Igniting Next Level Productivity with AI-Infused Data Integration Workflows
The Multimap Journey and How to raise Angel Investment by Sean Phelan
1. multimap.com
Online Maps to Everywhere!
The Multimap Journey
The Multimap Journey
February 2013
February 2013
Sean Phelan
Sean Phelan
Founder
Founder
2. multi map. com
Online Maps to Everywhere!
About me
University of Sussex, 1977-1980
• Electronic Engineering/Computer Science
Software engineer at Scicon Consultancy then Geac Computer for ~9 years
• Geac specialised in high-volume cost-effective transaction processing
• I worked on computer networking
MBA, Institute Theseus, France 1989-1990
• specialist MBA in technology strategy & innovation
Telecoms strategy consultant, at Yankee Group then KPMG, for ~5 years
Started Multimap.com late 1995
Sold company to Microsoft in December 2007
Now an Angel Investor
• 11 investments made; 6 still in business.
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3. multi map. com
Online Maps to Everywhere!
About Multimap
Founded in 1995 and online since 1996
High-volume public site delivers close to 200 million page views per month
#1 business mapping service provider in Europe; #2 or #3 Worldwide
• Delivering maps to more than 1,200 business customers
• Broad portfolio of products
• Serving multiple platforms
120 Employees in London, Boston, Sydney, and Istanbul
Consistently profitable since mid-2002
One of only three companies to appear in in Tech Track’s Top 100 fastest-growing Technology
companies in 2003, 2004, 2005, and 2006
Acquired by Microsoft, December 2007
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4. multi map. com
Online Maps to Everywhere!
Why start this, in 1996?
GPS was
becoming a
consumer product
GSM was taking off
as a cellular
standard; mobile
phone penetration
was growing
Netscape went
public: the internet
is real!
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Online Maps to Everywhere!
The original idea: Maps on phones…
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How did companies get web mapping in 1995-1997?
Desktop GIS packages from Mapinfo, ESRI or
other smaller vendors…
Combined with “web server” add-ons to get
images from desktop to web…
Combined with professional consulting services to
make it all work, usually from consultants who had
never done this before….
Total cost likely to be from £15,000 to £50,000.
Deployment time likely to be 2-6 months.
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7. multi map. com
Online Maps to Everywhere!
The initial web service concept: “Mash-up 1.0”
Maps come from
Multimap.com; points on
Page Request
maps come from the
customer
Your Server
Page Response
Set up in under 1 hour
User’s computer List price: £500
MAP
Request
MAP
Response
Multimap
Server
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8. multi map. com
Online Maps to Everywhere!
Disruptive Innovation?
“A disruptive innovation is an innovation that helps create a new
market and value network, and eventually goes on to disrupt an
existing market and value network (over a few years or decades),
displacing an earlier technology. The term is used in business and
technology literature to describe innovations that improve a product
or service in ways that the market does not expect, typically first
by designing for a different set of consumers in the new market and
later by lowering prices in the existing market.”
Source: http://en.wikipedia.org/wiki/Disruptive_innovation
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9. multi map. com
Online Maps to Everywhere!
Incremental Innovation
Christensen 1997; Wikipedia graphic
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Innovation & Product Differentiation
Christensen 1997; Wikipedia graphic
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Disruptive Innovation?
Christensen 1997; Wikipedia graphic
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Early-stage Timeline
1996 1997 1998 1999 2000 2001
- Bootstrapping - Fund-
- Growth -
Raising
•Market Research
•Recruitment
•Sourcing map data
•Offices
•Software development
•Marketing campaign
•Web site creation
•B2b sales team
•Ad sales
•Early b2b sales
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13. multi map. com
Online Maps to Everywhere!
Quarterly Sales & Profitability, Q4 1999 to Q4 2001
New Office
New Office
Ad Campaign
Ad Campaign
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14. multi map. com
Online Maps to Everywhere!
2000/2001 – dot.com Crash
Tech valuations peaked in March 2000 then collapsed
wiped out $5 trillion in market value of tech companies from March 2000 to October 2002
Banner advertising CPMs fall from £10/thousand to 20p/thousand
In UK, RIP Boo.com, Clickmango.com,
Ready2Shop.com, Pets.com,
Toysmart.com, et al.
Investor’s interest in tech start-ups
completely evaporates
How to respond?
NASDAQ Composite index Page 14
15. multi map. com
Online Maps to Everywhere!
Options:
✔
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Online Maps to Everywhere!
Creation and growth of Multimap
2004 Australian office; Microsoft partnership; NZ partner
2003 Sunday Times Tech Track 100; Australian maps; won Argos
and Ford US; profitable again; more than 1 billion maps served
2002 Ford Europe becomes a client… integrated hotel &
restaurant services, gained Australian distributor
2001 US street-level maps launched, Recognized as #1 Directory
in the UK, Interactive TV service.
2000 Launch of WAP, PDA services, Tele Atlas street-level
maps, Travel directions, Aerial photos, tube maps
1999 $3 million investment by Flextech (now Telewest)
1998 Worldwide service launched. First use of OS data
1997 Launch of public site. First fee-based customers
1996 Initial software development. Worldwide patent filing
1995 Company Founded. Initial patent filing.
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Online Maps to Everywhere!
Financial Performance, 1999-2005
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How did the Multimap development team respond to Google, draggable maps etc.?
Definitely a “bet the company” project. Actually three projects:
• Create a draggable map API
• Create ~4 billion map tiles to cover the mapped surface of the earth at street level
• Create a new public web site, using our own API
Did it all succeed?
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21. multi map. com
Creation and growth of Multimap
Online Maps to Everywhere!
2007 Launch of new public site with draggable maps; added coverage
of China, Malaysia, Hong Kong, Singapore, Thailand.
2006 Queen’s Award for Innovation; Draggable map API; Malaysian
partner; new office; new site design
2005 US expansion; draggable maps for Yell; first £1 million month
2004 Australian office; Microsoft partnership; NZ partner
2003 Sunday Times Tech Track 100; Australian maps; won Argos and
Ford US; profitable again; more than 1 billion maps served
2002 Ford Europe becomes a client… integrated hotel &
restaurant services, gained Australian distributor
2001 US street-level maps launched, Recognized as #1 Directory
in the UK, Interactive TV service.
2000 Launch of WAP, PDA services, Tele Atlas street-level
maps, Travel directions, Aerial photos, tube maps
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Online Maps to Everywhere!
Transaction Timeline
2005/2006: Original investor Telewest merges with NTL; combined entity merges with Virgin Mobile
to form Virgin Media
Early 2006: Virgin Media indicates general interest in an exit from Multimap
Q3/Q4 2006: Decision to seek new investor(s) for ~30% of equity (all replacement capital) — ~£8M
Dec 2006: RFP sent to three potential advisory firms
Jan 2007: Presentations from advisors; winning proposal: First Capital
Feb 2007: Finalisation of First Capital engagement; work commences on Information
Memorandum (IM)
April 2007: IM completed & circulated to investors; development and practice of investor
presentation
May/June 2007 Presentations to potential investors — VC, private equity & trade.
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24. multi map. com
Online Maps to Everywhere!
Transaction Timeline
July 2007 Potential trade investors express interest in “majority stake”
23 July 2007 “TomTom N.V. intends to make a cash offer of €2 Billion for TeleAtlas N.V.”
August 2007 Expand engagement of First Capital to encompass trade sale
Sept 2007 “Nokia to Pay $8.1 Billion for Navteq”
10 Oct 2007 pre-Budget report: new flat 18% CGT rate replaces 10% after taper relief
18 Oct 2007 Deadline for final offers
23 Oct 2007 Enter exclusivity with Microsoft
12 Dec 2007 Transaction announced.
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Online Maps to Everywhere!
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How to raise Angel Investment
(with thanks for content to Julian Costley)
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Online Maps to Everywhere!
What does an angel want?
Upfront proposition
“I would like you Mr./Ms Investor to invest X for Y% of my business. The
business will achieve Z financial performance over Q years. The
proposition will become valuable to various potential buyers in P years,
and I intend to sell to one of these acquirers in 5 to 7 years. Given
comparable deals in the market, I anticipate that the business will sell for
a price which equals 5X profit [sometimes revenue is the multiple used],
and our forecasts show that we will achieve that in that time period.”
Courtesy of Julie Meyer
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28. multi map. com
Online Maps to Everywhere!
What does an angel want?
Credible model on revenue and general idea – market
need, scale
Single main idea:
GOOD - “We can become the definitive support
organization for international staff locating in Hungary”
BAD – “Once we have all these international staff on
our books the real profits will be driven by the dating
agency we plan to offer as well...and...er...selling them
air tickets...”
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What does an angel want?
Management commitment – personal time spent and
financial commitment of own money
The plan is oven ready – just needs the last ingredient
(money) before serving!
To add value - sector known to Angel
Accessible location/country of the business
Attractive valuation/investment return – downside
protection before upside gain
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30. multi map. com
Online Maps to Everywhere!
What does an angel want?
Enough funding asked for and a share for the
angel that gives the Angel a ‘voice’
A well-structured investment round sells ~30%
As a group we need 10% minimum
Make it easy for me!
Information, meetings, term sheets, return
calculations, etc.
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31. multi map. com
Online Maps to Everywhere!
What Angels usually get!
You don't know who I am!
Rarely do the management teams actually establish:
“who is my audience?”
Poor administration
Rarely does anyone check if the information sent in
advance has reached them
Unclear investment proposition
Yes, we get a pre-money valuation but a simple NPV
or earnings multiple calculation helps explain the
opportunity
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32. multi map. com
Online Maps to Everywhere!
What Angels usually get!
Angels are experienced business people, so don’t tell us
things that don’t match our real-world experience:
“We expect 250,000 registrations on our website at an average €0.01 per
registration = €2,500 acquisition cost”
“We aim to minimize staff recruitment costs through our MBA alumni
contacts”
“Provided every user stays on line with us an average of 2 hours a day we
meet our projected figures”
“We can be fully operational 60 days after funding and cash generative in 9
months!”
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33. multi map. com
Online Maps to Everywhere!
What Angels usually get
• Your money is too expensive!
• Angels take risks but expect returns of 10X or more…
• Which is logical considering risk
• You can get cheaper money later through higher
valuations and/or by adding debt to your balance sheet.
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34. multi map. com
Online Maps to Everywhere!
What Angels usually get
• Pitching before being ready to follow up:
• “The full business plan is nearly ready; we’ll send it
when it is....”
• “We have top-level financials but no detailed monthly
P&L and cash flow data for 3 years out”
• “We’ve yet to prepare subscription documents but we
will send ... etc., etc.”
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35. multi map. com
Online Maps to Everywhere!
What Angels usually get
• There’s no sales close. But you could say...
• “Are you interested enough to meet us again for a detailed review?”
• “Would you be prepared to spend 2 hours with us refining our
strategy – you seem to know a lot about this sector?”
• “Would you be prepared to send our plan to other investor friends
you have?”
• “May I have your card or email address so we can follow up and
keep you in the picture as we move to close this round?”
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36. multi map. com
Online Maps to Everywhere!
What Angels usually get
Entrepreneurs sometimes give up too easily
We don’t want to be hassled, but determination is good
If the proposition changes positively — then tell us
If an angel says ‘no’ then ask why – you may be able
to get around the problem
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37. multi map. com
Online Maps to Everywhere!
Thank you!
@sean_phelan
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Hinweis der Redaktion
To view this collection of sample slides: Click on the Slide Show button on the Tool Bar at the top of the window -or- Select Slide Show... on the File menu This presentation was created using only the templates included in PowerPoint 3.0. From each family, the template designed for on-screen video was chosen.
To view this collection of sample slides: Click on the Slide Show button on the Tool Bar at the top of the window -or- Select Slide Show... on the File menu This presentation was created using only the templates included in PowerPoint 3.0. From each family, the template designed for on-screen video was chosen.
And then a few weeks later, Google released their own UK coverage