The Dimensions Of Innovation In Entrepreneurship

Chris
Evdemon
(易可睿)
 Managing
Partner
 Eastern
Bell
Venture
Capital


Today
let’s
talk
about
…
 •  Innova3on:

 Product
vs.
Process
vs.
Business
Model
 •  The
5P’s
in
Star3ng
a
New
Business
 •  Venture
Capital
Trends
in
China
in
2009


©
2009
‐
Chris
Evdemon


2


Forms
Of
Innova3on


©
2009
‐
Chris
Evdemon


3


Forms
Of
Innova3on


©
2009
‐
Chris
Evdemon


Design


Sourcing
&
 Manufacturing


Retail
Sales


DistribuHon
&
 LogisHcs


4


Innova3ve
Start‐Ups


©
2009
‐
Chris
Evdemon


5


ECitySky
 •  Founded
in
mid
2007
in
Beijing
with
$115,000
 USD
start‐up
capital
from
the
three
founders
as
 well
as
family
and
friends.
 •  The
company
is
developing
China’s
first
truly
3D,
 fully
web‐based,
immersive
SNS
/
virtual
world
 technology
plaZorm.
 •  In
May
2008
the
company
raised
$400,000
USD
 from
angel
investors.
 •  Currently
in
private
beta‐version.
 ©
2009
‐
Chris
Evdemon


6


The
Founders


Aug.’07


May ’08


Nov.’07


©
2009
‐
Chris
Evdemon


7


ECitySky


HIGH
TECH
BARRIER
–
CORE
COMPETENCY

 ©
2009
‐
Chris
Evdemon


8


ECitySky


©
2009
‐
Chris
Evdemon


9


ECitySky
 •  Current
technology
plaZorm
is
truly
 innovaHve,
by
global
standards.
 •  “Great!
We
now
have
a
cool
technology,
how
 about
gegng
a
business
model?”


Another
 Virtual
 World
 ©
2009
‐
Chris
Evdemon


A
Casual
 Entertainment
 3D
SNS


What
mak es
 money
oth er
 than
gamin g?
 10


ECDL
Hellas
 •  Founded
in
March
2000
in
Athens,
Greece
 with
€70,000
Euro
start‐up
capital
from
two
 founders
and
one
angel
investor.
 •  License
to
operate
in
Greece
the
ECDL
digital
 literacy
cerHficaHon
program.
 •  Greece
has
a
10
million
people
populaHon
and
 in
2000
GDP
per
capital
was
about
$14,000
 USD.
 ©
2009
‐
Chris
Evdemon


11


ECDL
Hellas


©
2009
‐
Chris
Evdemon


12


ECDL
Hellas
 •  When
we
started
in
March
2000,
we
had
the
 following:
 –  signed
license
agreement
for
ECDL
in
Greece;
 –  ECDL
syllabus;
 –  four
(4)
ECDL
tests
for
manual
marking;
 –  a
brief
and
generic
“Standards
&
Guidelines”
 booklet.


©
2009
‐
Chris
Evdemon


13


ECDL
Hellas
 •  By
the
end
of
its
3rd
fiscal
year
(2003),
company
 had
achieved
in
Greece:
 –  establishing
ECDL
as
the
synonym
of
“digital
literacy”;
 –  €10
million
Euro
in
revenue;
 –  €2
million
Euro
in
net
profit;
 –  1,000+
Authorized
Test
Centers;
 –  200,000
ECDL
candidates.
 –  AddiHonally,
ECDL
Hellas
acquired

 the
ECDL
license
for
and
started

 operaHons
in
Turkey.
 ©
2009
‐
Chris
Evdemon


14


ECDL
Hellas
 •  In
March
2000,
the
ECDL
program:
 –  was
already
successful
in
the
U.K.,
Ireland,
Germany
 and
the
Scandinavian
countries
…
 –  …
but
it
was
struggling
in
France,
Spain
and
Italy.
 –  The
examinaHon
process
was
largely
as
follows:
 •  a
candidate
registered
and
took
test(s)
at
an
ECDL
 Authorised
Test
Centre
(ATC)
whenever
he/she
wanted;
 •  tests
were
supervised
by
ATC
personnel;
 •  tests
were
marked
by
ATC
personnel;
 •  results
were
communicated
by
fax
or
email
to
ECDL
HQ
in
 that
country.


©
2009
‐
Chris
Evdemon


15


ECDL
Hellas
 •  By
the
end
of
2000,
we
had
created
new
tools
and
processes,
 customized
for
the
Greek
market
realiHes:


–  a
proprietary
simulaHon‐based
Automated
Test
EvaluaHon
System
 (ATES);
 –  a
fully
web‐based
intranet
/
extranet
for
all
stakeholders
in
the
ECDL
 operaHons
(i.e.
ATCs,
candidated,
ECDL
Hellas,
etc.);
 –  a
detailed
ECDL
ATC
OperaHons
Manual
(~70
pages)
explaining
every
 part
of
the
ECDL
program
and
relevant
processes;
 –  full
(compulsory)
training
program
and
materials
for
all
ATC
staff;
 –  an
iniHal
set
of
customisable
ECDL

 markeHng
materials
in
Greek
which

 ATCs
could
use
in
their
local
market;
 –  a
daily,
9am
–
9pm
call
centre
for
ATCs;
 –  and
much
more
…


©
2009
‐
Chris
Evdemon


16


ECDL
Hellas
 •  The
examinaHon
process
was
re‐designed
as
follows:
 –  ATC
determined
which
days
/
hours
ECDL
examinaHons
 were
to
take
place
at
its
premises.
 –  ATC
registered
candidate(s)
online
at
the
intranet
and
 candidate(s)
took
test
using
the
ATES;
 –  tests
were
supervised
by
official
ECDL
Supervisors,
 members
of
the
Greek
Computer
Society;
 –  Supervisors
were
assigned
to
specific
ATCs
by
the
intranet;
 –  tests
were
automaHcally
marked
by
the
ATES,
results
were
 instantly
communicated
to
(a)
the
candidate
and
(b)
ECDL
 Hellas’
central
database
through
the
intranet.


©
2009
‐
Chris
Evdemon


17


ECDL
Hellas
 •  From
a
process
point‐of‐view,
ECDL
Hellas
was
 successful
largely
because:
 –  it
took
a
generic,
internaHonally
licensed
business
and
 customised
it
for
the
local
market;
 –  it
took
a
licensed
product
and
made
a
first‐class
service
 out
of
it;
 –  it
realised
that
its
clients
were
the
ATCs
(not
the
 candidates)
and
focused
on
building
and
servicing
a
 network
of
“partners”;

 –  it
protected
the
credibility
of
its
product
and
service;
 –  it
automated
all
unnecessarily
manual
processes
thus
 increasing
efficiency,
quality
of
service
and
reducing
cost.
 ©
2009
‐
Chris
Evdemon


18


Ethos
Technologies
 •  Founded
in
the
beginning
of
2005
in
Beijing
 with
$20,000
USD
start‐up
capital
from
three
 founders.
 •  The
company
is
a
soxware
development
 outsourcing
provider
with
its
main
(back‐)
 office
in
Beijing
and
front‐offices
in
Oslo,
 Stockholm
and
Helsinki.

 •  For
2008,
revenues
where
40
million
RMB
and
 net
profit
was
1.5
million
RMB.
 ©
2009
‐
Chris
Evdemon


19


Ethos
Technologies
 The
Founders
…


…
and
their
“family”!


©
2009
‐
Chris
Evdemon


20


Ethos
Technologies
 •  Key
quesHon
for
founders
was
“how
to
provide
customer
value?”
 •  Their
answer
is
to
be
“Global,
Local
and
Agile”.
 –  Quality
Solu3ons:



•  focus
on
solving
the
real
problem,
not
only
execuHng
according
to
a
specificaHon;
 •  the
Ethos
team
must
understand
and
take
ownership
of
the
soluHon;
 •  achieved
by
having
a
front
office
in
each
of
their
target
markets
for
both
pre‐
and
axer‐ sales
support
Ethos
eliminates
usual
offshore
distance
/
language
/
culture
barriers.


–  Time
To
Market:



•  tradiHonal
“Waterfall”
methodology
separates
project
into
serial
phases
whereas
agile
 allows
parallel
tracks,
i.e.
development
and
planning
goes
hand
in
hand;
 •  truly
global
development
center
can
provide
the
required
capacity
for
rapid
 development.




–  Reduced
Risk
/
Cost:



•  iteraHons
every
2‐4
weeks
with
tangible
deliveries
provide
early
feedback
on
risk
factors,
 reducing
significantly
overall
project
risk
and
cost.


©
2009
‐
Chris
Evdemon


21


Ethos
Technologies


©
2009
‐
Chris
Evdemon


22


Ethos
Technologies
 Agile
Development
 •  New
trend
in
soxware
 development.
 •  Dynamic
and
flexible
–
but
 requires
close
 communicaHon
and
 collaboraHon.
 •  Frequent
iteraHons
allows
 for
learning
in
the
project
 execuHon.
 •  Increases
quality
and
 throughput
Hme
–
reduces
 risk.


+

Global
Delivery
Model
 •  The
world
is
flat
–
potenHal
 to
source
services
globally.
 •  Leverage
capacity
and
cost
 levels
in
remote
locaHons.
 •  China
is
emerging
as
an
 alternaHve
to
India,
large
 talent
pool
and
be{er
 infrastructure.
 •  Need
to
bridge
culture
and
 communicaHon
issues.


Ethos’
Agile
Global
Delivery
Model
(AGDM)
is
“the
best
of
both
worlds”.


©
2009
‐
Chris
Evdemon


23


Ethos
Technologies
 Flexible


Ethos
is
moving
 ahead
of
 compe::on
by
 combining
Agile
 and
Global
 Delivery
Model


Onshore
 suppliers


Rigid


Onshore
 compe::on
has
 evolved
through
 process
 innova:on
in
 Agile
 methodologies
 over
the
last
 years


TradiHonal
 Offshoring


Onshore


Offshore


Offshore
suppliers
 have
captured
the
 share
of
the
 market
that
can
 easily
be
supplied
 by
tradi:onal
 Global
Delivery
 Model.


Today
let’s
talk
about
…
 •  Innova3on:

 Product
vs.
Process
vs.
Business
Model
 •  The
5P’s
in
Star3ng
a
New
Business
 •  Venture
Capital
Trends
in
China
in
2009


©
2009
‐
Chris
Evdemon


25


Prepara3on

 •  Study
and
learn
from
best
pracHces
in
foreign
 markets.
 •  Understand
your
own
local
market.
 •  Add
your
own
“secret
sauce”.
 •  IniHal
strategic
decisions
are
a
crucial
 component
for
a
start‐up
company’s
success
 or
failure.


©
2009
‐
Chris
Evdemon


26


Prepara3on



©
2009
‐
Chris
Evdemon


27


Prepara3on



©
2009
‐
Chris
Evdemon


28


Prepara3on



©
2009
‐
Chris
Evdemon


29


Prepara3on



©
2009
‐
Chris
Evdemon


30


Prepara3on



©
2009
‐
Chris
Evdemon


31


Prepara3on
for
Fundraising

 •  Carefully
prepare
all
your
materials:
 –  1’
elevator
pitch
 –  execuHve
Summary
 –  introductory
slides
deck
(~15
slides)
 –  full
slides
deck
 –  full
business
plan


•  PracHce
your
pitch
and
prepare
to
answer
difficult
 quesHons.
 •  Explain
in
detail
what
you
are
going
to
do
with
the
 money.
 •  Be
humble
while
confident
and
dynamic,
and
always
 honest.
 ©
2009
‐
Chris
Evdemon


32


Prepara3on
for
Fundraising



©
2009
‐
Chris
Evdemon


33


Prepara3on
for
Fundraising



©
2009
‐
Chris
Evdemon


34


Pa3ence
&
Persistence



©
2009
‐
Chris
Evdemon


35


Pa3ence
&
Persistence



Set
Targets


Communicate


Assess
 Yourself
 ©
2009
‐
Chris
Evdemon


Evaluate
 Progress


Assess
Your
 Team
 36


Pa3ence
&
Persistence



©
2009
‐
Chris
Evdemon


37


Pa3ence
&
Persistence
in
Fundraising



©
2009
‐
Chris
Evdemon


38


Persuasion


©
2009
‐
Chris
Evdemon


39


Persuasion
 Co‐Founders


Senior
 Management


Investors


COMMUNICATION


Public


Staff


Clients


©
2009
‐
Chris
Evdemon


40


Persuasion
in
Fundraising



©
2009
‐
Chris
Evdemon


41


Persuasion
in
Fundraising

 •  What
is
an
early
stage
VC
looking
for?
 • An
excep3onal
CEO.
 • Core
team
in
place.


• In‐depth
compeHHon
analysis
and
tracking.
 • Well
planned
and
cost
effecHve
marke3ng
plan.
 • Exis3ng
revenue
stream(s).
 • Clearly
idenHfied
new
revenue
stream(s).
 • Reserve
cash
for
at
least
twelve
(12)
months.
 • Clear
and
realisHc
cash
flow
posiHve
projecHon.


©
2009
‐
Chris
Evdemon


42


Produc3vity


©
2009
‐
Chris
Evdemon


43


Produc3vity


©
2009
‐
Chris
Evdemon


44


Today
let’s
talk
about
…
 •  Innova3on:

 Product
vs.
Process
vs.
Business
Model
 •  The
5P’s
in
Star3ng
a
New
Business
 •  Venture
Capital
Trends
in
China
in
2009


©
2009
‐
Chris
Evdemon


45


Venture
Capital
in
China
in
2008
 •  China’s
venture
capital
market
is
already
the
 second
largest
in
the
world,
behind
the
U.S.
 •  2008
was
a
record
year,
despite
the
global
 financial
crisis
worldwide,
in
terms
of:
 •  capital
raised
‐
$7.3
billion
USD
 •  number
of
new
funds
‐
116
 •  total
investment
amount
‐
$4.2
billion
USD
 •  number
of
new
deals
–
607


©
2009
‐
Chris
Evdemon


46


Venture
Capital
in
China
in
2008


©
2009
‐
Chris
Evdemon


47


Venture
Capital
in
China
in
2008


©
2009
‐
Chris
Evdemon


48


Venture
Capital
in
China
in
2008
 •  But
Q3/Q4
numbers
 show
a
rapid
decline.
 •  IPO
exits
also
 significantly
down
year‐ on‐year.
 •  TradiHonal
industries
sHll
 a
very
large
part
of
the
 dealflow.
 ©
2009
‐
Chris
Evdemon


49


Venture
Capital
in
China
in
2008
 •  Some
addiHonal
observaHons:


–  sHll
li{le
a{enHon
to
early
stage;
 –  Beijing
and
Shanghai
represent
the
 vast
majority
of
deals;
 –  foreign
investment
is
sHll
more
than
 double
of
the
domesHc
investment.


©
2009
‐
Chris
Evdemon


50


Investment
Trends
for
2009
 Sectors
a{racHng
most
a{enHon
from
VCs
in
China
will
be:
 –  Technology:
 •  Enterprise
soxware
 •  LogisHcs
technology
/
infrastructure


–  Cleantech

 –  EducaHon

 –  Consumer
Services:

 •  •  •  • 

e‐Commerce
 Internet
communiHes
 Mobile
applicaHons
 Gaming


–  Healthcare
Services
 –  Medical
Devices
 ©
2009
‐
Chris
Evdemon


51


Online
Trends
for
2009
and
Beyond
 1.  2.  3.  4.  5.  6. 

Social
networks
are
a
business
but
cannot
survive
on
ad
revenues
alone.
 Mobile
social
networks
are
the
future.
 Online
communiHes
are
not
just
a
teen
phenomenon.
Focused,
target
 group
communiHes
are
being
formed
and
have
economic
effects.
 E‐commerce
is
here
and
will
be
the
main
growth
segment
for
the
next
 few
years.
Mobile
commerce
is
sHll
at
a
nascent
stage
in
China
but
will
 also
grow
rapidly
in
the
next
few
years.
 The
amount
of
informaHon
available
online
is
overwhelming.
Privacy
is
 becoming
a
luxury.

 Online
gaming
is
already
the
most
popular
“21st
century”
form
of
 entertainment
and
it
is
just
gegng
started!
Mobile
MMORPGs
are
also
 around
the
corner.
 3D
environments
will
start
integraHng
with
2D
‐
is
this
the
definiHon
of
 Web
3.0?
Several
new
worlds
for
kids,
for
teens,
for
the
fashion‐ conscious,
for
socializing,
for
brands,
for
educaHon,
etc.
will
start
and/or
 grow
this
year.


©
2009
‐
Chris
Evdemon


52


Online
Trends
for
2009
and
Beyond
 7. 

The
new
mass
media.
Last
year,
Korea
was
reportedly
the
first
country
to
 have
its
populaHon
spend
more
Hme
online
than
watching
TV.
Who’s
 next?

 8.  Online
startups
will
face
a
strong
dose
of
realism.
You
will
have
to
show
 not
only
usage
but
also
revenues.
Copycats
will
no
longer
get
 automaHcally
financed
unless
they
have
proven
business
cases
–
it
is
 Hme
to
innovate.
 9.  It
is
finally
here
‐
the
impending
launch
of
the
wireless
3G
mobile
 networks
in
China.
China
Mobile
is
set
to
launch
their
3G
TD‐SCDMA
 network
in
Q2.
Unfortunately,
the
TD‐SCDMA
is
a
China‐only
standard; 3G
handsets
from
other
countries
will
not
work
on
the
China
Mobile
 network.
China
Unicom
however
does
use
W‐CDMA
which
is
a
global
 standard
and
compaHble
with
the
Apple
iPhone
3G.
 10.  Welcome
to
the
“Age
of
Convergence”!
E‐commerce,
SNS,
virtual
worlds
 and
online
games
are
coming
together,
blurring
the
fronHers
between
 categories,
web
and
mobile,
online
and
offline.
Lifestyle
is
going
digital.


©
2009
‐
Chris
Evdemon


53


Consumer
Trends
for
2009
 •  •  •  •  • 

Consumers
in
China
do
not
have
many
role
models,
 therefore
currently
open
to
try
new
products
and
accept
 new
brands.
 SHll
predominantly
price
sensiHve
but
more
and
more
 people
are
beginning
to
have
brand
awareness.
 Chinese
consumer
market
is
very
fragmented
in
most
 product
lines.
This
is
unlikely
to
change
in
the
near
future.
 Several
opportuniHes
to
capture
market
share
will
be
in
 2nd
and
3rd
Her
ciHes.
 Emerging
middle
class
has
already
started
paying
 a{enHon
to
diet,
fitness,
healthy
lifestyle,
 environmentally‐friendly
products
and
services,
etc.


©
2009
‐
Chris
Evdemon


54


Thank
you!
谢谢你们!


©
2009
‐
Chris
Evdemon


55