The Macro Story

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Created in Denmark
Strategies for Innovation
Jimmy Maymann
CEO, The Huffington Post
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AGENDA
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
Introduction
The Macro Story
The Micro Story
The HuffPost Story
Closing Thoughts
3
INTRODUCTION
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
What makes the difference between entrepreneurial success and failure?
Ability to Scale, Cultural Perceptions, Influx of Different Mindset/Foreign Talen
Which forces contribute to higher productivity?
Business Culture, Government Policy, Collaboration, Talent Pools
How can Denmark catalyze the same kind of entrepreneurial activity?
Better understand entrepreneurs’ needs, change cultural perception of entrepreneurs, encourage
collaboration
How is HuffPost changing the traditional media landscape?
HuffPost being disruptive in media industry
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The Macro Story
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
GDP Per Capita (1980 - 2011) in USD 1
$70,000
$60,000
Denmark
CAGR: 5.48%
$50,000
United States
CAGR: 4.86%
$40,000
United Kingdom
CAGR: 5.07%
Israel
CAGR: 6.07%
$30,000
Denmark’s GDP growth is
strong compared to three
economies where
entrepreneurs are likely to
$20,000
start new businesses: US,
$10,000
UK, and Israel
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
$0
1 Source:
World Bank
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The Macro Story
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
GDP growth is only a snapshot of how Denmark is performing today.
The “new economy” of Denmark will be shaped by these factors:
1. Entrepreneurial Activity
2. High Tech Contribution to GDP
3. Government Contribution to Private R&D
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The Macro Story
THE MACRO STORY
INTRODUCTION
THE MICRO STORY
THE HUFFPOST STORY
% of Early Stage Entrepreneurial Activity Amongst Adult Population
CLOSING THOUGHTS
2
Entrepreneurial Activity
14%
United States
2012: 12.8%
12%
significantly contributed to
United Kingdom
2012: 9.00%
10%
8%
6%
4%
growth in other economies,
Israel
2012: 6.50%
only 5% of Denmark’s adult
Denmark
2012: 5.40%
population is involved in
early-stage entrepreneurial
2%
activity, as opposed to 13% in
0%
2001
2002
2003
2004
US
2 Source:
While new businesses have
2005
UK
2006
2007
Israel
2008
2009
2010
2011
2012
the US.
Denmark
GEM Consortium
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The Macro Story
THE MACRO STORY
INTRODUCTION
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
Contribution of High Tech Sector to Total Exports (2009) 3
US
3.3%
UK
2.0%
High Tech Contribution to GDP
Israel
1.6%
Denmark
0.6%
0%
3 Source:
4 Source:
OECD
Bloomberg
20%
40%
60%
80%
100%
In Denmark, the high tech sector
contributes to 0.6% of all exports,
despite the fact that Denmark is the 6th
most high tech R&D intensive country
in the world. 4
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The Macro Story
THE MACRO STORY
INTRODUCTION
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Composition of Domestic Enterprise R&D Expenditures (2009) 5
Government Investment in R&D
US
14.01%
UK
7.89%
Israel
4.67%
Denmark
2.58%
Source: OECD
5 Source:
Public Funding
Denmark invests relatively less in
private sector R&D.
The US and UK governments have
heavily invested in private enterprise
R&D. Israel’s investment is still relatively
higher, but it reached a peak of 11%
during the 1990s.
Private Funding
OECD
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Building the worlds leading teen story telling platform
SERVICE
• Social network to connect,
collaborate & share
• Tools to develop stories
(words, video & images)
• Competitions based on
current trends (fan fic)
BUSINESS
• Commercial story rights books, games & film
• Premium services for users
• Educational services
PROGRESS
2011 (Dec):
• 10K users
• 5K “Movellas”
• 277K reads
• 100% web
2012 (Dec):
• 70K users
• 40K “Movellas”
• 2.6M reads
• 75% mobile
2014 (outlook):
• 1M users
• 90% mobile
• $100M
Clusters of Innovation
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
How can Denmark position itself to remain competitive in the
future by catalyzing new business growth in other sectors today?
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Clusters of Innovation
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
The United States, UK, and Israel have seen substantial success in cultivating clusters of innovation.
United States: Silicon Valley
Considered to be the most well-developed start-up ecosystem in the world, with over 25 startups that are valued at greater than $1 billion. The
Silicon Valley ecosystem – with its high concentration of universities, venture funding, talent, and entrepreneurial talent – increase the likelihood
of successful startups
United Kingdom: Silicon Roundabout
UK’s high tech presence surged after the 2008 recession due to efforts by the government to actively accelerate the formation of companies in the area. The
Silicon Roundabout has a high concentration of companies in communications and digital media.
Israel: Silicon Wadi
Israel is an excellent startup ecosystem due to a healthy funnel of startups across the developmental lifecycle, a developed funding ecosystem, a strong
entrepreneurial culture, and a strong supply of talent.
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Clusters of Innovation
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
In recent years, Israel has systematically created the right environment for innovation
Talent
Policy
Collaboration
Culture
US
UK
Israel
Denmark
Weak
Moderate
Strong
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Case Study: Israel
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
CLOSING THOUGHTS
THE HUFFPOST STORY
Israel’s incubator program brings public, private, and academic institutions together with entrepreneurs.
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1
Entrepreneur has an idea and
applies to an incubator, based on the
sector of the proposed business.
3
Entrepreneur gets
Entrepreneur pitches idea to
training from industry experts and government and to fund managers.
venture capital fund managers.
4
Israel’s government contributes
up to $600,000 USD. Rest of
funding comes from VC.
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Case Study: Israel
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
Israel’s system is inherently profit-driven rather than developmental, translating to productivity.
Licensing
Privatized
Profit Driven
Universities from which
ideas come can earn
royalties on the business
once it generates revenue
System was privatized after
10 years, to ensure that
growth is organic and
profit-oriented
Seed funding from nongovernment entities keeps
the focus on profits
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Case Study: Israel
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
Nicknamed “Start Up Nation”, Israel’s innovation policies and culture are conducive to entrepreneurship.
% of GDP Spent on R&D (2010) 7
Every 18 year old in Israel must join
Policy
Israel
4.46%
United States
2.90%
United Kingdom
1.86%
Denmark
3.06%
the Israeli Defense Force, a tradition
Culture
that builds business acumen and
business relationships amongst
young adults.
Israel is the world’s top-spending
country on research and development.
7 Source:
World Bank
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The Micro Story
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
Entrepreneurs have a means-oriented mindset while executives have a goal-oriented mindset.
Manager/Executive sees means and figures out
whether they can achieve or define a specific goal.
Goal
Oriented
Entrepreneur sees goal and wonders how he can
reconfigure the means.
Means
Oriented
Culturally, the Danish are more attuned to the Manager/Executive mindset, because of a fear of failure that continues to
inhibit citizens from wanting to start a business.
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The Micro Story
THE MACRO STORY
INTRODUCTION
THE HUFFPOST STORY
CLOSING THOUGHTS
THE MICRO STORY
Historically, US has had the fewest proportion of adults discouraged to start a business due to fear of
failure – Danish entrepreneurs could potentially learn to be less risk averse
Percent of adults who perceive entrepreneurship opportunities but
cite fear of failure would prevent them from starting a business
50%
Denmark
40%
Israel
30%
US
20%
UK
10%
0%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Source: GEM Consortium
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The Micro Story
INTRODUCTION
THE MACRO STORY
THE HUFFPOST STORY
THE MICRO STORY
CLOSING THOUGHTS
Entrepreneurship and Unemployment Rates in the US
(1996 – 2009)
11%
0.40%
10%
0.35%
9%
8%
0.30%
7%
0.25%
6%
0.20%
5%
4%
0.15%
3%
0.10%
2%
0.05%
1%
0%
Recessions can make people less
risk averse and catalyze
entrepreneurship
In the United States, the
unemployment rate increased
significantly after the 2008 financial
crisis – but so did the rate that
people founded new businesses
0.00%
199619971998199920002001200220032004200520062007200820092010
9
Unemployment Rate
10
Entrepreneurship Rate
9 Source:
10
United States Bureau of Labor Statistics
Source: Kauffman Foundation
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Source: PCGA
The Micro Story
THE MACRO STORY
INTRODUCTION
THE HUFFPOST STORY
THE MICRO STORY
CLOSING THOUGHTS
Entrepreneurs are distinct from small business owners in that, from the very beginning, they intend for their
businesses to scale
VALIDATION – Idea is spread to potential customers.
SCALE – Aggressive growth of idea and company
SCALE
EFFICIENCY
VALIDATION
DISCOVERY
SALES (DEMAND)
DISCOVERY – Idea is born and tested.
EFFICIENCY – Business model refined and tested.
In Denmark
Denmark’s present income tax structure may discourage entrepreneurs and
investors.9
TIME
11
12
Source: The Economist
Source: Danish Business Authority
Danish entrepreneurs currently wait too long to merge or be acquired, but this is
often needed in order to scale their businesses.10
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The Huffington Post Story
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
HuffPost combines an award-winning newsroom with coverage across a broad variety of content
NEWS & BUSINESS
ENTERTAINMENT
+ 500 editors and reporters
+ 50k bloggers
LIFESTYLE
TECH & INNOVATION
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The Huffington Post Story
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
The Huffington Post is a global, cross-platform experience reaching more than 71M users
CORE SITE
LIVE STREAMING VIDEO
MOBILE
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The Huffington Post
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
The sheer scale of our operation drives impact by connecting editorial to the social
landscape in real-time
CONTENT + CONVERSATION
EVERY
1600+
58 SEC
500
STORIES EACH DAY
A NEW PIECE OF CONTENT IS
PUBLISHED GLOBALLY
REPORTERS AND
EDITORS
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The Huffington Post
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
The Huffington Post’s digitally native culture has driven its exponential growth
Digitally Native Culture
Monthly Visitors (Global)
HuffPost Unique Visitors
•
No print history – no legacy ways of thinking
100 MM
•
“Winning the internet” is the mantra – the goal is
to be everywhere
50 MM
•
Editorial and Tech co-create new products and
innovations
0 MM
•
Social media at the heart of every HuffPost
employee
•
Data-driven culture at every level
2005
2007
2009
2011
2013
Source: Google Analytics
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What Denmark Can Learn
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
Strengths
Opportunities
1. Human Capital – create a pipeline for
1. Corporate Tax System – evaluate income
entrepreneurial talent, and bring in
and capital gains taxes to encourage more
more foreign talent
investors
2. Entrepreneurial culture – cultivate a culture
2. Incubators – learn from the
experience of incubators in US, UK,
and Israel to build more robust,
scalable businesses
of higher risk tolerance and willingness to
experiment
3. More R&D investment – increase domestic
R&D investments
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What Denmark Can Learn
INTRODUCTION
THE MACRO STORY
THE MICRO STORY
CLOSING THOUGHTS
THE HUFFPOST STORY
Short term
Lower Income
Tax
+
Lower Capital
Gains Tax
+
Cross-sector
Collaboration
+
Import Talent
+
Increase R&D
Investments
Long term
Optimize
Incubators
+
Promote
private sector
funding
+
Talent pipeline
from universities
to startups
+
Promote riskseeking,
entrepreneurial
culture
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INTRODUCTION
THE MACRO STORY
THE MICRO STORY
THE HUFFPOST STORY
CLOSING THOUGHTS
Tak!
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