between revenue earned last year and revenue earned this year Sample size for team is 680 companies, brand is 1,634 companies, distribution is 498 companies, and sourcer is 576 companies 8.4x 33.9x 3.2x Ranking System: Models are Correlated With Business Success Helio: Predictors of Future Revenue Growth
  • 16. Over time, Helio grows more valuable, able to prescribe changes that shape outcomes Source: Gartner, Data Sophistication Journey Difficulty Value Predictive Analytics What will happen? Descriptive Analytics What happened? Diagnostic Analytics Why did it happen? Prescriptive Analytics How can we make it happen? 16
  • 17. Helio: Reshaping Capital Formation More Meritocratic: entrepreneurs evaluated based on business data—not what they look like, who they know or where they’re based More Innovation: an efficient private market catalyzes innovation for some of the most important products Consumer as the ideal entry point: quant investing can and should move to other private markets 17