Thomas P. Offner September 2014

Digital Days 2014

Leveraging the Power of Startups and

Entrepreneurship for Corporate Success

Short bio Thomas P. Offner

Technical School and Business Administration (AT and CH)

Canbox AG, Oldenburg, Director Business Development

Intel Capital, Munich, Strategic Investment Manager

Vivigo Consulting Ltd., London, Partner

Audi AG, Ingolstadt, Stratregic Market Development

fatfoogoo AG, Vienna, CFO

Groupon Inc, Vienna, Zurich, Co-Founder

ProSiebenSat.1 SevenVentures GmbH, Munich/Unterföhring, Digital Commerce

FH Salzburg and Graz, Lecturer

YouTube local

74 Facebook status updates per second

Princess Beatrice´s ridiculous wedding hat gained over 140.000 fans on FB

“Pippa” Middleton got a Facebook page counting over 230.000 Fans within 24 hours

At least one part of „Her Royal Hotness’“ body

2.274 check-ins at Westminster Abbey

Google reported over 72 million viewers

watching via YouTube's live stream

74 FB UK status updates per sec

140.000 wedding hat fans

230.000 „Royal Hotness“ fans

72 million viewers on YouTube

33m TV sets 0 PCs, 0 tablets 0 mobiles

Source: Statistisches Bundesamt, EVS

How I grew up

60m TV sets

4m Smart TVs 32m PCs

8.2m Tablets

112m Mobiles

35m Smartphones

Source: AGF/GfK-Fernsehforschung, TV Scope, SevenOne Media, forsa, Enigma GfK, mindline, budde, golem, bitkom, Allensbach/Acta 2012

How my son is growing up

We live in a world of change

In every sense of the word

Most disruption doesn’t come from the corporate world

Small and fast startups change the world

Corporates are often to slow and immobile for change

Big companies tend to concentrate to much on

management; i.e. solely focus on permanent improvement

Very little or no entrepreneurial spirit or room for

entrepreneurship; i.e. no focus on innovation

Guy Kawasaki’s story about ice

Ice harvesting, Massachusetts, early 1850s

Guy Kawasaki’s story about ice

Ferdinand Carré's ice-making device about 1865

Guy Kawasaki’s story about ice

General Electric "Monitor-Top" refrigerator, introduced in 1927.

How media companies can avoid those pitfalls

1. Stay innovative – disruptive innovation (not better saws)!

2. Innovation happens in small structures!

3. Not technology is innovative but people are!

How media companies can avoid those pitfalls

Startups are everywhere

How media companies can avoid those pitfalls

Examples of disruptive startups

Internal External

Innovation Lab Corporate Venturing M&A

Design thinking with

external Consultant

Multi disciplinary

members from

different units

Out-of-the-box thinking

Two weeks (exclusive)

Venture Capital Unit

Accelerator

Incubator

Company Builder

Dedicated

M&A unit

Finance,

Legal, Tax

How media companies can avoid those pitfalls

Corporate meets startup

Combine both worlds to a new discipline

Corporate meets startup

Combine both worlds to a new discipline

How media companies can avoid those pitfalls

Examples from the corporate world

Strategy: acquisition

Within 13 months

Yahoo boss Marissa

Mayer buys 20

startups for the price

of over $ 1.2 billion

Strategy: incubation

Accelerator

program to

implement new ideas

by "Corporate

Entrepreneurs"

Strategy: excursion

Since 2012 the media

group continuously

sends top manager to

the Silicon Valley.

Some corporations were able to adopt

Private logistics: DHL’s bring:BUDDY vs. CheckRobin

Consumers become logistic service partners

Via bike, public transport or on foot

Collaboration between DHL and a group of

German design students

Rolled out at Shanghai trade fair 2010

“Privates bring it” – lift service for parcels

Austrian start-up, founded in 2013

Serial entrepreneur, founder of CheckFelix

(sold to Kayak in 2011)

Two established routes in Austria already

Some corporations were able to adopt

Carsharing: Daimler's Car2Go vs. zipcar

US car carsharing company founded in 2000

Area served: UK, CA, USA, ES, AT

Zipcar charges a one-time application fee, an

annual fee, and a reservation charge.

Acquired by Avis Budget Group in 2013

Subsidiary of Daimler AG providing carsharing

services in EU and North American cities

Founded in 2008

Offers exclusively Smart Fortwo vehicles

Worldwide market leader in free floating carsharing

Some corporations weren’t

Intelligent home: Bosch vs Nest

How about the biggest German media company?

Innovation Camp

ProSiebenSat.1 Accelerator

SevenVentures

SevenVentures Pitch Day 7VPD

Innovation Camp (Lab)

Conceptual formulation:

“How can we transfer our ability to evoke emotions

with moving images to digital business models?”

“How can we leverage our vast video repository?”

Innovation Camp (Lab)

Innovation Camp (Lab)

Ingredients for success

Multi disciplinary teams from different business units

Two weeks exclusive camp far away from corporation (focus = speed)

Moderated by an external consultant

Work along a defined process Collecting background information (experts and customer interviews)

“If I had asked people what they wanted, they would

have said faster horses.” (Henry Ford)

Defining directions for innovation

Generating ideas - every idea is possible (but solve a problem)

Prototyping and testing (lean startup)

One-sentence pitch

Innovation Camp (Lab)

Ingredients for success

No business plan

“Everybody has a plan until they get

punched in the face.”

“No campaign plan (business plan)

survives first contact with the enemy

(customers)”

(Helmuth Graf von Moltke, Field Marshall)

(Steve Blank, serial entrepreneur)

(Mike Tyson)

Innovation Camp (Lab)

Ingredients for success

Full commitment from CEO

Innovation Camp (Lab)

Results

Innovation Camp (Lab)

Results

1. INNOVATION: Stay close to relevant media innovation

2. TALENT: Build talent network of potential hires

3. DEAL FLOW: Build network of investors such as business

angels and venture capitalists

4. PR: Position ProSiebenSat.1 as an innovator in press and

towards the capital market

5. ROI: Participate in equity proceeds of portfolio companies

ACCELERATOR: get access to talent,

innovation, and improve public opinion

VENTURES: Media as valuable investment currency

Classic

Inventory

(TV) Media Inventory

Unutilized Inventory

Unutilized Inventory

Internal sales

Classic sales models

for core Inventory

• Close cooperation

with big media

agencies

• Commitment and

volume based pricing

models

Innovative M4R/E model

Fast growing online

companies with need for

variable fee structures

Small companies with

attractive products in

TV-affine segments with

cash constraints

Venture unit

VENTURES: Clear screening criteria for (media) deals

As part of the investment strategy

Ideally: excess media with relevant quality and low variable costs

No relevant existing or likely classical media spend

Relevant media-affine product category (no B2B or pure tech plays)

Clear target group fit

Upside from stimulatory media spend in category (dating market)

No financial, operational, legal risks

Overall yield comparable to classical sales yield

Long-term fit with corporation and solid cash flows or exit potential

VENTURES: Classical venture capital approach

The horse, the jockey, the course

Technology is like an insurance: You need to have it but you don’t

want to care about it

Technology is like an insurance

Technology is like an insurance: You need to have it but you don’t

want to care about it (and it should cost little to nothing)

Not most important success factor when starting a company

The most successful start-ups had rudimentary technologies in

the beginning (Zappos, Groupon, AirBnB, etc.)

Amazon (AWS) as leading cloud service provider

VENTURES: The relevance of technology

And how it increases over time

1. Leverage your core assets into related markets: media,

content, talent, market insight

2. Create synergies in your portfolio and foster cross-selling

3. Expand digital business to European footprint

4. Create additional growth through low cost and low risk

acquisitions

Digital growth strategy for integrated media

companies

CASE STUDY: Zalando

Zalando as European version of online shoe retailer Zappos

Extensive media push created European market leader in online shoes:

Three times higher sales in

the year 2011 versus 2010

95% brand awareness

30k shipments per day based

on huge assortment with 150k

products and 1,000 brands

More than 600,000 visitors

each day

Source: Zalando, Google Insights, Press releases

CASE STUDY: Zalando

Broadcaster can deliver more than just media Integrated optimized campaign over all channels

(TV, online, mobile)

CASE STUDY: Talenthouse

7VPD: PR event to generate deal flow

and access to innovation

7 start-ups on stage

pitching their company

(3 minutes elevator pitch)

7 top jury members (6 +1)

7 million Euro in TV media

as prize (P7S1 channels)

During NOAH conference,

London

Live stream on myvideo

7VPD: PR – great press feedback

“Mehr als 300 Gründer aus 14 Ländern haben ihre Bewerbung bei Seven Ventures, dem

Beteiligungsunternehmen von ProSiebenSat.1 eingereicht, sieben Kandidaten sind in die

Endrunde gekommen.”

„Seven Ventures, the venture subsidiary of the ProSiebenSat.1 Group, plans to run a pitch

competition for startups, the prize for which will be millions of Euros worth of advertising time

on Germany’s biggest TV network.”

“The prize to be offered at what is being called SevenVentures Pitch Day, to take place in

London on Nov. 6 and 7, is television commercial time valued 7 million euros, or about $9

million.”

“Was eher nach Maya-Kalender klingt, war das Highlight der NOAH Konferenz 2012 in

London: Der SevenVentures Pitch Day.”

Media partner and online streaming of the event (as well as myVideo).

7VPD: Innovation – great winners

Outlook: what’s hot for media companies?

And what’s not (very personal estimate)

FinTech (Security)

Sharing Community

E-learning

E-health

Internet of things (intelligent home)

Online gaming and gamification

Thank you

(for your comments)

BACKUP

Innovation Camp (Lab)

Connecting the dots

How media companies can avoid those pitfalls

No coincidence viral campaigns are professionally

planned and executed (Zalando)

You can’t plan the ice bucket challenge!

Example Coca Cola Happiness Machine