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Marketrevolution stayhungrystayupdated-startupentrepreneurs-131205053654-phpapp01
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Transcript of Marketrevolution stayhungrystayupdated-startupentrepreneurs-131205053654-phpapp01
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28.11.13
STARTUP & THE NEW ENTREPRENEURS
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Where does this story start?
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Natbat, sept 13.
This is the story of Natalie & Simon
From idea to exit
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Dissapore, aug 2012; La Stampa, jul 2013.
The history of Eataly
From microwave to Culatello
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source:
Testo slide
What do they have in common?
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They are STARTUPS
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Google Trends, 2013.
Media, blog, social, TV, newspaper, magazine...
A skyrocketing interest
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startups
but is it just a buzzword?
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Whitehouse, feb 2009.
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The future of our economyrelies on theimagination of our
entrepreneurs
Barack Obama
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Wikipedia, 2013; Geekwire, sept 2011.
Long story short
Ok, but what's new around here?
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1998-2000dot-com Bubble
2004-todayThe new wave
1973-1998The golden age
1950-1970The early days
Theres something new (and more)
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Wikipedia, nov 2013; Forbes, nov 2013; Doppiozero, oct 2013.
3 drivers
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Economic
Economic Crisis Youth unemployment Failure of the traditional
business models Economic pressure from
emerging markets
Technological
Exponential growth in various technologies
Know-how sharing Development of a global
real-time communication network
Cultural
Mixture of counterculture utopias and neo-capitalism optimism
Loss of authority of the institutions
Craving for meaning and realization
Cult of failure Cooperative practices
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source:
Where everything was born
The reasons why Silicon Valley was (and is) the epicenter
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Colleges
Research centers
Labs
Ultraliberalism
Hippie culture
Technology as a religion
Cult of failure
Do than discuss
Technology
Venture capital
Lean juridical system
ResourcesValuesPlace
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
What is the startup revolution?
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
TITOLOSOTTOTESTO
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A global community of people who, relying on their creativity, skills and commitment, create new
organizations as a tool to disrupt conservative paradigm, solve global problems and create value for themselves
and the community itself.
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
The new paradigm
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#vision
#disruption
#explorationfrom execution to
from management to
from retention to
#valuefrom profit to
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
What is a startup?
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Eric Ries
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Source: Lean Startup, 2010..
A human institution designed to deliver a new product or service under conditions ofextreme uncertainty.
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
RISKINNOVATIONPEOPLE
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ITS ABOUT
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS 17
ITS NOT ABOUT
DIGITALINDUSTRYSIZE
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
How does this work?
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Market Revolution, nov 2013.
An highly connected ecosystem
The startup framework
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Entrepreneur.com, 2013.
Colleges, research labs, business schools, foundations, public institutions
Where ideas and people come from
Institutions
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source:
Founders, coders, designers, makers, mentors, angels
Networking is the Word
Community
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Websites, blogs, magazines, webzines
Not only the specialized ones
Media
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Where you get to know and be known
Events
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Fairs, events, competition, hackathons, demo days
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Finance, legal, administration
skills and services to run a company
Services & support
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Coworking, fablabs
Where companies are built and can share ideas, experiences, skills and network
Spaces & places
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
INVESTMENT & CORPORATELets focus on
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Paul Graham
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Source:Paul Graham, nov 2005.
Venture funding works like gears.A typical startup goes through several rounds of funding.A each round you take just enough money to reach the speed where you can shift into the next gear.
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
two friends, an idea
Let's start a company
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This girl
This guy
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Paul Graham, nov 2005.
Lets follow the story of a (imaginary) startup called:
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STARTUPPERWARE
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
The first funding aimed at company set up, prototyping and living expenses
Pre-seed round
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Goal: - Fine tuning of the idea
- Build the prototype
Timing: 3 months
Pre-seed
Early stage
Seed
A-B-C round
Late stage
STARTUPPERWARE
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Funders and Founders, may 2013.
Friends & Family
Pre-seed round
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Pros: easy to find, no interferences.Cons: mix together business and personal life, no business network, not accredited as investors.
15k5% of the equity
20%Option pool
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Grants & Competitions
Pre-seed round
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Pros: smart money, visibility and PR, few constraints.Cons: no business network.
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Startupbro, 2013.
Crowdfunding
Pre-seed round
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Pros: no constraints, awareness and PR.Cons: hard to get, no business network, high expectations.
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Investopedia, 2013; Paul Graham, nov 2005.
Burn rate - monthly cost of mantainance of the company. Tells you when you are running out of cash.
Option pool - Shares of stock reserved for employees of a private company. Are used to attract talents. The amount of stock an employee gets decreases polynomially with the age of the company.
Key concepts
Pre-seed round
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Techinasia, dec 2012.
The first boost to build the company
Seed round
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Goal: concept validation- Minimum Valuable Product
- Business plan: value proposition, target, maket size, revenue model, competitors, competitive advantage
Timing: 3-6 months
Pre-seed
Early stage
Seed
A-B-C round
Late stage
STARTUPPERWARE
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Funders and Founders, may 2013.
Firms that oer small amounts of funding, working spaces, business and technical advisorship, sta services (PR, lawyers, accountants, etc), networking.
Incubators/accelerators
Seed round
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Goal: profitable disinvestment of the shares
People
Main focus
Big batch
Model
15-100K
Funding
5-30%
Equity
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Forbes, apr 2012, Startup Weekend, 2013.
Incubators/accelerators
Seed round
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Cons: Small funding, strong competition for brands, lower commitment.
Pros: low control over the startup, easy to reach, standardized investment process, personal relationship, access to VC network.
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Bernardi, nov 2013.
Organizations which internally generate ideas for new startups and hire people to develop them.
Startup foundries
Seed round
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Investopedia, 2013; Business Model Generation, 2013; Grasshopperherder, 2013; Lean Startup, 2010; Investment law group, 2013.
Equity - stocks or any other security representing an ownership interest. For a startup is one of its main assets.
Business model - how an organization creates, delivers and captures value (economic, social, cultural, or other forms).
Pivoting - structured course correction designed to test a new fundamental hypothesis about the product, strategy and engine of growth.
Track record - the percentage return of invested assets.
Key concepts
Seed round
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Techinasia, dec 2012.
Its time to make things seriously
Early stage round
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Goal: customer validation- Generate traction
- Generate revenue
- Hiring sta
Timing: 12-18 months
Pre-seed
Early stage
Seed
A-B-C round
Late stage
STARTUPPERWARE
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Paul Graham, nov 2005.
Rich people who invest in new companies.
Goal: invest in startups with high-speed growth
Angel investors
Early stage round
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market captivity
Main focus
15-20%
Equity
up to 200k
Funding
Cons: potential issues for subsequent rounds, push to exit, less reputation to protect, involved in the management.
Pros: SME, networking, mentoring, less investment constraints.
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Paul Graham, nov 2005; Investopedia, 2013.
Accredited investors - people with over a million dollars in liquid assets or an income of over $200,000 a year.
Evaluation - in early stage investing, valuations are voodoo
Exit strategy - is the way of "cashing out" an investment.
Key concepts
Early stage round
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Techinasia, dec 2012; Wikipedia, 2013.
Grow. And keep growing.
Series A-B-C round
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Goal: from revenue to profit- Scaling business
- International expansion
- Hiring executive
Timing: 1-2 year
Pre-seed
Early stage
Seed
A-B-C round
Late stage
STARTUPPERWARE
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Paul Graham, nov 2005.
Investment firms that manage, either private or general funds, in equity stakes of high-risk/high-return ventures.
Goal: cash-out with a strong multiplier (2-3x)
Venture capital
Series A-B-C round
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Exit
Focus
Mgmt fee
Model
> 1 million
Funding
10-40%
Equity
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Paul Graham, nov 2005.
Venture capital
Series A-B-C round
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Cons: control on the management, strict regulation on investment.
Pros: capital, experience, network.
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Paul Graham, nov 2005; Investopedia, 2013; Investopedia, 2013.
Term sheet - summary of what the deal terms will be when and if they do a deal.
Due diligence - the background check of the business, technological, financial and legal aspects of the company.
Diluition - reduction in the ownership percentage of a share of stock caused by the issuance of new stock.
Key concepts
Series A-B-C round
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Wikipedia, nov 2013, Crunchbase, nov 2013; Business Insider, nov 2013.
Get bought or go public
Later stage round
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Goal: cash-out- Solid growth
- Acquisition
- Financial stabilization
Timing: 3-4 years
Pre-seed
Early stage
Seed
A-B-C round
Late stage STARTUPPERWARE
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Startup Italia, nov 2013.
Acquisition
Later stage
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EOS is an italian biopharmaceutic startup, founded
in 2006 with private capital and investment
of Sofinnova Partners and
Principia.
In 2010 created their flagship
innovative product: Lucitanib.
The 2012 its licensed for using in US, Japan and China markets.
Few days ago was acquired by
Clovis, U.S. biopharmaceutical company, for $
400 million in cash + shares.
Its (perhaps) the biggest exit of the history of Italian startup.
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Wikipedia, nov 2013, Crunchbase, nov 2013; Business Insider, nov 2013.
IPO
Later stage
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After 7 years and $1.16B of
funding, on November 6,
2013, Twitter was listed on the New
York Stock Exchange (NYSE).
70 million shares were priced at US
$26.
Twitter raised $1.82B.
In the first day of trading, shares closed at US
$44.90 for $31b evaluation.
In one day Twitter created
1,600 new millionaries.
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Forbes, apr 2013; Crunchbase, nov 2013.
Testo slide
Large private company
Later stage
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GoPro was founded in 2004
by Nick Woodman to capture and
share our lives most exciting
moments in high definition.
Over the years received funding
from several investors. The
latest was in 2012 from Foxconn of
$200 million.
Today, GoPro evaluation is $2.25 billion.
The estimated revenues in 2013 are more $900+
million.
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Whos financing who
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Pre-seed Early stageSeed A-B-C round Late stage
Self-financing
Grant
Crowdfunding
Incubator
Accelerator
VCs
Angel Investors
Companies
Some examples
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
(Some) figures and data
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
The global start-up ecosystem
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http://multisite-blog.digital.telefonica.com.s3.amazonaws.com/wp-content/uploads/2013/01/Startup-Eco_14012013.pdf
The startup output index represents the total activity of entrepreneurship in the region, controlling for
population size and the maturity of startups in the region
Silicon Valley
Tel Aviv
Los Angeles
New York
Boston
LondonToronto
Vancouver
Sydney
Sao Paulo
Moscow
Paris
Berlin
Singapore
Melbourne
Bangalore
Santiago
Waterloo
Source: Start-up Ecosystem Report 2012 , Telefonica
to ta l ac t iv i ty o f entrepreneurshipcontrolling for population size and the maturity of startups
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
How many startups?
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23
Per 1.000 working age people
1112
16
Source:World Bank, 2012
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Sourcce: Human Highway per Italia Startup, 2012
Whats going on in Italy
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300 k
29 mln
5,3 mln
3,5 mln
1.227
Internet Users
Would invest in start-ups
Would invest much money in start-ups
Know where to invest
Create an innovative startupStartuppers
Wanna-be Startuppers
Committed Wanna-be startuppers
Potential Startuppers
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Global Entrepreneurship Research Association (GERA)
Fear of Failure RatePercentage of 18-64 population with positive perceived
opportunities who indicate that fear of failure would prevent them from setting up a business
What can stop them?
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Italia Startup, 2013
Italian Startup ecosystem
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450
194
604
35
20
42
INNOVATIVE STARTUPS INCUBATORS & ACCELERATORS
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
VC investment in the US
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725 274
million dollars
7.800 1.638
Seed
Early stage
companies
Source: PricewaterhouseCoopers and the National Venture Capital Association (NVCA),2012
in
in
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Seed & early stage investment
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477
56
274
355
UK France
ItalyGermany
EUROPEAN UNION
Million euros in 2012
Source:European Private Equity and Venture Capital Association; PricewaterhouseCoopers and the National Venture Capital Association (NVCA),2012
8.600
1.900
UNITED STATES
Million dollars in 2012
(28m 2013)
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: The Venture Capital Secret: 3 Out of 4 Start-Ups Fail, 2012.
U.S.-based companies initially funded by venture capital between 2006 and 2011
How many survive?
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66
6.613
5.555
727
operating independently
were acquired or made initial public oerings
currently in IPO registration
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
from a business point of viewmodels, strategy, consequences
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source:
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Whats going on?
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
What Companies Want
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THEMSELVESGet noticed in a highly competitive industry
INDUSTRYFind the next big idea
INTERNALLYSmart talented employees
Increase eciency and eectiveness
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source:
The next big idea
How can startups help?
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Source: Harvard Business Review, dec 2008; Wikipedia, nov 2013.
Open innovation
Its not convenient to innovate on its own.
Find and access to new ideas and paths to market through partenership and collaborations.
The boundaries between a firm and its environment have become more permeable; innovations can easily transfer inward
and outward.
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Steve Blank
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Source: Steve Blank, jan 2010..
A temporary organization formed to search for a
repeatable and scalable business model.
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Source: Privco,2012
The TOP 10 Acquirers of 2012
1
2
3
4
5
6
7
8
9
10
16
16
12
10
10
9
8
7
6
6
Number of acquisitions in 2012
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Nymag, 2013
Get noticed in a highly competitive industry
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PR & ReputationA 17-year-old whiz kid who sold his company to Yahoo
for $30 million
like BEST STORY EVER for PR.
How can startups help?
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Smart talented employees
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ACQ-HIRE
Source :Fortune,2013
How can startups help?
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source Wikipedia, nov 2013:
Increase eciency and eectiveness
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NEW MANAGERIAL METHODS
LEAN STARTUP: a set of methodologies and tools for developing businesses and products
Validated learning, minimum viable product, actionable metrics, pivoting.
How can startups help?
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
The dark side of startup revolution
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
What are the risks?
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Startup Ecosystem Corporate
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Focus on hyped but with little value segments
For startups
Can I be sexy too?
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Especially for social and consumer internet
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Source: Infoworld, nov 2013; Instagram, jan 2013; Businessweek, nov 2013.
For the ecosystem
Are we in a new bubble?
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$100m investmetnov 2012
$1b acquisitionapr 2012
$3b evaluationnov 2013
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
How can a speculative system foster breakthrough innovation that create new markets and at the same time destroy others?
for the ecosystem
Dont you mind if we disrupt?
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Discover, communicate, acquire, integrate and collaborate with startups require a whole new set of skills and processes.
for corporate
Well, it is not my job!
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Startup revolution is not a passing hype but it's a growing movement that is
changing the way people and businesseswork and create value.
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MARKET REVOLUTION - Stay Hungry, Stay Updated - STARTUP & ENTREPRENEURS
Speakers
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Cinzia Malerba | Analyst
Business Analyst at Orange Network, on marketing and change management. Shes coordinator of Market Revolution, a blog about trends and business strategies. She previously worked in brand management and trade marketing in apparel and fashion, in Luxottica and Valentino. She holds a master in Management at Bocconi University and she has been exchange student at Louis Pasteur University in Strasbourg, France and Asian Institute of Management in Manila, The Philippines.
Stefano Daelli | Associate
Consultant at FUTUREBERRY on new business models, marketing and digital strategy topics. Hes project manager of Market Revolution, a blog about trends and business strategies, and co-founder of IMBIK, startup incubator based in Milan. He worked at the Accenture Customer Innovation Center in Milan. He graduated in Philosophy at Universit Statale degli Studi di Milano and has been resident student of Collegio di Milano. He is professor at IED Management.
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