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good afternoon good to be here um at
tedex Salford I was at tedex Brussels I
think this is bigger I think we're doing
it bigger here in
Salford I'm going to talk to you a
little bit this
afternoon about that guy isn't he great
I love the face of that guy that's the
face of every entrepreneur just in case
you didn't know that they may not show
it to you but never forget that that's
the face that's going on inside of them
and so the next time your cousin or your
brother or your friend down the street
or your work colleague says they're
going to do something they're going to
set up a business or they are setting up
a business and they're doing X and you
say not sure it's going to work just
remember that inside they've got that
that look going on and they're uh
they're going to show it to you now I
frequently say follow the entrepreneur
I'm going to give you two reasons two
good reasons why we should as a nation
as a group of people follow the
entrepreneur and that's really the
following they see the inevitable
entrepreneurs through Dent of being
sometimes bit off the reservation or a
unique experience in their job or some
sort of special intelligence or Market
opportunity they see what's coming down
the pike they see the future they see
what inevitably is going to come but
most importantly they're willing to live
abnormal lives and you can Define
abnormal however you want to but I think
we all know what we mean I think we all
have a friend or or loved one that's
working U more than a workaholic they're
they're living an abnormal lives to a
life to bring the future to us and those
are two good reasons why I think we need
to follow the
entrepreneur now if I think about my own
industry venture capital and if I kind
of go back go back as far as Christopher
Columbus go back as far as Michelangelo
think about the people who other people
besides Deborah who crossed the ocean
other people who painted the cistin
chapel we've had that class of people
entrepreneurs throughout history we
haven't always called them entrepreneurs
sometimes we've called them creators
sometimes we've called them adventurers
Etc but there's been a dynamic
throughout history for a very long time
there's a group of people who see the
future who work abnormal lives to bring
that future to us and there's another
group of people who have capital and
that Capital follows the money and that
to me was a major Revelation when I was
living in Paris in my early 20s obsessed
frankly about having no money I thought
my God how am I going to break through I
know no one I've come to this country
country and they weren't waiting for me
and oh my God what am I going to do
until my friend at the time said stop
worrying about the money if you're good
at what you do if you're meant to do it
the money will find you and I thought
that it was the most ridiculous idea I
had ever heard and I told him that until
I stopped to think about it I said well
you know he is older successful wiser
Etc and I tell you the past 25 years has
been one long example of the the less I
focus on the money the more I focus on
my unique contribution the more I focus
on what I'm meant to do my unfair
Advantage play to my strengths the more
the money finds me and I really
encourage you to think the same way but
the bigger issue is is that the
financial services
industry thinks it's an industry it's
not it's a service industry to Industry
and that's where we got to get everybody
understanding that what we're here to do
is to back industry I back digital
industrialists I'm a capital provider to
digital industrialists and that's the
proper order of things and throughout
history Capital has always followed
ideas and the people who are at the
front of of purveying those ideas and
building structures businesses companies
countries Etc around the leading ideas
of the day Queen Isabella was no nothing
more than a woman who put Christopher
Columbus on a
retainer the medich family were there to
back Michelangelo as he explored and
developed the cine Chapel so just
remember when you're thinking how do I
get that money I can't do anything
because I don't have any money wrong
Capital follows ideas always has always
will so remember the new the new economy
turns out it's only the latest version
of new how many of you have heard of
carlot
Perez not that many hands going up out
there put it on your reading list carlot
Perez theory of disruptive technology
and adoption basically what carot has
done very helpfully has looked at the
past couple hundred years and she's
pointed out there's a moment of
disruptive technology from which 60 to
70 years of technological change emerges
and one of the things that's most
missing from the narrative that we read
in the business papers and the
Publications and so forth that the the
the country reads is understanding how
technology creates proc prosperity it's
not just a niche industry from some of
us who love to hang out with
technologists it's actually one of the
key drivers and levers of change and
growth and prosperity you can't be a
high growth business unless you're
leveraging finance and Technology you
can be a good business you can be a
lifestyle business you can be an honest
hardworking managing director of a
business but you can't actually be a
high growth business without technology
and finance so this this little chart
here just shows you those moments of
disruptive technology the Big Bangs of
technological change and then what
happens is a cycle of its the
installation of new technologies and the
deployment of those Technologies into
big business and what carot did is she
was a Venezuelan Economist she went out
to Silicon Valley where I where I grew
up in a 1971 she was expecting to study
oil and in the the the changing of
course that Deborah spoke about what she
found she found the the Intel
microprocessor she went to study oil she
ended up studying the microprocessor and
she realized that the phenomenon that
she was witnessing was none other than
one that comes every 60 or 70 years and
then you have a series of installation
and deployment of those Technologies and
here are just a couple of companies and
people that you will recognize all that
have stemmed out like concentric circles
from that big bang of disruptive
technology so the revolution starts as a
small fact with big promise and moves to
become a significant force in the market
and that's why I never underestimate any
entrepreneur that I meet the first time
I met Nicholas enstrom he had been
raising capital for 18 months he didn't
look like the guy who was going to sell
Skype to eBay less than two years later
for $2.5 billion the most important
things in life start off as a small fact
with huge promise and they can become
sign significant forces in the market
and in your life if you believe in them
now these big Banks attract new
investment I was asked earlier what
should I go out to Silicon Valley to set
up my business I said no there are some
of us that are trying to get the capital
providers and we are capital providers
to back the companies that are built
around the
Technologies most importantly I say a
new context is emerging and for those of
us who understand that a new common
sense is emerging in the world we need
to communicate that the future is not
going to be like the past the job that
you have tomorrow is not going to be
like the one that you lost that there's
a a process of constant change and that
while it's difficult it's
inevitable and that we have to be the
purveyors of saying there's a new
expanding pie there's a set of changes
that technology is going to bring to our
lives and we have to be in control of
those changes so that they don't further
create more divisions more unfair
inequality Etc but it is inevitable so
what carot talks about in her theory of
disruptive technology is that you have
this economic institutional and
technological change which just runs
like a circle and keeps on moving
throughout history and if we don't
introduce this into the country's
dialogue about about what's happening
it's not just about monetary policy it's
not about political it's about how
technology creates a new common sense
for how the world the world at the end
of this 6year cycle will not be like the
world that was existing in 1971 in
Silicon Valley when carlot Perez went
out in search of oil and found the
microprocessor and the world which
emerges with the next big bang whatever
that big bang of disruptive technology
will be will be still different and will
create a whole new reality a new common
sense as well and we have to be open to
that because the winners are the people
who get to the other side first
and welcome everybody
across so what does that mean in simple
Julie language when I first came to this
country in 1998 I set up a network of
entrepreneurs called First Tuesday and
everybody who came to First Tuesday
events we had them in Manchester as well
these were digital revolutionaries
internet entrepreneurs they were David
with a slingshot they wanted to kill and
assassinate the goliaths of the
day it didn't really work out that way a
couple of them survived and you know the
big internet names that survived and so
forth but I would argue that today it's
a very different Dynamic David and
Goliath need to dance remember through
the the last 12 years Broadband mobile
technology just continued to penetrate
into our lives we are living Our Lives
more with the benefit of Technology we
just don't think of it as
technology and so the the digital
entrepreneurs that come to my office
today at aradne Capital they're looking
for our Ace fund to invest in them they
don't say things like we've got this
great piece of disruptive techn
techology and we're going to kill Tesa
we're going to take over barklay they
say something completely different they
say we've got a great digital
application we've got a digital car
we're looking for a highway can you help
us find the highway for our digital
car so consumerization of Technology
that's what's been going on for the past
15 years when I started out in my career
it wasn't the case technology was
adopted inside the office and you may
have heard of The Singularity is near
another book for your for your reading
list basically Raymond kwell says at a
certain point we have to leverage
technology just to understand how much
how fast it's taking over our lives
because the rate of adoption of new
technologies is emerging so
quickly now this this explains my entire
business you've got David David is the
digital enabler he's that entrepreneur
that's building the digital car Goliath
are all the all the different corporates
that have distribution they could be
Tesco they could be Barclays they could
be a train line they could be virgin
active the biggest thing that corporates
have today is distribution audience
scale reach and they need to open
themselves up to digital entrepreneurs
they need to put a big old signpost out
there they need to create an ability for
those digital entrepreneurs to interact
with their customers because no venture
capitalist today is going to give 50
million Sterling to a digital David to
go acquire customers he or she's is
going to have to find that Highway and
if the corporates don't become the
highway if they don't open themselves up
and become that Enterprise platform
they'll go to Amazon they'll go to Apple
they go to Facebook and to Google and
salesforce.com and every other American
Technology firm and they their
Highway lots of examples of digital
enablers engaging with corporates today
this David and Goliath dance is
happening all over the market and you'll
spot this everywhere you
go so many of you heard last August 2011
Mark andreon the founder of Netscape
running one of the most disruptive
Venture Capital firms in the world out
in Silicon Valley he was quoted by The
Wall Street Journal in an interview he
said software is eating the world all
businesses are being rebuilt as software
firms and I do mean and he meant all
businesses every business imagining is
going to be Rewritten with software and
digital business models and if for those
of you that are out there that might be
watching this that will say well yeah
but not my
business then you're basically going to
get steamrolled over by a technology
firm a software firm that's going to
take over your industry your sector your
company it's happened in music it's
happened in books it's happened in Telos
it's happening in banking it's happening
it's just a question of how fast you die
or whether you get onto the high growth
Highway
so given all that what's the investment
opportunity where do you go well we have
a cunning
plan we never forget at aradne Capital
and at entrepreneur country which is one
of our four businesses um that
Innovation is about economics people get
confused they're wrong they think it's
about technology it's not remember
technology and finance are service
Industries to Industry they're
supporting they give leverage they give
growth but they're not the main event so
Innovation is about economics if it were
about technology we'd all be flying the
Concord we're not we're stuffed in jumbo
Jets so if there's one concept that I
really want you to take away from
today's talk is that there's a profound
Network orientation to business to all
of life in fact nothing operates
linearly or hierarchically today nothing
is about I'm buying you're selling
nothing is about I'm bigger you're
smaller nothing is about I'm right
you're wrong so just do it and get on
with it and report back we are
participating in a transaction we're
participating in an ecosystem we're
participating in a club and a group and
and and so forth and as a result of
understanding and taking forg even if
you don't even if you're not sure go
with it for a week with this concept
that there's a network orientation to
everything and think therefore about the
opportunities because I guarantee you
that the people who understand this are
the ones who are going to be
winning ecosystems ecosystem economics
is what we believe predicts the winners
the people whether they're in large
printing companies or small mom and pop
chops the people who understand who
who's in their
ecosystem and can and can figure out how
they can drive a set of Economics to
create a growing pie and to create a set
of shared econom ICS and the central
transaction that could be buying milk at
your corner store that could be um how
ebooks are distributed that could be
about how printing reshapes itself in
the world of ebooks any business
operates in an ecosystem where the
transaction is the micro representation
of the macro ecosystem we're
participating in these we're not
dictating we've moved to a world of
carrots not
stick let's talk about Google and
ecosystem economics Google say that they
organize the world's information
actually they do a lot more than that
don't they they organize the economics
of the world's information and I and you
as consumers of their search share in no
economic or financial upside of the use
of our data they aggregate albeit
anonymously our data but they don't give
us any upside
whatsoever now I've argued for a long
time that their greatest Achilles heal
would be if somebody would offer a
different ecosystem economics approach
to that and give the individual user a
share of the economics and I looked for
that entrepreneur I found him his name
is John paleo males he's a British
entrepreneur and he ran a business
called beat that quote beat that quote
was a financial services price
comparison engine it wasn't even the
biggest one it wasn't money supermarket
and when Google came knocking looking
for a company to acquire in that sector
they didn't think about many Supermarket
they looked for the guy who had the
business model that threatened them to
their core which was offering an
economic value for the use of people's
data and they said I think we'll have
that one and then they acquired beat
that quote for 122 times ebit dah
multiple you don't do that unless you're
threatened Google is in the driver's
seat because they understand ecosystem
economics they they may not talk about
it but they absolutely do but the
opportunities are always to create a
more inclusive set of ecosystem
economics and that's what Alis Lukes did
alist Lis is one of this country's most
phenomenal entrepreneurs he started with
his vision of Mobile Banking and
payments the core of monetize a $600
million company has just acquired its
largest US competitor backed by Visa now
listed on the London Stock Exchange with
the simple statement he said if this
Mobile Banking is going to work it has
to work for everyone instead of just
selling software to the banks I'm going
to create a set of Economics for the
mobile operator the bank lowering the
cost of capital for the individual
compared to say Western Union who are
going to charge me 22% if I'm
poor I'm going to create a set of e
ecosystem economics which work so just
wrapping up Mo monetize has created a
global company because ecosystem
economics have created that market
pull and they have created a a huge
mcommerce region as well so in 2012
Network benefits acur to those firms who
understand their role in their ecosystem
and organize the economics for it this
in turn leads to exceptional returns for
their
shareholders thank you very much
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