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Majority World Report 2014
@capeWeb Summit, Nov 2014
It’s a big networked world out there
And it’s not one we know well
It’s changing and growing incredibly fast
And with mobile, it will connect 5.6bn people within 5 years
The stakes are high
Especially now you can win very big, very fast
$3.2bn(Jan 2014)
$3.1bn(Apr 2007)$1.65bn
(Oct 2006)
$966bn(Jun 2013)
$1bn(Apr 2012)
$22bn(Feb 2014)
$2bn(Mar 2014)
Teenager from NZ went from unknown to 360m views
It takes less and less time to create $10bn in value
>$5bn rev4 years old
$985m rev (2013)$8.85bn Mkt Cap
10 years
$1bn rev $3.2bn M&A
6 years
$6.5bn rev $248bn Market Cap
15 years
So how is European tech doing?
Despite appearances, actually pretty well…
Born in Edinburgh$800m round led by Sequoia (Oct 2013)
$250m led by TCV (Nov 2013)
Born in Stockholm
Born in Paris$2bn IPO (Oct 2013)
>$3m rev per day 51% for $2bn (Oct 2013)
3 years
Born in Helsinki
$700m round led by IVP (Jan 2014)
Born in Berlin
$80m round led by Founders Fund (Jan 2014)
Raised in San Francisco (via Dublin)
4 years$900m M&A (Feb 2014)
Born in Tel Aviv
1.2bn games daily>$1.8bn rev (2013)
Born in London & Stockholm$7bn IPO (Mar 2014)
Born in Stockholm$110m round (Mar 2014)
Born in Copenhagen$2.4bn IPO (Apr 2014)
IPO (May 2014)$1.7bn Market Cap
Raised in San Francisco (born in Copenhagen)
Born in London$1.6bn IPO (June 2014)
Born in London$65m round (June
2014)
Born in London$4.5bn IPO (June 2014)
Born in Jerusalem$7.6bn IPO (July 2014)
Born in Paris $100m raise (July 2014)
Born in Stockholm$290m rev
$2.5bn M&A (Sept 2014)4 yrs
Born in Berlin$2.3bn rev
$6.8bn IPO (Sept 2014)
Born in Berlin$2bn raised
$8bn IPO (Sept 2014)
The sun is out, the sky is blue….
But GDP growth is not beautiful in developed
economies
To what extent, if at all, do you feel that today’s youth will have had a better or worse life than their parents generations or will it be the same?
And people are worried about their futures…
Ipsos Mori Global Trends 2014
They are worried about their jobs….
They’re worried about social justice
About being able to vote…
That they won’t have a better life than their parents
Education isn’t preparing us for the new Majority World
There is a massive gap between what we learn and what we need to
learn
We are still living in a bubble
Forbes 2000$20tn in market cap
More than 80m employees
They spend > $1tn a year on IT
But technology is not doing much to save them
In fact it is turning every sector in the Forbes 2000 upside down
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120
2
4
6
8
10
12
14
16
18
20
EUUS
In just 20 years, over 220 “Unicorns” have been born
But only a few sectors have really been seriously disrupted
Finan
cial S
ervice
s
Constructi
on and Reso
urces
Transp
ort
Manufac
turin
g
Electr
onicsReta
il
Utilities
Insuran
ce
Consumer
Teleco
Chemica
ls
Food and Drin
ks
Servi
ces
Software
Media
& Entertai
nment
Health
care
Trave
l0
50
100
150
200
250
300
350
400
Forbes 2000 Companies Companies Valued over 1$bn
Forbes 2000 list, Cruchbase, Aileen Lee’s list, Fred Wilson’s Hackpad and Index’s own research
So should Forbes 2000 be investing like Facebook?
$266bn FTSE100($5k per UK citizen)
$85tn global AUM($12k per human)
With so much money at stake who is holding boards and management
accountable?
One easy piece of advice……
We know 7% of small companies create >50% of new jobs
.
Start ups can create enormous value in a very short time
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
21% US GDP
Maybe that’s why 55m people on Facebook are interested in
“Entrepreneurship”
Millennial Manifesto is going global…
New entrepreneurs can come from anywhere
Percentage of cities population who are interested in EntrepreneurshipData from the facebook API, looking at pages people like, posts
Dublin
Tel Aviv
Manila
Sydney
Sao Paolo
London
Stockholm
Jakarta
San Francisco
NYC
Palo Alto
Delhi
Boston
Berlin
Paris
0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00%
Becoming an entrepreneur is going mainstream
But Europe’s great universities are almost nowhere in supporting this movement
USA Israel Canada UK India0
5
10
15
20
25
30
35
40
45
PitchBook Report of Top 50 Universities for VC backed Companies
So how should you think about catching the wave?
Aim high and shoot for the moon
Remember #risk62 – you will lose most of your time and money
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
So learn by doing
Join the New Creative Generation
“The Internet isn’t really a technology. It’s a belief system”
@cape♯demand8
Appendix
Extra Slides
Europe is ahead of US and Japan despite itself
It’s really expensive to break into the charts
Top Mobile Apps 2014
Network effects reinforce success
We’ve had almost 60 years of evidence on how innovation economics can drive explosive social and economic value
creation…..
Semis
Hardware
SoftwareInternet
Mobile CloudNetworking
Crowd
80-90% of radical innovations fail
Forbes 2000 top 20 Countries
United St
ates
Japan
China
United Kingd
omCan
ada
South Korea
France
India
German
y
Switze
rland
Hong Kong
Australia
Taiwan
Brazil
Russia
Italy
Spain
Swed
en
Netherl
ands
Singa
pore
Malaysi
a0
100
200
300
400
500
600
Num
ber o
f Com
pani
es o
n Fo
rbes
200
0 lis
t
1. Do you have a public version of the GOV.uk dashboard?
2. Ok, how about you show us just one high volume service?
3. How do you benchmark vs your national GDP?
4. You spend at least $1bn pa on IT. Do you spend at least 5.5% with start-ups?
5. How digital literate is your board and senior team?
10k business ideas1k 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
Data from the facebook API, looking at pages people like, posts and other demographic information
New entrepreneurs can come from anywhere
Percentage of countries population who are interested in Entrepreneurship
In most countries, Ronaldo..
Ronaldo V Entrepreneurship
US
India
Brazil
Philippines
UK
Indonesia
Egypt
Australia
Canada
Turkey
Mexico
South Africa
Nigeria
Italy
Argentina
France
Saudi Arabia
Poland
Germany
Vietnam
0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000
Ronaldo
Entrepreneurship
You have to learn take risks
Time Emotions Money
Europe is in a state
Especially in EU & North America
And in Europe this is hardly a surprise
But growth is somewhere else
Worried about speaking out
EU is growing slower than RoW
500m Spanish views6 months