Startups The Future of Platforms & Markets Published 5 months ago on December 5, 2017 By The Asian Entrepreneur Authors & Contributors Share Tweet Like every year, end of May is the moment when the fabulous and awaited Internet Trends report from Mary Meeker of KPCB gets published. I’ve tried to give a look at this amazing piece of work with a platform perspective: what do the internet trends we’re seeing mean for the future of platform thinking? That was my original question. This year issue of Meeker’s peek into the state of the internet is characterized by a strongly quantitative analysis: less trends are spotted — most of them are actually recurring ones, such as the key importance of experiences for brand success or the penetration of voice and AI — and more numbers are provided to testify an evident truth. We’re (almost) all connected. Indeed, new smartphones sales don’t grow much anymore YoY, while global internet users are growing steadily at 10% rate: this basically means we’re buying less phones in the west (mostly due to Moore’s law slowing down and making new phone buying less frequent) while a bit of growth is still happening in connecting countries such as India or the African continent. Giant tech companies are set to dominate the Internet of the present-future In an internet where everyone is connected with anyone else and where we’re getting to the upper limit of attention time available (with screen time approaching 6 hours a day in the US), efficiency in connecting people with products and services is key. Thanks to their data-centric nature and to the huge network effects that allow them to train machines and algorithms with an insane amount of data, Google and Facebook now dominate — and are on track to monopolize — global advertising, ensuring all of us can easily get connected with the right (?) product and services. Amazon is continuously growing its footprint to the extent of, eventually, putting out of business, this year, the largest number of retailers in history. We’re finally noticing that retail as we know it (disconnected from the overall — digitally powered — buying experience) is cursed. Giant tech companies are therefore dominating the business landscape, and the most interesting aspect perhaps is that they are continuously growing their feature base. Here’s the point: huge tech giants have something that other companies don’t have, they’ve network effects (and enormous user bases), and the agility to test and prototype new ideas rapidly. While a traditional giant company may have the first, it’s likely failing on the latter; while a nimble tech innovation company may have the latter will always have to bounce back to GAFA to be able to leverage on their network effects to distribute and test new ideas to wider markets. Facebook now encompasses all the aspects of our socially-connected life, Amazon now sells directly under its brands — or child brands — things such as baby wipes, batteries, or bed linen. Tech innovations such as AI, machine learning and conversational interfaces (all on the rise) will provide GAFA with even more potential to create seemingly personal relationships with customers, increasing their potential to deal with long tails with highly customized services and self-customization tools to let customers make the tweaks that they couldn’t anticipate. God only knows what will happen when the penetration of IoT and connected devices will really cross the chasm: everything wants to be connected, and when it’s connected, it will be owned by the GAFA. Soon machines will be able to fake human relationships We now have an internet made of enormous platform-infrastructures, connecting entities in their huge ecosystems, providing them with the possibility to find each other precisely, and to trade value to an extent we never experienced before. What’s left? A few days ago, my good friend and italian digital icon Fabio Lalli, blurted on Facebook that with giants like Facebook now encompassing everything social and spurring new features continuously (at least test-validating them), it’s really hard for entrepreneurs today to think of something new and valuable, and be able to overcome the bullying of the GAFA bringing it to the market. Similar reflections could probably be made for e-commerce entrants confronting with and Amazon, or business automation innovators facing the market domination of Salesforce, or similar giants. So what’s left for us to invent in this internet? The effect of the penetration of the GAFA, in parallel with the everlasting effort of existing incumbents to componentize and digitalize their business through APIs is leaving modern entrepreneurs with an interesting set of tools to leverage on: the possibility to connect part of existing industrial business processes, through APIs, in more complex value creation models the possibility to easily reach customers thanks to the efficiency of advertising and GAFA distribution the possibility to leverage on abundant open code base and Everything as a Service Despite “vertical” transaction-based marketplaces such as Airbnb and the likes have demonstrated that a clearly designed strategy and mission can achieve global growth and impact, I’m skeptical there’s still a lot of room for entrepreneurs to come up with a simple idea that can disrupt these transactional markets. This may be hard, first because most of those simple markets are now already crowded with exceptional brands, and, furthermore, because it will be easy for GAFA and the likes — including these huge global transactional marketplaces like Airbnb — to jump into an adjacent market by enabling “just another” transaction type among their networks (think of Facebook Marketplace feature or the recent move of Airbnb into travel experiences). It didn’t take much to Airbnb to move from beds and houses to experiences. If just 4 percent of Facebook’s 1.7 billion global users turn to Marketplace to buy and sell used cars, Facebook would pass reigning giant Craigslist, as well as Autotrader, Cars.com and eBay Motors. All these considerations make me think that the upcoming one is really the age of the so-called market-networks. As you may know, the term market-network, was coined by James Currier, efficiently describing something that (in his own words): “Use SaaS workflow software to focus action around longer-term projects, not just a quick transaction” “Promote the service provider as a differentiated individual, helping to build long-term relationships” Market networks essentially rethink, facilitate and transform all the complex business processes and social workflows that will never be interesting to GAFA (due to the high fragmentation and niche nature of the opportunity) radically improving the overall experience of users and — often — professionals involved. Early examples of market-networks include the famous houzz.com, Angelist, honeybook as mentioned by James in his seminal blogpost, but also growing brands like lendinvest or opendesk. GAFA vs Market Networks impact growth model Differently from GAFA and the likes, that substantially grow their impact by trying to climb the value chain with feature pullulation, still being attached to the idea to be attractive to anyone, market networks start by providing high value to a restricted group of users (more in general to a niche market) and then grow their impact by trying to grow their ecosystem’s size, oftentimes creating multi-national branches. We can reasonably expect the market networks of the future to be able to leverage more on integrating utilities, telco, retail and other traditional industries through APIs and smart contracts, growing their potential and the value generated for participants. A bit of foresight — The Infinite Tail The evolution of the internet infrastructure is pushing the concept of the long tail as we know it even further. We could argue we’re evolving into what could be called an “infinite tail”. Having everyone connected to anyone else in a shared space of trade, and having enabling technologies at hand to leverage on almost infinite “resources as a service” — increasingly also in the “real” world thanks to API integrations and smart contracts — is going to annihilate the cost of organizing trade among uncoordinated entities. We can expect then, to evolve into an age where ever-larger global, social and technological infrastructures — soon to be decentralized thanks to technologies like the blockchain — will power small markets in what we could call, indeed, an internet of markets. In these small markets— be it a small consulting company working with ten key customers, a digitally enabled artisan carefully creating products for her small fanbase or, a music artist living off local shows and special vinyl record sales — reputation will be the key enabler of this infinite tail economy and players will thrive on strong ties and long term relationships, exactly the context that market networks should be set to address, most likely with a decentralized approach (empowering myriads of different small networks) that doesn’t necessarily need network effects to exist and thrive. reputation will be the key enabler of this “infinite tail” economy made of strong ties and long term relationships, empowering myriads of small networks Now seemingly alienating technologies like AR or VR will end up helping us bring presence to remoteness, tearing down the last barriers to a world of thriving, relational, infinite small markets. At that moment in time the evolution towards a real global market age will be completed and we’ll be out of the Taylor bathtub forever. Platforms of the future may be different in shape and strategy but we can be reasonably sure that they will still need to be designed around the idea that relationships play a central role in modern business. _________________________________________________________ About the Author This article was written by Simone Cicero of PlatformDesignToolKit. Related Topics:amazonbillionbusinesscustomerse-commerceentrepreneursFocusgrowthimportanceIndiaIoTlifemesuccesstechtravelvalue Continue Reading You may like Will Financial Liberalisation Trigger a Crisis in China? Georges Tchokoua Women on Top in Tech – Chrissa McFarlane, Founder and CEO of Patientory Why Angel Investors are Shaking Up the Global Startup Scene Emmanuelle Norchet Myths & Facts about Entrepreneurship Entrepreneurship Why Angel Investors are Shaking Up the Global Startup Scene Published 1 day ago on April 24, 2018 By The Asian Entrepreneur Authors & Contributors Candace Johnson is someone who has made a global impact on our modern international telecom and broadcast business. She co-initiated the foundation of SES-Astra and SES Global, which today owns a fleet of 54 satellites and broadcasts 6500 TV channels. And she founded the world’s first Internet-based online service, Europe Online, making it into one of the first broadband Internet services. But it was in her role as president of EBAN, the European trade association of several hundred business angels, which brought her to Eindhoven’s High Tech Campus recently. She explains why angel investors are making a difference to the global start-up scene and explodes several myths that surrounds the way they do business. She spoke with StartupDelta’s Jonathan Marks. Building the match between angel investors and hardware startups “People often think that angel investors are people who do investments around the corner, locally, or in services like e-commerce. To be frank, when the HTCE management told me that they were focussing on the hardware side of things, I was thrilled.” “What I’m trying to do as President of EBAN, and having incubated MBAN (MENA Business Angels Network) and ABAN (African Business Angels Network) under my presidency, is to extend the scope of angel investments. The vast majority of angels are already tech savvy. But we need to educate our successful angel investors to invest more in hardware and infrastructure. We also need to help start-ups develop a pitch that speaks to the interests of angels, so they can get funding for their initiative.” “We run the EBAN Training Institute with the goal of raising standards. We’re seeing more and more that the best angel investors are serial entrepreneurs. They bring their trusted network, expertise and experience to the table.” “Money is important too, but it is not at the top of the list. Business angel investors are high net worth individuals who usually provide smaller amounts of finance (€25,000 to €500,000) at an earlier stage than many venture capital funds are able to invest. They are increasingly investing alongside seed venture capital funds.” Angels are more important than most people know “We follow the guidelines and standards developed by the European Venture Capital Association. For over seven years, during the depths of the financial crisis in 2008 until the recent recovery started, it was the angel investors who took over the role of early stage financing. More than €7.5 billion are being invested annually in Europe, with a sustained growth in recent years. Of that €5.5 billion comes from angels. In fact we have had to professionalize our profession to meet the demand of the growth in this early stage ecosystem.” We always have an exit strategy “Angel investors can only continue to invest if they have exits. I hear many people talk about investing. Only a few discuss exits. I want to change that. I also stress that proven entrepreneurial success is essential in order to become a member of our association. We need to ensure that useful “lessons learned” are shared with the start-ups. They are always based on hands-on real-world experience. We have no time for people who are using new blood to try and correct mistakes they made in their own failed companies.” “EBAN was started in 1999 together with the European commission. For the first ten years, I think people were too focussed on the investing part. Now we need to focus on exits and returns on investment. Without returns, business angels are out of business. And remember there is only a short window of opportunity during which start-ups can scale-up to becoming global success stories”. “Our feeling is that you should not make an investment in a company unless you can see the path for the exit. The exit may be a trade sale, an IPO, etc. The exit also does not have to be 100 %. It does, however, have to bring you a return on your investment so that you can continue to invest. This approach helps you focus on building great companies. There’s always competition in healthy markets, so no-one can afford to waste time. We’re not a charity; we’re doing this because we love building and financing global success stories. We’re therefore looking for companies with a real marketable product, not a prototype or a collection of well-presented ideas.” Is there specific advice you can share with high-tech startups? “In the last few years we’ve seen the rise of the accelerators alongside incubators. They have helped raise standards because a good idea needs to be validated by the market before it is the basis for a high-growth company.” “As investors, we always need to see a start-up demonstrate that they have first clients and initial revenues. We’re not saying that they have had to scale or show market traction. But if we are going to put in our personal money, then we expect the founder to be resourceful enough to work out the first product, to have found the first clients and show us evidence of the first revenues.” “The incubators who help get an idea into reality and the accelerators have been good at making startups better prepared for angel investment, offering the right coaching to turn an idea into a validated business. That means angel investors are better able to select the growth companies and focus on making a good return on their investment.” Hanneke Stegweg “We recognise that young companies need to present their business proposition to the angels attending our annual conference. So we’ve created ways that teams get immediate, honest feedback on the quality of their business presentation. We have one full day of preparation and coaching followed by a Global Investment Forum. The best go on to pitch to the entire network. This year, the “company to watch” category was won by Hanneke Stegweg, who is the Dutch CEO of the iLost company. Together with Neelie Kroes, I am keen to see more women founders lead entrepreneurial teams.” What needs to change for things to move faster? “We held this year’s EBAN congress in Eindhoven at the recommendation of several members. They all work in the innovation and financing of innovation field. But this region also came up in our discussions with StartupDelta. We have worked closely with Neelie Kroes when she was with the European Commission.” “We were tipped off to the High Tech Campus specifically by our Russian members: the Russian Business Angels and the Skolkovo Foundation who are building the Skolkovo science park just outside Moscow.” “And last, but not least, I know Eindhoven from my work in telecommunications and broadcasting hardware field. We often came here to work with Philips on the establishment of the DVD and MPEG-4 standards.” “During our visit to the Brainport area it was clear that there is more than enough money in the region and a healthy appetite to invest in innovation. But there are some caveats that we feel need to be addressed.” “Frankly, I think we are rather tired of the “nice-to-have” e-commerce companies. We would prefer to reinvest in world-class companies who are building something tangible, solving a real-world challenge. They need to demonstrate they can scale and become global.” “We can see that the efforts by many have helped to raise the bar in the Netherlands and that’s good news for everyone. But remember there is a difference between entrepreneurs and SME’s. Entrepreneurs are the only ones to change our world. They create large companies, worthwhile employment, and that grows into large revenues.” Failure is not an option “We should get rid of this talk of failure being an option. If you’re taking angel money, it is NOT OK to fail.” “If you take third party money, you have a responsibility as an entrepreneur to do everything you can to make a return on the investment of your business angel. The media keeps talking about friends, family and fools. But that’s nonsense! Founders, families and friends build great companies!” “I have always been a free marketer at heart. Europe and The Netherlands need to create nations of investors. I believe in the power of private sector-led investment. Government needs to follow the leads set by business angels, not the other way round. We are investing our own money and using our years of experience to scale up these companies. An entrepreneur who is not willing to work and dedicate her or his lives 24/7 to achieve the goal should look elsewhere for money!” “We’re fortunate that the EBAN network acts as a magnet for excellence. We were honoured to have the President of the European Research Council and the Head of Technology Transfer of the European Space Agency address our Congress to show us where the technology trends are going and where we should invest.” “From a venture and entrepreneurial financing perspective, we were most grateful to our colleagues from the United States who joined with our European, MENA, and African colleagues to set the bar high in creating, building and financing global success stories. Amongst those joining us in Eindhoven from the United States were the president of the Global Accelerator Network from the USA, the president emeritus of the Angel Capital Association of the USA, the President of Start-Up Angels and Board Member of Up Global from the USA. We also welcomed the President Emeritus of the Crowd funding association of the US as well as the chairman of New York Angels. And we were delighted with the presence of David S. Rose, the president of GUST.com. These are some of the world’s best experts in angel investing.” “They all said they were pleasantly surprised by the high standard of the startups that came to Eindhoven from all over the world. It was well above what they had expected. Start-ups from Africa, Middle East and Europe traditionally explain what they do, rather than explaining to investors why their idea is important. But that’s changing rapidly for the better. Entrepreneurs are also getting better at defining what they need in order to scale-up.” NEXT STEPS : It’s all about active networking “I should explain that in expanding our reach in Europe, with have formed alliances with the European Space Agency and the European Research Council. They also have their own accelerators and incubators. I think the onus is on the angel investor community to help bring this scientific community to a higher level of entrepreneurship. They need to think about the market for their inventions from the beginning. I believe we can help these organisations filter out the very best ideas and give those the attention they need to scale ideas into real businesses. There needs to be a validated market need for the technology they are developing.” “We have two main events. There is the annual EBAN congress, this year in Eindhoven and next year in Porto, Portugal. And we run the EBAN Winter University, this year running from November 17–19th in Copenhagen. We’re doing this with leading organisations active in Europe’s creative industries. And all this is in addition to individual events and competitions organised by EBAN members at a local, regional and national level. Increasingly we’re assembling cross-border syndicates, both between European countries and increasingly inter-continental networks linking Europe with innovation hubs in Africa, Middle East and North America. As companies scale and go global, it is important they have access to an international shareholder network. It’s a softer landing when they cross continents. We also believe there is a way in which we can build partnerships with techno-business parks around the globe, led by the flywheel initiatives shown by High Tech Campus Eindhoven over these very fruitful days in the Netherlands. _________________________________________________________________ About the Author This article was written by Jonathan Marks, Executive Director at Photon Delta. See more. Continue Reading Entrepreneurship Myths & Facts about Entrepreneurship Published 2 days ago on April 23, 2018 By The Asian Entrepreneur Authors & Contributors Today, there is a pervasive and nearly deafening mantra insisting that you quit your job and become an entrepreneur. The collective says you should do it today because every day you wait brings you closer to a life of poverty and regret. A central theme in the entrepreneurial world is challenging the status quo and questioning conventional wisdom in search of new and better ways of doing things. If you’re just going to follow the pack, you may as well just get a real job and call it a day. Entrepreneurship can be incredibly rewarding. Starting your own business may be the best decision you ever make. But it’s not for everyone. There’s a lot to consider before you take the plunge and a lot of myths to expose, starting with these. Let’s take a glance at some of the Myths of entrepreneurship: 1. You’ll be Happier Entrepreneurship can be incredibly rewarding. Starting your own business may be the best decision you ever make. But it’s not for everyone. There’s a lot to consider before you take the plunge and a lot of myths to expose, starting with these. 2. You’ll have more freedom, control and work-life balance If you’re on your own, chances are you’re going to find yourself wearing all sorts of hats and working 24×7 for a very long time. Work will become your life. There’s nothing wrong with that, but not everyone feels more freedom and control that way. 3.You’ll be more fulfilled Do we know what just about everyone loves to do? Great work that accomplishes goals they can be proud of. One can do that working for a big company, a small company, or their own company. Fulfillment has nothing to do with business ownership. If one wants to manage, lead, or run a business, it’s better off learning the ropes in a good company before starting your own. 4.There are no jobs; technology and outsourcing killed them all It is shockingly untrue. If technology destroyed jobs, then which one will you call the most lucrative and fastest-growing industry on the face of the earth.That’s right: technology. If you can’t find a job, chances are you lack in-demand skills or education, in which case, yes, you might want to consider starting a small business which does not require much of exclusive skill sets in particular. 5.Entrepreneurs Live a Glamorous Lifestyle That’s again untrue. Most entrepreneurs do not live a glamorous lifestyle; if they do, their investors should cringe. Entrepreneurs are notoriously frugal, hard working and opportunity-obsessed with little time for outside activities. These qualities are not hallmarks of the glamorous life. Now,Let’s look at some of the facts of entrepreneurship. Most successful entrepreneurs succeed by exceptional execution of ordinary ideas: See Jiffy Lube, Starbucks and Charles Schwab. Most successful entrepreneurs concentrate on minimizing risk rather than taking huge risk at the time of starting their companies. Successful entrepreneurs use their innovative passion in many ways, such as buying companies, creating new ventures within larger companies and re-strategising nonprofits. More than 80 percent of new ventures are boot-strapped from personal savings, credit cards, second mortgages and the like. The median start-up capital is about $10,000. Waste Management began with a single truck; Sam Walton started with $5,000. So, in short access capital is not required to startup. Being first to execute well and delight customers is not at all important for success. A lot of startups have entered quite late in a particular startup industry and have done well. _______________________________________________________________________ About the Author This article was written by Utkarsh Sharma. Continue Reading Latest Popular Entrepreneurship7 hours ago Will Financial Liberalisation Trigger a Crisis in China? 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