Majority World Report 2014

@capeWeb Summit, Nov 2014

It’s a big networked world out there

And it’s not one we know well

It’s changing and growing incredibly fast

And with mobile, it will connect 5.6bn people within 5 years

The stakes are high

Especially now you can win very big, very fast

$3.2bn(Jan 2014)

$3.1bn(Apr 2007)$1.65bn

(Oct 2006)

$966bn(Jun 2013)

$1bn(Apr 2012)

$22bn(Feb 2014)

$2bn(Mar 2014)

Teenager from NZ went from unknown to 360m views

It takes less and less time to create $10bn in value

>$5bn rev4 years old

$985m rev (2013)$8.85bn Mkt Cap

10 years

$1bn rev $3.2bn M&A

6 years

$6.5bn rev $248bn Market Cap

15 years

So how is European tech doing?

Despite appearances, actually pretty well…

Born in Edinburgh$800m round led by Sequoia (Oct 2013)

$250m led by TCV (Nov 2013)

Born in Stockholm

Born in Paris$2bn IPO (Oct 2013)

>$3m rev per day 51% for $2bn (Oct 2013)

3 years

Born in Helsinki

$700m round led by IVP (Jan 2014)

Born in Berlin

$80m round led by Founders Fund (Jan 2014)

Raised in San Francisco (via Dublin)

4 years$900m M&A (Feb 2014)

Born in Tel Aviv

1.2bn games daily>$1.8bn rev (2013)

Born in London & Stockholm$7bn IPO (Mar 2014)

Born in Stockholm$110m round (Mar 2014)

Born in Copenhagen$2.4bn IPO (Apr 2014)

IPO (May 2014)$1.7bn Market Cap

Raised in San Francisco (born in Copenhagen)

Born in London$1.6bn IPO (June 2014)

Born in London$65m round (June

2014)

Born in London$4.5bn IPO (June 2014)

Born in Jerusalem$7.6bn IPO (July 2014)

Born in Paris $100m raise (July 2014)

Born in Stockholm$290m rev

$2.5bn M&A (Sept 2014)4 yrs

Born in Berlin$2.3bn rev

$6.8bn IPO (Sept 2014)

Born in Berlin$2bn raised

$8bn IPO (Sept 2014)

The sun is out, the sky is blue….

But GDP growth is not beautiful in developed

economies

To what extent, if at all, do you feel that today’s youth will have had a better or worse life than their parents generations or will it be the same?

And people are worried about their futures…

Ipsos Mori Global Trends 2014

They are worried about their jobs….

They’re worried about social justice

About being able to vote…

About machine men & their machine minds…

That they won’t have a better life than their parents

Education isn’t preparing us for the new Majority World

There is a massive gap between what we learn and what we need to

learn

We are still living in a bubble

Forbes 2000$20tn in market cap

More than 80m employees

They spend > $1tn a year on IT

But technology is not doing much to save them

In fact it is turning every sector in the Forbes 2000 upside down

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

2

4

6

8

10

12

14

16

18

20

EUUS

In just 20 years, over 220 “Unicorns” have been born

But only a few sectors have really been seriously disrupted

Finan

cial S

ervice

s

Constructi

on and Reso

urces

Transp

ort

Manufac

turin

g

Electr

onicsReta

il

Utilities

Insuran

ce

Consumer

Teleco

Chemica

ls

Food and Drin

ks

Servi

ces

Software

Media

& Entertai

nment

Health

care

Trave

l0

50

100

150

200

250

300

350

400

Forbes 2000 Companies Companies Valued over 1$bn

Forbes 2000 list, Cruchbase, Aileen Lee’s list, Fred Wilson’s Hackpad and Index’s own research

So should Forbes 2000 be investing like Facebook?

$266bn FTSE100($5k per UK citizen)

$85tn global AUM($12k per human)

With so much money at stake who is holding boards and management

accountable?

One easy piece of advice……

We know 7% of small companies create >50% of new jobs

.

Start ups can create enormous value in a very short time

1978 1981 1987 1995 1995 1997 1999 1999 2005

and $1.4tn in new market value

creating 440k new jobs

with $545bn in new annual revenue

serving >1bn customers

Source: HIS Global Insight

21% US GDP

Maybe that’s why 55m people on Facebook are interested in

“Entrepreneurship”

Millennial Manifesto is going global…

New entrepreneurs can come from anywhere

Percentage of cities population who are interested in EntrepreneurshipData from the facebook API, looking at pages people like, posts

Dublin

Tel Aviv

Manila

Sydney

Sao Paolo

London

Stockholm

Jakarta

San Francisco

NYC

Palo Alto

Delhi

Boston

Berlin

Paris

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00%

Becoming an entrepreneur is going mainstream

But Europe’s great universities are almost nowhere in supporting this movement

USA Israel Canada UK India0

5

10

15

20

25

30

35

40

45

PitchBook Report of Top 50 Universities for VC backed Companies

So how should you think about catching the wave?

Aim high and shoot for the moon

Remember #risk62 – you will lose most of your time and money

x<0.5 0.5<=x<1 x=1 1<x<2 2<=x<5 x>=50

10

20

30

40

50

60

% Cost % Value

So learn by doing

Join the New Creative Generation

“The Internet isn’t really a technology. It’s a belief system”

@cape♯demand8

Appendix

Extra Slides

Europe is ahead of US and Japan despite itself

It’s really expensive to break into the charts

Top Mobile Apps 2014

Network effects reinforce success

We’ve had almost 60 years of evidence on how innovation economics can drive explosive social and economic value

creation…..

Semis

Hardware

SoftwareInternet

Mobile CloudNetworking

Crowd

80-90% of radical innovations fail

Forbes 2000 top 20 Countries

United St

ates

Japan

China

United Kingd

omCan

ada

South Korea

France

India

German

y

Switze

rland

Hong Kong

Australia

Taiwan

Brazil

Russia

Italy

Spain

Swed

en

Netherl

ands

Singa

pore

Malaysi

a0

100

200

300

400

500

600

Num

ber o

f Com

pani

es o

n Fo

rbes

200

0 lis

t

1. Do you have a public version of the GOV.uk dashboard?

2. Ok, how about you show us just one high volume service?

3. How do you benchmark vs your national GDP?

4. You spend at least $1bn pa on IT. Do you spend at least 5.5% with start-ups?

5. How digital literate is your board and senior team?

10k business ideas1k firms started

100 VC funded

20 IPO

2 market leaders

Nobel Prize in

Economics2006

ProfessorEdmund Phelps

Less than 10% of business ideas even get started

Data from the facebook API, looking at pages people like, posts and other demographic information

New entrepreneurs can come from anywhere

Percentage of countries population who are interested in Entrepreneurship

In most countries, Ronaldo..

Ronaldo V Entrepreneurship

US

India

Brazil

Philippines

UK

Indonesia

Egypt

Australia

Canada

Turkey

Mexico

South Africa

Nigeria

Italy

Argentina

France

Saudi Arabia

Poland

Germany

Vietnam

0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000

Ronaldo

Entrepreneurship

You have to learn take risks

Time Emotions Money

Europe is in a state

Especially in EU & North America

And in Europe this is hardly a surprise

But growth is somewhere else

Worried about speaking out

EU is growing slower than RoW

500m Spanish views6 months