How to generate more innovation and improve return on investment from your innovation ecosystem. Global downturn raised expectations for innovation services that are not producing enough results. We explore the reasons and solutions to overcome these challenges. Solutions that can radically improve transparency, efficiency and measurability of the innovation funnel, to produce economic growth. Related recorded short version video: https://youtu.be/kF6kjq374RQ?t=4m15s

1. smart city expo 2014
Valto Loikkanen
Grow VC Group ++
www.growvc.com ++
@growvc ++
Copyrights © Grow VC Group 2014

2. For twitter
@valto
#startupecosystem

3. About me

4. As an Entrepreneur
● 20 years as international Serial Entrepreneur (US, EU, Asia) &
Portfolio Entrepreneur, with personal hard earn success & failures
● 17 years experience in developing web based tools for various
business processes
● 6 Years of developing equity crowdfunding model globally via Grow
VC Group (scaling access & availability of risk funding)
● 5 years for Startup Ecosystem online support tools, platforms &
metrics
● Past year, being part of three Horizon 2020 Groups: Access to Risk
Finance, Widening participation and International Cooperation

5. As a Business Advisor
● 10 years of startup mentoring with over 2000 one to one mentoring
sessions and workshops with 1000+ entrepreneurs and hundreds
of startups around the world at various development stages and
industries
● 10 years developing Startup Support services, with entrepreneurial
mind and lean methodology (fast ideation, implement and measure
cycle)
● 5 years of “living lab” development for Startup Ecosystem in
Finland with City of Helsinki

6. About Grow VC Group
"The global pioneer of securities crowdfunding, peer
to peer marketplaces and new investment models."

7. Other Business Verticals
Real estate, P2P loans etc.
Consulting
& knowledge
Services
Local Investors
Startups
Startup Ecosystem
Global
Investors
Enable online
investment
platforms and
marketplaces
Online infrastructure
to manage and
measure startup
ecosystems

8. Other Business Verticals
Real estate, P2P loans etc.
Consulting
& knowledge
Services
Local Investors
Startups
Startup Ecosystem
Global
Investors
Enable online
investment
platforms and
marketplaces
Online infrastructure
to manage and
measure startup
ecosystems

9. "How to generate more
innovation and improve return
on investment from your
innovation ecosystem."

10. Where Does Innovation Happen?

11. Research
IPR
Innovation via Big
Companies & Public
Sector.
Closed process &
Internal resources
Innovation by
Startups
Funding
Sources
Innovation Ecosystem
Customers

12. Innovation process is moving away from “closed
structures” and big companies to more open and
collaborative startup ecosystem.
Megatrend

13. Research
IPR
Innovation via
Big Companies &
Public Sector.
Closed process &
Internal resources
Innovation
by
Startups
Research
IPR
Innovation via
Big
Companies &
Public Sector.
Innovation by
Startups
Open,
collaborative &
external resources
Funding
Sources
Service
Providers
Support
Organizations
Funding
Sources
New
Funding
Solutions
Innovation
Ecosystem
Startup
Ecosystem
Customers
Customers

14. Research
IPR
Innovation via
Big Companies
& Public Sector.
Innovation by
Startups
Open, collaborative &
external resources
Funding
Sources
Service
Providers
Support
Organizations
New
Funding
Solutions
Startup Ecosystem
Customers

15. Why this megatrend?
● The megatrends of innovation is focusing more and more around startups
● The old world is about ideas, research and big companies creating the
innovation (products and services from these).
● The old models is already working at it’s best and is difficult to improve - as
such, little growth can be achieved in that area
● The new world is about making the innovation happen via Startups, where
innovation is also more openly and independently exposed to markets
● Startups are “outsourced innovation” for big companies and biggest group
generating new jobs
● Startups are fast, flexible, highly motivated, cost effective and supported by
private and public parties
● The big companies themselves are moving away from traditional innovation
models towards more open innovation and working with and buying most
promising startups after they have validated scalable innovation.

16. Difference between
innovation & startup?

17. “Innovation is about developing
a new product, service or business model.”

18. “Startups do innovation and also develop
a new growing company & business.”

19. "What are the keys to get
successful results?"

20. ● To new growth ambition startup creation
● Pre-startup and early stage startup support
services
● get more research, inventions, ideas and
other IPR to be utilized by startups
Focus

21. Why Startups?

22. Recent study by Kauffman Foundation
and the Institute for Competitiveness
& Prosperity.

23. “Over the last twenty five years,
almost all of the private sector jobs
have been created by businesses
less than five years old.”

24. “Between 1988 and 2011, companies
more than five years old destroyed
more jobs than they created in all
but eight of those years.”

25. What is a Startup?

26. Startup
“A startup company or startup is a company or
temporary organization designed to search for a
repeatable and scalable business model”
http://en.wikipedia.org/wiki/Startup_company

27. Startup
“The only essential thing is growth. Everything
else we associate with startups follows from
growth.”
http://en.wikipedia.org/wiki/Startup_company

28. A B
C D
High Growth Ambition and
very scalable business model
Low Growth Ambition and/or
Non Scalable business
Market
validated
business
model
Unvalidated
business model
"a kiosk"
"new startup"
“New Startup”

29. Startup stages

30. http://en.wikipedia.org/wiki/Startup_company
Startup Development?

31. ?
Startup Development

32. Improved Startup stages

33. ScaleProduct
Market Fit
Growth
Time
Ideation
Scalable product or
service idea for a
big enough target
market. Some
initial business
models for how it
would make
money. One
person or only a
vague team; no
confirmed
commitment or no
right balance of
skills in the team
structure yet.
Concepting
Clear and meaningful
target with direction
for at least 3 years
with milestones how
to get there, -> 3, 6,
12, 24, 36 months…
Team of two or three
core founding
partners with
balanced ownership.
Can also already
have some extended
team with lighter
commitment (stock
options and or cash
compensation)
Commitment
Committed and
balanced founding
team. Able to develop
the product or service
(Minimum Viable
Product) without
dependency of
uncommitted external
resources, or already an
initial product or service
in place. Existing signed
shareholder agreement
between founders, with
milestones, committed
time and money use, for
at least 2+ years with
vesting.
Validation
Can demonstrate
some user growth and
or revenue (initial
traction). Continue to
attract additional
resources (money or
sweat equity) for
equity or future
revenue. Looking for
clear market validation
(Product Market Fit),
to move into scaling.
Scaling
Showing a clear,
growing and
measurable user and or
market traction in a big
or rapidly growing
target market. Can and
wants to scale fast.
May have attracted
significant funding.
Establishing
Achieved great growth,
that can expected to
continue. No longer
needs to struggle to
get resources and can
acquire those easily.
Continues to grow and
often wants to
culturally continue
behaving like a
"startup" for as long as
possible. Founders exit
or continue business
as usual.
Minimum Viable
Product (MVP)
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
Startup Key Stages
By www.startupcommons.org
Vision & Mission
-2 -1 0 21 3
Target

34. Startup Ecosystem
A startup ecosystem is formed by people, startups in their various
stages and various types of organizations in a location (physical
and/or virtual), interacting as an organic system to create new
companies.
Different organizations typically focus on specific parts of the
ecosystem function and/or startups at their specific development
stage(s).
Learn more: http://www.startupcommons.org/understanding-startup-ecosystems1.html

35. Startups & Ecosystems
Startups develop in startup ecosystems through the
development phases in constant interaction with
various organizations, services & people.
The more dynamic, transparent and balanced the
ecosystem is the more successful startups ecosystem
can create.

36. Case Helsinki

37. Challenge was
● Not enough (high) growth companies in Finland
● Growth services were a total mess
● Growth potential or stage was not systematically
identified
● Angel investing was not systematically organized
● Poor investment readiness
● Ecosystem concept and understanding as a whole was
missing
● ROI at single service and ecosystem level is unclear

38. Level 1: Identify problem
● Growth potential and development phases should be
systematically identified
● Need more high growth companies to Helsinki
● Clear guidance to right growth paths
● Matching growth potential with most fitting services,
people and accelerators should be systematically
coordinated
● Improved investment readiness
● Ecosystem should be visualized to be understood

39. Level 2: Take action
● Make Startup development phases more broadly used
as "canvas" for ecosystem service design
● Get common terminology more broadly to be used
● Identify service gaps and development new services to
fix them
● Improve ecosystem level understanding and
communications among the ecosystem parties
● Define handovers between services and iteratively
improve
● Implement online ecosystem infrastructure to BETA use

40. Level 3: Finalize and start iterating
● Common metrics identified
● Ecosystem IT infrastructure in use
● Metrics implementation
● Metrics in use and shared with the ecosystem
● Iterative ecosystem development and validation by
metrics

41. Midterm results
● Less unknown
● Silos are braking
● ROI becomes more measurable and understandable
target
● Growing supply of “investment ready” startups
● more new companies creating jobs and attracting
international investments into region

42. Three steps of ecosystem development
1. map out starting position
2. Identify and fix gaps and bottlenecks
3. implement measurements
Iteratively improve; measure and learn

43. With help of key stages tool
● Map out ecosystem services
○ Public & Private
● Describe ecosystem target
● Label items;
○ startups, services, events, funding instruments, blog
posts, tools, ideas, suggestions, etc.

44. ScaleProduct
Market Fit
Growth
Time
Ideation
Scalable product or
service idea for a
big enough target
market. Some
initial business
models for how it
would make
money. One
person or only a
vague team; no
confirmed
commitment or no
right balance of
skills in the team
structure yet.
Concepting
Clear and meaningful
target with direction
for at least 3 years
with milestones how
to get there, -> 3, 6,
12, 24, 36 months…
Team of two or three
core founding
partners with
balanced ownership.
Can also already
have some extended
team with lighter
commitment (stock
options and or cash
compensation)
Commitment
Committed and
balanced founding
team. Able to develop
the product or service
(Minimum Viable
Product) without
dependency of
uncommitted external
resources, or already an
initial product or service
in place. Existing signed
shareholder agreement
between founders, with
milestones, committed
time and money use, for
at least 2+ years with
vesting.
Validation
Can demonstrate
some user growth and
or revenue (initial
traction). Continue to
attract additional
resources (money or
sweat equity) for
equity or future
revenue. Looking for
clear market validation
(Product Market Fit),
to move into scaling.
Scaling
Showing a clear,
growing and
measurable user and or
market traction in a big
or rapidly growing
target market. Can and
wants to scale fast.
May have attracted
significant funding.
Establishing
Achieved great growth,
that can expected to
continue. No longer
needs to struggle to
get resources and can
acquire those easily.
Continues to grow and
often wants to
culturally continue
behaving like a
"startup" for as long as
possible. Founders exit
or continue business
as usual.
Minimum Viable
Product (MVP)
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
Startup Key Stages
By www.startupcommons.org
Vision & Mission
-2 -1 0 21 3
Target

45. -2 -1 30 21
Public services
& funding
Private service providers
& investors
Supporting Startup Development
Startup Knowledge - Money & Connections

46. Map your current startup
ecosystem support
services

47. -2 -1 30 21
BusinessideaTeam
Online Communities and tools on connected platform (Startup Commons)
BusinessCompany

48. Sample set of services

49. -2 -1 30 21
BusinessideaTeam
Private Advisory: Multiple advisors
In search of co-founders
SHA Workshop
Group Advisory
Private Advisory: One advisor
Pitch Training & feedback
General networking
In search of team members
Startup Info (stages & service matching)
Company registration, VAT etc. basics advisory
Co-working space and pop up advisory
Pitching events: for advisors, funding, sweat equity & visibility
Recruiting support & advisory
Biz Model Canvas
MVP & metrics workshop
Customer Development
Online Communities and tools on connected platform (Startup Commons)
BusinessCompany
Random events, meetups & presentations in the ecosystem
Media as a Service
Marketing ServicesMarketing Workshop
Subsidised specialist grants (UX, design etc. etc.)
Sales as a Service
Subsidised specialist grants (accounting, legal
etc.)
Startup Weekend etc.
Accelerator Bootcamps
Public sector as a customer

50. Evaluating things

51. Business Idea Potential
More Potential
Big Market
Market growing
Market pull
Scalable
Less Potential
Small market
Market shrinking
Market Push
Not scalable

52. Team Validation
More Potential
Good Team
Balanced Skills
Committed
Doer Attitude
Right Culture
Less Potential
Solo Entrepreneur
Uneven Skills
Not committed
Talker Attitude
Wrong Culture

53. A B
C D
High Growth Ambition and
very scalable business model
Low Growth Ambition and/or
Non Scalable business
Market validated
business model
Unvalidated
business model
"a kiosk"
New Startup
at Stage 0
Startup
Early Startup
at Stage 2

54. A B
C D
High Job Creation Potential (need
of people)
Low Job Creation Potential
Low Demand Potential
Very few and/or low paying
limited region customers
High Demand Potential
a lot of potential well
paying international
customers
No Value Idea
High Value Idea
Idea evaluation
NOTE: as a public sector!
Medium Value Idea
Low Value Idea

55. Use together with
development phases
criteria

56. About Metrics
● Ecosystem as a funnel
● Input and output volumes of each service
● Compare each service ROI separately

57. Other tools
● Ecosystem development workshop
● Development support
● Mapping and agreement templates
● Ecosystem IT infrastructure
● Knowledge on demand (for all levels)
● Library of best practices service models

58. ● Develop startup ecosystem as a whole
● Measure “everything” to learn and improve
● Improve iteratively
Recap

59. Single most valuable
tool to improve your
ROI
Free to use under
creative commons
licence
Original www.
startupcommons.org
Licence terms
http://creativecommons.
org/licenses/

60. “Only the things that are understood can
be developed”

61. “When more people and organizations
are developing things together, there
needs to be a common language and
understanding about what is being
developed.”

62. “Systematically implement this common
language to your ecosystem and
everything follows naturally.”

63. “Only things that can be measured,
can be improved.”

64. “Missing knowledge you can buy.”

65. “Plenty of EU funding available.”

66. Just take the first step...

67. Valto Loikkanen
valto@growvc.com
+358 400 421 551 (FIN)
+1 415 854-0546 (US)
Grow VC Group ++
www.growvc.com ++
@growvc ++
Twitter
@valto
#startupecosystem