Prof. Erhan Erkut MEF University

StartupIstanbul 2014

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Jack Ma's Original Sales Pitch

Must watch for all wantrepreneurs $60,000 investment in 1999, $230B in 2014 3 important messages in one minute

1. Not just a domestic website2. 8-to-5 is not enough3. Our brains are just as good as their brains

http://www.youtube.com/watch?v=Up9-C4_8dVo

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Old vs. New

CompanyFounded inNo. of employeesMarket capAssetsFunction

Turkish Airlines193323,160$4.3BPlanesSends people

Whatsapp199955$19BServersSends messages

THY + Turkcell + Tupras = $14.6B Market cap

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To be an Entrepreneur in Turkey

Erhan Erkut, MEF University

StartupIstanbul30 September 2014

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Central location bw. East & West Large & growing economy Large & young population Stable political climate Large university system Liberal investment climate Developed infrastructure Low taxes, tax exemptions

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…and for entrepreneurs

High penetration… Internet Smart phones Credit cards

Well-developed delivery systems (door2door_in24)

Expats returning from USA Government support for startups, angels, uni’s Techno-parks

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Given all of this..

…Turkey should be an entrepreneurial hub

Is it?

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How does Turkey compare to Israel?

Criterion Turkey IsraelPopulation 75M 8MNo. of NASDAQ companies

0 70

Largest exit to date

Gittigidiyor ($200M, Ebay)

NDS ($5B, Cisco)

Startup financing (2013)

$80M for 60 companies

$2.3B for 600 companies

GDP/capita $10,500 $37,000

http://www.haaretz.com/business/.premium-1.575541

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Mappedinisrael.com

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Why is E’ship weak in Turkey?

1. Values (power distance, risk aversion, fatalism)2. History (empire committed to conquest)3. Economy (state controlled, centrally planned)4. Education system (groom state employees)5. Ecosystem (all players weak)

HBR article

6. Government actions

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Government and entrepreneurship

The current gov’t. is business-friendly A number of pro-e’ship initiatives

Startup financing for entrepreneurs ($50K) Tax break for angels (%25) Financing of university tech transfer offices ($2.5M)

Initiatives harming e’ship Internet restrictions Over-promotion of the construction sector Modifications in the education system

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The 4 Pillars of Western Civilization

1. Democracy (participative)2. Capitalism (regulated)3. Rule of Law (indept. dispute resolution)4. Civil society (NGO’s, social networks, …)

The Great Degeneration: How Institutions Decay and Economies Die – Niall Ferguson

Individual freedoms and a functioning legal system are important for entrepreneurs.

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Why should you try to become an entrepreneur anyway?0. Istanbul is destined…1. It is in your DNA2. Change the world3. Autonomy matters4. The Alternative is…

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It is in you!

All human beings are entrepreneurs. When we were in the caves, we were all self-employed. As civilization came we became “labor” and forgot that we are entrepreneurs.

Muhammad Yunus

The will to create is encoded in human DNA and creation is the essence of entrepreneurship.

Reid Hoffman & Ben Casnocha

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Change the world!

The best reason to start an organization is to make meaning—to create a product or service that makes the world a better place.

Guy Kawasaki

Doing something no one has done before Improving something that has been done before

Citius, Altius, Fortius Adopting a good solution to a new environment

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Autonomy matters!

We are born to be players, not pawns. We are meant to be autonomous individuals, not individual automatons.

Daniel Pink

4 T’s of Autonomy Task (what) Time (when) Technique (how) Team (with whom)

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Now that you graduated from U

Get a job… 9-t-5 …or 6, 7, … 5 days a week …or 6 Fixed income, small raises 20 vacation days …maybe Race for promotions They decide, we implement They manage our career Our tombstone reads “He

was diligent and obedient” Great option for robots, and

avatars

Start a company… 7:00 am to 2:00 am 7 days a week No income, maybe later Vacat-what? Co-create with team We decide/implement Control our fate Tombstone: “She made

the world a better place” This is what humans are

made for

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It is your choice…

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But can I be an entrepreneur?

Entrepreneurship can be taught and learned

Few individuals are not cut out for e’ship Very low risk tolerance Low perseverance Dislike team work Just want to be a cog Ethics-schmetics Get rich quick

But then again, these individuals are…

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Suggestions for university students with entrepreneurial plans:

1. Do not expect much from your university2. At least one internship + summer job3. Read at least 5 entrepreneurship books4. Follow etohum activities5. Get to know the players in the ecosystem6. Spend a day in an incubator or accelerator7. Select 5 startups and follow them closely8. Offer free part-time help to a start-up9. Work for a company for 5 years10. Try intrapreneurship at the company

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Suggestions for university students with no entrepreneurial plans:

1. Do not expect much from your university2. At least one internship + summer job3. Find the organization that suits you the best4. Congratulations…you are a corporate slave now5. When you had enough, go to the previous slide6. Remember to say “Hoca tolds us so…”

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Erhan Erkut Contact Info:

Twitter: @ErhanErkut E-mail:

erkute@mef.edu.tr erhanerkut2000@gmail.com

Blog: www.erhanerkut.com