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Peter Cochrane

Peter Cochrane

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Peter Cochrane

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  1. Boom & Bust…. Doing a start-up company from ground zero SciTech 2003 John Innes Conference Centre Norwich Research Park Norwich, UK 29 January 2003 Peter Cochrane

  2. The Big Issues! • Population - Migration • Ageing - Health - Care • Energy - Pollution - Ecosytem - Climate • Raw Materials Availability - Limits • Logistics - Transport - Constraints  • Education - Complexity - Understanding  • Wealth Distribution • Globalisation - Deregulation • Political Stability 

  3. New ventures are not optional… Thriving in business depends on new visions for making the transition from “atoms to bits” Small entrepreneurs will restructure industry Large organizations have to restructure themselves Mastering the entrepreneurial process is a must

  4. he basis of my observations…. CompanyFounder Director NEDAdvisor Investor ConceptLabs USA 1998 xx xeBookers UK 1998 xx xNomadix USA 1998 x xPSPL USA 2000 xxRTC USA 2000 x xShazam UK 2000 xiSolon UK 2000 xxEtenna USA 2001 xKVector USA 2001 xx x EZD UK 2002 xxVenture Capital FundsPortview Israel 1999 x x CreateVentures UK 2000 xx xFailures = 5

  5. Example - eBookers 180 160 140 120 £M 100 80 60 40 20 0 1999 2000 2001 2002

  6. Energy and time expended… 90 80 70 Finance Management Marketing Sales Delivery Support  60 50 40 30 20 10 0 Idea Science Technology Engineering

  7. The in… • Identify an opportunity • Identify a customer and market • Search for the competition • Understand every aspect • Locate a suitable technology • Engineer a solution/prototype • Formulate a plan • Raise money & create the company • Spend every $ as if it were your last!

  8. The out… • Create a corporation • Create something a corporation will buy

  9. Customer Driven Exponentiation • Hotmail • - No cost to user • - Easy to sign up • Every message sent advertises the product

  10. My basic rules… • Don’t enter a sector with competition • Get to market in < 9months • Only start things that have huge potential • Only work with friends

  11. In my experience we should… Make sure every single facet of any business start is in place and fit for purpose: technology, design, product, plant, production, market, marketing, sales, delivery, support, aftercare, people, finance etc All have to be 100% at the same time If one element fails then so does the whole

  12. In my experience we should… 1. Never assume people understand 100% anything you say 2. Never assume people do anything 100% you ask of them 3. Never believe or trust a customer 100% 4. Never believe or trust a banker 100%. 5. Identify all competitors - and their state of play 6. Look out for oblique threats from outside the sector 7. Not be blinded by enthusiasm for a technology or idea - especially if it is yours Not let pride get in the way Identify the out - as well as the in! 10. Realize it is never too late to shout stop!

  13. Business = Wealth Generation  Science Technology Knowledge Engineering Products Services Education Employment ChangeMarkets Sustainability $

  14. ROI  nvestment nnovation ideas Return On $ T Technology People Employment ProductMarket Sustainability

  15. Identifying the customer… The have a problem they need solving They have money to spend They have desperation in their eyes

  16. I happen to like… The Bell-Mason Model

  17. New Ventures Developing new technologies, products, and businesses imply: -a basic vision -a sound business model -a mature technology -an eager market -the right resources at the right times -a good team -good leadership & management -sufficient money

  18. Bell-Mason Model & Diagnostics A system for ...• Measuring risk• Predicting course• Tracking progress• Improving the odds of success

  19. Evolution of the “Ideal State” Stage IV. Market Development Business Plan Stage III. Manufacturing Marketing Product Development Product Stage II. Development Seed Sales Stage I. Concept Technology/ CEO Engineering Team Control Fundability Board of Directors Cash

  20. Where is all the action?

  21. Business Planning Strategy Organisation Operations Relationships Sales etc

  22. People Family Friends Home Health Hobbies etc

  23. Technology Science Engineering Prototypes Production Supply Installation etc

  24. Society Business Hot Spot People Technology

  25. So innocent looking… y= ex …it is compound interest on steroids!

  26. The ‘S’ Curve Continuum Technology $ DVD CD Cassette Tape Tape Time

  27. Moore’s Wall 3D ICs Molecular Quantum Genetic Biological Optical Computing New Sensors Networks Software Lifeforms Intelligences ICn Log Scale IC5 IC4 IC3 IC2 IC1 Transistor Thermionic Tube 1915 46 59 2010 2025

  28. Lifecycle of Emerging Technologies 10 Smartcards E-Cash VRML/ Avatars Java - the Platform Biometrics Imaging Agents Visibility PDAs Wearable Computers Java- the Language Interactive / Web TV Database Mining WWW Inflated Expectations Application Sharing Speech Recognition Cable Modems Desktop Videoconferencing Technology Trigger Disillusionment Enlightenment Productivity Time 0 0 9 Source: Gartner Group, Monthly Research Review, April 1997

  29. Ever-Increasing Availability Profit $ Abundance Scarcity Ever-Decreasing Cost

  30. Industrial Revolution Availability Availability Availability Power Bandwidth Transistor Apps Consumer Goods Awareness Profit Profit Profit Cost Cost Cost Personal Computer Age Age of Personal Bandwidth

  31. Consumer Recycle The Eco-model… Raw Materials Manufacture Distribution RETAIL Ecosystem Consumer Trash Trash

  32. Consumer Recycle Mobile B-B B-B B-B Raw Materials Manufacture Distribution RETAIL Ecosystem C-B C-C B-C Consumer Trash Trash

  33. Research 99.9% Development 5% Conferences Legal Finance Admin Patents Sales 99.9 0.1 10.0 90.0 99.0 1.0 95.0 5.0 99.0 1.0 100.0 0.0 80.0 20.0 0.0 100.0 Business Value… %Value Add -ve+ve

  34. Key parameters… • Investment • Burn rate • Time to market • Time to break even/profit • Market share • RoI • Efficiency • Profitability

  35. Company/Organis/zation Size What determines the size of any company or organis/zation? Size = CAPEX + OPEX Transaction costs tend to dominate GDP of Planet Earth = 47% Telco ~ 60 - 80% Healthcare ≥ 95%

  36. Interval between an innovation & competitive entry Competition - years

  37. Key Leadership Actions& Qualities Relationships LeadershipActionsQualitiesOutcomes

  38. Thinking Outside The Box

  39. Society Changes slowly!

  40. The dotcom bust! • Greed • Stupidity • Naivety • The old economy torpedoed the new • No bandwidth in the local loop! But this is just a glitch - the internet is very young - so are mobile phones, PDAs, PCs, wearables, things & people on line etc

  41. 120 100 80 60 40 20 0 2000 2001 2002 2003 2004 EU ON LINE SALES $Bn Projection

  42. 1 1 2 2 5 3 3 4 4 n Network Laws-Internet Broadcast Telephone 1 2 3 4 5 N 1 2 …n < n(n-1)/2 ~n2 < n/2 Nn Always - customer control Availability >95%

  43. Nothing much has changed…. "Nothing is more difficult than to introduce a new order. Because the innovator has for enemies all those who have done well under the old conditions and lukewarm defenders in those who may do well under the new" Nicolai Machiavelli, 1513 A.D.

  44. A world of opportunity & risk…. Thank you cochrane.org.uk conceptlabs.net  what you do best….outsource the rest…