what industry wants andy todd [email protected] telephone: +44 (0)7785 394220
TRANSCRIPT
Creating Wealth from Innovation
R & DSales
&Marketing
ProjectManagement
& Supply Chain
Admin, LegalIP Management
Accountancy… et al
Partners, MarketsClients and Consumers
Fund Raising&
Equity Management
SharedService
University
University
University
University
University
TheVentures
Researcher Scientist (Middle Management, SME’s)
Big CompanyExecutive
BigProfits
BigImpact
B
A
Well ConnectedBusiness Savvy
Deal MakerA
Networked with Decision MakersRespected in IndustryHigh Impact Deal ExperienceDone it Before
Questions….. 30 Seconds!
What are the odds of success?
Higher Education –Business and Community Interaction SurveyFigure 4 Selected HE-BCI income streams 2003-2008 (real terms)
Source: HE-BCI 2003-2007 Part B Tables 1b, 2, 3 and 4c
Even ‘professional’ investors make poor returns on early stage businesses
The VC’s Paradox
“You want my money ‘cause you can’t sell”
“Why would I want to invest in a company that can’t sell?
Base Rate Data VsAvailability BiasX’sAvailability Cascade
Kahneman and Tversky 1974
Why does VC Exist?
What works?.... Trade Investors
Disruption
Augmentation
Start from Scratch
1 in 160,000 chance of financial success
Traditional – Start from Scratch
Ref: High Tech Start Up. John L. NesheimISBN 0-684-87170-X
Commercial Edge Approach
Benefits….• Research at good commercial rates• Zero wastage of research effort• Independence from over-subscribed grant funding • The opportunity to get leveraged value… Royalties
and Equity
At this point
we’re making money
+++
16
Courtesy of Rolls-RoyceStrategic Research Centre
Emergency SmokeExtraction Motors
Variable Speed Drives
Oil SandsExtraction Systems
The BigMotor ManufacturersWire
Manufacturers
Ultra Deep Oil Extraction
Application Development
Hot Coatings LimitedHot Coatings LimitedHot Coatings LimitedHot Coatings Limited
What Drives Success?
The Different Types of Innovation
and these can be either used internally or supplied as propositions to customers
Hurdles to Innovation
So where can we help?
? ?
Marketer
Dealer
Portfolioist
Optimiser
SpeculatorProactive
Reactive
Undifferentiated Differentiated
Architect
Year 1 Year 3 Year 5 Year 10 Year 15 Year 20 Year 25 Year 30 Year 35
96.7 33.5 22.5 17.6 16.4 13.5 14.3 10.8 8.8
7.3 6.0 5.9 5.9 5.9 6.0 6.0 5.9 5.9
-57.1 -31.3 -18.0 -5.6 -3.0 -1.7 -2.2 -2.4 -2.5
Best
Average
Worst
100
120
60
80
40
20
0
-20
-40
-60
-80
An
nu
alis
ed R
etu
rn %
True High Growth Companies
1. Structured and Disciplined Sales
2. Disruptive Solution
3. Breakthrough Account
4. Top 5%ile Margin
5. B2B
6. Market > £500m
7. Global Plan
8. 1 or 2 in It’s Sector
9. Founded on Profitable Deal
Characteristics of High Growth Businesses
