Julie Meyer presents Ecosystem Economics™ - the Ariadne Capital Investment Methodology and EntrepreneurCountry Global Operating System - which she has presented at TED, corporate Board rooms, throughout the business media, and in EC Global workshops

1. @EnCountry @juliemariemeyer Channel ECTV julie@ariadnecapital.com
How Ecosystem EconomicsTM
Predicts the Winners

2. © Proprietary & Confidential – Ariadne Capital

3. © Proprietary & Confidential – Ariadne Capital
Shift Happens
Easter Parade on Fifth Avenue, New York. 13 Years apart
Where is
the car?
Where is
the horse?

4. © Proprietary & Confidential – Ariadne Capital
Ecosystem EconomicsTM
Three versions of the future
The technology platform companies take
over every industry
Music & Telecoms Advertising Books
First Version of the
Future

5. © Proprietary & Confidential – Ariadne Capital
Second Version
of the Future
The Digital David’s become disruptive
forces & create new established giants
Personal Loans Taxis Travel
Ecosystem EconomicsTM
Three versions of the future

6. © Proprietary & Confidential – Ariadne Capital
Ecosystem EconomicsTM
Three versions of the future
DAVID GOLIATH
David and Goliath dance
David shows technology enables the existence of an ecosystem through data and business model
Goliath brings customers, distribution, scale and reach
Third Version of
the Future

7. © Proprietary & Confidential – Ariadne Capital
PALO ALTO
Great Entrepreneurs Can Come From Anywhere
The Infrastructure of Entrepreneurship is not Evenly Distributed

8. © Proprietary & Confidential – Ariadne Capital
The face of every entrepreneur
They just may not show it to you!

9. © Proprietary & Confidential – Ariadne Capital
The face of every entrepreneur
They just may not show it to you!
They see the
inevitable and
advance the
future
They are
willing to live
abnormal
lives
2 good reasons

10. © Proprietary & Confidential – Ariadne Capital
Capital Follows Ideas

11. © Proprietary & Confidential – Ariadne Capital
Let's continue with the
historical perspective….
The
History

12. © Proprietary & Confidential – Ariadne Capital
Academic Influences of Ecosystem Economics™
Carlotta
Perez
Hernando
De Soto Polar
Ronald
Coase
Renee
Mauborgne
Geoff
Moore
Chan
Kim

13. © Proprietary & Confidential – Ariadne Capital
Economic growth since the end of the 18th Century
5 Distinct Stages, associated with 5 successive Technological Revolutions
Five Successive Technological Revolutions, 1770’s to 2000’s
Technological
Revolution
Popular Name for
the Period
Core Country or Countries Big-bang initiating the revolution Year
FIRST The Industrial Revolution Britain Arkwright’s mill opens in Cromford 1771
SECOND
Age of Steam
and Railways
Britain (spreading to
Continent and USA)
Test of the Rocket steam
engine for the Liverpool
- Manchester railway
1829
THIRD
Age of Steel, Electricity
and Heavy Engineering
US and Germany forging ahead
and overtaking Britain
The Carnegie Bessemer stell plant
opens in Pittsburgh, Pennsylvania
1875
FOURTH
Age of Oil, the
Automobile and Mass
Production
USA (with Germany at fist vying
for world leadership), later
spreading to Europe
First Model-T comes out of the
Ford plant in Detroit, Michigan
1908
FIFTH
Age of Information and
Telecommunications
USA (spreading to
Europeand Asia)
The Intel microprocessor is
announced in Santa Clara, CA
1971

14. © Proprietary & Confidential – Ariadne Capital
Lifecycle of technological revolution
Gestation
period
Big-bang
Paradigm
configuration
Introduction of successive new products,
industries and technology systems, plus
modernisation of existing ones
Constriction
of potential
Time
60 to 80 Years
Degreeoftechnologymaturity
andmarketsaturation
Period one Period two Period three Period four
Early new products
and industries.
Explosive growth and
fast innovations
Full constellation
(new industries,
technology systems
and infrastructure)
Full expansion
of innovation and
market potential
Last new products
and industries.
Earlier ones
approaching
maturity and
market saturation

15. © Proprietary & Confidential – Ariadne Capital
INSTALLATION
Late 1970’s through to Noughties
1976 – Steve Jobs, Steve Wozniak found Apple Computer
1984 - Michael Dell founds PC’s Limited later named Dell Computer
Corporation
1985 – Irwin Jacobs founds QualComm, pioneer in Wireless
Communications
1990 – CERN / Tim Berners Lee
1994 – Yahoo founded
2003 – Skype – “free calls on web”
2004 - Facebook founded
Age of IT and Telecommunications
60 to 80 year cycle – 1971 – 2030
BIG BANG
NOVEMBER 1971 IN SANTA CLARA,
CALIFORNIA
Bob Noyce and Gordon Moore launched
Intel’s first microprocessor, the precursor of
the computer on a chip
THE
TURNING
POINT

16. © Proprietary & Confidential – Ariadne Capital
The Revolution starts as a small
fact with a BIG promise and
moves to a significant force in
the market
The
Revolution

17. © Proprietary & Confidential – Ariadne Capital
Technological Revolutions
1999
David with his
slingshot wants
to kill Goliath

18. © Proprietary & Confidential – Ariadne Capital
The Economy & Social Institutions Respond
1999 to 2014
Broadband and Mobile Technologies
continue to invade our lives
2015
David and Goliath must dance

19. © Proprietary & Confidential – Ariadne Capital
The David
& Goliath™
Model

20. © Proprietary & Confidential – Ariadne Capital
Our Framework: David & Goliath
Ecosystem EconomicsTM
DigitalEnabler
Strategic
Value
Financial Value
Network Effects
Vulnerability
Distribution
Ecosystem Economics™
shifting industry players
Consumer
Data sets become prevalent
Network
Orientation at heart of the
consumer insight
When partnering with,
1) Brings new digital
revenues
2) Brings lean operating
system
When acquired,
1) Can become
2) Can reinforce or gain
a position as industry
architect
Renting
Not Licensing
Operating system
to the industry

21. © Proprietary & Confidential – Ariadne Capital
Engaging “Natural Allies” with incentives
Ecosystem EconomicsTM
You
Natural
Ally 1
Natural
Ally 2
Natural
Ally 3
You
Natural
Ally 1
Natural
Ally 2
Natural
Ally 3
You
100%

22. © Proprietary & Confidential – Ariadne Capital
Innovation is about Economics not Technology
Otherwise we’d all be flying the Concorde but we’re packed into Jumbo Jets

23. © Proprietary & Confidential – Ariadne Capital
APPLICATIONS
“Digital Enablers”
Digital Davids enabled
by
Goliaths + EC Global
Goliaths
INFRASTRUCTURE
High Regulation, Low Margin, Others using
your investments without contribution
PLATFORMS
(Google, Facebook, Apple, Amazon)
Make Investments
in assets (Costs)
Take advantage
of Revenue (Profits)
The Platforms are Making All the Money
Ecosystem EconomicsTM

24. © Proprietary & Confidential – Ariadne Capital
Shape your Industry by changing your business model
Step 1 Step 2 Step 3
Business model/Transaction
Micro
Industry > Ecosystem
Distribution > Platform
With Network Effects
Goliath/
David
Partnership
Macro
Building Net
New Revenue
Everything is Network-based, not linear • Everything is Multi-stakeholder
Company’s ability to shape
industry dynamics
Company valuation
increases
Company market
power increases

25. © Proprietary & Confidential – Ariadne Capital
Imagine a world where you couldn’t get:
Now imagine a world where everything you do is part of your aggregated
personal transactional ability.
a credit card on the housing
ladder
Where you had no assets

26. © Proprietary & Confidential – Ariadne Capital
Europe is an eldest child; it values the “estate”.
The US is a later born child.
B2C
Raise huge amounts of capital
Disrupt Industry
B2C2B
Capital efficiency @ Unit Economics
Enable & Extend Industries
European
Model
to Win
Classic
Valley
Model

27. © Proprietary & Confidential – Ariadne Capital
Google Economics
• Google says that they organise the world’s information
• They actually organise the economics of the world’s information
• I, as a consumer of their search, am not given any economic upside in the search transaction.
• They have built a multi-billion pound business using – albeit anonymously – my personal data –
aggregated with that of others, but releasing none of the economic value to me
• Their biggest Achilles Heel is if someone in the search space were to cut a different set of economics
for the consumer
• Ariadne Capital found that entrepreneur – John Paleomylites – founder of BeatThatQuote, and sold his
business to Google on the 4th of March 2011 for a 122 EBITDA multiple for these reasons

28. © Proprietary & Confidential – Ariadne Capital
Industries are being transformed
by digital business models

29. © Proprietary & Confidential – Ariadne Capital
In 2015, “Network Benefits” accrue to those Firms
who understand their role in their ecosystem and organise
the economics for it.
This in turn leads to exceptional returns for their shareholders.

30. © Proprietary & Confidential – Ariadne Capital
PALO ALTO
If you didn't go to Palo Alto at the beginning,
you will go to Palo Alto in the end …

31. © Proprietary & Confidential – Ariadne Capital
Building the Future From the Future
In EntrepreneurCountry,
You Build the Future
“If I had asked my customers what
they wanted, they would have said
faster horses.” - Henry Ford
STATUS QUO
REMAKING THE INDUSTRY BY
DEFINING THE FUTURE OF IT

32. © Proprietary & Confidential – Ariadne Capital
Creative Destruction
defines the problem …
… Ecosystem Economics™
provides the solution.

33. © Proprietary & Confidential – Ariadne Capital
From the Financial Times 20 October 2015
We take that as a personal challenge.
You should too…
“We are the only European player with significant size
to build great businesses in Europe and keep a large
share of it”, Samwer says.

34. © Proprietary & Confidential – Ariadne Capital
Shift Happens
Easter Parade on Fifth Avenue, New York. 13 Years apart
Where is
the car?
Where is
the horse?

35. © Proprietary & Confidential – Ariadne Capital
Don't go to Palo Alto

36. © Proprietary & Confidential – Ariadne Capital
Go to
www.entrepreneurcountry.com

37. © Proprietary & Confidential – Ariadne Capital
The Prince by Nicolo Machiavelli CHAPTER VI
And it ought to be remembered that there is nothing more difficult to take in hand, more perilous to
conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of
things. Because the innovator has for enemies all those who have done well under the old conditions, and
lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the
opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in
new things until they have had a long experience of them. Thus it happens that whenever those who are hostile
have the opportunity to attack they do it like partisans, whilst the others defend lukewarmly, in such wise that the
prince is endangered along with them.

38. © Proprietary & Confidential – Ariadne Capital
David Wins
Because he sees the future