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Boom & Bust…. Doing a start-up company from ground zero. SciTech 2003 John Innes Conference Centre Norwich Research Park Norwich, UK 29 January 2003. Peter Cochrane. The Big Issues!. Population - Migration Ageing - Health - Care - PowerPoint PPT Presentation
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Boom & Bust….Doing a start-up company from ground zero
Peter Cochrane
SciTech 2003John Innes Conference CentreNorwich Research ParkNorwich, UK
29 January 2003
The Big Issues!• Population - Migration• Ageing - Health - Care• Energy - Pollution - Ecosytem - Climate• Raw Materials Availability - Limits• Logistics - Transport - Constraints • Education - Complexity - Understanding • Wealth Distribution• Globalisation - Deregulation• Political Stability
Thriving in business depends on new visions for making the transition from “atoms to bits” Small entrepreneurs will restructure industry
Large organizations have to restructure themselves
Mastering the entrepreneurial process is a must
New ventures are not optional…
Company Founder Director NED Advisor Investor
ConceptLabs USA 1998 x x xeBookers UK 1998 x x xNomadix USA 1998 x xPSPL USA 2000 x xRTC USA 2000 x xShazam UK 2000 x iSolon UK 2000 x xEtenna USA 2001 xKVector USA 2001 x x xEZD UK 2002 x x Venture Capital FundsPortview Israel 1999 x xCreateVentures UK 2000 x x x
Failures = 5
he basis of my observations….
Example - eBookers
0
20
40
60
80
100
120
140
160
180
1999 2000 2001 2002
£M
Energy and time expended…
0
10
20
30
40
50
60
70
80
90
Idea Science Technology Engineering
FinanceManagementMarketingSalesDeliverySupport
The in…•Identify an opportunity
•Identify a customer and market
•Search for the competition
•Understand every aspect
•Locate a suitable technology
•Engineer a solution/prototype
•Formulate a plan
•Raise money & create the company
•Spend every $ as if it were your last!
The out…
•Create a corporation
•Create something a corporation will buy
Customer Driven Exponentiation
Hotmail
- No cost to user
- Easy to sign up
-Every message sent advertises the product
1) Don’t enter a sector with competition
2) Get to market in < 9months
3) Only start things that have huge potential
4) Only work with friends
My basic rules…
In my experience we should…
Make sure every single facet of any business start is in place and fit for purpose: technology, design, product, plant, production, market, marketing, sales, delivery, support, aftercare, people, finance etc
All have to be 100% at the same time If one element fails then so does the whole
In my experience we should…
1. Never assume people understand 100% anything you say 2. Never assume people do anything 100% you ask of them 3. Never believe or trust a customer 100% 4. Never believe or trust a banker 100%. 5. Identify all competitors - and their state of play 6. Look out for oblique threats from outside the sector 7. Not be blinded by enthusiasm for a technology or idea -
especially if it is yours
8. Not let pride get in the way9. Identify the out - as well as the in! 10. Realize it is never too late to shout stop!
Business = Wealth Generation
$Science
Technology
Knowledge
Engineering
Products
Services
Education
Employment
Change
Markets
Sustainability
ROI
$T
Technology
People
Employment
Product
Market
Sustainability
Return On
nvestment nnovationideas
The have a problem they need solving They have money to spend
They have desperation in their eyes
Identifying the customer…
I happen to like…
The Bell-Mason Model
New VenturesDeveloping new technologies, products, and businesses imply:
-a basic vision-a sound business model-a mature technology-an eager market-the right resources at the right times-a good team-good leadership & management-sufficient money
Bell-Mason Model & Diagnostics
A system for ...
• Measuring risk
• Predicting course
• Tracking progress
• Improving the odds of success
Evolution of the “Ideal State”
Business PlanManufacturing
ProductDevelopment
Technology/Engineering
Control
FundabilityCash
Board of Directors
Team
CEO
Sales
MarketingStage III.Product Development
Stage II.Seed
Stage I.Concept
Stage IV.Market Development
Where is all the action?
BusinessPlanningStrategy
OrganisationOperations
RelationshipsSalesetc
PeopleFamilyFriendsHomeHealthHobbiesetc
TechnologyScience
EngineeringPrototypesProduction
SupplyInstallation
etc
Business
TechnologyPeople
HotSpot
Society
So innocent looking…
y= ex
…it is compound interest on steroids!
Time
Technology$
The ‘S’ Curve Continuum
CassetteTape
CD
DVD
Tape
Moore’s Wall
ThermionicTube
Transistor
IC1
IC2
IC3
IC4
IC5
ICn
1915 46 59 2010 2025
3D ICsMolecularQuantumGeneticBiologicalOptical Computing
NewSensorsNetworksSoftwareLifeformsIntelligences
Log Scale
Lifecycle of Emerging Technologies
0
10
0 9
Source: Gartner Group, Monthly Research Review, April 1997
Vis
ibil
ity
Time
TechnologyTrigger
InflatedExpectations
Disillusionment Enlightenment Productivity
WearableComputers
Biometrics
VRML/Avatars
E-CashSmartcards
Java - the Platform
Cable Modems
Agents
Interactive / Web TV
PDAs
Desktop Videoconferencing
Speech RecognitionApplication Sharing
Database Mining
Java- the Language
WWW
Imaging
Abundance ScarcityProfit $
Ever-IncreasingAvailability
Ever-DecreasingCost
ConsumerGoods
PowerProfit
Availability
Cost
AppsTransistorProfit
Availability
Cost
AwarenessBandwidthProfit
Availability
Cost
IndustrialRevolution
PersonalComputer
Age
Age ofPersonal
Bandwidth
Rec
ycle
Trash
Consumer
Trash Consumer
Distribution ManufactureRaw
MaterialsRETAIL
Ecosystem
The Eco-model…
Rec
ycle
Trash
Consumer
Trash Consumer
Distribution ManufactureRaw
MaterialsRETAIL
Ecosystem
B-B B-B B-B
B-CC-CC-BMobile
Business Value…
• Research 99.9%• Development 5%• Conferences• Legal• Finance• Admin• Patents• Sales
99.9 0.1
10.0 90.0
99.0 1.0
95.0 5.0
99.0 1.0
100.0 0.0
80.0 20.0
0.0 100.0
%Value Add-ve +ve
Key parameters…• Investment• Burn rate• Time to market• Time to break even/profit• Market share• RoI• Efficiency• Profitability
Company/Organis/zation Size
What determines the size of any company or organis/zation?
Size = CAPEX + OPEX
Transaction costs tend to dominate
GDP of Planet Earth = 47%Telco ~ 60 - 80%Healthcare ≥ 95%
Interval between an innovation & competitive entry
0
5
10
15
20
25
30
35
1887-1906
1907-1926
1927-1946
1947-1966
1967-1986
1987-1996
1997-2006
Com
pet
itio
n -
yea
rs
RelationshipsTasksDeveloping People
Achieving Results
EmpoweringStretchingPromoting Change
Realizing Values
CoachingSharing“Gut and Heart”“Brain and Pencil”
CompassionateRationale
VisionMotivationConsistencyExampleActionsQualitiesOutcomesMaking DecisionsCommunicating
DecisionsImplementing
DecisionsAreas of LeadershipDeterminationOpennessKey Leadership Actions& Qualities
Leadership Actions Qualities Outcomes
Rel
atio
nsh
ips
Thinking
Outside The Box
Society
Changes slowly!
The dotcom bust!
• Greed
• Stupidity
• Naivety
• The old economy torpedoed the new
• No bandwidth in the local loop!
But this is just a glitch - the internet is very young - so are mobile phones, PDAs, PCs, wearables, things & people on line etc
EU ON LINE SALES
0
20
40
60
80
100
120
2000 2001 2002 2003 2004
$Bn
Projection
Network Laws - Internet
1
2
3
4
n
< n/2
Broadcast Telephone
< n(n-1)/2 ~n2
1
3 4
5
2
1
2
N
3
4
5
1 2 …n
Nn
Always - customer control
Availability >95%
"Nothing is more difficult than to introduce a new
order. Because the innovator has for enemies all
those who have done well under the old conditions
and lukewarm defenders in those who may do well
under the new"
Nicolai Machiavelli, 1513 A.D.
Nothing much has changed….
A world of opportunity & risk….
Thank you
cochrane.org.ukconceptlabs.net
what you do best….outsource the rest…