Themes slideshow proof

Summit Creek capital

7Investable themes Driving Global Economic Growth

This Venn Diagram encompasses the themes that we see as important drivers of growth and productivity in the world economy for years to come. It is laid out so that each theme intersects with every other theme, in any combination. While there are compelling “pure play” stories in every theme, it is the intersections between these big ideas that are intriguing. By filtering a company through these themes, a clearer picture is formed of how that company relates to the evolving global marketplace.

Energy

Connectivity

Resources

Efficiency

Mobility

Demand

Food

1ConneCTIVITy

The Connectivity theme continues to drive grass roots, as well as global growth and innovation with no signs of slowing, by redefining and reshaping how we manage our daily lives. Connectivity is instant and ubiquitous. It envelops nearly every aspect of our daily lives -- from the way we manage relationships, to the way we manufacture goods and research, and shop for products and services.

Connectivity enables relationships, industries, currencies, and communities to form at warp speed, along with global security issues, border disputes and trade wars. Summit Creek Capital would never underestimate the influence and impact of The Connectivity theme. Neither should you.

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New IndustryIn 2010, 3 million tablets were connected to the

mobile network, and each tablet generated 5 times more traffic than the average smartphone.

www.cisco.com

World Wide

www.cisco.com

to Quadruple from 2009-2014Internet Traffic

InternetDatingThe online dating industry

is now worth $4 billion worldwide.

of us are already in the cloud

picasa, facebook, salesforce.com

http://computinginthecloud.files.wordpress.com/2008/09/pip_cloudmemo.pdf

69%

The Daily Deal

$6 Billion by 2015 **

Spending on U.S. daily deals could soar as much as $3.9 billion in the next four years, which seems a little conservative based on the figures known about the largest players in the space.

Source: emoney.allthingsd.com

SOCIALMEDIA

47 INSTANT MESSAGES SENT

PER DAY IN 2009

BILLION* Data provided by Pingdom.

Workers in the Cloud***1.19 Billion by 2013

919.4 Million in 2008

Name Status Pageafrique02.ai OK 1afrique02.ai OK 1asie02.ai OK 1asie02.ai OK 1

2DemanD

Before the Global Financial Crisis spawned buzzwords like the ‘new normal,’ there was an entire subset of buzzwords regarding the shifting economic paradigm. Acronyms, new words, and phrases such as ‘BRIC,’ ‘Chindia,’ ‘emerging markets,’ ‘developing economies,’ and ‘globalization’ were tossed around in the media with increasing frequency. The phenomena that these terms refer to is the economic growth of a group of countries that were once considered ‘third world.’ Countries such as Brazil, China, India, Indonesia, Malaysia, and Russia, are experiencing growth rates that are far in excess of their larger counterparts in the ‘developed’ world. A generational shift is occurring as the developed world hands off the baton of the world’s consumer to the developing, global middle class. Investing in newly minted consumers is a theme that will drive growth for the foreseeable future.

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Africa & Asia’surban population is expected

to double between 2000 & 2030***

of urban population growth will take place in the developing world***

China overtook the U.S. as the largest buyer of cars in 2009*

ChIna

U.S.a

less than 5% of the world’s population lived in Cities****

live in Cities

NOW50.5%100 years ago

New Economies = DEMAND

BET WEEN

2007 & 2009 consumption in emerging m a r k e t s

SURPASSED U. S . c o n s u m p t i o n FOR THE FIRST TIME*


3effICIenCy

Corporations become more efficient, doing more with fewer employees. Consumers become more efficient, ditching landlines, computers, TVs, and video game consoles for smartphones. When smartphones met e-commerce, the excitement spawned m-commerce, the global marketplace in your pocket. Price checking has never been easier. Nor has growing a small business: start from the ground up, and extend to the cloud. Cloud computing has created operational efficiencies for companies of all sizes, but as server farms grow larger, their proprietors are seeking to become more energy efficient. Energy efficiency discussions extend to appliances, buildings, power grids, server farms,vehicles and pretty much all corners of the physical world.

Investing in efficiency will continue to be one of Summit Creek’s focal points in years to come.

Efficiencies are created as all the themes interact with one another.

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Food + ResouRces: center pivot irrigation increases water efficiency 40-90% versus flood irrigation, yet 90% of the world’s farmland is flood irrigated.

Food + eneRgy + ResouRces:

LED lights and temperature-controlled

rooms allow for agricultural products to be grown in cities,

reducing transportation costs and water usage.

eneRgy + ResouRces + connectivity:

Smart Grid: Monitoring and Metering consumption of electricity, fuel, and water

to better balance usage and define chokepoints.

eneRgy + connectivity + RESouRcES + MobiLity

+ Food: Allows farmers to turn

off irrigation pumps during peak hours from a

smartphone; reducing their energy bill and reducing peak power prices. (m2m

communications)

MobiLity + connectivity: making a 1 click purchase from the ski lift of the book that was recommended by the guy sitting next to you on the lift chair.


4energy

From mitosis to manufacturing, our world is shaped by energy. Oil has had a good run as the king of energy, and though its reign will continue for decades more, the realization that it is a finite resource with some severe social and environmental side effects has spurred research into alternatives. Charlie Munger once said “I never miss an opportunity to NOT install solar systems, because I think they’re going to get cheaper. I’m not worried about what comes after oil, because solutions are on the horizon.”

References to a paradigm shift have become common in mainstream media; have you heard of the United States referred to as the ‘Saudi Arabia of Wind’ or the ‘Saudi Arabia of Natural Gas?’

From our food supply to our transportation network, from the way we communicate to the clothes we wear, energy is the common theme. And, as a theme, it will continue to drive investment and innovation.

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oil

coal

Nat

ural

Gas

Nuc

lear

Hyd

ro

34.30%

30.46%

23.41%

5.36%6.47%

Global Energy Use by Source 2010 (estimate) www.gregor.us

Wind was the 2nd largest US energy resource added for the 5th straight year.

10 GW of wind power added in 2009, bringing total to ~35 GW www1.eere.energy.gov

Enough solar energy falls on the earths sruface in twenty minutes to

mee

t the

nee

ds of the European Union for a

year

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Ger

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Pue

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n

Mou

ra P

hoto

volta

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ark

Port

ugal

Wal

dpol

enz

Sol

ar P

ark

Ger

man

y

Worlds Largest Photovoltaic Power StationsThe top 10 largest solar power

stations are all in Europe

0

10

20

30

40

50

60

(Peak Power, MW)

http://1bog.org/blog/a-world-without-oil/#more-12807

Currently, the world consumes more than 85 million barrels of oil per day. That amounts to nearly 31.6 billion barrels annually.


5fooD

Human beings, when it comes down to it, have few basic necessities: Food, water, shelter, and connectivity with others. Overlay life, liberty, and the pursuit of happiness, and necessities morph into luxuries. Producing enough food to feed an ever increasing population, with ever increasing standards of living, is a necessity. As demand for protein like meat and dairy products increases there is an even larger increase in demand for grains and arable land. In that light, Agriculture is one of the themes that we believe will be more important in years to come.

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With more people, it means we’ll need to produce more food in the next 50 years than we’ve produced in the past 10,000 years combined.****

8 billion = 8,000,000,000

the other three bRic nations Russia, india & china forecast notching up their growth by 26%, 21% and 26% through 2019**

brazil leads the pack, with growth of more than 40% through 2019.**

A g R i c u l t u R e

B R I C

fivebillion

four billion

three billion

billi

ons

of P

eopl

e

two billion

new stone Age

commences

new stone Age

bronzeAge

ironAge

Mod

ern

Age

Middle Ages

It took 123 years for the world to go from one billion people to two billion (in 1930).*

It took only 12 years to go from five billion to six billion people(in 1999).*

the black Death - the Plague

sixbillion

sevenbillion

eight billion

2-5 million years 7000 b.c. 6000 b.c. 5000 b.c. 4000 b.c. 3000 b.c. 2000 b.c. 1000 b.c. Ad 1000 A.D. 2030 A.D.

Global Population Growth

global water requirements are likely to rise at least 40% more than the current accessible & reliable supply.***

Just 13.31% of global land area is considered arable*


6moBIlITy

We’ve reached a tipping point in the last few years. We’ve had the internet for awhile now. We’ve also had cell phones for long enough that most of us can remember a briefcase-sized box with a shoulderstrap that you could talk on. And computers have been around since World War II. But, for the first time, internet access is available on a mobile device that has more computing power than PCs during Y2K, weighs less than a quarter-pounder with fries, and you can talk (or video conference) on it to boot. This always available computing power is a modern marvel, but combined with Connectivity, is truly a game-changer. Being mobile and connected allows for rapid decision making, accelerated product development, and a consumer base that can shop from anywhere.

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of purchases are already made using a mobile device.

according to ATT, Aug 26,2010

72%2009 vs 2010

smartphone salesup 72% compared 2009 *Gartner

ToTal moBIle DeVICe SaleS In 2010 1.6 Billion

*Gartner

$16.99

( 15% less and just

one mile away)

Price checking has never been easierWith barcode scanning apps, you can use your phone to instantly compare prices with other merchants while on-the-go. apps enable you to compare products across physical and ecommerce merchants, optimizing the shopping experience.

Results

2011

2010 67 million units

95 million units

Expected Growth of Smartphones in Units

*Gartner

I’m sure there’s an app for that.

?

Whatever it is...


7reSoUrCeS

Humans have always been dependent on the Earth’s resources. Some of those resource dependencies have developed as trade and commerce grew; coal and oil were not extremely useful before the industrial revolution. Others have never been excessively useful, but have captivated our attention for millenia (one shiny yellow metal, in particular, comes to mind). Still others, like water, have been taken for granted; regarded as free, misuse and overuse have been commonplace. Though mispricings are frequent, the laws of supply and demand hold strong for resources. There will be enormous opportunities in the way we account for and use our resources, especially as essential resource needs become scarce and new resources see increased demand. Resources have increasingly become viewed as national security issues: dependence on foreign oil has been cited as a funding source for terrorism; bottlenecks in the supply of rare earth elements threaten developed economies around the world.

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Less than 2% of the Earth’s water supply is fresh water. of that, only 1% is available for drinking water.***

average water use per person per day (liters)***Top 5

2. Australia

3. Italy

4. Japan

1. US

5. Mexico

575

493

386

374

366

china produces &

exports 95 % of rare earth elements.****

95%

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The average car contains nearly one mile of copper wire*

onE bARREL of oiL EquALS APPRoxiMAtELy

onE bARREL of oiL EquALS APPRoxiMAtELy

520 pounds of coal

725 pounds of oven dried wood

580 cubic feet of natural gas

19 gallons of motor gaso-line

Summit Creek capital

sourcesall source information can

be found by going to www.summitcreekcapital.com/infographic_sources

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Themes slideshow proof