Start ups need a child’s imagination

And a relentless desire to win

And some highly calculated risks

Prizes can be enormous

So how can you help yourself?

Understand Markets

Watch for Demand Signals Study People

Mobile changes everything

Changes which markets we connect

to

Even more in future

We live in a great place

London is on a roll

Learn to work on the network

New ways to tell stories

New ways to sell

New ways to work

New ways to raise money

10k business ideas

1k firms started

100 VC funded

20 IPO

2 market leaders

Nobel Prize in

Economics2006

ProfessorEdmund Phelps

Less than 10% of business ideas even get started

62% of venture investments are <1x

x<0.5 0.5<=x<1 x=1 1<x<2 2<=x<5 x>=50

10

20

30

40

50

60

% Cost % Value

Yes, start ups are really tough

You have no customers

No money

You and your team are fighting an imaginary war

Armed just with some big ideas

The extreme risk of 62% is definitely not for everyone, including many entrepreneurs and investors…..

.

In fact a 2% loss ratio for banks lending to SMEs is already pushing the

boundaries.

So if you feel comfortable managing risk, you might as well shoot for the moon

The capital which survives, creates businesses now accounting for 21% of US

GDP…..

1978 1981 1987 1995 1995 1997 1999 1999 2005

and $1.4tn in new market value

creating 440k new jobs

with $545bn in new annual revenue

serving >1bn customers

Source: HIS Global Insight

And in Europe we are starting to build waves of similar dimensions

So what should you be thinking about when you are starting a

business…

OpportunityOthers

Ownership

How big is the opportunity….

Who are the others….

What level of ownership is available….

Pick a field big enough to change the world

Moving to Maslow’s Web

CommunicationsClothing

Discretionary Non-Discretionary

Media

Entertainment

Shopping

Travel

Energy & Housing

Education

Food

Finance

Health

Safety

1993-2003 2004-2012 2012+

And in Europe we have no shortage of willing talent….

Child’s imagination

Relentless desire to win

Highly calculated risks

No short cut to being a grandmaster

“achievement is talent plus preparation.”- Malcolm Gladwell

You have to learn take risks

Time Emotions Money

What should you focus on in the business…?

OpportunityOthers

Ownership

CustomersConversationsConvenience

CostsCompetition

Maniacal focus on the customer….

Encourage conversations….

Offer new levels of convenience….

Leverage and manage cost structure…

Let the competition worry about itself…

So aim too high. The prize is huge and we all have an

amazing start just by being here

Embrace your 62%

@cape♯risk62