Startup Estonia
81
Startup Estonia Valto Loikkanen Grow VC Group ++ www.growvc.com ++ @growvc ++ Copyrights © Grow VC Group 2014
-
Upload
estonian-development-fund -
Category
Presentations & Public Speaking
-
view
434 -
download
0
Transcript of Startup Estonia
Startup EstoniaValto Loikkanen
Grow VC Group ++ www.growvc.com ++
@growvc ++
Copyrights © Grow VC Group 2014
About me
As an Entrepreneur● 20 years as international Serial Entrepreneur (US, EU, Asia) &
Portfolio Entrepreneur, with personal hard earn success & failures● 17 years experience in developing web based tools for various
business processes● 6 Years of developing equity crowdfunding model globally via Grow
VC Group (scaling risk funding)● 5 years for Startup Ecosystem online support tools, platforms &
metrics● For past year, being part of three EC Horizon 2020 Groups:
○ Access to Risk Finance, ○ Spreading Excellence & Widening participation ○ International Cooperation
As a Business Advisor● 10 years of startup mentoring with over 2000 one to one mentoring
sessions and workshops with 1000+ entrepreneurs and hundreds of startups around the world at various development stages and industries
● 10 years developing Startup Support services, with entrepreneurial mind and lean methodology (fast ideation, implement and measure cycle)
● 5 years of “living lab” development for Startup Ecosystem in Finland with City of Helsinki
About Grow VC Group"The global pioneer of securities crowdfunding, peer to peer marketplaces and new investment models."
Other Business VerticalsReal estate, P2P loans etc.
Consulting in specific areas
Local Investors
Startups
Startup Ecosystem
Global Investors
Other Business VerticalsReal estate, P2P loans etc.
Local Investors
Startups
Startup Ecosystem
Global Investors
Consulting in specific areas
Startup Development Phases & Startup Ecosystem
Development
Where Does Innovation Happen?
Research IPR
Innovation via Big Companies & Public
Sector.
Closed process & Internal resources
Innovation by Startups
FundingSources
Innovation Ecosystem
Customers
Innovation process is moving away from “closed structures” and big companies to more open and
collaborative startup ecosystem.
Megatrend
Research IPR
Innovation via Big Companies &
Public Sector.
Closed process & Internal resources
Innovation by
Startups
Research IPR
Innovation via Big
Companies & Public Sector.
Innovation by Startups
Open, collaborative &
external resourcesFundingSources
Service Providers
SupportOrganizations
FundingSources
New Funding Solutions
Innovation Ecosystem
Startup Ecosystem
Customers
Customers
Research IPR
Innovation via Big Companies & Public Sector.
Innovation by Startups
Open, collaborative & external resources
FundingSources
Service Providers
SupportOrganizations
New Funding Solutions
Startup Ecosystem
Customers
Difference between innovation & startup?
“Innovation is about developing
a new product, service or business model.”
“Startups do innovation
AND also develop
a new growing company & business.”
Why this megatrend?● The megatrends of innovation is focusing more and more around startups ● The old world is about ideas, research and big companies creating the
innovation (products and services from these).● The old models is already working at it’s best and is difficult to improve - as
such, little growth can be achieved in that area ● The new world is about making the innovation happen via Startups, where
innovation is also more openly and independently exposed to markets● Startups are “outsourced innovation” for big companies and biggest group
generating new jobs● Startups are fast, flexible, highly motivated, cost effective and supported by
private and public parties● Smart big companies are moving more and more away from traditional
innovation models towards more open innovation and working with and buying most promising startups after they have validated scalable innovation.
Why Startups?
Recent study by Kauffman Foundation and the Institute for Competitiveness
& Prosperity.
“Over the last twenty five years, almost all of the private sector jobs have been created by businesses
less than five years old.”
“Between 1988 and 2011, companies more than five years old destroyed more jobs than they created in all
but eight of those years.”
What is a Startup?
Startup
“A startup company or startup is a company or temporary organization designed to search for a
repeatable and scalable business model”
- The term became popular internationally during the dot-com bubble
http://en.wikipedia.org/wiki/Startup_company
A B
C D
High Growth Ambition and very scalable business model
Low Growth Ambition and/or Non Scalable business
Market validated business
model
Unvalidated business model
"a kiosk"
"new startup"
“New Startup”
Startup stages
http://en.wikipedia.org/wiki/Startup_company
Startup Development
?
Startup Development
Improved Startup stages
Startup Key Milestones
-2. Ideation-1. Concepting 0. Commitment 1. Validation 2. Scaling 3. Establishing
From investors and startups point of view
“Investor”
- anyone that makes meaningful resource investment purely for ROI
money, work, project, time, skills, contacts etc..
Valuation?● typically used and know from investing money to company ● is needed also for other calculation purposes● is also needed for founders ownership % estimates & sweat
equity investments (for work, services, contacts etc.)● acts as a measure of company development● is a core "deal tool" at all stages
About valuation● for cash investment the valuation is typically lower than for
other types● is only as real as validated with an actual deal(s) made -
anything else is "guesstimate"● typical valuation levels do exist for different stages● early stages more based on promise and later stages more
based on results so far + estimated development curve
Ideation● Potential scalable product/service idea● Some initial business models for how it would make money
●One person or vague team●no real commitment confirmed ●and/or no right balance in the team structure yet
-2 3210-1
“Investors” view
"pie in the sky"
– a lot of work to get involved....
Valuation level
$0
Business Potential
More PotentialBig MarketMarket growingMarket pullScalable
Less PotentialSmall market
Market shrinkingMarket PushNot scalable
Concepting● Have set some clear meaningful target
● clear direction (3y+) with key milestones to get there● …36, 24, 12, 6, 3 months -> 3, 6, 12, 24, 36 months…
● Team of two or three core people ● but can also have additional team with lighter
commitment
-2 -1 30 21
“Investors” view
“hmmm..., maybe there is something here...”
still very risky.... money does not really help here...
Valuation level
$0 - 100k
Commitment● Committed skills balanced founding team ● Able to develop the product/service (without dependency of
uncommitted external resources) ● OR already have initial product/service developed● Shareholder agreement with “right things” in it
● milestones & committed time/money usage ● founding team commitments for min. 2+ years with
vesting, etc.
-2 -1 30 21
“Investors” view
“Looks like this may have real potential..?
Time to get in for a good deal...? Still very risky..... Maybe join as Advisor...?”
Valuation level
$300 - 500k
Team Validation
More PotentialGood TeamBalanced SkillsCommittedDoer AttitudeRight Culture
Less PotentialSolo Entrepreneur
Uneven SkillsNot committedTalker AttitudeWrong Culture
Validation
● Can already show some user growth and/or revenue (initial traction)
● And/or continue to attract external resources (money / additional people/work) for equity or future revenues
-2 -1 30 21
“Investors” view
“This is starting to get interesting...”
Join now? - Later I may not get in or it's going to be out of my range…
Valuation level
$500k - 2M
Between Previous & Next Stage
● Is where assumptions get validated
● If selected market and team is good…
-> The idea and business models can be (and often is) changed or pivoted several times
Scaling
● Showing clear and growing user/market traction, momentum and or growth
● And/or is able to attract significant funding
-2 -1 30 21
“Investors” view
awesome! :) OR
Oh, I missed the boat :(
earliest time when good VC's start to get interested....
Valuation level
$1 - 10M
Establishing● Pretty clearly is going to make it● Often wants to culturally continue behaving like a "startup"
for as long as possible● No longer need to "try" get resources and can get those
easily ● Continue to grow ● Founders make exit or continue biz as usual
-2 -1 30 21
Valuation level
$5 - 10M+
Success
idea + plan + action + timing
= reaching a set target
Successidea + plan (set of initial
assumptions) + action ((volume x testing assumptions - failures) +
(volume x testing improved assumptions - failures)) + timing =
reaching a target
Valuation development
"What are the keys to help get successful results?"
● To new growth ambition startup creation ● Pre-startup and early stage startup support services● get more research, inventions, ideas and other IPR to be
utilized by startups● develop individual services in balance & context with entire
ecosystem
Focus
Startup EcosystemA startup ecosystem is formed by people, startups in their various stages and various types of organizations in a location (physical and/or virtual), interacting as an organic system to create new
companies.
Different organizations typically focus on specific parts of the ecosystem function and/or startups at their specific development
stage(s).
Learn more: http://www.startupcommons.org/understanding-startup-ecosystems1.html
Startups & Ecosystems
Startups develop in startup ecosystems through the development phases in constant interaction with
various organizations, services & people.
The more dynamic, transparent and balanced the ecosystem is the more successful startups ecosystem
can create.
Three steps of ecosystem development
1. map out starting position 2. Identify and fix gaps and bottlenecks 3. implement measurements
Iteratively improve; measure and learn
Using key stages tool
● Map out ecosystem● Describe ecosystem● Common Language To Label items;
○ startups, services, events, funding instruments, blog posts, tools, ideas, suggestions, etc.
-2 -1 30 21
Public services & funding
Private service providers & investors
Startup Development
Knowledge vs. Money
-2 -1 30 21
Map your startup ecosystem services here!
-2 -1 30 21
Organization AService A
Organization AService B
Organization BService A
Support activities Targets
A B
C D
High Job Creation Potential (need of people)
Low Job Creation Potential
Low Demand PotentialVery few and/or low paying
limited region customers
High Demand Potentiala lot of potential well paying international customers
No Value Idea
High Value Idea
Idea evaluation NOTE: as a public sector!
Medium Value Idea
Low Value Idea
A B
C D
High Growth Ambition and very scalable business model
Low Growth Ambition and/or Non Scalable business
Market validated business model
Unvalidated business model
"a kiosk"
New Startup at Stage 0
Startup
Early Startup at Stage 2
Use together withdevelopment phases
criteria
About Metrics● Ecosystem as a big service offering and a path ● Find bottlenecks ● Develop in balance● Input and output volumes of each service● Measure & iterate to improve services
Single most valuable tool to improve your ROI
Free to use under creative commons licence
Original www.startupcommons.org
Licence termshttp://creativecommons.org/licenses/
● Develop startup ecosystem as a whole● Measure “everything” to learn and improve● Improve iteratively
Recap
“Only the things that are understood can be developed”
“When more people and organizations are developing things together, there needs to be a common language and
understanding about what is being developed.”
“Systematically implement common language to your ecosystem and other
things will start to follow naturally.”
“Only things that can be measured, can be improved.”
“Any missing knowledge you can buy.”
“Plenty of EU funding available.”
Valto [email protected]
+358 400 421 551 (FIN)+1 415 854-0546 (US)
Grow VC Group ++www.growvc.com ++
@growvc ++
Thank You!#startupecosystem
