Presenter Presenter Info Info -- Andreas AntonopoulosAndreas AntonopoulosEducationMBA, 2001, Weatherhead School of Management, Case Western Reserve, USAPh.D., 1997, Electrical & Electronic Engineering, University College London, UK.M.Eng , 1994, Electrical & Electronic Engineering, University of Patras, Greece.

CurrentlyUniversity of New York in Prague Rector and Professor of Telecoms Business andUniversity of New York in Prague, Rector and Professor of Telecoms Business and EntrepreneurshipWorking Knowledge, Co-Founder and Managing Partner Marathon Invest, Co-Founder and sitting on the Board of DirectorsViva Credit, Angel Investor & Board of DirectorsUniversity College London, Adjunct Professor

BackgroundBackground- Combination of Industry, Entrepreneurial, Academic background- Have started 4 ventures, 1.5 successful exits...- Employed in Industry at RHK (now Ovum), Bell Labs/Lucent Technologies, Nortel Networks and British Telecom- Employed in Academia at UNYP, CEU Business School, University College London- Consultancy work with 30+ companies (via Working Knowledge)- Worked and/or lived in Argentina Brazil Germany Greece Hungary the PhilippinesWorked and/or lived in Argentina, Brazil, Germany, Greece, Hungary, the Philippines, Romania, Singapore, Spain, Thailand, UK and the US- Have taught/guest lectured at 8 Universities

Principles ofPrinciples ofPrinciples of Principles of IntrapreneurshipIntrapreneurshipIntrapreneurshipIntrapreneurship

Who wants to be an Entrepreneur?

“Anyone who wants to experience theAnyone who wants to experience the deep, dark canyons of uncertainty and ambiguity; and who wants to walk theambiguity; and who wants to walk the breathtaking highlands of success. But I

ti d t l t lk th l ttcaution, do not plan to walk the latter, until you have experienced the former.”—An Entrepreneur

What is Entrepreneurship? Who is an Entrepreneur?Who is an Entrepreneur?

“Creating and building something of value from practically nothing.”

“The pursuit of opportunity without regard to resources controlled.”

“A way of thinking and acting that is opportunity obsessed holistic inA way of thinking and acting that is opportunity obsessed, holistic in approach, and leadership balanced—for the purpose of wealth creation.”

“Any attempt at new business or new venture creation, such as self-Any attempt at new business or new venture creation, such as selfemployment, a new business organization, or the expansion of an existing business, by an individual, a team, or an established business.”

“The Act of being an entrepreneur” (Wikipedia)

An entrepreneur is a person who has possession of a new enterprise, venture or idea, and assumes significant accountability for the inherent risks and the outcome.

“A way of managing and leading.”

What Skills are Important?p

Creativity and opportunity recognition/evaluationy pp y g

Real-time strategy and decision making

C f t ith h bi it d i kComfort with chaos, ambiguity and risk

Understanding of start-up basics and accounting

Teamwork

Evangelism selling negotiating and motivationEvangelism, selling, negotiating, and motivation through influence and persuasion

Communications skills both oral and writtenCommunications skills both oral and written

Traditional vs. Entrepreneurial Career PathsEntrepreneurial Career Paths

High SchoolHigh School

University

University

University

Practical Experience

Big Company (or Companies) Management Training

W ll M d Hi h G th FiWell Managed, High Growth Firm

Startup Venture

Another Startup?

Retire Venture Capital or Angel Investor

Never really retire

IntrapreneurshipIntrapreneurship is the act of behaving like an entrepreneur except within a larger organization.p g g

"A person within a large corporation who takes direct responsibility for turning an idea into a profitable finished product th h ti i k t ki d i ti "through assertive risk-taking and innovation".

First introduced in 1976 by the Economist!

“An entrepreneur takes substantial risk in being the owner and operator of a business with expectations of financial profit and other rewards that the business may generate. On the contrary, an intrapreneur is an individual employed by an organization for remuneration, which is based on the financial success of the unit he is responsible for. Intrapreneurs share the same traits as entrepreneurs such as conviction, zeal and insight”

Do you have this drive? Can you identify intrapreneurs into your organizations?organizations?

Intrapreneurial Managersp gWhat are the differences in skill sets and h t i ti th t i t i lcharacteristics that intrapreneurial managers

need to learn vs. traditional managers?Pro-activeness

Creativity

Strong drive for results

Good corporate understandingGood co po ate u de sta d g

Good market understanding

Opportunity identification skillsOpportunity identification skills

Analytical and business casing skills

Sales skills

What Do you Think of Argentiniansas Entre/Intrapreneurs?

• Individualistic?

Feedback seeking?• Feedback seeking?

• Competitive?p

• Team players?

• Creative?

• Risk taking?• Risk taking?

Can Entrepreneurship be Taught?Yes — Skills and knowledge transfer

– Doing vs. Teachingg g• Pele and Ronaldo each had a coach.

– Mental Framework to Carry Into Entrepreneurial Situations:• “You CAN do it too ”• You CAN do it, too.• Confidence not arrogance

– Mistakes to be Avoided:• e.g. Viability of opportunity, assessment of viability and

finances

No Personality and risk tolerance (leadership?)No — Personality, and risk tolerance (leadership?)– Some things are just the way they are.– It’s like going to war. You never know if you or anyone else is g g y y

capable until the shit hits the fan—then you know.

Windows of Apprenticeship

Why is it important?

For how long?

What was different about the dot com period? What lessonsWhat was different about the dot.com period? What lessons can be drawn from the period?

If you want the odds in your favor, get the experience first..y y , g p

On average, success stories had 7-10 years work experience and some savings before starting. Most will go through false starts.

The Six dominant Themes Which CANNOT Be Acquired

Commitment & Determination

Leadership

Opportunity ObsessionOpportunity Obsession

Tolerance of Risk, Ambiguity, and U t i tUncertainty

Creativity, Self-reliance, and Ability to Adapty, , y p

Motivation to Excel

Non Acquirable Attitudes & Behaviorsq

- Energy, health, emotional stabilitygy, , y

- Creativity and innovativenessy

- Intelligenceg

- Capacity to inspirep y p

- Values

Myths & RealitiesyEntrepreneurs are born not made

Entrepreneurs like riskEntrepreneurs like risk

Entrepreneurs are their own bosses and are completely independentp

Entrepreneurs work longer and harder than managers in big companies

Start a business and fail and you ll never make it again

Money is the most important start up ingredient

Entrepreneurs should be young and energetic

Entrepreneurs are money oriented

Entrepreneurs are lone wolves and cannot work with others

If an entrepreneur is talented success will happen in a year or two

Major Inventions/Products/Marketsj

Many of the above start-ups were bought by incumbents

The “Revolution”

What factors have driven the “Silent Revolution”What factors have driven the “Silent Revolution”– In the US?– In Europe?– In other parts of the World?

Entrepreneurship is now taught in more than 2,000 HEIs in the US

Best tool for social mobilityBest tool for social mobility

Opportunity Opportunity pp ypp yRecognition & Recognition & gg

ScreeningScreeninggg

Starting Point is the Identification of an Opportunity

It all starts here…

Opportunity Recognition – The Very y g yHeart of the Entrepreneurial ProcessWhat’s the difference between and idea andWhat s the difference between and idea and an opportunity?

– Opportunities are created, or built, using ideas and entrepreneurial creativityp y

– An opportunity has the qualities of being attractive, pp y q g ,durable, and timely and is anchored in a product or service, which creates or adds value for its buyer or end userend user.

Chaos and Change

Friends of the entre/intrapreneur?

What are usual areas which spawn and drive opportunity?

– Regulatory changes– 10-fold changes in 10 years or less (Moore’s law)– Reconstruction of value chain and distribution

channels Maturity of main business models/Uncertainty for– Maturity of main business models/Uncertainty for revenue growth drivers

– Market leaders are customer obsessed orMarket leaders are customer obsessed or customer blind

Where are Opportunities Identified?Where are Opportunities Identified?Technology changes (Moore’s law, Metcalf’s law, disruption)

Market changes (value chain disruption/obsolence/vulnerabilityMarket changes (value chain disruption/obsolence/vulnerability, deregulation)

Societal changes (changes in ways we live, work, learn etc)Societal changes (changes in ways we live, work, learn etc)

Brontosaurus factor (doing things better than an incumbent)

Undervalued assetsUndervalued assets

Different applications of “new products” (i.e. glue and post-it from 3M, polarized lights for cars: Polaroid, angina drug from Pfizer..)

Being the right person in the right place in the right time

“Henry Ford” question

Arthur Rock Criterion for New Opportunities

“Look for business concepts that will change p gthe way people live or work”

Imperatives for New Opportunitiesp pp

Think BIG

Skills to assess opportunities early to avoidSkills to assess opportunities early to avoid wasting time and effort (experience counts..)

C ti thi kiCreative thinking

Team Creativityy

Big opportunities with little capital

Timing

Windows of opportunitypp y$1B

ze

Market

Mar

ket S

iz

$500M

$250MWindow ofopportunity

5 10 200

$100M

Time (years)5 10 200

Opportunity Screening GeneralOpportunity Screening General CriteriaWhat are criteria for evaluating new product/service opportunities?

Viability

Timing

Market size

In house skills

Competition

Opportunity Identification..pp y“This device has so many shortcomings that cannot be used as a communication medium”, Western Union Finance Services on the first phone d i 1876devices, 1876

“This box playing commercial music has no commercial value. Who would pay for wirleess messages?”, David Sarnoff, Industrialist when asked to invest in radio production 1920radio production, 1920

“Who would be interested in listening the actors talking?”, H.M.Warner, Warner Brothers, 1927

“There never going to be more than 1,000 cars in Europe since they wont be enough professional chauffers for them”, Daimlel Benz PR Director, 1928

“We ll never have enough cars to fill in all these roads”, Charles Scott urban l f L A l 1940planner of Los Angeles, 1940

“We dont like this new guitar sound and music, people wont like it.” DECCA records rejection of the Beatles, 1962

“I see absolutely no reason for someone to have a computer at home,” Ken Olson, Founder and CEO of Digital Equipment, 1977

“640K RAM will be adequate for all applications”, Bill Gates, Microsoft, 1981

Lifecycle of technologies & markets

Lead Early Early Late LaggardsNew ters

LeadUsers

EarlyAdopters

yMajority

LateMajority

Laggards#

of N

Ado

pt

Physical limits

Time

Physical limits

Effort

How to Communicate an Opportunity

fWhat is the customer benefit; or, what problem does the idea solve (“what pain does it li ”)?it relieve”)?

What is the market?

How will it make money?How will it make money?

Customer Benefit

Entrepreneurial Entrepreneurial Activity Activity ––

Venture CreationVenture Creation

Types of Ventures

Wh t i lif t l M d PWhat is a lifestyle, or Mom and Pop venture?

What is a High Potential Venture?What is a High Potential Venture?

The Creation Process/Cycle The Founders and Team

O t it R iti d S iOpportunity Recognition and Screening

Resource Requirements and Evaluation

Securing/Confirming Financing

S l d M k ti C i th ChSales and Marketing — Crossing the Chasm

Managing Growth

Good Times and Bad Times

Exit Cashing out Harvesting Crash and BurnExit, Cashing out, Harvesting, Crash and Burn, Dot-Bomb, Dot-Gone

J t D It A iJust Do It… Again.

Where to Avoid Savings..

Lawyers

Accountants

Stages of Growth

$100M

$50M

ales

$25MS

Idea / Venture

$25M

Idea / VentureStart-Up

High-Growth Maturity Stability$3M

$1M

Time (years)2-3 8-10 13-150

$1M

Time (years)

The New Venture TeamWhat are the team philosophies and attitudes that the best entrepreneurs fashion in building team?

Cohesion

TeamworkTeamwork

Integrity

Commitment to the long haulCommitment to the long haul

Harvest Mind-set - (not big car and big office)

Commitment to Value creation - Win/win and sharing the wealth

E l i lit N d l d hi d lEqual inequality - No democracy, leadership and role sharing, but reward based on contribution. Sharing equity equally is not a good thing generally.q y q y g g g y

Fairness, Sharing of the harvest

What Investors Look for

Has the team worked together before?as t e tea o ed toget e be o e

Do the members have the right experience?

Do the founders know their weaknesses and are ready toDo the founders know their weaknesses and are ready to address them?

Are the founders clear about their future role? OwnershipAre the founders clear about their future role? Ownership future?

Have they agreed on a common goal?Have they agreed on a common goal?

Are they fully committed to the goal

Are they putting personal stakes into it?Are they putting personal stakes into it?

New VentureNew VentureNew Venture New Venture FinancingFinancingFinancingFinancing

Forms of FinancingForms of Financing

Self Financing

Angel Investors (private persons, companies)

Venture Capital

Bank Loans/Credit LinesBank Loans/Credit Lines

Private Equity

Corporate PartnersCorporate Partners

What is PE?What is PE?

Private Equity

Venture Capital

Early stage

Seed Start-up ExpansionReplacement Capital Buyout

41

EntrepreneurshipEntrepreneurshipEntrepreneurship Entrepreneurship TodayTodayTodayToday

Emerging Markets EntrepreneursScaring the West, Very aggressive

Low cost base & Access to fast growing markets

610M internet users in BRICI countries today, 1.2B by 2015

Much more likely to access the internet via mobile devices rather than PCs compared to westerners (spurs service innovation)PCs compared to westerners (spurs service innovation)

2020 median age: India: 28, China: 37, America: 38, EU: 45, Japan: 49

Entrepreneurialism is much more popularp p p

Shape markets (from video games to online karaoke)

Examples: – India: Globalis: founded in 2001, offices in 11 countries, CEO 25 years old.

Infosys: Largest global player on outsourcing is a 15 years old start up, Air Deccan from Captain GopinathGhana: SOFTtribe (“tropically tolerant business solution provider”– Ghana: SOFTtribe (“tropically tolerant business solution provider”, CellBazaar, virtual marketplace, Kamal Quadir

– Txteagle.com, crowdsourcing in emerging markets, Nathan Eagle from MIT, reaches 2B mobile phone subscribers via 220 operators. Already has , p p ylargest contract-labour force in Kenya

Valley Updates

Quora (http://www.quora.com/about), Q&A site from FB employees, raized$14M, Valued at $87.5M

Blippy (http://blippy.com/), Share and Review online purchases, raised $11M at a valuation of $46M, pre-revenue!

Inkling (http://www.inkling.com/) , Interactive textbooks, raised $9M inInkling (http://www.inkling.com/) , Interactive textbooks, raised $9M in valuation of $30M+

Groupon, founded 2008 with deal of the day enticement (recession helped), $135M raised on a $1.35B valuation,Europe leader: www.vente-privee.com$ $ , p p

Swoopo, (www.swoopo.com), best “dollar auction game” product online. 60c pay for auctions, founded in Germany in 2005, valued at $87M, 26M revenues, 2.5M registered users. GoBid.com latest with one popping up in every market. “the most pure, distilled evil in a business plan”. Introduced discount on nominal price equal to money spent.

Twitter valuation has been valued at $1B last summer on 3rd round up from $95M i id 08 i 2 d d$95M in mid 08 in 2nd round

Interesting Areas – Sharing/RentingZipcar.com, leading online car sharing, 500K+ active members, values at $58M. “Americans spend 18% of their income to an asset which mostly lies idle”. Overall market value estimates of $6B by 2015 (Frost & Sullivan) Streetcar: market leadermarket value estimates of $6B by 2015 (Frost & Sullivan). Streetcar: market leader in London. Carmakers and rental companies are moving in..

Neflix.com, online film rental, made $116M in 2009. Movies by mail

“B b St l” (htt // b b t l / l ) h h db“Bag borrow or Steal” (http://www.bagborroworsteal.com/welcome), posh handbag rentals. Which pain does it rlieve?: <Allows women to avoid the “emotional and financial sacrifices” of the endless search for the “right” accessory>

Rent That Toy com (toys rental) valued at $32MRent-That-Toy.com (toys rental), valued at $32M

Couchsurfing.org, 3M registered users in 79K cities, excellent user feedback case (trip advisor model), valued at over $28M

ThredUp.com, childrens’ clothes’, videos etc exchanges

freecycle.org, give away site, 8M+ members

Attitudes for conspicuous consumption (Thorstein Veblen) have changed. Status isAttitudes for conspicuous consumption (Thorstein Veblen) have changed. Status is not displayed by what you own but by virtual means by boasting on what they are doing (twitter), what they are reading (Shelfari), what they are interested in (Digg) and who they know (Facebook). Collaborative consumption is ïn”.

Limits are there (you wont exchange clothes and not all are happy to short time rent a car)

Interesting Areas – For Profit Activism

Microlendingg

Campaigns

www.carrotmob.org

http://1bog.org (one block off the grid).

Brent Shulkin & Steve Newcomb (powerset exit to Microsoft) founded virgance for “mission driven”Microsoft) founded virgance for mission-driven ventures

Lend me some sugar on FB

www.kickstart.org

THANK YOUTHANK YOU

QUESTIONS??QUESTIONS??

Andreas Antonopoulos, PhD, MBARector, University of New York in PragueManaging Partner, Working Knowledge