Chris
Evdemon
(易可睿)


Managing
Partner

Eastern
Bell
Venture
Capital

 Today
let’s
talk
about
…


•  Innova3on:


Product
vs.
Process
vs.
Business
Model


•  The
5P’s
in
Star3ng
a
New
Business


•  Venture
Capital
Trends
in
China
in
2009


©
2009
‐
Chris
Evdemon
 2

 Forms
Of
Innova3on


©
2009
‐
Chris
Evdemon
 3

 Forms
Of
Innova3on


Sourcing
&

Design

Manufacturing


DistribuHon
&

Retail
Sales

LogisHcs


©
2009
‐
Chris
Evdemon
 4

 Innova3ve
Start‐Ups


©
2009
‐
Chris
Evdemon
 5

 ECitySky


•  Founded
in
mid
2007
in
Beijing
with
$115,000

USD
start‐up
capital
from
the
three
founders
as

well
as
family
and
friends.

•  The
company
is
developing
China’s
first
truly
3D,

fully
web‐based,
immersive
SNS
/
virtual
world

technology
plaZorm.

•  In
May
2008
the
company
raised
$400,000
USD

from
angel
investors.

•  Currently
in
private
beta‐version.


©
2009
‐
Chris
Evdemon
 6

 The
Founders

Aug.’07


May ’08


Nov.’07


©
2009
‐
Chris
Evdemon
 7

 ECitySky


HIGH
TECH
BARRIER
–
CORE
COMPETENCY



©
2009
‐
Chris
Evdemon
 8

 ECitySky


©
2009
‐
Chris
Evdemon
 9

 ECitySky


•  Current
technology
plaZorm
is
truly

innovaHve,
by
global
standards.

•  “Great!
We
now
have
a
cool
technology,
how

about
gegng
a
business
model?”


Another
 A
Casual
 What
mak

es

Virtual
 Entertainment
 money
oth
er

World
 3D
SNS
 than
gamin
g?


©
2009
‐
Chris
Evdemon
 10

 ECDL
Hellas

•  Founded
in
March
2000
in
Athens,
Greece

with
€70,000
Euro
start‐up
capital
from
two

founders
and
one
angel
investor.

•  License
to
operate
in
Greece
the
ECDL
digital

literacy
cerHficaHon
program.

•  Greece
has
a
10
million
people
populaHon
and

in
2000
GDP
per
capital
was
about
$14,000

USD.


©
2009
‐
Chris
Evdemon
 11

 ECDL
Hellas


©
2009
‐
Chris
Evdemon
 12

 ECDL
Hellas

•  When
we
started
in
March
2000,
we
had
the

following:

–  signed
license
agreement
for
ECDL
in
Greece;

–  ECDL
syllabus;

–  four
(4)
ECDL
tests
for
manual
marking;

–  a
brief
and
generic
“Standards
&
Guidelines”

booklet.


©
2009
‐
Chris
Evdemon
 13

 ECDL
Hellas

•  By
the
end
of
its
3rd
fiscal
year
(2003),
company

had
achieved
in
Greece:

–  establishing
ECDL
as
the
synonym
of
“digital
literacy”;

–  €10
million
Euro
in
revenue;

–  €2
million
Euro
in
net
profit;

–  1,000+
Authorized
Test
Centers;

–  200,000
ECDL
candidates.

–  AddiHonally,
ECDL
Hellas
acquired


the
ECDL
license
for
and
started


operaHons
in
Turkey.


©
2009
‐
Chris
Evdemon
 14

 ECDL
Hellas

•  In
March
2000,
the
ECDL
program:

–  was
already
successful
in
the
U.K.,
Ireland,
Germany

and
the
Scandinavian
countries
…

–  …
but
it
was
struggling
in
France,
Spain
and
Italy.

–  The
examinaHon
process
was
largely
as
follows:

•  a
candidate
registered
and
took
test(s)
at
an
ECDL

Authorised
Test
Centre
(ATC)
whenever
he/she
wanted;

•  tests
were
supervised
by
ATC
personnel;

•  tests
were
marked
by
ATC
personnel;

•  results
were
communicated
by
fax
or
email
to
ECDL
HQ
in

that
country.


©
2009
‐
Chris
Evdemon
 15

 ECDL
Hellas

•  By
the
end
of
2000,
we
had
created
new
tools
and
processes,

customized
for
the
Greek
market
realiHes:

–  a
proprietary
simulaHon‐based
Automated
Test
EvaluaHon
System

(ATES);

–  a
fully
web‐based
intranet
/
extranet
for
all
stakeholders
in
the
ECDL

operaHons
(i.e.
ATCs,
candidated,
ECDL
Hellas,
etc.);

–  a
detailed
ECDL
ATC
OperaHons
Manual
(~70
pages)
explaining
every

part
of
the
ECDL
program
and
relevant
processes;

–  full
(compulsory)
training
program
and
materials
for
all
ATC
staff;

–  an
iniHal
set
of
customisable
ECDL


markeHng
materials
in
Greek
which


ATCs
could
use
in
their
local
market;

–  a
daily,
9am
–
9pm
call
centre
for
ATCs;

–  and
much
more
…


©
2009
‐
Chris
Evdemon
 16

 ECDL
Hellas

•  The
examinaHon
process
was
re‐designed
as
follows:

–  ATC
determined
which
days
/
hours
ECDL
examinaHons

were
to
take
place
at
its
premises.

–  ATC
registered
candidate(s)
online
at
the
intranet
and

candidate(s)
took
test
using
the
ATES;

–  tests
were
supervised
by
official
ECDL
Supervisors,

members
of
the
Greek
Computer
Society;

–  Supervisors
were
assigned
to
specific
ATCs
by
the
intranet;

–  tests
were
automaHcally
marked
by
the
ATES,
results
were

instantly
communicated
to
(a)
the
candidate
and
(b)
ECDL

Hellas’
central
database
through
the
intranet.


©
2009
‐
Chris
Evdemon
 17

 ECDL
Hellas

•  From
a
process
point‐of‐view,
ECDL
Hellas
was

successful
largely
because:

–  it
took
a
generic,
internaHonally
licensed
business
and

customised
it
for
the
local
market;

–  it
took
a
licensed
product
and
made
a
first‐class
service

out
of
it;

–  it
realised
that
its
clients
were
the
ATCs
(not
the

candidates)
and
focused
on
building
and
servicing
a

network
of
“partners”;


–  it
protected
the
credibility
of
its
product
and
service;

–  it
automated
all
unnecessarily
manual
processes
thus

increasing
efficiency,
quality
of
service
and
reducing
cost.


©
2009
‐
Chris
Evdemon
 18

 Ethos
Technologies

•  Founded
in
the
beginning
of
2005
in
Beijing

with
$20,000
USD
start‐up
capital
from
three

founders.

•  The
company
is
a
soxware
development

outsourcing
provider
with
its
main
(back‐)

office
in
Beijing
and
front‐offices
in
Oslo,

Stockholm
and
Helsinki.


•  For
2008,
revenues
where
40
million
RMB
and

net
profit
was
1.5
million
RMB.


©
2009
‐
Chris
Evdemon
 19

 Ethos
Technologies

The
Founders
…


…
and
their
“family”!


©
2009
‐
Chris
Evdemon
 20

 Ethos
Technologies

•  Key
quesHon
for
founders
was
“how
to
provide
customer
value?”


•  Their
answer
is
to
be
“Global,
Local
and
Agile”.


–  Quality
Solu3ons:


•  focus
on
solving
the
real
problem,
not
only
execuHng
according
to
a
specificaHon;

•  the
Ethos
team
must
understand
and
take
ownership
of
the
soluHon;

•  achieved
by
having
a
front
office
in
each
of
their
target
markets
for
both
pre‐
and
axer‐
sales
support
Ethos
eliminates
usual
offshore
distance
/
language
/
culture
barriers.

–  Time
To
Market:


•  tradiHonal
“Waterfall”
methodology
separates
project
into
serial
phases
whereas
agile

allows
parallel
tracks,
i.e.
development
and
planning
goes
hand
in
hand;

•  truly
global
development
center
can
provide
the
required
capacity
for
rapid

development.



–  Reduced
Risk
/
Cost:


•  iteraHons
every
2‐4
weeks
with
tangible
deliveries
provide
early
feedback
on
risk
factors,

reducing
significantly
overall
project
risk
and
cost.


©
2009
‐
Chris
Evdemon
 21

 Ethos
Technologies


©
2009
‐
Chris
Evdemon
 22

 Ethos
Technologies

Agile
Development
 Global
Delivery
Model

•  New
trend
in
soxware
 •  The
world
is
flat
–
potenHal

development.
 to
source
services
globally.

•  Dynamic
and
flexible
–
but
 •  Leverage
capacity
and
cost

requires
close
 levels
in
remote
locaHons.

communicaHon
and
 •  China
is
emerging
as
an

collaboraHon.
 alternaHve
to
India,
large

•  Frequent
iteraHons
allows
 + talent
pool
and
be{er

for
learning
in
the
project
 infrastructure.

execuHon.
 •  Need
to
bridge
culture
and

•  Increases
quality
and
 communicaHon
issues.

throughput
Hme
–
reduces

risk.


Ethos’
Agile
Global
Delivery
Model
(AGDM)
is
“the
best
of
both
worlds”.


©
2009
‐
Chris
Evdemon
 23

 Ethos
Technologies

Ethos
is
moving

ahead
of

Flexible


compe::on
by

combining
Agile

and
Global

Onshore
 Delivery
Model

suppliers


Onshore

compe::on
has

evolved
through

process

Rigid


Offshore
suppliers

innova:on
in
 have
captured
the

Agile
 share
of
the

methodologies
 market
that
can

TradiHonal

over
the
last
 easily
be
supplied

years
 Offshoring
 by
tradi:onal

Global
Delivery

Model.


Onshore
 Offshore

 Today
let’s
talk
about
…


•  Innova3on:


Product
vs.
Process
vs.
Business
Model


•  The
5P’s
in
Star3ng
a
New
Business


•  Venture
Capital
Trends
in
China
in
2009


©
2009
‐
Chris
Evdemon
 25

 Prepara3on


•  Study
and
learn
from
best
pracHces
in
foreign

markets.

•  Understand
your
own
local
market.

•  Add
your
own
“secret
sauce”.

•  IniHal
strategic
decisions
are
a
crucial

component
for
a
start‐up
company’s
success

or
failure.


©
2009
‐
Chris
Evdemon
 26

 Prepara3on



©
2009
‐
Chris
Evdemon
 27

 Prepara3on



©
2009
‐
Chris
Evdemon
 28

 Prepara3on



©
2009
‐
Chris
Evdemon
 29

 Prepara3on



©
2009
‐
Chris
Evdemon
 30

 Prepara3on



©
2009
‐
Chris
Evdemon
 31

 Prepara3on
for
Fundraising


•  Carefully
prepare
all
your
materials:

–  1’
elevator
pitch

–  execuHve
Summary

–  introductory
slides
deck
(~15
slides)

–  full
slides
deck

–  full
business
plan

•  PracHce
your
pitch
and
prepare
to
answer
difficult

quesHons.

•  Explain
in
detail
what
you
are
going
to
do
with
the

money.

•  Be
humble
while
confident
and
dynamic,
and
always

honest.


©
2009
‐
Chris
Evdemon
 32

 Prepara3on
for
Fundraising



©
2009
‐
Chris
Evdemon
 33

 Prepara3on
for
Fundraising



©
2009
‐
Chris
Evdemon
 34

 Pa3ence
&
Persistence



©
2009
‐
Chris
Evdemon
 35

 Pa3ence
&
Persistence



Set
Targets


Evaluate

Communicate

Progress


Assess
 Assess
Your

Yourself
 Team

©
2009
‐
Chris
Evdemon
 36

 Pa3ence
&
Persistence



©
2009
‐
Chris
Evdemon
 37

 Pa3ence
&
Persistence
in
Fundraising



©
2009
‐
Chris
Evdemon
 38

 Persuasion


©
2009
‐
Chris
Evdemon
 39

 Persuasion


Co‐Founders


Senior

Investors

Management


COMMUNICATION


Public
 Staff


Clients


©
2009
‐
Chris
Evdemon
 40

 Persuasion
in
Fundraising



©
2009
‐
Chris
Evdemon
 41

 Persuasion
in
Fundraising


•  What
is
an
early
stage
VC
looking
for?

• An
excep3onal
CEO.

• Core
team
in
place.


• In‐depth
compeHHon
analysis
and
tracking.

• Well
planned
and
cost
effecHve
marke3ng
plan.


• Exis3ng
revenue
stream(s).

• Clearly
idenHfied
new
revenue
stream(s).


• Reserve
cash
for
at
least
twelve
(12)
months.

• Clear
and
realisHc
cash
flow
posiHve
projecHon.


©
2009
‐
Chris
Evdemon
 42

 Produc3vity


©
2009
‐
Chris
Evdemon
 43

 Produc3vity


©
2009
‐
Chris
Evdemon
 44

 Today
let’s
talk
about
…


•  Innova3on:


Product
vs.
Process
vs.
Business
Model


•  The
5P’s
in
Star3ng
a
New
Business


•  Venture
Capital
Trends
in
China
in
2009


©
2009
‐
Chris
Evdemon
 45

 Venture
Capital
in
China
in
2008

•  China’s
venture
capital
market
is
already
the

second
largest
in
the
world,
behind
the
U.S.

•  2008
was
a
record
year,
despite
the
global

financial
crisis
worldwide,
in
terms
of:

•  capital
raised
‐
$7.3
billion
USD

•  number
of
new
funds
‐
116

•  total
investment
amount
‐
$4.2
billion
USD

•  number
of
new
deals
–
607


©
2009
‐
Chris
Evdemon
 46

 Venture
Capital
in
China
in
2008


©
2009
‐
Chris
Evdemon
 47

 Venture
Capital
in
China
in
2008


©
2009
‐
Chris
Evdemon
 48

 Venture
Capital
in
China
in
2008

•  But
Q3/Q4
numbers

show
a
rapid
decline.

•  IPO
exits
also

significantly
down
year‐
on‐year.

•  TradiHonal
industries
sHll

a
very
large
part
of
the

dealflow.


©
2009
‐
Chris
Evdemon
 49

 Venture
Capital
in
China
in
2008

•  Some
addiHonal
observaHons:

–  sHll
li{le
a{enHon
to
early
stage;

–  Beijing
and
Shanghai
represent
the

vast
majority
of
deals;

–  foreign
investment
is
sHll
more
than

double
of
the
domesHc
investment.


©
2009
‐
Chris
Evdemon
 50

 Investment
Trends
for
2009

Sectors
a{racHng
most
a{enHon
from
VCs
in
China
will
be:

–  Technology:

•  Enterprise
soxware

•  LogisHcs
technology
/
infrastructure

–  Cleantech


–  EducaHon


–  Consumer
Services:


•  e‐Commerce

•  Internet
communiHes

•  Mobile
applicaHons

•  Gaming

–  Healthcare
Services

–  Medical
Devices


©
2009
‐
Chris
Evdemon
 51

 Online
Trends
for
2009
and
Beyond

1.  Social
networks
are
a
business
but
cannot
survive
on
ad
revenues
alone.

Mobile
social
networks
are
the
future.

2.  Online
communiHes
are
not
just
a
teen
phenomenon.
Focused,
target

group
communiHes
are
being
formed
and
have
economic
effects.

3.  E‐commerce
is
here
and
will
be
the
main
growth
segment
for
the
next

few
years.
Mobile
commerce
is
sHll
at
a
nascent
stage
in
China
but
will

also
grow
rapidly
in
the
next
few
years.

4.  The
amount
of
informaHon
available
online
is
overwhelming.
Privacy
is

becoming
a
luxury.


5.  Online
gaming
is
already
the
most
popular
“21st
century”
form
of

entertainment
and
it
is
just
gegng
started!
Mobile
MMORPGs
are
also

around
the
corner.

6.  3D
environments
will
start
integraHng
with
2D
‐
is
this
the
definiHon
of

Web
3.0?
Several
new
worlds
for
kids,
for
teens,
for
the
fashion‐
conscious,
for
socializing,
for
brands,
for
educaHon,
etc.
will
start
and/or

grow
this
year.


©
2009
‐
Chris
Evdemon
 52

 Online
Trends
for
2009
and
Beyond

7.  The
new
mass
media.
Last
year,
Korea
was
reportedly
the
first
country
to

have
its
populaHon
spend
more
Hme
online
than
watching
TV.
Who’s

next?


8.  Online
startups
will
face
a
strong
dose
of
realism.
You
will
have
to
show

not
only
usage
but
also
revenues.
Copycats
will
no
longer
get

automaHcally
financed
unless
they
have
proven
business
cases
–
it
is

Hme
to
innovate.

9.  It
is
finally
here
‐
the
impending
launch
of
the
wireless
3G
mobile

networks
in
China.
China
Mobile
is
set
to
launch
their
3G
TD‐SCDMA

network
in
Q2.
Unfortunately,
the
TD‐SCDMA
is
a
China‐only
standard;
3G
handsets
from
other
countries
will
not
work
on
the
China
Mobile

network.
China
Unicom
however
does
use
W‐CDMA
which
is
a
global

standard
and
compaHble
with
the
Apple
iPhone
3G.

10.  Welcome
to
the
“Age
of
Convergence”!
E‐commerce,
SNS,
virtual
worlds

and
online
games
are
coming
together,
blurring
the
fronHers
between

categories,
web
and
mobile,
online
and
offline.
Lifestyle
is
going
digital.


©
2009
‐
Chris
Evdemon
 53

 Consumer
Trends
for
2009

•  Consumers
in
China
do
not
have
many
role
models,

therefore
currently
open
to
try
new
products
and
accept

new
brands.

•  SHll
predominantly
price
sensiHve
but
more
and
more

people
are
beginning
to
have
brand
awareness.

•  Chinese
consumer
market
is
very
fragmented
in
most

product
lines.
This
is
unlikely
to
change
in
the
near
future.

•  Several
opportuniHes
to
capture
market
share
will
be
in

2nd
and
3rd
Her
ciHes.

•  Emerging
middle
class
has
already
started
paying

a{enHon
to
diet,
fitness,
healthy
lifestyle,

environmentally‐friendly
products
and
services,
etc.


©
2009
‐
Chris
Evdemon
 54

 Thank
you!
谢谢你们!


©
2009
‐
Chris
Evdemon
 55