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Building the Businesses
of the Future To Change The
World
Sodan Selvaretnam
Founder, ChangeTheMachine and CEO, Chia Ventures
Facebook Page: facebook.com/changethemachine
AGENDA:
1. The Transformation of Business
2. Your Place In The New World
3. Key Pillars to Building Your New World
4. Visioning The Future
5. Data As Your Guide
6. Building On The Fundamentals
7. Conclusion
Building the
Businesses
of the Future with
Vision, Data and
Creativity
THE TRANSFORMATION OF BUSINESS
Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
1980 1990 2000 2010
Business Then
Rely on economies of scale.
Coordinated large companies.
Innovation is slow & exclusive.
Business now
Increased opportunity for entrepreneurs & competition.
Growth of “innovation elite”.
Lifecycle of older companies is dramatically shortened.
THE TRANSFORMATION OF BUSINESS
1980 1990 2000 2010
Business Then
Rely on economies of scale.
Coordinated large companies.
Innovation is slow & exclusive.
Business now
Increased opportunity for entrepreneurs & competition.
Growth of “innovation elite”.
Lifecycle of older companies is dramatically shortened.
A transformation fueled by:
➢ A new global supply chain
➢ Low cost & small scale feasibility
➢ Internet distribution of services
Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
In 1958, US corporations
remained in the S&P 500
index for an average of
61 years. By 2011 that
average shortened to
18 years and the churn
continues to accelerate
with time.
THE TRANSFORMATION OF BUSINESS:
THE DATA BEHIND THE TRENDS
Source: Article by Mark J Perry on January 2014. Professor of Economics and Finance, University of Michigan
https://www.aei.org/publication/charts-of-the-day-creative-destruction-in-the-sp500-index/
On average, an S&P 500
company is now being
replaced about once
every two weeks.
At the current churn
rate, 75% of the S&P 500
firms in 2011 will be
replaced by new firms
entering the S&P500 in
2027.
Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
Your Place In The
New World
SO, THE RATE OF CHANGE IN
BUSINESS IS ACCELERATING….
AND YOU WANT TO ENTER THIS
RISING TSUNAMI. WHY?
TAKE A FEW SECONDS TO
BREATHE AND REFLECT.
Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
LET’S TAKE A MOMENT TO REFLECT…
WHY DID WE ASK THAT QUESTION?
TO SURF
THE
TSUNAMI
AND WORK HARD
TO
BUILD A FUTURE YOU
PASSION
MATTERS
Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
IS PASSION AND CONVICTION ENOUGH?
Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
Start Ups Unlock
Human Potential
Key Venture
Success Factors
Bill Gross, Founder, IdeaLab, “The Single Biggest Reasons Why Start Up Succeeds”, March 2015
1. Idea/Outlier - (28%)
2. Team - Execution, Adaptability (32%)
3. Business Model (24%)
4. Funding (14%)
5. Timing (42%)
Research: Used 200 IdeaLab and non IdeaLab companies: AirBnB, Uber, YouTube etc.
An Internal + External Journey
WHAT DOES THIS MEAN TO ME?
Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
YOU ARE NOT IN
FULL CONTROL
YOU WILL FAIL…
A LOT.
1. IT’S REALLY HARD: “IT’S LIKE
EATING GLASS AND STARING AT
THE ABYSS.” - Elon Musk, Tesla
2. MENTAL ILLNESS IN
ENTREPRENEURS - Brad Feld,
Foundry Group
3. THE LACK OF FUNDAMENTALS
FOCUS IN VENTURE CAPITAL - A
PONZY SCHEME, VODOO
ECONOMICS
4. CHANGING THE WORLD OR A
FREIGHT TRAIN DISASTER BASED
ON EXCEPTIONS (ie. Zuckeberg,
Jobs, etc.)
ISSUES WE DON’T TALK ABOUT
CAN KOOL AID AND HYPE
SOLVE THESE PROBLEMS?
?????????
1.YOU HAVE NO CHOICE - THE WORLD HAS
CHANGED.
2.IT’S CONFUSING WITH TOO MUCH OUT THERE
3.NOW, YOU’RE TELLING ME I’M HEADED FOR A
FREIGHT TRAIN IF I GO DOWN THIS PATH
Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
GET BACK TO THE FUNDAMENTALS
- DON’T BELIEVE THE HYPE!
WHAT’S AT THE CORE OF THIS?
Resume
Virtues
Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
Eulogy
Virtues
External Metrics of Success
Accomplishments and Titles
Building a Billion Dollar Business
Skills and Resume
High Status and Victories
Virtues talked about at Funeral
Core of Being
Kind, Brave, Honest or Faithful
Relationships You Formed
Embody Moral Qualities - Do
WHAT’S AT THE CORE OF THIS?
Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
Eulogy
Virtues
• Embody certain moral qualities
• Serene, inner character
• A solid sense of right and wrong
• Not only do good but be good
• Love intimately
• Sacrifice self in the service of others
• Obedience to some transcendent
Truth
• To have a cohesive inner soul that
honors creation and one’s own
possibilities
• Has the ability to renounce worldly
success and status for a sacred
purposes
• Life as a moral drama - charity. love
and redemption
HOW CAN YOU CHANGE THE WORLD?
Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
Discover
the Self
Find
What’s
Important
to you
Solve
Problems
Beyond
Self
The
Journey
KEY PILLARS TO BUILD YOUR NEW WORLD
VISION DATA CREATIVITY EXECUTION
Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
VISIONING THE
FUTURE
LET’S TAKE A MOMENT TO REFLECT…
VISIONING THE FUTURE: FRAMEWORKS
A KEY QUESTION:
How do you
want to world to
be different?
Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
VISIONING THE FUTURE: FRAMEWORKS
FRAMEWORK #1:
As Is: What is the
world you are
creating inside look
like today?
To Be: What can the
world look like once
you are done
creating?
Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
VISIONING THE FUTURE: FRAMEWORKS
FRAMEWORK #2:
The Simple Value
Chain —->Create,
Distribute/Market,
Consume
Re-create and
Develop several
new value chains as
appropriate in the
“To Be” Scenario
•APPLICATION: White-boarding the music industry using the above frameworks
VISIONING THE FUTURE - TEAM EXERCISE
Pick An Area or
Industry
Develop an As Is vs.
To Be Scenario and
Apply The Simple
Value Chain
Work with your
team to outline
Pitch the vision
DATA AND
OBSERVATION AS
YOUR GUIDE
LET’S TAKE A FEW MOMENTS TO REFLECT…
War is 90%
information
Hiding within these
mounds of data is
knowledge that
could change the life
of a patient, or
change the world.
For every two
degrees the
temperatures goes
up, checkins at ice-
cream shops go up
by 2% -
Andrew Hogue,
Foursquare
Napoleon Bonaparte,
Military Leader
Atul Butte, Biotech
Researcher and
Entrepreneur, Phd.
DATA AS YOUR GUIDE: 4 KEY FORCES
Key Trends:
• Regulatory,
Technology, Societal/
Cultural,
• Socio-economic
Market Forces:
• Market Segments,
Needs and Demands
Macro Economic
Forces:
• Global Markets, Capital
Markets, Commodities
Industry Forces:
• Suppliers, Stakeholders,
Competitors, New
Entrants, Substitutes
EXAMPLE OF A VC APPLYING 4 FORCES
I’m really excited about the potential for virtual reality
in the near/ intermediate future, and while we’ve only
made one investment in VR to date, we plan to do
more. It is the next major computing platform,
changing the way we interact with one another and
the world around us. It’s still very early days and will be
5 years before enough VR headsets are out there.
However, before mass penetration of true interactive
VR takes root, mobile first VR (e.g. Samsung Gear VR,
Google Cardboard) will provide a more near term
solution, with a multitude of 360 videos from guys such
as VRSE, Felix & Paul, Jaunt, and NextVR. Similarly, early
VR gaming adopters will enjoy the Oculus Rift, Sony
Morpheus, and Valve-HTC Vive to get their fix from
stunning games such as The Heist, Eve Valkyrie, and
Dinosaur Island.
- Sunny Dhillon, Signia Venture Partners, Forbes, Sept.
14, 2015
Category
Key Trends: Societal/
Cultural, Technology,
Socio-economic
Market Trends:
Market Segments,
Needs and Demands
Industry Forces: New
Entrants, Suppliers
THE POWER OF OBSERVATION AND DATA
❖ “Who are these people that love my Apple computer and what else do they do?”
❖ “It looks like a lot of them are mobile phone users.”
❖ “They need a mobile phone but the user experience sucks.”
❖ “Most people who have mobile phones are heavy email users.”
❖ “Most people who have mobile phones also have a portable music device.”
❖ “There appear to be other correlations to other things they do as well…”
❖ “I am going to talk to more of these people and find out more…”
❖ “I am going to let my imagination flow and put it all together into a mobile phone that
is so easy to use and removes friction of use to all the other things they do…”
Observation As A Data Source, Imagination As The Glue with Customer
Data and the Birth of A Game Changing Product
DATA AND OBSERVATION AS YOUR GUIDE
Making The Correlations with Data and Statistics To Make Game
Changing Products for the Future
❖ Could we do what Steve Jobs pieced together through the power of statistics and
data?
❖ There are 30,000 data attributes in the 3rd party data marketplace
❖ We now have the power to find the ones that matter to guide us into areas and
experiences that are most relevant to our customers
❖ We now have the power of data to accelerate observations that may have been
otherwise manually and intuitively pieced together
THE POWER OF BIG DATA
Understanding the
consumer through
data to incubate
new products
Pretotyping, product
Prototyping and
Growth Hacking -
Testing product/
market fit
Understanding the
consumer through
data to increase
CLV
Pre-revenue
Post-revenue
Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
THE POWER OF DATA-DRIVEN EXECUTION
Pretotyping, Product Prototyping and Growth Hacking
❖ A pretotype is a partially mocked-up of the intended product or service
that can be built in minutes, hours or days instead of weeks, months or
years.
❖ Iterate rapidly on your product prototype through continual feedback
from your customers
❖ Test all cost-effective, direct channels combined with messaging
through continual feedback from your customers to refine channel,
message and customer segments for growth
BUILDING ON THE
FUNDAMENTALS
CREATIVITY
There is plenty written in these areas, so I encourage you to read from
the best
Creativity
❖ Creative Confidence, By: Tom and David Kelley
❖ Thinking Fast and Slow, By: Daniel Kahneman
❖ The Art of Possibility: Transforming Professional and Personal Lives, By: Rosamund
Stone Zander and Benjamin Zander
EXECUTION
There is plenty written in these areas, so I encourage you to read but
most importantly learn from the best while continuously doing
Execution
❖ Do, do do….learn, learn, learn…find operator mentors who have “been
there and done it”.
FUNDAMENTALS
There is plenty written in these areas, so I encourage you to read but
most importantly learn from the best while continuously doing
FUNDAMENTALS
❖ BUSINESS MODELS
❖ FINANCIAL MODELING AND KPIS
❖ TECHNICAL/CODING AND GROWTH HACKING/MARKETING
ONE FINAL WORD
ABOUT CREATING
THE FUTURE…
Thank you. Bon Voyage!
Sodan Selvaretnam
Email: sodan@changethemachine.com, www.changethemachine.com
Facebook Page: facebook.com/changethemachine

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Building 21st Century Businesses for Success_Sodan Selvaretnam_Draper University Talk_July 18, 2016

  • 1. Building the Businesses of the Future To Change The World Sodan Selvaretnam Founder, ChangeTheMachine and CEO, Chia Ventures Facebook Page: facebook.com/changethemachine
  • 2. AGENDA: 1. The Transformation of Business 2. Your Place In The New World 3. Key Pillars to Building Your New World 4. Visioning The Future 5. Data As Your Guide 6. Building On The Fundamentals 7. Conclusion Building the Businesses of the Future with Vision, Data and Creativity
  • 3. THE TRANSFORMATION OF BUSINESS Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved. 1980 1990 2000 2010 Business Then Rely on economies of scale. Coordinated large companies. Innovation is slow & exclusive. Business now Increased opportunity for entrepreneurs & competition. Growth of “innovation elite”. Lifecycle of older companies is dramatically shortened.
  • 4. THE TRANSFORMATION OF BUSINESS 1980 1990 2000 2010 Business Then Rely on economies of scale. Coordinated large companies. Innovation is slow & exclusive. Business now Increased opportunity for entrepreneurs & competition. Growth of “innovation elite”. Lifecycle of older companies is dramatically shortened. A transformation fueled by: ➢ A new global supply chain ➢ Low cost & small scale feasibility ➢ Internet distribution of services Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
  • 5. In 1958, US corporations remained in the S&P 500 index for an average of 61 years. By 2011 that average shortened to 18 years and the churn continues to accelerate with time. THE TRANSFORMATION OF BUSINESS: THE DATA BEHIND THE TRENDS Source: Article by Mark J Perry on January 2014. Professor of Economics and Finance, University of Michigan https://www.aei.org/publication/charts-of-the-day-creative-destruction-in-the-sp500-index/ On average, an S&P 500 company is now being replaced about once every two weeks. At the current churn rate, 75% of the S&P 500 firms in 2011 will be replaced by new firms entering the S&P500 in 2027. Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
  • 6. Your Place In The New World
  • 7. SO, THE RATE OF CHANGE IN BUSINESS IS ACCELERATING…. AND YOU WANT TO ENTER THIS RISING TSUNAMI. WHY? TAKE A FEW SECONDS TO BREATHE AND REFLECT. Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
  • 8. LET’S TAKE A MOMENT TO REFLECT…
  • 9. WHY DID WE ASK THAT QUESTION? TO SURF THE TSUNAMI AND WORK HARD TO BUILD A FUTURE YOU PASSION MATTERS Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
  • 10. IS PASSION AND CONVICTION ENOUGH? Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved. Start Ups Unlock Human Potential Key Venture Success Factors Bill Gross, Founder, IdeaLab, “The Single Biggest Reasons Why Start Up Succeeds”, March 2015 1. Idea/Outlier - (28%) 2. Team - Execution, Adaptability (32%) 3. Business Model (24%) 4. Funding (14%) 5. Timing (42%) Research: Used 200 IdeaLab and non IdeaLab companies: AirBnB, Uber, YouTube etc. An Internal + External Journey
  • 11. WHAT DOES THIS MEAN TO ME? Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved. YOU ARE NOT IN FULL CONTROL YOU WILL FAIL… A LOT. 1. IT’S REALLY HARD: “IT’S LIKE EATING GLASS AND STARING AT THE ABYSS.” - Elon Musk, Tesla 2. MENTAL ILLNESS IN ENTREPRENEURS - Brad Feld, Foundry Group 3. THE LACK OF FUNDAMENTALS FOCUS IN VENTURE CAPITAL - A PONZY SCHEME, VODOO ECONOMICS 4. CHANGING THE WORLD OR A FREIGHT TRAIN DISASTER BASED ON EXCEPTIONS (ie. Zuckeberg, Jobs, etc.) ISSUES WE DON’T TALK ABOUT CAN KOOL AID AND HYPE SOLVE THESE PROBLEMS?
  • 12. ????????? 1.YOU HAVE NO CHOICE - THE WORLD HAS CHANGED. 2.IT’S CONFUSING WITH TOO MUCH OUT THERE 3.NOW, YOU’RE TELLING ME I’M HEADED FOR A FREIGHT TRAIN IF I GO DOWN THIS PATH Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved. GET BACK TO THE FUNDAMENTALS - DON’T BELIEVE THE HYPE!
  • 13. WHAT’S AT THE CORE OF THIS? Resume Virtues Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved. Eulogy Virtues External Metrics of Success Accomplishments and Titles Building a Billion Dollar Business Skills and Resume High Status and Victories Virtues talked about at Funeral Core of Being Kind, Brave, Honest or Faithful Relationships You Formed Embody Moral Qualities - Do
  • 14. WHAT’S AT THE CORE OF THIS? Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved. Eulogy Virtues • Embody certain moral qualities • Serene, inner character • A solid sense of right and wrong • Not only do good but be good • Love intimately • Sacrifice self in the service of others • Obedience to some transcendent Truth • To have a cohesive inner soul that honors creation and one’s own possibilities • Has the ability to renounce worldly success and status for a sacred purposes • Life as a moral drama - charity. love and redemption
  • 15. HOW CAN YOU CHANGE THE WORLD? Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved. Discover the Self Find What’s Important to you Solve Problems Beyond Self The Journey
  • 16. KEY PILLARS TO BUILD YOUR NEW WORLD VISION DATA CREATIVITY EXECUTION Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
  • 18. LET’S TAKE A MOMENT TO REFLECT…
  • 19. VISIONING THE FUTURE: FRAMEWORKS A KEY QUESTION: How do you want to world to be different? Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
  • 20. VISIONING THE FUTURE: FRAMEWORKS FRAMEWORK #1: As Is: What is the world you are creating inside look like today? To Be: What can the world look like once you are done creating? Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
  • 21. VISIONING THE FUTURE: FRAMEWORKS FRAMEWORK #2: The Simple Value Chain —->Create, Distribute/Market, Consume Re-create and Develop several new value chains as appropriate in the “To Be” Scenario •APPLICATION: White-boarding the music industry using the above frameworks
  • 22. VISIONING THE FUTURE - TEAM EXERCISE Pick An Area or Industry Develop an As Is vs. To Be Scenario and Apply The Simple Value Chain Work with your team to outline Pitch the vision
  • 24. LET’S TAKE A FEW MOMENTS TO REFLECT… War is 90% information Hiding within these mounds of data is knowledge that could change the life of a patient, or change the world. For every two degrees the temperatures goes up, checkins at ice- cream shops go up by 2% - Andrew Hogue, Foursquare Napoleon Bonaparte, Military Leader Atul Butte, Biotech Researcher and Entrepreneur, Phd.
  • 25. DATA AS YOUR GUIDE: 4 KEY FORCES Key Trends: • Regulatory, Technology, Societal/ Cultural, • Socio-economic Market Forces: • Market Segments, Needs and Demands Macro Economic Forces: • Global Markets, Capital Markets, Commodities Industry Forces: • Suppliers, Stakeholders, Competitors, New Entrants, Substitutes
  • 26. EXAMPLE OF A VC APPLYING 4 FORCES I’m really excited about the potential for virtual reality in the near/ intermediate future, and while we’ve only made one investment in VR to date, we plan to do more. It is the next major computing platform, changing the way we interact with one another and the world around us. It’s still very early days and will be 5 years before enough VR headsets are out there. However, before mass penetration of true interactive VR takes root, mobile first VR (e.g. Samsung Gear VR, Google Cardboard) will provide a more near term solution, with a multitude of 360 videos from guys such as VRSE, Felix & Paul, Jaunt, and NextVR. Similarly, early VR gaming adopters will enjoy the Oculus Rift, Sony Morpheus, and Valve-HTC Vive to get their fix from stunning games such as The Heist, Eve Valkyrie, and Dinosaur Island. - Sunny Dhillon, Signia Venture Partners, Forbes, Sept. 14, 2015 Category Key Trends: Societal/ Cultural, Technology, Socio-economic Market Trends: Market Segments, Needs and Demands Industry Forces: New Entrants, Suppliers
  • 27. THE POWER OF OBSERVATION AND DATA ❖ “Who are these people that love my Apple computer and what else do they do?” ❖ “It looks like a lot of them are mobile phone users.” ❖ “They need a mobile phone but the user experience sucks.” ❖ “Most people who have mobile phones are heavy email users.” ❖ “Most people who have mobile phones also have a portable music device.” ❖ “There appear to be other correlations to other things they do as well…” ❖ “I am going to talk to more of these people and find out more…” ❖ “I am going to let my imagination flow and put it all together into a mobile phone that is so easy to use and removes friction of use to all the other things they do…” Observation As A Data Source, Imagination As The Glue with Customer Data and the Birth of A Game Changing Product
  • 28. DATA AND OBSERVATION AS YOUR GUIDE Making The Correlations with Data and Statistics To Make Game Changing Products for the Future ❖ Could we do what Steve Jobs pieced together through the power of statistics and data? ❖ There are 30,000 data attributes in the 3rd party data marketplace ❖ We now have the power to find the ones that matter to guide us into areas and experiences that are most relevant to our customers ❖ We now have the power of data to accelerate observations that may have been otherwise manually and intuitively pieced together
  • 29. THE POWER OF BIG DATA Understanding the consumer through data to incubate new products Pretotyping, product Prototyping and Growth Hacking - Testing product/ market fit Understanding the consumer through data to increase CLV Pre-revenue Post-revenue Proprietary and Confidential. © 2015 Chia Ventures, Inc. All Rights Reserved.
  • 30. THE POWER OF DATA-DRIVEN EXECUTION Pretotyping, Product Prototyping and Growth Hacking ❖ A pretotype is a partially mocked-up of the intended product or service that can be built in minutes, hours or days instead of weeks, months or years. ❖ Iterate rapidly on your product prototype through continual feedback from your customers ❖ Test all cost-effective, direct channels combined with messaging through continual feedback from your customers to refine channel, message and customer segments for growth
  • 32. CREATIVITY There is plenty written in these areas, so I encourage you to read from the best Creativity ❖ Creative Confidence, By: Tom and David Kelley ❖ Thinking Fast and Slow, By: Daniel Kahneman ❖ The Art of Possibility: Transforming Professional and Personal Lives, By: Rosamund Stone Zander and Benjamin Zander
  • 33. EXECUTION There is plenty written in these areas, so I encourage you to read but most importantly learn from the best while continuously doing Execution ❖ Do, do do….learn, learn, learn…find operator mentors who have “been there and done it”.
  • 34. FUNDAMENTALS There is plenty written in these areas, so I encourage you to read but most importantly learn from the best while continuously doing FUNDAMENTALS ❖ BUSINESS MODELS ❖ FINANCIAL MODELING AND KPIS ❖ TECHNICAL/CODING AND GROWTH HACKING/MARKETING
  • 35. ONE FINAL WORD ABOUT CREATING THE FUTURE…
  • 36. Thank you. Bon Voyage! Sodan Selvaretnam Email: sodan@changethemachine.com, www.changethemachine.com Facebook Page: facebook.com/changethemachine