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1 Thanks a lot for the introduction. I was really looking forward to be here in Sao Paulo. Some of you know me already. My name is Thomas Goletz. I m one of the cofounders and investors of Netresearch App Factory AG. It is a German company and the organisation behind all Meet Magento conferences worldwide. As always at a Meet Magento there is a power pack full of knowledge, ideas, contacts and other input ahead of us. Core topics are ecommerce and business. Sounds like business as usual. But it isn t. We came a long road with Magento. All Meet Magento activities share a specific mind set. It s not open source, but it is triggered by open source. It s about knowledge, excellence and freedom. Said this I would like to go through some thoughts about ecommerce & about more general questions reg. business. What does it means for commerce and ecommerce in particular? Let s begin with Meet Magento. All those conferences are NOT a business itself. Also today we need the sponsor and we need you to buy a ticket, just to cover the external expenses. When I was talking here last time in 2013, I explained why we are doing Meet Magento, if it is not business. Based on a few specific values, it was about enabling eco systems in specific markets and offering a platform where merchants find everything to do successful ecommcere. And this didn t change. We believe in contributing and sharing knowledge as well as in freedom. Nevertheless I didn t specify the statement more in detail last year. And freedom is a quite general expression. Why do we believe freedom is important in business? In 2014 so far we have seen 11 conferences around Meet Magento. At the end of year we ll have 14. And in 2015 there will be including the Brazilian one- more than 20 events. 20 different countries and markets. Each event about ecommerce.

2 Going to each of those conferences was a special kind of challenge. I didn t expect the challenge. Of course, it is fun to visit all those countries. If you look to this map you can see that Meet Magento fills a gap. Magento doesn t seem to look after most of those markets in a specific. Even if it is not 100% correct, because Ebay/Paypal and with them are nearly everywhere in the world, there is some truth. The Meet Magento approach as an independent conference fits exactly into this world. It is about your business in your market, using Magento at its best. The motto behind is: Think globally and act locally. So we went in most of the European countries. We went in June to China, last month to Ukraine and Russia and some days ago to New York. Even Meet Magento is the framework and seems to be the same at all places, but every conference is different. You go there and know immediately that there is no way to have one system for all. Because of the people. And because every market is different. You can t expect that a best practice in US will work in Brasil or vice versa. That matters for any aspect in business life. You must adapt to your audience and customer. And that s the real challenge behind Meet Magento conferences for us. Each conference needs a local environment, local know how and the national champions and players. You can see it here. Brazil is Brazil. It is not Germany or USA. The world is not equal. It s sound simple and easy. But it isn t. Looking back to all conferences and pre- or after meetings it became clear that there are a set of questions, which are same in all places. It is not about SEO, checkout, payment or logistics. They are much more general. Discussing with more than 1.000

3 merchants and developers during the last 9 months face to face we developed a first understanding what we should address in future. There are always 3 basic main items which are the same, everywhere. They are: Growth Innovation Education Let s have a look to the first item. I don t want to say that it is a funny coincidence, but growth and Magento have a relationship, at least at marketing level. Magento was named as platform of growth. And we understand it as tool for growing business. Growth is an important aspect of our life. We grow from kids to adults, our knowledge and pool of experiences grow daily, economies need to grow. In our companies we don t want to survive only, we want to develop the business. It is about growth. Also in a broader understanding growth is essential for a country. If you want to bring more people in employment, if you want to improve people s life than you need to grow your economy. Not growing means stepping back. It is stagnation. The relation between economy and growth had been described in many articles and theories. We all make the experience that ecommerce is growing. ecommerce is seen as something dynamic, generating fantastic business opportunities, something that changes the world. So, ecommerce is about growth. If we will analyse the economical impact in a broader way then it becomes clear that a huge share of ecommerce business replaces traditional business. A pair of shoes bought online won t be bought offline anymore. It s the same with advertisement. The marketing budgets overall are not bigger than 10 years ago. But they go now to Google and SEO, not in TV commercials or printed advertisements. In such cases we can not talk anymore about ecommerce as a driver for growth in general.

4 Fortunately there are other ecommerce models enabling new types of business and services the world hadn t seen before. We all know them. One of the big questions that underlies is: How can we generate growth? What are the drivers for growth? We believe strongly that innovation is the most important driver for it. What is innovation? It is one the most abused or misled words during the last decades. There are many products, services or ideas, which are labeled as innovation. But they are not innovative. A new feature in a software or using the latest macbook is not innovation. Innovation is about solving unsolved problems. To find a solution for a challenge, seen or not seen by people. It can be driven by a process, technology or science. Innovation enables a new product, a new service or a new business model, different to already existing ones. It makes us unique. In the next years there are huge challenges, requiring innovations: 1) Energy technologies - independent from resources. 10 billion people need energy to grow and develop their lives for a better one 2) Eco systems and environment: Safe them. Rebuild them 3) Population density: Mega cities & huge distances between cities Technologies, institutions and structures to enable life in such environments 4) To care about billions of elder and very old people. Btw: Brazil is one of the places where you have to deal with all four. You are used here to work on them. It is always funny to talk with Chinese people. They are not aware that there are other mega cities in the world than Shanghai or Beijing. Considering places like Tokio or Sao Paulo shows that you have to manage a high density of people on one side. On the other side you have huge areas with a very low density of people, who also want to be connected. It is a real challenge.

5 All those four mega trends need innovations. Real innovations. An real innovation must add to those challenges. Help to solve them. If we look to 3) and 4) then we know that ecommerce can be part of solutions. ecommerce helps people to buy what they need. It helps people to share information. It can make their life easier. A different view to ecommerce and what you do here, isn t it? ecommerce is not about SEO, Google Adwords, checkout, caching, and supply chain. It is about changing the world. To make the world a better place. From this point of view it is important what we do here. Each of us. Please let me come back to the relation between growth and innovation. When you start a new business or expand your existing business then you have only two options for your business model: Copy of an existing model Create a new model If you copy an existing model than you do what people already do. It is easier to do, because you know already before what to expect and how to do it. Other people have it realized before. If you copy then it brings finally more competition to a market. We can see this every day. Companies sell the same products, use the same channels and compete at the end by price. Copy cats in every meaning of the word. Every time we create something new, we are the first. Some people say, that creating something is a singular action and the result is something fresh and strange. And they are right. Nobody has seen this before. At the first view you take more risk, because nobody knows if it will work. But if it works, then the inventor is at first the only one. So, overall the risk is much lower.

6 From my point of view there is a specific beauty inside this approach. You open much more options and opportunities for you company. If companies don t create new things, they will fail in future, no matter how much money they make today. Only optimization of existing business and processes sometimes called as best practices brings dead. The best ways are new and untried. And believe me: There are so many companies outside which stay as they are. They don t work on new ways. Instead they hire consultants for business process optimization and best practice implementation. But without innovation this is useless at the end. What means this for us? ecommerce itself is not innovative. Before you start your business work on your business idea. There is not an universal formula or structure for success. What I have seen during the last decades is that successful companies find value in unexpected places. You have to look to those places. To achieve this they think about business first from principles instead of formulas. It is not mechanic, it is understanding. Coming back to the initial statement: Copying vs. Creating. It is not so the smartest move to copy. The environment and context of a business model changes every day. What was good last year must not be good today or tomorrow. If you start a new Google then you won t get the same success like Google has, even if you do the same. If you do another market place, then you won t become the next MercadoLivre. And btw: Copying a successful model is one of the wrong assumptions some successful entrepreneurs make when they start a new business: It worked the first time, let s do the same again. It nearly never works.

7 The 3 rd item we have is education. Innovation needs education. Education is key. It is one of the biggest responsibilities of societies and their leaders to provide such education. People want to be enabled. And education is an enabler. But what is education? What is good education? I don t have final answers here. What we see is, that the ability to understand principles as well as an open mind set is important. Knowledge can be built up, but the abilities to build it must exist. If there is a new programming language in 10 years, we can learn it. If we don t know how learn, then it will become hard. We will have today some very interesting aspects about education in the Magento universe. It s worth to listen to Ben Marks today, but also to get in contact with most of the experts here. If you want to learn, then you are at the right place here. And this brings me to the spirit of Meet Magento. It is about contributing, sharing and freedom. Everybody can attend: Merchants in any shape and size, service providers and developers. Everybody contribute to the conference by sharing and supporting in which way ever during and after the conference. Meet Magento is the framework for all that. It is about business and tools to innovate. Inventing innovation is our all challenge. It s what you can t see that matters. We have a fantastic program today. More than 20 presentations, workshops and a bunch of experts available to answer any question. Use it and dive into this knowledge pool. I don t know what we will get in the evening. It is about of each of us to make to good. Contributing and sharing enables access to knowledge and ideas. It helps you to work on innovation. We want to invite you to work on innovation in your commerce projects. It doesn t matter if you do it online or offline or both. Innovation enables growth. Innovation comes first.

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