ICEBERG Innovation - Summary of Slides for the 2014 Small Company - Big Business Workshop

Presented by Robert Buhrke(Founder and MD of ICEBERG Innovation)1 September 2014 at the Hilton Hotel in Cairns

It's not what we make, it's what we make possible. ™

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It is not the strongest of the species that survive, nor the most

intelligent, but the one most responsive to change.

Charles Darwin

WELCOME TO

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Using INNOVATIONto “get in” or “get an edge” or get to the top!

•Something NEW or NOVEL that has VALUE and IMPACT in the marketplace

•It can be so much more than a new product

What is INNOVATION?

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Lookout for

• Short Intro1. Innovation

• Some Basics• Profits• Techniques

2. Access to Funding3. Tips & Case Study

Overview for today’s session

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About Robert• Qualified Sparky (in EU)

• Dipl.-Ing. (MSc) Electrical and Computer Engineering

• Lived in DE, CA and AU

• 20+ years experience with New Product Development

• Innovation Expert, international clients

• 1st Innovation Coach in Australia

• Developed and pioneered 3 Innovation Programs for Gov

• Co-Founder of the Tropical Innovation Awards in Cairns

• well over 10,000 hours of practical Consulting+ Commercialisation work experience

• LOVES small business and traveling (25+ countries)

• LOVES GREAT IDEAS & AWESOME PRODUCTS

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Why listen?

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We assist business owners to“Make Innovation easier & profitable”

through unlocking hidden value

1. Innovation Products & Services

2. Commercialisation Consultancy

3. Access to Capital

• Proven products, methods and tools

• Collaboration & Strong Partnerships

• Access to Technology & Manufacturing

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From Idea

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1st Product

iPhone 3 / 4 / 5 / 6 Cases• Dust- and Waterproof• Shockproof• Useful Accessories

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New Models

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USP? CPA?What makes youand your productspecial?

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• Short Video Clip

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Mercedes outranked all other automotive brands in terms of customer loyalty and satisfaction.

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•highest-rankedluxury brand

•Driving sales“Best or Nothing”

•Excellence in Engineering+ Performance+ Design+ Safety

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125th Birthday

Low-Cost High

ImpactInnovation

Examplefrom

Mexico

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What Customers want

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What you can provideWhat your competitorscan provide

What your competitorscannot provide

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61% of CEOs worldwide say that

INNOVATION IS A PRIORITY(or a PRIMARY FOCUS) within their business.

Why innovate?

So… what’s wrong with the other 39%?

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The price of not innovating?

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?

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Year 1 2 3 4 5

8% 56%

Difference Difference

Top Innovators outperform others by a growth factor of (84% / 28% =) 3

3x Growth in 5 years

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Wortha closer look?

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Levers to Increase Profitability and Growth

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#1

WHY INNOVATE?

• Solving a meaningful problem / Helping others

• Profit / Survival of the Company

• Revenue per Employee

• Cost & Risk Reduction

• Social and Environmental Benefits

• Sense of Achievement

• Retirement / Exit Plan

• … ?

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Need another REASON?

Innovation skills are a KEY toFUTURE-PROOF ANY BUSINESS

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1. typically something that hasimpact and value in the marketplace

2. A profit driver & cash-cow!

3. It may have other benefits e.g. cost savings, social orenvironmental benefits

Beyond creativity, ideas and inventions…What is a REAL INNOVATION?

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Innovation Basics

• It’s all aboutfuture-proofing your business

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Biggest problem for many firms?

1. What new products/services

can/should we offer?

2. What else can we do?

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The Problem

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Different Typesof InnovationMain Types

• Product

• Service

• Process

• Organisational

• Business Model Innovation

…

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Tips

1. Focus on the customer!• Pain or Problem• Needs• Wants • Desires/Dreams?

2. Get a Phd!(in your clients’ problems)

3. Combine different types and levels of innovation

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Example: Evolution of a productHasn’t it been around a long, long time?

Version 1

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Version 2

Year: 1972

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Version 3

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Version 4

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Version 5

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How many wheels does your current product (service or business) have?

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How to innovate?

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Method Result

Wait for inspiration

Get help

Learn to innovate

Get help and learn to innovate

Useful Tools

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Horizons Concept

time

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Horizons Concept

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H1H2

H31 Max 80 %2 Max 20%3 1-5%

Do we like theHORIZON concept?

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How about a different business model?

Status:

April 2014 in Cairns:

•58 Rentals

•$20 - $200

• Web-based• Asset-low• Cash-rich

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Aug 2014

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• 280 rentalsin Cairns

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Start up!

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Founded in August of 20082013: sales of 1.9b | revenue: $250mValuation: $2.5 billion 2012 $10 billion in 2014?

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From ZERO to HERO2008 = ZERO2013 = 1.9b in sales20XX = HERO

TIP from the Founder:

THINK BIG!64

Readyfor a real gem?

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Revenue from Innovation

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By type and methodBMI Network Process Product & Service Channel/Brand/Experience

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For whom are we creating value? Who are our most important customers?

What is our customers’ major problem?

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What value do we deliver to the customer? Which one of our customer’s

problems are we helping to solve? Which customer needs are we

satisfying? What bundles of products and services are we offering to each

Customer Segment?

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Through which Channels do our Customer Segments want to be reached?

How are we reaching them now? How are our Channels integrated? Which

ones work best? Which ones are most cost-efficient? How are we

integrating them with customer routines?

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What type of relationship does each of our Customer Segments expect us

to establish and maintain with them? Which ones have we established?

How costly are they?

How are they integrated with the rest of our business model?

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For what value are our customers really willing to pay? For what do they

currently pay? How are they currently paying? How would they prefer to

pay? How much does each Revenue Stream contribute to overall revenues?

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What Key Resources do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue Streams?

Which assets are essential?

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What Key Activities do our Value Propositions require? Our Distribution

Channels? Customer Relationships? Revenue Streams? Information

System? Logistic Platform?

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Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquiring from partners? Which Key Activities do

partners perform? Who do we rely on to run our business?

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What are the most important costs inherent in our business model? Which

Key Resources are most expensive? Which Key Activities are most

expensive? HR cost? Engineering cost? Manufacturing cost?

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VISUAL Business Model = QUICK. EASY. POWERFUL.

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Back to our real life example

Core VP

•Monetise an underutilized asset (house, room, castle)

• international easy-to-use platform

•Trust•User reviews to establish credibility•Providing insurance (just in case)

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FUNDING &Access to CAPITAL

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Some well-known (old) options

DEBT EQUITY

Family, Friends and Fools Family, Friends and Fools

Banks and Building Societies Business Angels

Overdrafts Venture Capital

Commercial Line of Credits Private Equity

Investment Banks Initial Public Offering84

What are theREAL OPTIONS?

1. Banks

2. Government

3. Crowdfunding

4. Investors85

Option 1:

You have to• Pay interest• Pay it back• Have and offer security

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GrantsOption 2:

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Option 3: Crowdfunding

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Option 4: INVESTORS & SMART MONEY

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Areas where we can help if criteria are met

Our sweet spot:

$200k – $ 5m

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CAPITAL (typically 200k to $5m)

other BENEFITS (not-so-visible for most people)

• interest-free and• non-repayable Funds

= Asset (instead of debt) • SMART Money• Increased Credibility• We can advertise

– you cannot• Easier way to exit

Access to• Funding Strategist• Expert Lawyer• Tools, Templates• Secondary Share

Sales Platform

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Why (privately-runor individually

organised)Capital Raisings don’t succeed

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From theEntrepreneursview:

1. No success with Angelsand VC’s especially rural

2. No success with bank lending

3. No success with others

4. People don’t understand howgreat the opportunity is

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From the Investors view:

• It’s not what they want

• wrong niche, not their sweet spot

• not viable, money not right

• they don’t understand what theopportunity is

• they can’t find your opportunity

• credibility is lacking

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What do you need to raise capital?

• A passionate, credible and likeable TEAM

• At least one smart person in the team

• Ideally at least one charismatic person in the team

• High profit margins

• Clear value proposition + unique competitive advantage

• sustainable business model

• A good story and people to tell the story to

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Not a walk in the park, but…

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The best way to predict the future is to create it. Peter Drucker

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Next Steps

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What makes or breaks innovation success?

Vision

Culture

Life Cycle Management

Foundation102

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A good start is a proper company assessment

Ability to make money from ideas and innovation

Most profitable

companies

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Does such an assessment really help?

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It works for big and small companies – even for startups!

turnover in $m

Professional and detailed assessment:

Benefits

•Detailed Diagnosis (100p)

•Objective

• Identifies all key areas for improvement

•Future focussed

•Helpful to Raise Capital

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How businesses perform at new product development

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time

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time

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A new idea is born!

As time progresses moreand more money isinvested in the idea

If things go well then the idea is launched as a new product

Very critical: short Time-to-Market

Product Launch!

Mo

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1st 2nd 3rd Sale

We finally start making some money

Highly desirable: short Time-to-Profit

Break Even

Happy Days:More money is coming in!

Hopefully sales explodeand profits go through the roof!

Understanding Critical Elements of New Product Development

© 2014 by Robert BuhrkeAll rights reserved by ICEBERG Innovation

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Summary: Why innovate?

TOP REASONS:

1.profit and growth

2.competitiveness

3.increasing productivity

A smaller but growing proportion of businessesinnovate for social and environmental reasons.

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Motivation?

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Now let’s innovate and build some cool and valuable things for your customers!

A very good method (but it needs explaining)!

• See flipchart and

• Ask me in the workshop or

• let’s schedule a follow up session

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Thank you for coming along!

If you need help, we’re just a phone call away.

Our Office Phone: 1300 037 679 Please ask for Robert Buhrke if you have any questions in regards to this presentation.

or you wish to follow up or discuss how we can help your company or project.

Alternatively contact us through our website at

www.ICEBERG-Innovation.com

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