My June, 25 keynote at the CEA LETI Days, on how risk, is the most valuable currency between startups and industry. The key point is on how to change our perspective on risk, and be able to "game the system" so as to reach an adequate critical mass of projects.

1. LETI DaysTRADING RISK
MERKAPT
Philippe MÉDA - 2015
Trading Risk
The most valuable currency
between startups and industry

2. LETI DaysTRADING RISK Philippe MÉDA
INNOVATION COPILOTS

3. LETI DaysTRADING RISK Philippe MÉDA
The Effects
of UNCERTAINTY
TRADING RISK
With Startups
How To PIPELINE
INNOVATION
Risk, the most valuable
currency between
startups and industry.

4. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
TWA (2001)
US Airways (2002)
United Airlines (2002)
US Airways (2004)
Northwest and Delta Airlines (2005)
SARS coronavirus pandemy risk (2003)
International Health Regulations initiative(2005)
« IHR, is a massive global plan that maps an emergency response effort if a health
emergency -- such as SARS -- strikes, involving 194 states and territories »
Airlines Bankruptcy

5. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
TWA (2001)
US Airways (2002)
United Airlines (2002)
US Airways (2004)
Northwest and Delta Airlines (2005)
SARS coronavirus pandemy risk (2003)
International Health Regulations initiative(2005)
« IHR, is a massive global plan that maps an emergency response effort if a health
emergency -- such as SARS -- strikes, involving 194 states and territories »
Airlines Bankruptcy

6. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
France 6 patients, no deaths (2003)
SARS coronavirus pandemy risk (2003)
International Health Regulations initiative(2005)
Airlines Bankruptcy

7. LETI DaysTRADING RISK Airlines Bankruptcy
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION

8. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
2008
$140
Crude Oil Price Peak

9. LETI DaysTRADING RISK Eyjafjallajökull
2010
$200m /day
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION

10. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
Risk
« Effect of uncertainty on objectives. »
ISO/IEC 31000:2009 Risk Management Standard.

11. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
vs. Our current knowledge
Risk
« Effect of uncertainty on objectives. »
ISO/IEC 31000:2009 Risk Management Standard.

12. LETI DaysTRADING RISK Uncertainty on objectives ?
The Discovery of Superconductivity, Physics Today, Sept. 2010
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION

13. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
Uncertainty on objectives ?
« As we pass the centenary of the discovery of
superconductivity, the design of new and
more useful superconductors remains as
enigmatic as ever. As high-density current
carriers with little or no power loss, high-
temperature superconductors offer unique
solutions to fundamental grid challenges of
the 21st century and hold great promise in
addressing our global energy challenge in
energy production, storage, and distribution.
Traditionally guided by serendipity,
researchers in the field have grown into an
enthusiastic global network to predictively
design new superconductors. »
Laura H. Greene, Dec. 2014

14. LETI DaysTRADING RISK Hype or Transfer?
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION

15. LETI DaysTRADING RISK Hype or Transfer?
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION

16. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
B2B ➔ B2C
Forecasting the Market

17. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
B2C ➔ B2B
Koomey’”⁹s Law
Forecasting the Market

18. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
50 Ideas
Go / No-Go Pipeline

19. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
50 Ideas 10 Projects
Go / No-Go Pipeline

20. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
50 Ideas 10 Projects 3 Prototypes
Go / No-Go Pipeline

21. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
50 Ideas 10 Projects 3 Prototypes
Go / No-Go Pipeline
1 Product

22. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
Knowledge/Risk
50 Ideas 10 Projects 3 Prototypes
Go / No-Go Pipeline
1 Product

23. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
Knowledge/Risk
« Play it Safe » Paradox
Rationali-
zation
Crunch
50 Ideas 1 Product
=

24. LETI DaysTRADING RISK Risk Is a Culture
Hofstede cultural dimensions
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION

25. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
Typical VC Investment Portfolio
Coventional wisdom:
30-50 Companies / year
10-20 Die at seed round
10-20 Make money and die shortly after
5-10 Survive
0-3 Transformative
120 Companies / 3 years = 1 Win

26. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
Screening or Reverse Pipeline
5 Ideas

27. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
Screening or Reverse Pipeline
5 Ideas 10 Projects

28. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
Screening or Reverse Pipeline
5 Ideas 10 Projects 50 Projects
5 Prototypes

29. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
1 Product
Screening or Reverse Pipeline
5 Ideas 10 Projects 50 Projects
5 Prototypes
100 Projects
10 Prototypes

30. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
Knowledge/Risk
Screening or Reverse Pipeline
1 Product
5 Ideas 10 Projects 50 Projects
5 Prototypes
100 Projects
10 Prototypes

31. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
Building Critical Mass
Knowledge/Risk
1 Product
5 Ideas 100 Ideas
10 Prototypes
Significative
Level of Risk
=

32. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
Knowledge/Risk
1 Product
5 Ideas 100 Ideas
10 Prototypes
Virtuous
Critical
Mass
Building Critical Mass
=
Significative
Level of Risk

33. LETI DaysTRADING RISK Building Critical Mass
Optionality in an
investment portfolio
Size matters.
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION

34. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
Significative
Level of Risk
Real Life?
Affordable
of Risk
Significative
Level of Risk
Virtuous
Critical
Mass

35. LETI DaysTRADING RISK
« What you must learn
is that these rules
are no different
than the rules
of a computer system.
Some of them can be bent.
Others can be broken. »
Gaming the System
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION

36. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
Customer Intimacy Product Leadership Operational Excellence
INDUSTRY
Two Different Cultures
80% Knowledge
« Culture »

37. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
Customer Intimacy Product Leadership Operational Excellence
STARTUPS INDUSTRY
80% Knowledge
« Culture »
20% Knowledge
« Culture »
Two Different Cultures

38. LETI DaysTRADING RISK Two Different Cultures
80% Knowledge
« Culture »
20% Knowledge
« Culture »
Virtuous
Critical
Mass
Significative
Level of Risk Risk
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION

39. LETI DaysTRADING RISK Two Different Cultures
80% Knowledge
« Culture »
20% Knowledge
« Culture »
Knowledge
Virtuous
Critical
Mass
Significative
Level of Risk Risk
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION

40. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
Your 2020 plan has failed.
Are You Investing in Risk?

41. LETI DaysTRADING RISK Are You Investing in Risk?
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
➊ Digital transformation is done
Predicted since 2007, now it’”⁹s there.

42. LETI DaysTRADING RISK
➋ Barriers to entry disappear
You’”⁹ll get Tesla-ized
Are You Investing in Risk?
$ 100m
4 Years
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION

43. LETI DaysTRADING RISK Are You Investing in Risk?
➋ Barriers to entry disappear
You’”⁹ll get Tesla-ized
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION

44. LETI DaysTRADING RISK
➌ The next billion people
have been busy
21m Electrical vehicles in Shanghai
how is your market?
Are You Investing in Risk?
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION

45. LETI DaysTRADING RISK
The Effects
of UNCERTAINTY
TRADING RISK
With STARTUPS
How To PIPELINE
INNOVATION
« Effect of uncertainty on objectives. »
ISO/IEC 31000:2009 Risk Management Standard.
Are You Investing in Risk?

46. LETI DaysTRADING RISK LETI DaysTRADING RISK
Thank you!
(Download this presentation on www.merkapt.com)