IDCEE 2012: No future without Startups - Joachim Schoss (Global Angel Investor)
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IDCEE 2012 No Future without Startups Joachim Schoss October 18, 2012 - Kiev
Transcript of IDCEE 2012: No future without Startups - Joachim Schoss (Global Angel Investor)
IDCEE 2012
No Future without Startups
Joachim Schoss
October 18, 2012 - Kiev
Intro Joachim Schoss Where Innovation is created Where revolutionary Innovation is created Some Reasons Why Further Examples Learnings
Content
Intro Joachim Schoss Where Innovation is created Where revolutionary Innovation is created Some Reasons Why Further Examples Learnings
Content
> 25 years in business 50% for startups 50% for established companies Focus: B2C, Internet, Finance Founder & CEO: e.g. Scout24 Board Member: e.g. NZZ, Banks Business Angel: e.g. Money-
bookers, Researchgate, bettermarks
Intro Joachim Schoss
Intro Joachim Schoss Where Innovation is created Where revolutionary Innovation is created Some Reasons Why Further Examples Learnings
Content
Around 50% of all innovations are created by established companies, the other 50% come from startups.
Prof. D. Harhoff, ....
Where Innovation is created
Intro Joachim Schoss Where Innovation is created Where revolutionary Innovation is created Some Reasons Why Further Examples Learnings
Content
Where revolutionary Innovation is created
Internet as a good example
Where revolutionary Innovation is created
Internet as a good example The most frequented websites of the
world:
Where revolutionary Innovation is created
Business model: Social network Founded 2004 As a startup By a student at Harvard
Mark Zuckerberg (19, from NJ) Market cap Oct. 2012 > 50 b$
Business model: Web search engine Founded 1998 As a startup By two Ph.D.-students at Stanford
Larry Page (25, from Mich.) andSergey Brin (25, from Moscow)
Market cap Oct. 2012 > 180 b$
Youtube
Business model: Webportal for videos Founded 2005 As a startup By three former employees of Paypal:
Chad Hurley (28, from Penn.), Steve Chen (27, from Taiwan)
und Jawed Karim (26, from Germany) Market cap -> part of Google
Youtube
Yahoo
Business model: Webportal Founded 1994 As a startup By two Ph.D.-students at Stanford
David Filo (28, from Wisc.) and Jerry Yang (25, from Taiwan)
Market cap Oct. 2012 > 18 b$
Yahoo
The most frequented website, launched by an established company, ranks ????? in the world
Where revolutionary Innovation is created
The most frequented website, launched by an established company, ranks 50th in the world (BBC Online)
Where revolutionary Innovation is created
The most frequented website, launched by an established company, ranks 50th in the world (BBC Online)
Wouldn’t we have expected established media and retail companies to dominate the internet?
Where revolutionary Innovation is created
The most frequented website, launched by an established company, ranks 50th in the world (BBC Online)
Wouldn’t we have expected established media and retail companies to dominate the internet?
The example internet is not universally valid, but: Software, cars, pharmaceutics comparable
Where revolutionary Innovation is created
Intro Joachim Schoss Where Innovation is created Where revolutionary Innovation is created Some Reasons Why Further Examples Learnings
Content
The created businesses were not the result of strategic planning
These businesses created markets that probably were not even in the minds of established companies
The 50 year old CEO of a 100 year old company will not let 25 year olds put the whole company at risk (Facebook’s loss ‘07: 138 m$)
All these startups were VC funded (in the Silicon Valley, although no founder grew up there)
Why did only startups create these values?
The reliable satisfaction of customer‘s expectations
The company‘s valuation is a result of the existing profits, revenues etc. - the company can loose it‘s complete value
The best managers are appointed to insure the continued success of the most important business lines and focus on near term profit
Risk aversity and evolutionary improvements
Success Principles of established companies
Without innovation no need for a startup
The valuation is a result of the size of the chance of the innovation
A startup has almost nothing to loose and has to attack the established competitors
From CEO to web design: Everybody thinks of innovation and conquest and is focused on long term growth
Risk taking and revolutionary improvements
Success Principles of Startups
Intro Joachim Schoss Where Innovation is created Where revolutionary Innovation is created Some Reasons Why Further Examples Learnings
Content
Example Scout24
Business model: Online classifieds Founded 1998 As a startup By two business consultants
Joachim Schoss (34) und Arndt Kwiatkowski (36)
EBIT > 100 m$, one of the most successful German internet businesses
Example Scout24
The majority of classifieds went from newspapers to Scout24
Today > 1m homes, > 2m cars, > 10m singles on Scout24
„The winner takes it all“ Bought by Deutsche Telekom in two
steps 2004 and 2007
Scout24 - today
To much self-assuredness of the established companies in the beginning
Established companies captured by managing the daily business
Lack of innovation in a 100 year old market
Lack of will to cannibalize the most profitable business line
Lack of will to cooperate with competitors
Why did the Startup win?
Example ResearchGate
Business model: Network for researchers Founded 2008 As a startup By a Ph.D.-student at Harvard
Ijad Madisch (27, German) and two friends
World market leader with over two million members
Example ResearchGate
Not enough focus on online networks at the established companies
Not enough interest to permanently adapt the business model to the market needs
The best managers at the established companies captured by running the daily business
Lack of will to cannibalize the most profitable business line
Lack of will to cooperate with competitors
Why did the Startup win?
Intro Joachim Schoss Where Innovation is created Where revolutionary Innovation is created Some Reasons Why Further Examples Learnings
Content
Startups are responsible for half of all innovations … and are able to create fantastic values You can hardly be too young to start a
revolutionary business When you start a revolutionary business no
established companies will be competitors (only other startups)
You must not come from the Silicon Valley to create world market leaders
… but Silicon Valley funding helps a lot to become a world market leader
Learnings
Not fully correct:
There is a future without startups - but a much less brighter one!
Let’s be ambitious and courageous, the world is waiting for new
innovations!
„No future without Startups“
