Entrepreneurship:Global Transformation Engine

Industrial Revolution Age of Steam and Railways

Age of Steel, Electricity and Heavy Engineering

Age of Oil, Automobiles and Mass Production

Age of TechnologyThe Internet

RevolutionAt every turn, Entrepreneurs have

been the main instrument of change

“The Internet Revolution is in fact the Industrial Revolution of our time. It’s a sweeping social disruption that brings with it not only new inventions and scientific advances, but perhaps most importantly revolutionizes both the methods of work and we the workers ourselves.”

Forbes, 2012

In the Internet Revolution, entrepreneurs will be more powerful and more disruptive than we can imagine.

We are nearing a time when anyone, anywhere can create the next massively high growth company

FACT:

It’s Cheaper to get Started

Declining initial startup costs • The Cloud, open source,

online distribution platforms, shift to Lean Startup methods and “minimum viable products”, etc.

• It no longer costs $1 to 5M dollars to start a new company like it did when founders started up ten or fifteen years ago.

But More Expensive to Scale

Increasing scaling costs • Companies that achieve

product market fit will often kick their growth into high gear by ramping up their budgets.

• Separately, customer acquisition channels tend to become saturated which further increases costs at the scaling stage.

No One is Alone -- • Supports for entrepreneurs exist around the globe• Startup America, Startup Canada, Startup Britain, Startup Chile, Startup

Brazil…support local (city level), entrepreneur-led initiatives to create hubs of vibrant entrepreneurial activity

• Locally - solve challenges + develop model for what “better” looks like• Highlight / reward best practices to encourage emulation• Connect the leaders to each other for peer-to-peer sharing --- created

the beginnings to what can become a true global startup ecosystem

Entrepreneurship Demystified• Best selling books sharing philosophies, fundamentals,

methodologies – Lean Startup (Eric Ries), Startup Owners’ Manual (Steve Blank, Bob Dorf), Startup Communities (Brad Feld). The authors travel and speak globally.

• Blogs (by top VC’s and successful entrepreneurs) read by a global audience (Fred Wilson, Chris Dixon, Mark Suster, etc.)

• Global participation in top accelerator programs such as Y Combinator, 500 Startups, Tech Stars. Graduates frequently return home rather than staying in the US.

• Collegiate level entrepreneurship programs – in the US, there are over 2,000 full-time entrepreneurship programs in existence now versus just 16 in 1970

• Anyone, anywhere can participate, engage, learn and use the best practices of high growth entrepreneurship.

New Hubs of Entrepreneurship

“Everywhere Else”New ecosystems are successfully evolving in a fraction of the time that it took Silicon Valley or Boston to emerge

Ecosystem Within Four WallsCo-working spaces with embedded incubators, accelerators, and capital are quickly becoming the epicenters for their local startup communities

Entrepreneurs digging wherever there is goldEntrepreneurial mobility – Entrepreneurs are not starting / staying where they are from, not loyal to any single community

Cross-community CollaborationInitiatives like the Startup Federation enable entrepreneurs to virtually and physically circumnavigate the globe

Entrepreneurship is a global phenomenonFACT:

• Through the trade, foreign direct investment, political idea exchanges, capital flows, migration, the spread of technology, and elimination of barriers (tech, communication, travel), the world’s markets and businesses are increasingly connected and interdependent.

• The vast majority of global GDP growth is happening in developing and emerging markets like China, India, Brazil, Russia, Indonesia, Turkey, and Mexico.

Beyond the Valley

• Technology advances have made it entirely feasible to build highly complex solutions from anywhere

• This pushes against the traditional notion that startups need to cluster together around a physical center of commerce.

• Traditional centers of entrepreneurship will remain, but we are seeing the rise of “everywhere else”

Startups are De-clustering

• Globally-minded investors aggressively pursuing “the best possible deals in the world”• 500 Startups - one new investment somewhere on the planet

about every three days. • Challenge Cup – global competition in 16 cities to find the most

promising startups in education, health, energy, smart cities

Competing on the Global Stage

Early stage venture investing is undergoing massive disruption (in favor of entrepreneurs!)FACT:

Entirely New Approaches

“Venture Capital is open to attack by disruptive new business models and technology.”

Naval Ravikant

Out with the old…• Investors no longer taking a board seat -- unbundling of

advice, control and money• Financing terms are increasingly being standardized• Convertible notes are becoming the norm at the early

stage• Fundraising rounds are trending to continuous, rather

than discrete, rounds (no fixed amounts, no closings)• Prices are beginning to float• Herd mentality is stronger than ever in early stage rounds

today (something entrepreneurs can easily leverage)• Rise of “super angel” / small bets

In with the new…

Transparency• Leveling the playing field between investors and entrepreneurs (but

raising the bar for everyone)• Platforms like AngelList now allow entrepreneurs to follow investors, see

who they’re following, which startups they’re interacting with and more• Massive amounts of information available to entrepreneurs online:

• Demo day live streams• Sample pitch decks• Standard terms sheets• VC 101

• Entrepreneurs can easily evaluate the investor and decide if they want to let them in the deal.

Quantified Startup• Using data to make better investment decisions• Everything from social metrics to real-time user and accounting data

to how many code commits the developers make• Real-time tracking and dash boarding of data to quickly identify (and

potentially shed) lagging portfolio companies• Enables a shift from an opaque and semi-closed system to a

transparent and open environment which more merit based than it has ever been.

• Emergence of platforms and tools -- Dashboard.io (Paul Singh of 500 Startups), Mattermark (“where big data meets venture capital”)

Entirely New Approaches to early stage investing

Crowdfunding: • Over 1M crowdfunding campaigns globally in 2012, raising over $2.7B• Only 4% were equity campaigns• As more countries allow equity crowdfunding, expect these figures to

grow exponentially• Platforms like Funder’s Club, wefunder, and CircleUp driving significant

interest in equity crowdfunding

Syndicates:• Any accredited investor on AngelList can create, lead and collect carry for

a fund of angel money for a specific startup.• “If I were young & wanted to be in VC I would…set up shop on AngelList

organizing syndicates.” (Fred Wilson, Union Square Ventures)

Socially-driven Disruption Is Upending Every Industry(opportunities are everywhere!)FACT:

Socially-driven Disruption• Rise of the social web is creating peer-to-peer models of social

business disrupting numerous industries• In media, content producers can connect directly with their

audience upending traditional models• In manufacturing, platforms like Etsy help creators monetize their

services without having to go through the usual channels or middlemen

• In services, such as hotels and taxis, which can be easily socialized companies like Uber, Lyft, Hailo, Airbnb, SideCar and TaskRabbit are succeeding

Internet 2.0: Socially Impactful Disruption

“The first revolution started in the '90s with the release of the web and consumer email. The goal was to get everyone online and make the Internet part of everyday life. That goal has largely been achieved. Now that the Internet is ubiquitous and mobile, we've entered the second revolution, which will improve education, health care, energy and transportation.”

---- Steve Case

• Socially-driven disruption is now moving through the rest of the economy

• Key targets are education, healthcare and other service sectors which are ripe for disruption, where social “pull” can drive structural industry change

Good for the World; Good for Investors

Consumer Web: $70b

Education: $869bHealth: $1,067b Energy: $1,200b

In the Internet Revolution, entrepreneurs will be more powerful and more disruptive than we can imagine.

1. We are nearing a time when anyone, anywhere can create the next massively high growth company

2. Entrepreneurship is a global phenomenon – anyone can build highly complex solutions from anywhere

3. Early stage venture investing is undergoing massive disruption (in favor of entrepreneurs!)

4. Socially-driven Disruption Is Upending Every Industry (opportunities are everywhere!), especially in important arenas like education, healthcare, energy and transportation

CorporateLocal

Hierarchical

EntrepreneurialGlobal

Networked

Shifting Global Economic MindsetIt’s a whole different world out there…

Closed Transparent

TransformationalTransactional

In the Internet Revolution, entrepreneurs will be more powerful and more disruptive than we can imagine.

Donna HarrisCofounder

@dharrisindc