Fast Growth Forum

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Fast Growth Forum
Tricky First Million
26 March 2014

Sponsors
Supporters

Start ups need a child’s imagination

And a relentless desire to win

And some highly calculated risks

Understand
Markets
Watch for
Demand Signals
Study People

Changes which markets
we connect to

10k business ideas
1k firms started
100 VC funded
20 IPO
2
market
leaders
Nobel
Prize in
Economics
2006
Professor
Edmund
Phelps
Less than 10% of business ideas even get started

62% of venture investments are <1x
0
10
20
30
40
50
60
x<0.5 0.5<=x<1 x=1 1<x<2 2<=x<5 x>=5
% Cost % Value

Yes, start ups are
really tough

You and your team are fighting an imaginary war

Armed just with some big ideas

The extreme risk of 62% is definitely not for
everyone, including many entrepreneurs
and investors…..
.

In fact a 2% loss ratio for banks lending
to SMEs is already pushing the boundaries.

So if you feel comfortable managing risk, you
might as well shoot for the moon

The capital which survives, creates businesses now
accounting for 21% of US GDP…..
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

And in Europe we are starting to build waves of similar dimensions

So what should you be thinking about
when you are starting a business…
Opportunity
Others
Ownership

How big is the opportunity….

What level of ownership is
available….

Pick a field big enough
to change the world

Moving to Maslow’s Web
Communications
Clothing
Discretionary Non-Discretionary
Media
Entertainment
Shopping
Travel
Energy & Housing
Education
Food
Finance
Health
Safety
1993-2003 2004-2012 2012+

And in Europe we have no shortage of willing talent….

No short cut to being a grandmaster
“achievement is talent plus preparation.”
- Malcolm Gladwell

You have to learn take risks
Time Emotions Money

What should you focus on in the
business…?
Opportunity
Others
Ownership
Customers
Conversations
Convenience
Costs
Competition

Maniacal focus on the customer….

Offer new levels of convenience….

Leverage and manage cost structure…

Let the competition worry about itself…

So aim too high.
The prize is huge and we all have an
amazing start just by being here

Embrace
your 62%
@cape
♯risk62

www.mendeley.com
The Importance
of Vision
...at Mendeley
Jan Reichelt
Co-Founder

A brief introduction
to Mendeley

Mendeley extracts data
and fulltext from PDFs, ..
..share and discuss their
research in groups, ..
..lets researchers organize
and annotate papers, ..

..and aggregates everything
in the cloud
..share and discuss their
research in groups, ..

A global research network with 2.6 million users;
the 15 largest userbases:
University of Cambridge
University of Oxford
Stanford University
MIT
Harvard University
University of Michigan
Imperial College London
University College London
University of Washington
Cornell University
Columbia University
University of Edinburgh
UC Berkeley
Sao Paulo University
University of Toronto
2,000 Mendeley Advisors
around the globe

300 active third-party apps built on the Mendeley API

Content Publishers
Metadata
Publishers, service providers, ...
Social Layer Mendeley, ...?
Today
Amount/Importance

Social Layer
Metadata
Content
Facebook, Twitter,
Youtube, Pinterest...
Creating and sharing
“stuff” as a result.
Tomorrow?
Amount/Importance

What was Mendeley’s
vision on day 1?

To revolutionize the way researchers and students work and
create the world’s largest research community (2008)
To create the world’s largest research community and
shareable academic database, open to everyone (2008)
Wants to help researchers manage, share, and discover
academic knowledge (2008)
A “Last.fm” for research (2009)
The world’s largest research collaboration platform and
database (2011)
Mendeley helps people to organize and collaborate on
research projects and makes academic research
fascinatingly more accessible and transparent. (2013)

Vision: It’s the story you tell. It’s a
“fuzzy” understanding of what
your company stands for.
• Why fuzzy? Because it should
be robust for years.
• Can a vision ever be achieved?
Goals can!

Vision
Goals
Strategy
Tactics
Activities
High-level, long term understanding
of what a company stands for
Short-term, day-to-day
operational implementation *Adapted from Diana Railton

Do something you
really, really like!
Develop your vision,
and translate it into a
great product

Our vision helped
Mendeley to create
(some sort of) reality
and self-fulfilling
prophecy
“In other words, ‘vision’ is a popular industry narrative
applied after-the-fact”? (Josh Miller, Medium)

Have a strong (founder)
team and stick together
Techcrunch/Web Summit Europas
Award 2013 for best start-up founders

“How Long Does it Take to Build a Technology
Empire?” (www.ipo-dashboards.com)

Because the journey is so long, vision
is so important – it keeps the start-up
together during high growth times.
You can only accomplish more
things through and with other
people, and vision helps to
achieve internal alignment.

But vision does more for the team…
Daniel Pink (2009):
Drive: The Surprising
Truth About What
Motivates Us
• Autonomy
• Mastery
• Purpose

Mendeley’s vision was coming
from passion and was driving
us to take entrepreneurship as
a lifestyle.
The emotions are the
hardest part.

My Background
• Graduated from HEC School of Management with a focus
on Entrepreneurship
• Co-founded PriceMinister and created product & sales
platform
• Moved to Asia (Singapore / Hong Kong) to develop Club
Med’s Asia Pacific digital platform & TBWA digital offering
and met my creative business partner
• Exited PriceMinister in 2010 when acquired by Rakuten
• Moved to London and opened Shopcade end 2011 after
being obsessed with social and shopping implications

Getting critical mass takes time and effort

This applies to big and small companies
Read Clayton Christensen on “Disruptive innovation”

For today’s youth, keeping up with new fashion styles and
knowing where to buy them at the best price takes large
amount of time and effort.
16 – 25 year olds are hungry for novelty and not loyal to one brand. They constantly
hunt for the next “it” item using multiple sources, then go searching for where to go buy
the look at the best price. 50% shop at retailers who introduce new lines more
frequently than just once a season, and over 27% bought clothing from 5 or more
retailers in the last 12 months.

87
Browse the hottest looks of the moment
Identify what people are wearing
Buy these items at the best possible price

How we get feedback and develop features
User centric design
We regularly meet with our correspondents, content partners,
and hold monthly events with fashion industry insiders to showcase
the app and get feedback to ensure product updates are based on fashion
industry needs.
Lean Startup Approach
We only develop minimum number of features that have a clear need
and iterate on them until there’s a correlation with improvement in
performance data. We are not afraid of dropping stuff. We often test on web
before porting it to mobile as it’s more flexible.
Data driven business decisions
We have an always-on dashboard of userbase, engagement, sales, and
marketing. We often test new things and see how it impacts data, such as
new product features

User centric design example
From blogger brunches held in LA and London
The bloggers wanted to see on Shopcade: more fellow blogger styles, ability
to see styles from other users, more emerging brands
So we launched:
“Looks” feature on Shopcade, so that both bloggers and our
community can upload their looks.
Shopcade Store, where emerging brands with no affiliate networks can offer
their products directly on Shopcade and be featured.

You want feedback from the right
type of people for your product
o We held a Bus Party during London Fashion Week with 600+ VIP attendees
including Amy Willerton (Miss Universe GB), Fran (Made in Chelsea), Jade
Ellis (X Factor), Diana Vickers (X Factor), Ella Catliff (LaPetiteAnglais), Lilah
Parsons (MTV), Hilary Alexander (Telegraph),V V Brown (Musician), Natalie
Suarez (Model), Vogue, Elle, Candid Magazine, Rough Magazine, Yahoo,
Rodnik Band, Fake Club, Alice Luker.
o Not only was everyone photographed and featured on Shopcade mobile
fashion app, they all gave feedback on the app.
o https://www.youtube.com/watch?v=11jFMpNbzaY

Useful tools
Collaborate: Shopcaders’
usability Lab
Monitor: Analytics
Optimize: Multiple testing
Listen: Active Community

Lean Startup Approach example
Conversion rate optimization
We discovered that contextualizing sign-up gates on users’ first visit based
on their intent and source led to quadrupling conversion rate. (ie. If they visit
Shopcade by searching for Motel Rocks skirts, we show messages about
Motel Rocks on the registration popup.)

Think It – Build It – Ship It – Tweak It

Data driven business decisions
Which push notifications to send on mobile:
After testing via email “deal notifications”, where people are notified when
products they want on Shopcade goes on deal, we found that those emails
had a high click-through rate and led to purchases. Thus on mobile, we
ensured this is one of the high priority push notification over all others.

Weekly app downloads
Android iOS
Clear signs of necessity and addictiveness of
Shopcade is backed up by latest data and user response.

Do:
Get feedback from the right people
Get responses in real-life, not in the office
Preview your features to a small group of influencers
They already know you well and the market needs
and people generally want to be helpful
Really listen hard to criticisms
Don’t just think they don’t understand
Get the whole team to look at their data
Keep people accountable, and they will focus
on delivering results

Don’t:
Survey initial visitors about what they want
They may not be your core demographic after all or
not know what they want unless you show them
Plug your site on blogs/forums
Takes too much time and impact is not guaranteed
Launch on date
Launch on quality
Cool homepage ever
Show users what they want to see and keep it simple

Final thoughts:
The product is not everything
MYTH: A good product attracts users
TRUTH: A good product retains users
MYTH: PR and events will get you users
TRUTH: PR and events will get you noticed by
investors and partners and get you feedback.
=> You need virality and build a product people love
and want to share.
=> You need marketing plans to get awareness and
distribution.

Thank you
P.S. Download our new mobile app for iPhone and Android.
+44 786 799 3803
nathalie@shopcade.com
Twitter: @nathgaveau
shopcade.com/nathalie
99

Scaling Startups
@rorystirling
@mmc_ventures
#fastgrowthforum

Keynote
@rorystirling
@mmc_ventures
#fastgrowthforum

“a talk that establishes the main
underlying theme”
“establishes the framework for the
following programme of events”
@rorystirling
@mmc_ventures
#fastgrowthforum

WHAT THIS IS NOT
@rorystirling
@mmc_ventures
#fastgrowthforum

"Startup"
@rorystirling
@mmc_ventures
#fastgrowthforum

"A startup is a company designed to
search for a repeatable and scalable
@rorystirling
@mmc_ventures
#fastgrowthforum
business model"
(Wikipedia)

"Startup = Growth"
(Paul Graham)
@rorystirling
@mmc_ventures
#fastgrowthforum

A startup is a
company designed to
grow fast
@rorystirling
@mmc_ventures
#fastgrowthforum

The ONLY essential
thing is GROWTH
@rorystirling
@mmc_ventures
#fastgrowthforum

Everything else we
associate with
startups follows from
growth
@rorystirling
@mmc_ventures
#fastgrowthforum

…you can use growth
like a compass to
make almost every
decision you face
@rorystirling
@mmc_ventures
#fastgrowthforum

BILLION DOLLAR
STARTUP$
@rorystirling
@mmc_ventures
#fastgrowthforum

Startup = Growth
@rorystirling
@mmc_ventures
#fastgrowthforum

Scaling Growth
@rorystirling
@mmc_ventures
#fastgrowthforum

“Scaling”
@rorystirling
@mmc_ventures
#fastgrowthforum

To be a STARTUP you need to
GROW (fast) and to GROW you need
to SCALE
@rorystirling
@mmc_ventures
#fastgrowthforum

What is scaling?
How do I do it?
@rorystirling
@mmc_ventures
#fastgrowthforum

Team & Culture
@rorystirling
@mmc_ventures
#fastgrowthforum

Systems & processes
@rorystirling
@mmc_ventures
#fastgrowthforum

Finally…
@rorystirling
@mmc_ventures
#fastgrowthforum

3 M’s
@rorystirling
@mmc_ventures
#fastgrowthforum

Management
@rorystirling
@mmc_ventures
#fastgrowthforum

Market
@rorystirling
@mmc_ventures
#fastgrowthforum

Momentum
@rorystirling
@mmc_ventures
#fastgrowthforum

Thank you
@rorystirling
@mmc_ventures
#fastgrowthforum

VALUES
Why creating a high-performance culture
isn’t just beers and ping pong
27th Mar 2014 - 9:40am
Lord’s Cricket Ground, London
George Karibian
Founder, PaymentSense

battle scars
credit card processing
for SME’s
Finalist 2004
Finalist 2005
Finalist 2006
2013 – Ranked
24th in Europe
founded 2009
founded 2012
overdraft financing
for SMEs
founded 2012
tech payments platform
for mobile apps
founded 2000
rollover to PE 2010
online office products
for SMEs
telco
for SMEs
Finalist 2004
Finalist 2005
Finalist 2006
founded 2003
exit to PE 2008
5 startups | 400k customers | £100m+ turnover

values
so obvious – yet so difficult

• peter drucker
• clear goals
• stamp out failure
• fear
the pyramids
extreme perhaps – but built a masterpiece

• great past
• expense reports
• how would you handle abuse
• what xerox did
xerox
no different than the way they built the pyramids?

welch matrix
‘b’ players
• “we are family”
‘a’ players
• no brainer
• rock stars
• comp them
• develop them
• edge of comfort zones
• retain them
‘d’ players
• no brainer
• part with them
‘c’ players
• difficult to identify
• easy to deal with
• info bottlenecks
• credit for others’ work
• focus on reducing targets
• black boxes
• hold mgmt hostage
• political animals
• weed them out
• easy to identify
• difficult to deal with
• 2nd chancers
• training
• new role
• ease their move
b’s and c’s separate the few great companies from the many mediocre ones
a b
c d
results
+
+
-
-
values
a
c d
b

accelarated natural selection
freq
risk / return
hi
lo hi
aim
here
land
here
9/10
their
safe
landing
zone
our
goal
fail fast - learn fast

sunflowers
beware of the sunflower
a
a a
a a a
a a c a a
a c c c a a
a a c c c a a
a a c c c c a a
a a a c c c c a a a
a a a b b c b c a a a
a a a b b b c b c b a a a
a a a a b c a a a a a a a
a
a a
a a a
a a c a a
a c c c a a
a a c c c a a
a a c c c c a a
a a a c c c c a a a
a
a a
a a a
a a c a a
a c c c a a
a a c c c a a
a a c c c c a a
a a a c c c c a a a
a
a a
a a a
a a c a a
a c c c a a
a a c c c a a
a a c c c c a a
a a a c c c c a a a

the rot effect
have only ‘a’ players around your table… and real magic begins to happen

Scaling Startups
#fastgrowthforum

to create a place where you actually want to be
more than life itself.
a place that truly isn’t a company.
a place where everyone is friends.

empowered trusted rewarded
piglets working on products
they believe in ends in direct
wins for all piglets and
projects.

everything I am about to
ask something that has
been suggested to me but I
shot down.

why don’t we ask people if
they need a standup desk?

Why don’t we invest more
in training our piglets?

Why don’t we plan projects
to effectively allow people to
think and not just produce.

1. What is your Desired Outcome?
2. Why are Revenue and Profit Important?
3. The Evolution of Revenue and Profit
4. Should You Focus on Revenue Growth or
Profit Growth?
5. What Does MVF Focus On?

TO Sell your
business for as much
as possible

2. Why are Revenue and Profit
Important?
4. Should You Focus on Revenue Growth or Profit
Growth?

Potential Size
Size
(Revenue or
Users)
Your
Confidence in
Negotiating
Speed of
Growth
Potential
Profit Margin

Growth?

 Marketing Channel Optimisation
 Landing Page Optimisation
 Strong Sales Process
 Strong On-Boarding Process

• Customer
Montetization
• Cost of Customer
Acquisition
TIME

4. Should You Focus on Revenue Growth
or Profit Growth?

• Demonstrate you can pull levers to generate
profit, or
• Have line of sight on profit in the future

Growth?
5. What does MVF Focus On?

2009 2010 2011 2012 2013 2014 2015 2016
£500k per
Month
Revenue
£1m per
Month
Revenue
£1m per
Month
Gross
Profit
£2m per
Month
Gross
Profit

“Rough Diamond”
“Inconsistent Player”
“Talent Risk”
“Future Star”
“Key Player”
“Solid Professional”
“Consistent Star”
“Current Star”
“High Professional”
Performance
Potential

CREATING PROCESSES AND KPIS TO MANAGE YOUR
BUSINESS WITHOUT LOSING AGILITY AND INNOVATION

#BESTBUDS OR #DEVILBABY
Budweiser, "Puppy Love" 20th Century Fox,
Devil Baby Attack
48,499,082 views, 1,861,707 shares 43,332,549 views, 2,031,736 shares

WE HELP BRANDS MEASURE SUCESSS &
IDENTIFY TRENDING CONTENT
Source: Company Management
• Real-time benchmarking
• Customizable data clusters
• 2,000 preloaded brands
• Granular social reactions
• Plus the bigger picture!

WE PREDICT & IMPROVE CONTENT SHAREABILITY
Basic emotions
Primal responses
Cognitive responses
Intensity
Emotional valence
Schema disruption
Social motivation
Memorability
Enjoyability
Medium
Favourability
Interpanel agreement
and more...

AND ACTIVATE THE OPEN WEB WITH PAID MEDIA
Maximize peak sharing
Prolong burn-out phase
with Unruly
without Unruly
Brands use Activate to maximize earned media
• Make videos ubiquitous & shareable
• Maximize social spread and viral views
• Target super-sharers to slow burn-out

WHY DO SHARES MATTER?
50x
INCREASE
2006 2013
Source: Viral Video Chart

…WITH GLOBAL ASPIRATIONS
FROM DAY ONE…

5. Expansion Plans
5.2 Geographic Expansion
Today
Regional Hub
Local Office
Sales Presence
London
2007
Paris
2010
Sydney
2010
New York
2011
Stockholm
2011
San Francisco
2011
Amsterdam
2011
Berlin
2012
Singapore
2014
Chicago
2012
Hamburg
2013
Oslo
2013
EMEA
Americas
APAC
LA
2012
GLOBAL GROWTH
Seoul
2014

ADIDAS ‘DON’T STOP ME NOW’
2012

DOVE REAL BEAUTY SKETCHES
2013

TECHNOLOGY & INNOVATION
International Winner,
Hot New Media and
Technological Platforms
Winner, Digital
Innovation
Winner, International
Impact Management
Team of the Year

SEARCH FOR PANDAS
Logo’s safe area
RECRUITING PANDAS

Deliver WOW Share the Love
Embrace
Change
VALUES

THANK YOU!
Winner Best Content
Distribution Service
Winner Digital Innovator of
the Year
Winner 2012 Digital Innovation
Award

Preparing Your Business for Exit
David Sidwell

FY97 FY98 FY99 FY00 FY01 FY02 FY03
£1.6m £2.5m £6.5m £10m £17m £24m £34m

• 2005, £300k
• 2001, £2m
• 2007, £10m
• 2012, £440k
• 2007, £13m
• 2005, £1.8m

Preparing your Business for Exit
1. Clear Proof Points
2. Scalable Business Model
3. Solid People

The 7 Great Myths of Preparing Your Business for Exit
1. I won’t be happy until I have made lots of money
2. I’ll sell when I’m ready…and I know when I’m ready
3. I know what my business is worth, and I’ll not sell for less
4. Big spreadsheets showing long term sales forecasts are pointless
5. You need a Big Vision
6. All investment is the same: it’s just money
7. Selling my business is what I do all day

Myth #1: I won’t be happy until I’ve made lots of ££££££

Your company reflects your personalityMyth #1: I won’t be happy until I’ve made lots of ££££££
No ! M&A enables you to achieve your goals in life

Myth #2: I’ll sell when I’m ready…
…and I’ll know when I’m ready
Maturity
Crisis of
Growth through
Size
Leadership
Autonomy
Control
Bureaucracy
Internal Growth
Creativity
Direction
Delegation
Co-ordination
Collaboration
External
partnerships
The Greiner Curve

Myth #2: I’ll sell when I’m ready…
…and I’ll know when I’m ready

Myth #3: I know what my business is worth…
…and I’ll not sell for less
Truth: You really aren’t the best judge. Honestly
Dream Value = 10-20x revenues
Tuck In: 2-5x revenues
Normal business:
3 x last year’s profits + cash at bank

Myth #4: Big spreadsheets showing long term sales
forecasts and market shares are completely pointless
Revenue and Valuation Forecast to 2018 - Assumptions and Summary
Core Planning Assumption: Increase in Money Under Management
Start Point £11.3m as at end March 2012
Organic Growth per month £200,000 = annual growth of £2,400,000
Investment Growth per month £300,000 = annual growth of £3,600,000
Market Growth Factor per annum 5.00%
Wastage from retiring clients per annum 5.00%
Revenues will be 3.00% of Funds Under Management
Split of Recurring Fees Income vs. Commission
Percentage of Recurring Fees Income will be 55% of Revenue initally and can be expected to rise
Valuation Calculation is Industry Standard: Multiple of Fee Income + Commission Income - Debt
Fee Income
multiple to be
used: 4
Low valuation = 3
Mid Market Valuation = 4,
Rising market valuation = 6
Summary: Organic Growth Model:
2012 2013 2014 2015 2016 2017 2018
actual
Funds £m 11,300,000 13,700,000 16,100,000 18,500,000 20,900,000 23,300,000 25,700,000
Valuation £ 595,668 £ 615,256 £ 771,456 £ 927,656 £ 1,083,856 £ 1,234,900 £ 1,362,100
Investment Growth Model:
2012 2013 2014 2015 2016 2017 2018
actual
Funds £ 11,300,000 14,900,000 18,500,000 22,100,000 25,700,000 29,300,000 32,900,000
Valuation £ 595,668 £ 635,656 £ 809,556 £ 1,025,756 £ 1,281,556 £ 1,532,200 1,743,700
“There is nothing so practical as a good theory”

WHAT
HOW
WHY
You need clarity about your purpose and your Road Map
Myth #5: You need a Big Vision

Would you hire them ? What for ?
They need goals/targets/appraisals
Myth #6: All investment is the same: it’s just money
“You can smell emotional commitment a mile away”

Myth #7: Selling my business is what I do all day

Preparing Your Business for Exit
1. Clear Proof Points
2. Scalable Business Model
3. Solid People – starting with …
You

Preparing Yourself for Exit
1. I won’t be happy until I have made lots of money
What are your goals in life ?
How will this business help you achieve them ?
2. I’ll sell when I’m ready…and I know when I’m ready
By the time you’re ready, it’s too late
3. I know what my business is worth, and I’ll not sell for less
No, you don’t. Honestly.
4. Business Models are pointless
The best possible value protection/creation strategy
5. You need a Big Vision
You need clarity about your purpose and your Road Map
6. All investment is the same: it’s just money
Choose the people, not the money
7. Selling my business is what I do all day
Beware…almost impossible not to take your eye off the ball

Thank you
Feedback please!

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