Technologies and Behaviours for Business 2.0

1

• Technologies and Behaviours for Business 2.0
• Presented by Julie Meyer
• NetData Horizon Scotland
• 24 October, 2007 Moray, Scotland

2
AGENDA FOR THIS MORNING Business 2.0

• Julies Vital Statistics
• Enabling Business 2.0 Follow the Entrepreneur
• Tipping Point Companies and Leadership Vignettes
• The Opportunity for Leadership
• Entrepreneurship as the Engine of Growth
• Opportunities
• Critical Success Factors for Business 2.0
• Leadership Exposed

3
VITAL STATISTICS Julies Journey So Far

• American by Birth, European by Choice,
  Libertarian at Heart
• 1966 1988 in San Francisco and Chicago
• 1988 2007 in Paris and London
• The Building Blocks Learning to de-risk
  situations
• Natural Leader
• Not the most technically excellent but the least
  afraid of anything
• Discovering my Unfair Advantage
• Fascinated and Motivated by the cross-cultural
• Courage to bring to life new things
• A Trust Builder
• Went to INSEAD in 1997, and transitioned into
  Venture Capital
• Invested in Web 1.0, and now Investing in Web 2.0
• Entrepreneurial Theme and Variation
• Founded First Tuesday in 1998 Sold it in 2000 to
  a VC
• Founded Ariadne Capital, an investment advisory
  firm, in 2000
• Have a fantastic team of colleagues who are
  experts in their fields
• Backed SKYPE, ZOPA, SpinVox, Monitise

4
ARIADNE CAPITAL Whats in a Name?

• Ariadne was the Greek princess who helped Theseus
  get through the labyrinth with the golden thread
• Thats what we do with our companies we help
  them navigate and negotiate their labyrinth

5
FOLLOW THE ENTREPRENEUR The credit belongs to
the man who is actually in the arena

• It is not the critic who counts, not the man who
  points out how the strong man stumbled or how the
  doer of deeds could have done better. The credit
  belongs to the man who is actually in the arena,
  whose face is marred by dust and sweat and blood,
  who strives valiantly, who errs and comes short
  again and again, who knows the great enthusiasm,
  the great venture and spends himself in a worthy
  cause, who at the best knows in the end the
  triumph of high achievement, and who at the
  worst, if he fails, at least fails while daring
  greatly so that his place shall never be with
  those cold and timid souls who know neither
  victory nor defeat.  - Theodore Roosevelt

6
ENABLING BUSINESS 2.0 What did we learn from
SKYPE?

• New Products and Services gain traction through
  Consumer Adoption first and then get picked up in
  the Enterprise
• Smart entrepreneurs segment their potential
  customer base and their addressable market by
  characteristics other than geography ie early
  adopters of broadband, high mobile penetration
  etc
• People are living more and more of their lives
  online
• Giving people a more frictionless, efficient way
  to communicate matters.
• Initial free services establish consumer behavior
  and then can lead to a business model
• Great marketing trumps great technology

7
WHAT WILL THE FUTURE BRING Entrepreneurship as
Engine of Growth

• The next wave of large European-founded companies
  will be built by serial European entrepreneurs
• Kazaa and Skype founders launch Joost
• FastWeb founder launches BabelGum
• Samwer Brothers
• Cycle of innovation is increasing and shortening
• Globalisation is softening the edges of economic
  cycles
• Start-ups will be acquired earlier and remain
  more autonomous inside firms
• EMAP/WGSN
• Yahoo/Answers.com
• NewsCorp/MySpace
• ROI for MA will be recalculated and rethought

8
TIPPING POINT COMPANY - 1 Monitise -Mobile
Banking Services

• Entrepreneur Alastair Lukies, WEF Technology
  Pioneer
• Backers Morse
• What They do The worlds leading Mobile Banking
  network
• Why important Banking Comes BEFORE Commerce
• Consumer Benefits You can pay for anything from
  your current account via your mobile phone
  
• 2.48 billion transactions switched per year
• 95 billion in issued funds
• Their brilliance not to treat banks like
  operators, and operators like banks
• To understand that there are basic banking
  services that you have to be able to do on your
  phone before you do more complex ones that is, I
  dont want to apply for a mortgage via my phone,
  but I do want to check your balance
• RBS, HSBC, Alliance Leicester and first direct
  have all adopted the Monitise platform for their
  mobile banking strategy
• Metavente with 9000 banks in their network are
  partner in the US

9
LEADERSHIP VIGNETTE 1 - Monitise Bringing
Branking to the Masses

• Ariadnes role with Monitise
• Drive Momentum
• Advise on Corporate Structure and Investor
  Development and Strategy
• Build a Model for Internationalisation
• Learnings
• It takes much longer to be successful than one
  would think
• You cant build an ecosystem without humility,
  Al Lukies
• Net Net
• Connecting up the world is on the mind of leading
  1st World Entrepreneurs
• Mobile Banking is a Key Building Block for Mobile
  Commerce

10
TIPPING POINT COMPANY - 2 Zopa P2P Lending
Borrowing

• Entrepreneur James Alexander
• Backers Benchmark, Bessemer, Tim Draper
• What They do P2P Lending Borrowing
• Why is this important People want to lend and
  borrow from people
• Consumer Benefits The cheapest loans in the UK,
  no early repayment penalty
• Over 150,000 members in the UK
• Great financial return PLUS strong social reward
• c. 30 better return than leaving your money with
  ING Direct
• Defaults less than 0.2 
• 50 employees
• Now being copied in US, Germany, Canada, Denmark,
  Holland
• eBay, Virgin and Facebook have all entered the
  Social Lending market in the last 2 months
• Zopa getting ready to launch in the US,
  franchising and JV ing elsewhere
• Key learnings
• the Zopa community really care and want it to
  work .... direct comms with our Members are
  critical to successful development (e.g. blog,
  Bulletin Board, email etc)  
• trust is earned in financial services through
  time .... a trusted safe and secure marketplace
  is critical to success

11
LEADERSHIP VIGNETTE 2 - Zopa The Individual
Revolution

• Ariadnes role with ZOPA
• Invested 6 m in US Expansion round of capital,
  and syndicated the full 20 m
• Recommended early expansion into the US to avoid
  becoming the QXL to someone elses Ebay
• Assisted in finding Lenders and Borrowers
• Learnings
• People think of their finances online differently
  than doing communications online wasnt a hockey
  stick curve
• Tools and Marketplaces such as Zopa will continue
  to drive the penetration of the Individual as the
  main block of society ones own PL and ones
  own brand in mainstream society
• Net Net
• The Individual Revolution is unstoppable

12
LEADERSHIP VIGNETTE 3 SKYPE now part of EBAY

• Ariadnes role with SKYPE
• Early Business Development Deals
• 4 Ariadne people transitioned to SKYPE
• Continue to work with Zennstroms personal
  investment vehicle
• Learnings
• MSN or AOL can turn on their VOIP client anytime
  and it will be game over
• Timeframes for ROI on MA
• The Financing Equation hasnt kept up with the
  Strength of the Bench in Europes Entrepreneurial
  Quarters
• Net Net
• European Entrepreneurs have a new pride in their
  initiatives
• 7 of all Global Calls done through SKYPE in
  October 2006

13
TIPPING POINT COMPANY - SpinVox 4 Voice to
Screen Leader in VoiceMessaging

• Entrepreneur Christina Domecq, EY Entrepreneur
  of the Year
• Backers Private Investors and Hedge Funds
• What They do SpinVox is a voice-to-text
  carrier-grade managed services provider
• Why is this important No one likes listening to
  voicemails
• Consumer Benefits Receiving communications how
  one prefers to receive them Storage and
  Forwarding abilities for voicemails
• SpinVox enabled worlds first voicemail to text
  service in 2004
• 130k customers proof-of-concept 1M people
  touched by SpinVox
• SpinVox has won awards for its product innovation
  and leadership
• SpinVox is being deployed by operators across 4
  continents
• Multi-lingual EN, SP, FR, GE
• Multi-channel Mobile, fixed, VoIP
• 17 operators signed hundreds of millions of
  contractual rev
• Expanding into the US

14
Spin-my-Vmail (Voicemail-to-Text)

• Instant at a glance see who called and what
  they said
• Easy you no longer have to dial-in and listen
  to messages, or remember who to call back
• In touch with a simple push of a button, youve
  quickly replied by text or returned the call
• Trust you can always listen to the original
  voicemail recording

Hi Richard. Ive just landed at Heathrow and will
meet you at the Hilton Hotel for 6pm. My number
is 07782543321. Call me when youre out of your
meeting. Ive news. Thanks! Options
Back
QuickLink - jumps straight to this voicemail for
playback
15
LEADERSHIP VIGNETTE 4 - SpinVox Voice to
Screen - VoiceMessaging

• Ariadnes role with SpinVox
• Raise Capital, Secure Talent, Identify Target
  Acquisitions, Manage Strategic Alliance
  Discussions, Market
• Learnings
• New category of application means landgrab
  opportunity
• Once the me-too propositions arrive in the
  market, you have to be on your front-foot on the
  PR and Marketing side
• New consumer behaviors take off in the consumer
  markets, and then move into the enterprise
• SpinVox established market demand from its first
  135,000 consumers who used the application which
  they marched into the operators to close those
  deals very quickly
• Net Net
• The Best Entrepreneurs Always Take Care to Stay
  in Control of Their Own Firms
• Get it right, but get into the US market before
  strong competition emerges there

16
TIPPING POINT COMPANY - 5 Momail free mobile
email

• Entrepreneur/CEO Roger Gronberg
• Backers iQube
• What they do Provide free mobile email to any
  handset providing the blackberry
  experience for any consumer
• The Game Change www.momail.co.uk password
  momailrox extremely easy to set up
• Why its important You can be connected remotely
  or on the road accessing key information
  anywhere.

17
TIPPING POINT COMPANY - 6 Intamac Remote Home
Monitoring and Management

• Intamac www.intamac.com - is a remote
  home-monitoring and management service provider
• They alert you to any event in your home whether
  that be a break-in, a boiler blowing, a flood
• They can also enable you to watch your nanny
  taking care of your children, or your second home
  checking that its not being rented out when it
  shouldnt be

18
LEADERSHIP A Definition Adopted

• Leaders are those people who create the
  conditions of trust, Colin Powell
• As told to the group of Global Leaders for
  Tomorrow at the World Economic Forum, DAVOS, 2003

19
THE OPPORTUNITY FOR LEADERSHIP Entrepreneurship,
Internet and Capitalism

• Capitalism was about empowered authority which
  didnt necessarily activate the citizenry the
  Internet stands that on its head, and shifts the
  power to the Individual making Individual
  Capitalism the force of the 21st Century
• - Iqbal Quadir, one of the founders of Grameen
  Phone

20
THE OPPORTUNITY FOR LEADERSHIP Europe Needs a
Growth Story

• If a Society is not Growing, It is Dying
• Are we merely managing decline?
• How many billion enterprises have been founded
  over the past 30 years in Europe?
• When People focus on the Growth Story, the Rest
  Falls Into Place
• Because Entrepreneurs understand Accountability,
  Transparency and Profitability
• Making Payroll
• The Paranoia of the Competition that could emerge
• Where the Buck Stops
• Europe Needs More Great Founders who have
  Everything it takes to be Great CEOs

21
WHAT ENTREPRENEURS DO INSIDE COMPANIES They Get
Out and Create a Market Storm

• Entrepreneurs, if they're good, have the best
  insight into how particular markets are
  developing. They are in the "eye of the storm,"
  dealing every day with how markets are
  dynamically evolving.
• Entrepreneurs also think differently. They see
  things that others don't. They feel compelled to
  make stuff happen, often simply because they see
  something that doesn't exist yetand should.
• Sometimes that blind faith leads to catastrophe,
  but more often, entrepreneurial insights
  eventually turn into step changes in how
  industries operate.

22
IS MA THE NEW RD? probably

• If a large company acquires an entrepreneur's
  insight and innovation, it has the opportunity to
  get ahead of rivals and own the step change.
• Time and time again we have seen that the
  benefits of market disruption and dislocation
  accrue to the first few players who embrace it.
• Put another way, if a market disrupter is
  acquired by the entity he or she has the most
  potential to disruptand the acquirer embraces,
  rather than smothers, the disruptionit can be
  extremely value-enhancing.
• Especially compared with the alternative.

23
Critical Success Factors

• For Business 2.0

24
CRITICAL SUCCESS FACTOR 1 Be as Unreasonable
About Success as an Entrepeneuer

• Entrepreneurs have a view of the market and/or a
  consumer behavior, which drives them to bring an
  innovation to life.
• Like becoming a Parent, if they knew what it
  would REALLY entail, they would think twice.
• That leads them to be paranoid, and feel that
  they are in a race against time.
• Which makes them learn how to
• Act with Imperfect Information
• Never assume they control time
• Never give up tied to their identity
• Expect Success

25
CRITICAL SUCCESS FACTOR 2 You Know More Than
You Think You Do

• Dont just trust your instincts but listen, hone
  and refine your instincts
• Determine what your Unfair Advantage is and Do
  More Of That

26
FACTOR 3 INVEST IN THE SUCCESS OF
OTHERS Todays World is an Ecosystem

• The Businesses with Business Models which enhance
  and grow the ecosystem will win
• Abundance Mentality
• Focus on being a Net Contributor to the System
  rather than a Net Taker, and what you find is
  that your Sphere of Influence over the System
  increases
• Focus on Long-Term Relationships

27
FACTOR 4 BE RADICALLY OPEN TO THE WORLD

• Bill Joy, the former CTO and guru from Sun
  Microsystems, assume innovation occurs
  elsewhere.
• Build reliable means to continually pull in
  whats relevant and potentially threatening to
  your business
• We have to be in many places and get signals
  sooner, Henning Kagerman, SAP CEO in the WSJ
• Were not in the dialogue Nokia Senior
  Executive
• Small things can indicate that large change is
  about to happen

28
FACTOR 5 EXACT ACCOUNTABILITY

• Management is the search for accountability. Who
  is doing what, by when, why, and how, and most
  importantly, what happens if they dont?
• The best entrepreneurs and executives are both
  leaders and good managers.
• There are no bad Lieutenants, Sergeants, Captains
  there are only bad Generals
• Trust is Efficient Trust but Verify
• Economies who trust spontaneously develop and
  progress more rapidly Francis Fukuyama

29
FACTOR 6 CREATE THE CONDITIONS OF TRUST SO
THAT GREAT THINGS CAN HAPPEN

• Trust is efficient leadership is about
  creating the conditions of trust, and the
  combination of building counter-cyclically,
  paying attention to small change which indicates
  that large structural change is about to happen,
  seeking out inefficient markets, and investing in
  the success of others, leads to businesses that
  are both valuable and sustainable.

30
LEADERSHIP Exposed

• Our deepest fear is not that we are
  inadequate. Our deepest fear is that we are
  powerful beyond measure. It is our light, not our
  darkness that most frightens us. We ask
  ourselves, Who am I to be brilliant, gorgeous,
  talented, fabulous? Actually, who are you not to
  be?
• - Nelson Mandela

31
THANK YOUjulie_at_ariadnecapital.com