The Future of Entrepreneurship

Presented by Julie Meyer

Future of Web Apps – London 2008

10 October 2008

Was it Sir John Templeton who said?

“Invest at the point of maximum pessimism?”

What Entrepreneurs Do Inside Companies- They get out and create a market

storm

Entrepreneurs, if they're good, have the best insight into how particular markets are developing. They are in the "eye of the storm," dealing every day with how markets are dynamically evolving.

Entrepreneurs also think differently. They see things that others don't. They feel compelled to make stuff happen, often simply because they see something that doesn't exist yet—and should.

Sometimes that blind faith leads to catastrophe, but more often, entrepreneurial insights eventually turn into step changes in how industries operate.

I. The BackDrop for Entrepreneurship in 2008

The Market in 2008Global Finance Trends for

Entrepreneurs From Bretton Woods to Global Finance 2.0

George Bush may get invited to someone else’s conference to sort things out

Getting Your Last Round of Funding in

Cutting costs Don’t be precious about Valuation

Meltdown is removing any last confidence that most people had in governments and large enterprise [banks included obviously] and forcing them to rely on themselves and shifting power to the individual

Many don’t see this yet as they think that government/large state is going to win out of this current crisis,

but it will be a neutered, emasculated, disrespected state/government sector

The Market in 2008Key Trends for

Entrepreneurs The Free Market of Open Source The Move of Applications to the Cloud The Network Orientation to Business Voice-powered applications are defining

the ultimate in user interface The Diaspora of Talent from emerging

markets are going home and cultivating the home markets

The Speed of Innovation is changing the way companies are built and invested in

“A quiet revolution is underway, led by the world’s most rapidly developing economies – with the least to spend and the most to gain” – Jonathan Schwartz

By 2012, 90% of the world’s companies will be using open source software - Gartner

Barriers to global trade have never been lower, nor has communication ever been simpler, driving political reform, cultural transparency, social progress and a tidal wave of wealth creation – all driven by the internet but actually more than that – driven by an endorsement of technology freedom.

Free is not proprietary, embraces collaboration, openness and standards – without royalties or risk or patent litigation

MySQL, Ubuntu, Open Office OpenOffice.org is a free office software suite used by

approximately 100 m users across the world with concentrations in the developing world

Business is Network-OrientedMore than just the Social

Networking Fad In this Web 2.0 Phase, the winners are those

firms who can align the economics of the ecosystem in which they operate for all the players in the ecosystem Monitise – Mobile Banking IndependentIP – Content Asset Management Lickerish – Celebrity Photography

So the opportunities might be to Disrupt or Enable the Ecosystem

Supply Chains become Supply Networks Many to Many Connections in an industry are

enabled

Voice-powered applications are defining the ultimate in user interface

SpinVox does one thing very well, convert Voice to Content. The world’s largest private speech technology company SpinVox captures spoken messages, converts them into

text and delivers them to SMS text or email; blogs; social media walls and spaces or unified communications environments.

Live Learning Phenomenon Scale

In the first half of 2008, record volumes were achieved; 6 million people now use SpinVox in their daily messaging.

Go to Market is Everything 12 Carrier deployments in the last year have proven that

SpinVox has the Carrier-grade scalability to deliver the real-time, accurate voice to text conversion on any device, anywhere and at anytime. In fact, SpinVox is the fastest growing network service feature in years.

`You were busy... so I spoke you a text instead’ to `I’m busy, but there’s always time to speak you a text message` and `I really want to share this moment with my social network.`"

The Diaspora of Talent from emerging markets are going home and cultivating the home markets

The World is Flat – Developing World Catching Up and LeapFrogging Developed China has outpaced the US in number of

Internet users And 29% of them are connecting via their phone

40% of all Silicon Valley start-ups are founded by someone of Asian descent [Indian or Chinese]

The world used to come to the West to get educated and live, now it’s coming to get educated but going back to build out new economies. Fortunes are getting made, and capital is moving to these higher growth opportunities as they are significantly de-risked by the top talent managing them.

The Speed of Innovation is changing the way companies are built and invested in

Google 10 Year Anniversary meets Lehmans >150 year history gone in 3 days 4 Years as a Public Company

Less Capital Required, and Staged against Achieving Key De-risking Milestones

Role of the Start-up is to refine the consumer behavior and figure out how to tax it after there’s traction Whereas the role of the Corporate is to

give distribution and scale

II. A Brief History of Entrepreneurship in Europe

Europe has always had its backersof Artists, Adventurers, and Mavericks

The difference between then and now is: We didn’t believe that life was fair We didn’t believe that all people should be

successful We didn’t believe that everything and everyone

should be equal The king and queen may have been benevolent,

but they certainly didn’t treat everyone the same Risk was rewarded And greatness was frequently achieved

The Medici Familypowerful Florentine family from the 13th to 17th

century

The Medici Bank was one of the most prosperous and most respected in Europe.

For a period of time the wealthiest family in Europe.

From this base, the family acquired political power initially in Florence, and later in wider Italy and Europe.

Great sponsors of art and architecture

Double-entry bookkeeping system for tracking credits and debits.

Christopher Columbus ~ The 1st Entrepreneur? Queen Isabella ~ The 1st Venture Capitalist?

The advisors to Isabella and Ferdinand were sceptical about Columbus’ plans, but to keep him from taking his ideas elsewhere, and perhaps to keep their options open, the King and Queen of Spain gave him an annual annuity and sent an order to all of Spain that he was to be given free food and lodging wherever he went.

When they finally agreed to help him, Ferdinand was reported as having claimed he was “the principal cause why those islands were discovered".

Contract between Columbus and Isabella & Ferdinand

If Columbus discovered any new islands or mainland, he would receive many high rewards.

•He would be given the rank of Admiral of the Ocean Sea.

•Appointed Viceroy and Governor of all the new lands.

•Entitled to 10 percent of all the revenues from the new lands in perpetuity

•He would also have the option of buying one-eighth interest in any commercial venture with the new lands and receive one-eighth of the profits.

The Year is 1492

The Ariadne Hypothesis – Pre-meditated Sabotage

Entrepreneurs are not the Problem Europe has had great entrepreneurs – great risk takers and

achievers, and is starting to have great serial Internet entrepreneurs

The Financing of Entrepreneurship has not been World-Class The Financing of Entrepreneurship in Europe has not kept up

with the rise of serial, successful entrepreneurs in Europe Although it’s changing….

Europe may have the richest poor people of any other region in the world, but you can count on one hand the £1 billion companies that have started from scratch over the past 30 years.

Great entrepreneurs can be found on every continent But there has been something pre-meditated about Europe’s

ability to squash the ambitions or make it harder than elsewhere for Europe’s home-grown group of entrepreneurs.

What’s The Problem?Lack of Accountability

Well, in France, one is taxed on assets whether or not they are revenue-generating, and taxes reach 70% of one’s income.

In the UK, they have increased capital gains taxes without consultation with the 4 leading business organisations

The EU Commissions’ financial accounts have failed to be signed off for more than a decade.

It is not difficult at all to connect the dots between

government, their lack of accountability, their desire to control people’s lives and money, and a diminished entrepreneurial sector.

Is There a Problem?Feudalism Alive and Well

Big Government/State creates dependency and weakens individuals

Feudalism cannot co-exist with meritocracy and freedom.

   Building a Growth Story for Europe means taking

individual risks and actions.

European Entrepreneurs – Driving the Growth story

Government needs to understand that it is the servant of the people, and that European Entrepreneurs are driving its growth story.

You can’t engineer fairness You can only seize the choice as to what to do with

your own life.

Some of us choose to create, build and be a net contributor. Others are intent on taking out of the system whatever we can get.

The World of the Entrepreneur

Nick Ogden, the founder of WorldPay, one of my 40 founding investors who are some of the leading European entrepreneurs said the following when I asked him what he was most proud of: “Never missing payroll”.

Entrepreneurs know where the buck stops. It stops with

them and/or hits them smack in their forehead. Entrepreneurship is not for the faint-hearted; it is about

persisting and taking total accountability for a company and your life: the good, the bad and the ugly.

As Candace Johnson, the founder of SES Astra always says, “never give up, never accept no, and never ever go away – even when they want you to.”

The Good News

The Triple Play of the Internet, Entrepreneurship and Individual Capitalism is bringing first world living conditions to people who previously were given aid and never encouraged to dream big dreams before.

This triple play means that we are losing the divisions that have historically separated the old and new worlds and different classes of people

Iqbal Quadir, one of the founders of the Grameen Phone, says so well: “Capitalism was about empowered authority which

didn’t necessarily activate the citizenry; the Internet stands that on its head, and shifts the power to the Individual – making Individual Capitalism the force of the 21st Century”.

He/she has the market insight He/she is the value creatorHe/she is the hero

Follow the Entrepreneur

‘The credit belongs to the man who is actually in the arena’

“It is not the critic who counts, not the man who points out how the strong man stumbled or how the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes short again and again, who knows the great enthusiasm, the great venture and spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly so that his place shall never be with those cold and timid souls who know neither victory nor defeat.”  - Theodore Roosevelt

What Entrepreneurs do inside companies - They Get Out and Create a Market Storm

Entrepreneurs, if they're good, have the best insight into how particular markets are developing. They are in the "eye of the storm," dealing every day with how markets are dynamically evolving.

Entrepreneurs also think differently. They see things that others don't. They feel compelled to make stuff happen, often simply because they see something that doesn't exist yet—and should.

Sometimes that blind faith leads to catastrophe, but more often, entrepreneurial insights eventually turn into step changes in how industries operate.

Don’t Play SmallBe Fearless

“Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness that most frightens us. We ask ourselves, Who am I to be brilliant, gorgeous, talented, fabulous? Actually, who are you not to be? …. Your playing small does not serve the world. There is nothing enlightened about shrinking so that other people won't feel insecure around you. …. And as we let our own light shine, we unconsciously give other people permission to do the same. As we are liberated from our own fear, our presence automatically liberates others.”

- Marianne Williamson

“We have the power within to build the world anew” – - Thomas Paine

If you would like this presentation or to get in contact, send me an email on

julie@ariadnecapital.com

www.ariadnecapital.com

THANK YOU