Marco Cantamessa Politecnico di Torino and I3P. HIGH-TECH ENTREPRENEURSHIP From theory to practice

Transcription

1 Marco Cantamessa Politecnico di Torino and I3P HIGH-TECH ENTREPRENEURSHIP From theory to practice 1

2 What s the most important thing in a high-tech enterprise? 2

3 3

4 These people (entrepreneurs) have 1. Created and built _<insert noun here>_ Found/Understood 2. <insert verb here> customers Improved 3. _<insert verb here>_ technology 4. Developed <insert noun here> 5. _<insert verb here>_ finance Companies Products / services Raised Made/distributed 6. <insert verb here> profits 7. Created many _<insert noun here>_ Jobs 4

5 The role of technology-based entrepreneurship Startups are key to the economy because of growth sales to other firms job creation Open Innovation Kane (2000) 5

6 The role of technology-based entrepreneurship Technology transfer Licensing Consulting Hiring Startup creation 6

7 So, let s start from you Have you ever thought of becoming an entrepreneur? Why should you become an entrepreneur? 7

8 Can I be an entrepreneur? Why should I think of launching a tech startup?

9 Can I be an entrepreneur? Let s look at entrepreneurs as a profession and as an attitude The term «entrepreneur» comes from French and Latin Imprendere comes from In moving towards Pre before Hendere grabbing with the hand Entrepreneur as a hunter (of what?) 9

10 Can I be an entrepreneur? Need for achievement, Self-efficacy Innovativeness, Stress tolerance / resilience, Need for autonomy, Proactiveness / passion. From a psychological perspective The existence of «entrepreneurial personality traits» is debatable (good news!) There appears to be a distinctive «entrepreneurial cognition» (Mitchell et al., 2007). can you learn it? 12

11 Can I be an entrepreneur? Thinking in terms of solutions (looking for a problem) problems (waiting for a solution) opportunities (to be exploited) 13

12 Can I be an entrepreneur? Knowing how to leverage others competencies 14

13 Can I be an entrepreneur? Rational, but capable of using heuristics. and sometimes falling into cognitive biases 15

14 Can I be an entrepreneur? Using both casual and effectual reasoning Effectual Means Effects Causal 16

15 Should I give it a try? What do I need to do? Do it! Assemble the resources Define a business model Frame the innovation Develop a strategy 17

16 Define a business model Do it! Assemble the resources Frame the innovation Develop a strategy 18

17 Business Models What kind of tech startup?

18 Business models Ask yourselves 4 key questions Who is my customer? How do I reach my customer? What is my value proposition? What must I do and have to do all this? Revenue Cost

19 Business models Make your business model canvas Key partners The network of suppliers and partners that make the business model work Infrastructure management Key activities The activities that must be done to make the business model work Key resources The assets required to make the business model work Value proposition The bundle of products and services that create value for a specific CS Product Customer relationships The relationships the firm establishes with specific CSs Channels How the firm communicates with and reaches its CSs to deliver a VP Customer segments The groups of people or organizations the firm aims to reach and serve Customer interface Cost structure The costs incurred to operate the business model Financial aspects Revenue streams The cash the firm generates from each CS 21

20 Business models Three approaches to build a busines model and a startup In B2B, who is the «customer»? Traditional tech startup Founders product vision Develop product Find customers Lean startup Founders product vision Build Minimum Value Products Iterate and Pivot Design Thinking Customer needs Build Minimum Value Products Iterate and Pivot

21 Do it! Define a business model Assemble the resources Frame the innovation Develop a strategy 24

22 Frame the innovation Where are we along the s-curve? What type of innovation (radical vs. incremental, etc. etc.)? Fits the current paradigm or challenges it? Standards anywhere? 25

23 Do it! Assemble the resources Define a business model Frame the innovation Develop a strategy 26

24 Develop a strategy Around your potential competitive advantage Drivers (cost vs. differentiation vs. «blue ocean») Competitive advantage Intellectual property Power relationships within your value system

25 Develop a strategy Don t mess up your Intellectual Property Inadvertent disclosure (make proper use of NDAs) Doing everything by yourself Leaving everything to the patent attorney Patenting what could be kept secret Not studying Freedom to Operate carefully Thinking one patent is enough 28

26 Develop a strategy Around your competencies Learning Competencies (what you know) Your offering (what you do)

27 Develop a strategy Define a coherent technology and market roadmap Capabilities development Technology development Development of prototypes / Product platforms (derivative) product development and subsequent sales in different markets External events and triggers t 30

28 Do it! Define a business model Assemble the resources Develop a strategy Frame the innovation 31

29 Assemble the resources Build your team

30 Assemble the resources Raise finance

31 Try connecting the boxes Labor-intensive services (consultancy) Fools, Friends & Family Capital-intensive services Bootstrapping Tech transfer entity IP-based product startup Fabless product startup Public R&D&I funding Debt Equity or co-development funding from customers Vertically integrated product startup Equity from Business Angels, Accelerators or Venture Capitalists

32 Assemble the resources Raise finance

33 Assemble the resources Typical investment rounds Type of round Typical amount Typical investor Seed rounds 50k-500k Business angels, accelerators, specialized VCs «A» rounds 500k-2M Early stage VCs «B» rounds 5M-30M Late stage VCs «C» rounds and expansion capital Whatever Whatever

34 Assemble the resources Venture Capital Firm (General Partners - GPs) 5% Source: EVCA, 2013 Investors (Limited Partners GPs) 95% VC Fund Startup 1 Startup 2 Startup n

35 Assemble the resources Raising commitments from LPs Returning money to LPs, deducted carried interest Generating deal flow Exiting from invested startups IPOs Trade sales Sales to founders Liquidations The VC investment cycle Selecting startups to invest or coinvest Calling for funds from LPs Deciding followon rounds Supporting invested startups

36 Assemble the resources How do VCs invest? VCs invest in high-risk startups (why?) VCs invest minority stakes (why?) VC investment contracts entail specific clauses w.r.t. governance, exits, future valuations (why?) Some BAs invest in convertible notes (why?) 41

37 Do it! Assemble the resources Define a business model Frame the innovation Develop a strategy 44

38 Do it Choose where! Consider Money People Customers & complementors + taxes, red tape, etc. 45

39 Do it Choose where Type of entity Incubator Accelerator Seed accelerator Competition to get in Relatively low High Very high Duration of program Long (years) Very short (months) Short Financing Meet investors Meet investors / win grants Seed finance provided Involvement in startup Tutors and mentors Mostly mentors Board and part time management

40 Do it Choose where

41 Italy s startup ecosystem ITALY AS A PLACE FOR STARTUPS? A new legislation has been enacted in 2012 and has boosted the structuring of the startup ecosystem Official definition of innovative startup Less red tape, from incorporation to failure Greater flexibility in labor contracts Incentives for investment Fast-track startup visas Limited government money going into a «fund of funds» and into matching funds

42 Italy s startup ecosystem ITALY AS A PLACE FOR STARTUPS? The ecosystem is taking shape (broad regional base + hubs) City Startups % of total Cumulated % MILANO % 13.10% ROMA % 20.76% TORINO % 25.22% NAPOLI % 27.40% BOLOGNA % 29.39% FIRENZE % 31.20% MODENA % 32.84% CAGLIARI % 34.33% GENOVA % 35.64% PALERMO % 36.89% Source: Registro imprese, Sep 28th, 2015

43 Italy s Startup Ecosystem ITALY AS A PLACE FOR STARTUPS? High scientific productivity and underutilized graduate talent

44 Italy s Startup Ecosystem ITALY AS A PLACE FOR STARTUPS? In technology, bits and atoms are coming together Italy has a strong competitive advantage in engineering and manufacturing (factories are already there!) not to mention food, fashion, furniture 18

45 Italy s Startup Ecosystem ITALY AS A PLACE FOR STARTUPS? Lack of Early Stage Venture Capital (slowly improving ) Demand for innovation is still weak The ecosystem is not yet popular with international entrepreneurs and investors Source: EVCA

46 Startups in Turin What s special about Turin High incidence of startups that are Associated to universities (45%, 1.8x national average) Engaged in «industrial» sectors (21%, 3x Milan and Rome) A «university town» that offers high-level technical competencies at reasonable cost Low cost / high quality of life Very strong manufacturing competencies are available in the region (factories are already there!) Two strong university incubators + other actors

47 The experience of I3P Independent company, owned by the universities and local public authorities Consultancy and advisory company that works with Students and researchers Other entrepreneurs Existing companies who want to create spinoffs Government-owned company, with an innovative business model, driven by results Numerous prizes won and highly ranked by UBI Global

48 The experience of I3P Scouting Within the university (spinoffs) and outside (Italian and foreign startups, corporate spinoffs) Events, competitions, hackatons,... and lots of one-to-one meetings Consultancy Strategic consultancy Specialist consultancy through partner firms Facilities Serviced offices Coworking spaces Acces to shared areas Support to business development Trade fairs Support to investitors Advisory, board representation, part-time management Tailor-made corporate events Development of sales networks Management of corporate incubation programs Fundraising Equity fundraising with BAs, VCs, corporate investors Matchmaking between technology and business competencies Integration of the founding team Staff recruitment Debt fundraising with partner banks

49 The experience of I3P An annual deal flow made up of 350 applications, 150 business plans / MVPs, 35 new startups, of which 15 admitted Balanced across sectors (ICT/digital, cleantech, medtech, industrial) with strong synergies with Politecnico di Torino and local industry Seed-level fundraising amounts to 2.5 M per annum on average A 3 M /year seed fund is being set up More than 1,400 jobs created, each of which has required a one-off investment of 6 k in public funds Positive P&L, and financially sound 183 Founded 42 Currently incubated 97 Surviving (1 IPO) 11 Acquired 33 Out of business

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51 Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did so. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover. (attributed to Mark Twain)