How can small units - such as startups - grant the survival of corporate behemoths through innovation and execution of entrepreneurial spirit.

1. Thomas P. Offner
September 2014
Digital Days 2014 Leveraging the Power of Startups and Entrepreneurship for Corporate Success

2. Short bio Thomas P. Offner
Technical School and Business Administration (AT and CH)
Canbox AG, Oldenburg, Director Business Development
Intel Capital, Munich, Strategic Investment Manager
Vivigo Consulting Ltd., London, Partner
Audi AG, Ingolstadt, Stratregic Market Development
fatfoogoo AG, Vienna, CFO
Groupon Inc, Vienna, Zurich, Co-Founder
ProSiebenSat.1 SevenVentures GmbH, Munich/Unterföhring, Digital Commerce
FH Salzburg and Graz, Lecturer

3. YouTube local

5. 74 Facebook status updates
per second

6. Princess Beatrice´s ridiculous wedding hat gained over 140.000 fans on FB

7. “Pippa” Middleton got a Facebook page counting over 230.000 Fans within 24 hours

8. At least one part of „Her Royal Hotness’“ body

9. 2.274 check-ins at Westminster Abbey

10. Google reported over 72 million viewers watching via YouTube's live stream

11. 74 FB UK status updates per sec
140.000 wedding hat fans
230.000 „Royal Hotness“ fans
72 million viewers on YouTube

12. 33m TV sets
0 PCs, 0 tablets
0 mobiles
Source: Statistisches Bundesamt, EVS
How I grew up

13. 60m TV sets
4m Smart TVs
32m PCs
8.2m Tablets
112m Mobiles 35m Smartphones
Source: AGF/GfK-Fernsehforschung, TV Scope, SevenOne Media, forsa, Enigma GfK, mindline, budde, golem, bitkom, Allensbach/Acta 2012
How my son is growing up

14. We live in a world of change In every sense of the word
Most disruption doesn’t come from the corporate world
Small and fast startups change the world
Corporates are often to slow and immobile for change
Big companies tend to concentrate to much on management; i.e. solely focus on permanent improvement
Very little or no entrepreneurial spirit or room for entrepreneurship; i.e. no focus on innovation

15. Guy Kawasaki’s story about ice
Ice harvesting, Massachusetts, early 1850s

16. Guy Kawasaki’s story about ice
Ferdinand Carré's ice-making device about 1865

17. Guy Kawasaki’s story about ice
General Electric "Monitor-Top" refrigerator, introduced in 1927.

19. How media companies can avoid those pitfalls
1.Stay innovative – disruptive innovation (not better saws)!
2.Innovation happens in small structures!
3.Not technology is innovative but people are!

20. How media companies can avoid those pitfalls Startups are everywhere

21. How media companies can avoid those pitfalls Examples of disruptive startups

22. Internal External
Innovation Lab Corporate Venturing M&A
Design thinking with external Consultant
Multi disciplinary members from different units
Out-of-the-box thinking
Two weeks (exclusive)
Venture Capital Unit
Accelerator
Incubator
Company Builder
Dedicated M&A unit
Finance, Legal, Tax
How media companies can avoid those pitfalls

23. Corporate meets startup Combine both worlds to a new discipline

24. How media companies can avoid those pitfalls Examples from the corporate world
Strategy: acquisition
Within 13 months Yahoo boss Marissa
Mayer buys 20 startups for the price of over $ 1.2 billion
Strategy: incubation Accelerator program to implement new ideas by "Corporate Entrepreneurs"
Strategy: excursion Since 2012 the media group continuously sends top manager to the Silicon Valley.

25. Some corporations were able to adopt Private logistics: DHL’s bring:BUDDY vs. CheckRobin
Consumers become logistic service partners
Via bike, public transport or on foot
Collaboration between DHL and a group of German design students
Rolled out at Shanghai trade fair 2010
“Privates bring it” – lift service for parcels
Austrian start-up, founded in 2013
Serial entrepreneur, founder of CheckFelix (sold to Kayak in 2011)
Two established routes in Austria already

26. Some corporations were able to adopt Carsharing: Daimler's Car2Go vs. zipcar
US car carsharing company founded in 2000
Area served: UK, CA, USA, ES, AT
Zipcar charges a one-time application fee, an annual fee, and a reservation charge.
Acquired by Avis Budget Group in 2013
Subsidiary of Daimler AG providing carsharing services in EU and North American cities
Founded in 2008
Offers exclusively Smart Fortwo vehicles
Worldwide market leader in free floating carsharing

27. Some corporations weren’t Intelligent home: Bosch vs Nest

28. How about the biggest German media company?
Innovation Camp
ProSiebenSat.1 Accelerator
SevenVentures
SevenVentures Pitch Day 7VPD

29. Innovation Camp (Lab) Conceptual formulation: “How can we transfer our ability to evoke emotions with moving images to digital business models?” “How can we leverage our vast video repository?”

30. Innovation Camp (Lab)

31. Innovation Camp (Lab)
Ingredients for success
Multi disciplinary teams from different business units
Two weeks exclusive camp far away from corporation (focus = speed)
Moderated by an external consultant
Work along a defined process
Collecting background information (experts and customer interviews) “If I had asked people what they wanted, they would have said faster horses.” (Henry Ford)
Defining directions for innovation
Generating ideas - every idea is possible (but solve a problem)
Prototyping and testing (lean startup)
One-sentence pitch

32. Innovation Camp (Lab)
Ingredients for success
No business plan “Everybody has a plan until they get punched in the face.” “No campaign plan (business plan) survives first contact with the enemy (customers)” (Helmuth Graf von Moltke, Field Marshall) (Steve Blank, serial entrepreneur)
(Mike Tyson)

33. Innovation Camp (Lab)
Ingredients for success
Full commitment from CEO

34. Innovation Camp (Lab)
Results

35. Innovation Camp (Lab)
Results

36. 1.INNOVATION: Stay close to relevant media innovation
2.TALENT: Build talent network of potential hires
3.DEAL FLOW: Build network of investors such as business angels and venture capitalists
4.PR: Position ProSiebenSat.1 as an innovator in press and towards the capital market
5.ROI: Participate in equity proceeds of portfolio companies
ACCELERATOR: get access to talent, innovation, and improve public opinion

38. VENTURES: Media as valuable investment currency
Classic Inventory
(TV) Media Inventory
Unutilized Inventory
Unutilized Inventory
Internal sales
Classic sales models for core Inventory
•Close cooperation with big media agencies
•Commitment and volume based pricing models
Innovative M4R/E model
Fast growing online companies with need for variable fee structures
Small companies with attractive products in TV-affine segments with cash constraints
Venture unit

39. VENTURES: Clear screening criteria for (media) deals
As part of the investment strategy
Ideally: excess media with relevant quality and low variable costs
No relevant existing or likely classical media spend
Relevant media-affine product category (no B2B or pure tech plays)
Clear target group fit
Upside from stimulatory media spend in category (dating market)
No financial, operational, legal risks
Overall yield comparable to classical sales yield
Long-term fit with corporation and solid cash flows or exit potential

40. VENTURES: Classical venture capital approach
The horse, the jockey, the course

41. Technology is like an insurance: You need to have it but you don’t want to care about it

42. Technology is like an insurance

43. Technology is like an insurance: You need to have it but you don’t want to care about it (and it should cost little to nothing)
Not most important success factor when starting a company
The most successful start-ups had rudimentary technologies in the beginning (Zappos, Groupon, AirBnB, etc.)
Amazon (AWS) as leading cloud service provider
VENTURES: The relevance of technology
And how it increases over time

44. 1.Leverage your core assets into related markets: media, content, talent, market insight
2.Create synergies in your portfolio and foster cross-selling
3.Expand digital business to European footprint
4.Create additional growth through low cost and low risk acquisitions
Digital growth strategy for integrated media companies

45. CASE STUDY: Zalando
Zalando as European version of online shoe retailer Zappos
Extensive media push created European market leader in online shoes:
Three times higher sales in the year 2011 versus 2010
95% brand awareness
30k shipments per day based on huge assortment with 150k products and 1,000 brands
More than 600,000 visitors each day
Source: Zalando, Google Insights, Press releases

46. CASE STUDY: Zalando
Broadcaster can deliver more than just media Integrated optimized campaign over all channels (TV, online, mobile)

47. CASE STUDY: Talenthouse

48. 7VPD: PR event to generate deal flow and access to innovation
7 start-ups on stage pitching their company (3 minutes elevator pitch)
7 top jury members (6 +1)
7 million Euro in TV media as prize (P7S1 channels)
During NOAH conference, London
Live stream on myvideo

49. 7VPD: PR – great press feedback
“Mehr als 300 Gründer aus 14 Ländern haben ihre Bewerbung bei Seven Ventures, dem Beteiligungsunternehmen von ProSiebenSat.1 eingereicht, sieben Kandidaten sind in die Endrunde gekommen.”
„Seven Ventures, the venture subsidiary of the ProSiebenSat.1 Group, plans to run a pitch competition for startups, the prize for which will be millions of Euros worth of advertising time on Germany’s biggest TV network.”
“The prize to be offered at what is being called SevenVentures Pitch Day, to take place in London on Nov. 6 and 7, is television commercial time valued 7 million euros, or about $9 million.”
“Was eher nach Maya-Kalender klingt, war das Highlight der NOAH Konferenz 2012 in London: Der SevenVentures Pitch Day.”
Media partner and online streaming of the event (as well as myVideo).

50. 7VPD: Innovation – great winners

51. Outlook: what’s hot for media companies?
And what’s not (very personal estimate)
FinTech (Security)
Sharing Community
E-learning
E-health
Internet of things (intelligent home)
Online gaming and gamification

52. Thank you
(for your comments)

53. BACKUP

54. Innovation Camp (Lab)
Connecting the dots

55. How media companies can avoid those pitfalls
No coincidence  viral campaigns are professionally planned and executed (Zalando)
You can’t plan the ice bucket challenge!
Example Coca Cola Happiness Machine