predicting the turn: the high stakes game of business between startups and blue chips
TRANSCRIPT
P R E D I C T I N G T H E T U R N
D A V E K N O X
V S
V S
DigitalMarketing
DigitalBusiness ModelsV S
Now it’sabout
managing disruption.
It used to be about fightingover market
share.
Now it’sdigital as a model.
It used to bedigital as media.
Now it’s aboutinfinite shelves &
free shipping.
It used tobe about
shelf space.
“There is a dramatic leveling of the playing field. The advantages of scale
that guaranteed success in the post-war era just don’t matter very much when
advertising is cheap, shelf space is infinite, and shipping is free.”
The State of Technology at the End of 2016
T H E F L O P T H E T U R N T H E R I V E R
I
Ventureas R&D
II
Dominos
III
Total AvailableMarket
IV
Market Intelligence
I
Ventureas
R&D
I. Venture as R&D
Nestle
Marketing
Procter &Gamble
Unilever PepsiCo Coca-Cola
R&D20%
2% 2%
11%
8%
2%
12%
1%4%
1%
Marketing vs R&D Budgets of Largest CPG Companies
I. Venture as R&D
I. Venture as R&D
Nestle
Marketing
Procter &Gamble
Unilever PepsiCo Coca-Cola
R&D20%
2% 2%
11%
8%
2%
12%
1%4%
1%
Marketing vs R&D Budgets of Largest CPG Companies
4.3B
15B
PhD and top technical talent are increasingly looking to startups for the
opportunity to be part of the next big idea.
I. Venture as R&D
II
DOMINOS
II. Dominos
29 Dominos
2625 27 28 29
Lorne Whitehead
II. Dominos
The speed of change is always accelerating. And the dominos will continue to fall closer and
closer to your bottom line.
II. Dominos
III
TotalAvailable Market
III. Total Available Market
1920 2016
III. Total Available Market
“Saying that you’re aiming for x% of a $ybn industry is unambitious — great
companies change the y, not the x.”
Benedict Evans - “Ways to Think About Market Size”
III. Total Available Market
IV
Market Intelligence
IV. Market Intelligence
Subscription e-Commerce First Fundings
2010 2011 2012 2013
IV. Market Intelligence
“Develop a sense of how and when the future will happen, and share
that foresight with key stakeholders throughout the corporation. The ability to see the future of your
industry before it happens.”
Scott Lenet - co-founder of Touchdown Ventures
IV. Market Intelligence
T H E T U R N
How do you Predict the Turn?
“We all know that if you swing for the fences, you’re going to strike out a lot, but you’re also going to hit some home runs.
The difference between baseball and business, however, is that baseball has a
truncated outcome distribution…
Jeff Bezos - Amazon, 2015 Shareholder Annual Letter
…When you swing, no matter how well you connect with the ball, the most runs you
can get is four. In business, every once in a while, when you step up to the plate, you
can score 1,000 runs.”
Jeff Bezos - Amazon, 2015 Shareholder Annual Letter
# T H E T U R N
InnovationDriven
AcquisitionInvest
in ChangePartners
in InnovationDisrupt
the Disruptors
“You can fight the end and that will probably not turn out well. Or you can acknowledge that this is happening. This is real, serious,
and going to change your world.”
Innovation Driven Acquisition
John Zimmer - President and co-founder, Lyft
# T H E T U R N
Innovation Driven Acquisition
# T H E T U R N
MapMyFitness
Endomondo
MyFitnessPal
“We invest on the side of change.”
Marc Andreessen
Invest in Change
# T H E T U R N
Invest in Change
# T H E T U R N
Partners in Innovation
“Startups are like water. They will take the easiest path down the hill.”
Phin Barnes - First Round Capital
# T H E T U R N
Partners in Innovation
# T H E T U R N
“Everybody talks about disruption until you actually f***ing disrupt something
and then everybody freaks the f*** out.”
Shane Smith - Founder of Vice Media
Disrupt the Disruptors
# T H E T U R N
Disrupt the Disruptors
# T H E T U R N
C O M P A N Y A C Q U I R E I N V E S T P A R T N E R D I S R U P T T H E D I S R U P T O R
V E N T U R E S H A T C H - H O U S E
"The sooner you stop fighting the present, the sooner you can get to work on figuring out the future."
David Heinemeier Hansson - Creator of Ruby on Rails