don't go to palo alto - julie meyer toa berlin

@EnCountry @juliemariemeyer

julie@ariadnecapital.com

Visions of the Future

How Ecosystem Economics™ will Define the Winners and Losers of the

Exponential Age

Three Visions of the FutureThe Technology Platform Companies take over every industry

• As Apple has to Music & Telecoms

• As Google has to Advertising

• As Amazon has to Books

The Digital Davids become disruptive forces and create new established giants

• As Wonga has to personal loans

• As airbnb has to travel• As Uber has to taxis

David and Goliath Must Dance

• David brings the new understanding of how technology enables an ecosystem through data and business model

• Goliath brings customers, distribution, scale and reach

Scenario Evidence Winners

The Face of Every EntrepreneurThey just may not show it to you!

Two Good Reasons

• They see the inevitable and advance the Future• They are willing to live abnormal lives

Capital Follows IdeasAlways Has, Always Will

The History

Let's Continue With The Historical Perspective….

Economic Growth since the end of the 18th Century has gone through 5 Distinct Stages,

associated with 5 successive Technological Revolutions

Five Successive Technological Revolutions, 1770’s to 2000’s

Technological Revolution

Popular Name for the Period

Core Country or Countries

Big-bang initiating the revolution

FIRST The Industrial Revolution

Britain Arkwright’s mill opens in Cromford

SECOND Age of Steam and Railways

Britain (spreading to Continent and USA)

Test of the Rocket steam engine for the Liverpool-Manchester railway

THIRD Age of Steel, Electricity and Heavy Engineering

US and Germany forging ahead and overtaking Britain

The Carnegie Bessemer stell plant opens in Pittsburgh, Pennsylvania

FOURTH Age of Oil, the Automobile and Mass Production

USA (with Germany at fist vying for world leadership), later spreading to Europe

First Model-T comes out of the Ford plant in Detroit, Michigan

FIFTH Age of Information and Telecommunications

USA (spreading to Europe and Asia)

The Intel microprocessor is announced in Santa Clara, CA

1971© Proprietary & Confidential – Ariadne Capital

Lifecycle of a Technological Revolution

Gestationperiod

Big-bang

Paradigmconfiguration

Introduction of successive new products, industries and technology systems, plus

modernisation of existing ones

Constriction of potential

Period one Period two Period three Period four

Around half a century

Early new products and industries. Explosive growth and fast innovations

Full constellation (new industries, technology systems and infrastructure)

Full expansion of innovation and market potential

Last new products and industries. Earlier ones approaching maturity and market saturation

AGE OF IT AND TELECOMMUNICATIONS50 ISH YEAR CYCLE – 1971 TO 20...?

• BIG BANG – NOVEMBER 1971 IN SANTA CLARA, CALIFORNIA

• Bob Noyce and Gordon Moore launched Intel’s first microprocessor, the precursor

of the computer on a chip

• INSTALLATION – late 1970’s through to Noughties

• 1976 – Steve Jobs, Steve Wozniak found Apple Computer

• 1984 - Michael Dell founds PC’s Limited later named Dell Computer Corporation

• 1985 – Irwin Jacobs founds QualComm, pioneer in Wireless Communications

• 1990 – CERN / Tim Berners Lee

• 1994 – Yahoo founded

• 2003 – Skype – “free calls on web”

• 2004 - Facebook founded

• THE TURNING POINT

The Revolution

THE REVOLUTION STARTS AS A SMALL FACT

WITH BIG PROMISEAND MOVES TO A SIGNIFICANT

FORCE IN THE MARKET

Technological Revolutions

• 1999 – David with

his slingshot wants to kill Goliath

The Economy & Social Institutions Respond

• 1999 to 2013 – Broadband and Mobile Technologies continue to invade our lives

• 2014 -David and Goliath must dance

The David & Goliath™ Model

Strategic Value

Network Effects- Lock In

Vulnerability

The David/Goliath Grid Model

Financial Value

“Dav

– th

e ‘D

“Goliath” – Distribution – The Highway

Ecosystem Economics™ – shifting industry players

Consumer Data driving new services

Network Orientation to business

Market is bigger than just top players

When partnering with, When acquired,

Brings lean operating system

1) Brings new digital revenues

Can become the Operating System to the Industry

Can reinforce or gain a position as Industry Architect

Capital© Proprietary & Confidential – Ariadne Capital

Network-orientation to business

How do I acquire customers?

Examples of Corporates engaging with Digital Enablers

• Large corporates which are partnering and/or acquiring digital technology firms include:

If you didn't go to Palo Alto at the beginning, you will go to Palo Alto in the end …

APPLICATIONS“Digital Enablers”

INFRASTRUCTURE High Regulation, Low Margin, Others

using your investments without contribution

PLATFORMS

How entrepreneurcountry enables the App Economy

Transition to platform centric companies withCloud, Social,

MobileBig Data solutions

Goliaths(Non-

technology mid-large

enterprise)

Take advantage of Revenue

(Profits)

MakeInvestments in Assets (Costs)

Ecosystem Economics

Innovation is about Economics Not Technology

• Otherwise we’d all be flying the Concorde

• But we’re packed into Jumbo Jets

MONITISE IS THE THIRD FASTEST GROWING COMPANY IN THE UK

MobileOperat

has created The Mobile Money Ecosystem over the past 12 years

Bank Platforms

CoreBanking

Other e.g.• CRM• Database

Wealth

Enabler

Use of standard Interfaces

3rd Party Providers

• Sharedealing• Insurance

Payments• Domestic • International

Shopping&

Loyalty

National

Services

• Transit• Utility

CardsProcessor

MobileTopUp

Price (GBp)MONI:LN

and Ecosystem Economics

• Google says that they organise the world’s information

• They actually organise the economics of the world’s information

• I, as a consumer of their search, am not given any economic upside in the search

transaction

• They have built a multi-billion pound business using – albeit anonymously – my personal

data – aggregated with that of others, but releasing none of the economic value to me

• Their biggest Achilles Heel is if someone in the search space were to cut a different set

of economics for the consumer

• Ariadne Capital found that entrepreneur – John Paleomylites – founder of BeatThatQuote,

and sold his business to Google on the 4th of March 2011 for a 122 EBITDA multiple for

these reasons

Industries are being transformed by digital

business models

In 2014, “Network Benefits” accrue to those Firms who understand their role in their ecosystem and organise the

economics for it

This in turn leads to exceptional returns for their shareholders

Don't Go To Palo Alto – Go To www.entrepreneurcountry.com

entrepreneurcountryUK - Laboratory • East Africa

• Finland• German-speaking Europe• Ireland• Nigeria• Nordic Region• Poland• Southern Mediterranean• South Africa• Spain• United Kingdom –

NorthWest, Cardiff, London

Expanded to 15 regions on the 30th September:

Be A Native

Not A Tourist

don't go to palo alto - julie meyer toa berlin

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