Digital technology has made a profound impact on business: it has disrupted organisational structures, created new revenue streams and fundamentally changed the way businesses engage with their customer base. Advancements in analytics, the increasing capability of mobile and the rise of Cloud have completely disrupted traditional models - but the technology only forms half of the picture - transformation requires a change in mindset accompanied by a genuine cultural shift.
16. Failure is common: the estimated cost of global tech failure is $3T USD
“By 2018, 70 percent of silo’ed digital transformation
initiatives will ultimately fail because of insufficient
collaboration, integration, sourcing,
or project management.”
IDC FutureScape: Worldwide CIO
Agenda 2016 Predictions
17. The pecking order is changing - ignore digital disruption at your peril!
18. The number of jobs to be lost to robots by 2021 will be 6%.
We will get it wrong if we ignoreit.
19. The cost of failure: It’s expensive. It’s embarrassing. It’s careerdestroying.
21. What kind of change is your organisationpursuing?
Catching up DisruptingKeeping up
22. How does this change impact onyour people?
New projects
New skills, new
behaviours
New colleagues
23. How does this change impact onyour people?
New projects
New skills, new
behaviours
New colleagues
Is it going to increase or decreaseworkloads?
Is it going to make people redundant?
41. • Introduction
• What we measure
• Metrics that matter
• What should you
do with it?
• Applying Pareto
and Pragmatism
@mcmillanstu #digiscot
Stuart McMillan,
Deputy Head of Ecommerce
Insight & Action
42. Introduction
• Established in 1981
• 128 Stores in 3 countries
• High quality of execution
• Multichannel
• Website launched 1998
• Introduction
• What we measure
• Metrics that matter
• What should you
do with it?
• Applying Pareto
and Pragmatism
@mcmillanstu #digiscot
43. What we measure
• Introduction
• What we measure
• Metrics that matter
• What should you
do with it?
• Applying Pareto
and Pragmatism
@mcmillanstu #digiscot
44. What we measure
• Introduction
• What we measure
• Metrics that matter
• What should you
do with it?
• Applying Pareto
and Pragmatism
@mcmillanstu #digiscot
YOY % DIFF
Clicks Spend Orders Revenue Conversion Rate
PPC 22.30% 0.91% -4.51% 2.31% -21.9%
Email 6.16% 35.65% -25.34% -15.89% -29.67%
Affiliates 3.60% 72.89% 4.18% 13.49% 0.6%
Struq 238.55% 162.70% 232.61% 280.68% -1.76%
Paid 25.47% 2.32% 0.16% 8.30% -20.18%
SEO 9.95% 0.96% 6.89% -8.18%
Schuh
Cycle -7.74% -26.02% -19.93% -19.81%
Direct 7.08% 40.64% 60.06% 31.34%
"Free" 8.86% 10.84% 20.99% 1.82%
Totals 16.63% 4.95% 14.06% -10.02%
45. What we measure
• Introduction
• What we measure
• Metrics that matter
• What should you
do with it?
• Applying Pareto
and Pragmatism
@mcmillanstu #digiscot
• Sale vs. full price
• Sell-through
• Checkout abandonment %
• % of customers entering checkout
• Site speed
• Errors
• Session duration
• NPS
• NES
• User Generated Content
• Competitor activity (inc. traffic)
• Blog views
• Social Media interaction
46. • Introduction
• What we measure
• Metrics that matter
• What should you
do with it?
• Applying Pareto
and Pragmatism
@mcmillanstu #digiscot
48. • Introduction
• What we measure
• Metrics that matter
• What should you
do with it?
• Applying Pareto
and Pragmatism
@mcmillanstu #digiscot
Drowning in a sea
of information
49. • Introduction
• What we measure
• Metrics that matter
• What should you
do with it?
• Applying Pareto
and Pragmatism
@mcmillanstu #digiscot
Case study 1
50. • Introduction
• What we measure
• Metrics that matter
• What should you
do with it?
• Applying Pareto
and Pragmatism
@mcmillanstu #digiscot
Case study 2
51. • Introduction
• What we measure
• Metrics that matter
• What should you
do with it?
• Applying Pareto
and Pragmatism
@mcmillanstu #digiscot
ROI
&
MVI
52. • Introduction
• What we measure
• Metrics that matter
• What should you
do with it?
• Applying Pareto
and Pragmatism
@mcmillanstu #digiscot
Knowledge
is nothing without
Understanding
53. Spend time and money on
people, not tools.• Introduction
• What we measure
• Metrics that matter
• What should you
do with it?
• Applying Pareto
and Pragmatism
@mcmillanstu #digiscot
https://www.kaushik.net/avinash/the-10-90-rule-for-magnificient-web-analytics-success/
54. • Introduction
• What we measure
• Metrics that matter
• What should you
do with it?
• Applying Pareto
and Pragmatism
@mcmillanstu #digiscot
Stuart McMillan,
Deputy Head of Ecommerce
ThankYou
68. “It has afforded me
something that I have
lost. Memory. I can
ask Alexa anything and
I get the answer
instantly. And I can ask
it what day it is twenty
times a day and I will
still get the same
polite answer.”
72. Asset Management
(Tech Forge)
GIS
Management
(Map Info)
Document and Content
Management
(Excel)
Work
Scheduling
(WebAspx)
Case
Management
(Siebel CRM)
Information
Management
(Xpress)
Project and Risk
Management
(Project Vision)
Contact CRM
(Siebel CRM)
Work Order Management
(Civica Flare)
Work Order Management
(Siebel CRM)
Work Order Management
(Symology)
Specialist
Control Systems
(ASLAN)
Case
Management
(Ocella)
Specialist
Control Systems
(Traffic Lights)
GIS
Management
(Cartology)
Work
Scheduling
(Total Mobile)
Contact CRM
(Tunstall)
Project and Risk
Management
(Verto)
Work Order Management
(TechForge)
Work Order Management
(Total Mobile)
Project and Risk
Management
(Covalent)
Work
Scheduling
(EGenda)
Work
Scheduling
(Care Manager)
Contact CRM
(FirmStep)
Contact CRM
(Lotus Notes)
Case
Management
(Axia)
Case
Management
(Foster Care)
Case
Management
(ICS)
Case
Management
(Raise)
Case
Management
(Si-Dem)
Asset Management
(Caspar)
Document and
Content
Management
(Goss ICM)
Document and
Content
Management
(Northgate EDMS)
Document and
Content
Management
(File Shares)
Council Property
Community Safety
& Emergencies
Environmental
Protection
Consumer
Affairs
Transport and
Infrastructure
Planning and
Building Control
Information
Technology
Adult Social Care
HR
Management
(Carval)
Information
Management
(Capita One)
Information
Management
(Capita eStart)
Information
Management
(Core IMS)
Information
Management
(CAF - Excel)
Information
Management
(Homelessness d/b)
Information
Management
(Registrar)
Asset Management
(Axiell)
Asset Management
(Symology)
Asset Management
(Civica APP/Flame)
Asset Management
(Siebel CRM)
Asset Management
(Centenial)
Information
Management
(EDMS)
Information
Management
(Land Terrier)
Information
Management
(Gower)
Information
Management
(Erimus)
HR
Pensions
HR
SAP Payroll
Booking and
Ticketing
(TLMS)
Booking and
Ticketing
(Blackbaud)
Finance and
Procurement
(Caspar)
Finance and
Procurement
(Northgate
iWorld)
Finance and
Procurement
(Northgate
eBenefits)
Finance and
Procurement
(Esker
Deliveryware)
Finance and
Procurement
(Intech - Fraud)
Finance and
Procurement
(Credita)
Finance and
Procurement
(Capita Axis)
Finance and
Procurement
(SAP FI)
Case
Management
(IAS)
Child Social Care
Education
Services
102. How you start will determine how you end
• Understanding the Issue (what is the problem being solved, don’t try and fix symptoms)
• Understanding the Context (how it is used, who uses it, does product or service meet the user requirements)
• Understanding the Market (competitor landscape, market imperatives, business risks and equality rights)
• Defining Knowledge Gap (the gap between what is provable knowledge and what is assumption)
• Define Baseline Metrics (core current metrics of situation)
• Define KPI's (core target metrics of future situation from Baseline Metrics, post deploy)
Only then Define the Methods and Processes
105. Nathan Fulwood
Strategy Director & Founder
Strategic Creative Consultancy
The value of brand
Engagement & experience
How to get it right, quicker
106. Brand is a relationship
WHO YOU ARE WHO THEY ARE
YOUR STORY
D
THEIR STORY
YOUR ARTIFACTS
N
BELIEFS
YOUR INVITATIONS
A
ASPIRATIONS
CULTURE
R
BEHAVIOURS
BELIEFS
B
WANTS & NEEDS
PRODUCTS VALUES
PERSONALITY LOCATION
ORGA NISAT ION AUDIENCE
115. DESIGN S P R I N T S
‘Greatest hits’ - Google Ventures Sprint Process - http://www.gv.com/sprint
You can pack business strategy, innovation,
creativity, behavior science and design thinking into
one week.
116. DAY ONE DAY T W O D AY T H R E E DAY FOUR DAY FIVE
AGREE O N THE M O S T
IMPOR TANT QUESTION
117. DAY ONE DAY T W O D AY T H R E E DAY FOUR DAY FIVE
E X P L O R E
POTENTIAL SOLUTIONS
118. DAY ONE DAY T W O D AY T H R E E DAY FOUR DAY FIVE
DEVELOP A
STOR YBOAR D
119. DAY ONE DAY T W O D AY T H R E E DAY FOUR DAY FIVE
BUILD A
PR OTOTYPE
120. DAY ONE DAY T W O D AY T H R E E DAY FOUR DAY FIVE
T E S T W I T H
FIVE C U S T O M E R S
127. T H E C O S T OF D E L A Y
Prioritise the most important project questions
and gain immediate feedback.
Value stream map - http://blackswanfarming.com/cost-of-delay/
£150,000 per week lost in delay.
131. A S T R O N G BRAND:
Aligns your organisation with the needs of your
customer and gives focus and consistency
Gives you plenty of hypotheses to test and learn from
Translates your business purpose into something your
audience can engagewith
133. Input
Internal leadership, management and employee insight
External client and stakeholder insight
Communications ecosystem audit
Competitive/comparative set analysis
Purpose
Why you do what you do
Ambition
What you aim to achieve
Proposition, brand story & themes
What you will be known for (clients, stakeholders and talent)
Output
Creative platform/brief
Engagement principles and tactics
Identity and design framework, education and guidance
Content, storytelling andmessaging
Values
What you believe in
Brand character (visual & verbal)
How you express yourself. What if feels like to work with you.
Personal insights provide the substance,
authenticity and inspiration for a compelling and
sustainablebrand.
Informs decision-making throughout process.
Early engagement/consultation helps create
ambassadors for process and outcomes.
Gives your brand energy and drive that all
stakeholders can connect with.
Ensures communications aredriven by
audience benefit.
Structures content generation,storytelling
and messaging.
Defines the human side of your business.
Who you are and what’s important to you.
Differentiates you and helps all audiences
connect rationally and emotionally with
the experience and service you offer. The
brief to influence and inspire all creative
and communicationdecisions.
Motivates employees, builds personal
connection with clients and creates a
platform for profile inyour
marketplace.
150. +44 (0) 131 561 7300 | www.bordercrossingmedia.com | Company No: SC 308 978
Generative Product Research Generative Market Research
Questions
How can we solve the problem?
What form should this take?
How important is the design?
What’s the quickest solution?
What is the minimum feature set?
How should we prioritise?
Methods
Solution interview
Contextual inquiry/ethnography
Demo pitch
Consulting
Competitor analysis and usability
testing
Questions
Who is our customer?
What are their pains?
What job needs to be done?
Is our customer segment too broad?
How do we find them?
Methods
Customer discovery interviews
Contextual inquiry/ethnography
Data mining
Focus groups*
Surveys* (open ended)
* Not recommended
151. +44 (0) 131 561 7300 | www.bordercrossingmedia.com | Company No: SC 308 978 1
2. Phrase your customer problems in their
words
152. +44 (0) 131 561 7300 | www.bordercrossingmedia.com | Company No: SC 308 978 1
I need new
functionality
153. +44 (0) 131 561 7300 | www.bordercrossingmedia.com | Company No: SC 308 978 1
I worry about
my daughter at
night
155. +44 (0) 131 561 7300 | www.bordercrossingmedia.com | Company No: SC 308 978
> 95 % of companies Marketing
and Development managers don’t
agree on what a Customer need is
Source: Stratgyn.com
156. +44 (0) 131 561 7300 | www.bordercrossingmedia.com | Company No: SC 308 978 1
3. Define your customer needs
157. +44 (0) 131 561 7300 | www.bordercrossingmedia.com | Company No: SC 308 978 1
Customer need:
Bill needs to
have peace of
mind that his
daughter is safe
when she
travels alone at
night.
159. +44 (0) 131 561 7300 | www.bordercrossingmedia.com | Company No: SC 308 978 1
How might we?
Sharing travel info
from app
GPS tracker in neck
Auto text message
every five minutes
Push notifications
Don’t let girls out after
dark
Long piece of
thread
Follow her
Breadcrumbs
Learn how to relax
and ignore it
Monitor her vital signs
Panic button
162. +44 (0) 131 561 7300 | www.bordercrossingmedia.com | Company No: SC 308 978
Evaluative Product/Market Research
Evaluative Product Research Evaluative Market Research
Questions
Is this solution working?
Are people using it?
Which solution is better?
How should we optimise this?
What do people like / dislike?
Why do they do that?
Methods
Paper/Clickable prototypes
Usability
Hallway
Live
Remote
Functioning products
Analytics
Questions
Are they really willing to pay?
How much will they pay?
How do we convince them to buy?
How much will it cost to sell?
Can we scale marketing?
Methods
5 second tests
Comprehension
Conjoint Analysis
Data mining/market research
Surveys* (closed)
* Not recommended
164. +44 (0) 131 561 7300 | www.bordercrossingmedia.com | Company No: SC 308 978 1
?1. Think about problems
not solutions
2. Phrase your customer
problems in their words
3. Define your customer
needs
211. Improve workforce
effectiveness, with
secure digital networks,
devices and tools that
transform ways of
working
Get closer to
customers and
communities through
innovative use of digital
technology
Cut out wasteful
processes, with
technology like
Internet Of Things or
Big Data & Artificial
Intelligence
It's not just about online transactions , we need to look at the steps of every frontline
process and search for unlockable data to drive efficiencies and change
212. 212
The Digital Layer Cake
Transform
DIGITAL
LEADERSHIP
Deliver – DIGITAL
SERVICES
Disrupt – Culture, Business Rules,
Customer Interactions, Data,
Discover – FOUNDATIONS :TheTechnical
Platform
DigitalCouncil Digital Places
214. CONFIDENCE
I understand my
business needs
•Cost Reduction
•Improve service
•Streamline process
I understand Digital
•The terms
•Methods
•The technology
•The impact
•Innovation
I have the necessary
skills
•In house
•Personally
•I can and have authority to
innovate
Technology is easy
to use
•For Citizen
•For staff
•For me
Its Secure
•But not business prohibitive
Digital will Support
& deliver
•Outcomes
•citizen
•staff
•council
215. Ambition
How else can I used
Digital to ..
•Reduce Cost
•Improve service
•Streamline process
Digital underpins
•Redesigning process
•Break Tradition
•Creating new opportunities
•New business models
•New Revenues
How can I hone skills
to create
•New Careers
•New culture
•Authority and environment
to innovate
Technology adapts
& evolves to support
•Citizen
•Staff
•Council Services
•me
Security at the heart
•Understanding
•Mitigated steps to protect
assets
Digital Evolution
Support & deliver
•Outcomes
•citizen
•staff
•council
216. delivering better outcomes
Digital can deliver savings at the same time as improving quality of life
Quality
Of
Life
Public Services Economy
Increased
Economic
Activity
• Increased
Participation
• Community
Empowerment
Inward
Investment
• Reduced Failure Demand
• Proactive rather than
Reactive Services
• Better Partnerships
• Improved Efficiency and
Cost Savings
• Improved Decision-Making
• Improved Market
Insight
• New Markets
• Innovation
Opportunities
• Business Growth
• Improved Achievement and
Lifelong Learning
• Better Health and
Independence
• Reduced risk of crisis
• Reduced inequality
Improved
Resiliency
and
Sustainability
Digital Place
228. ANDREW DOBBIE
FOUNDER/CD/MD
JILL MOFFAT
HEAD OF DIGITALPROJECTS
EMMA STRAIN
ACCOUNT DIRECTOR
JADE MACFARLANE
SENIOR DESIGNER
PETER PELOSI
SENIOR DESIGNER
EMMA FAULKNER
GRAPHIC DESIGNER
ASA RODGER
GRAPHIC DESIGNER
DAN SIMMON
GRAPHIC DESIGNER
JOHN HYLAND
ARTWORKER
HANNAH DAVIDSON
PA / OFFICE MANAGER
STEPHEN WEIR
OPERATIONS DIRECTOR
LORNA BROWN RAYMOND MCSTAY
CREATIVE SERVICES DIRECTOR COMMERCIAL DIRECTOR
STEVEN HADDEN
DESIGN DIRECTOR
STEPHANIE AITKEN
ACCOUNT MANAGER
DEXTER DOG
BARKETING MANAGER
MIKE BROOKE
HEAD OFSTRATEGY
EUAN BROWN
ACCOUNT MANAGER
HIBA OMAR
ACCOUNT MANAGER
JUDE KERRIGAN
ACCOUNT DIRECTOR
MEET THE
MADEBRAVE®
TEAM
NIALL MACFARLANE
DIGITAL DESIGNER
DAISY SWAIN
DIGITAL DESIGNER
FRASER HARKNESS
WEB DEVELOPER
LEWIS DORIGO
WEB DEVELOPER
KEENAN ERWIN
SOCIAL MEDIAMANAGER
STEPHANIE BOYLE
CONTENT STRATEGIST
229.
230.
231.
232.
233. SHORTLISTED
for Scottish SME of the year
SHORTLISTED
Consumer Engagement Award
(SpringbankWhisky)
WINNER
Outstanding Contribution
bya Young Business Leader
The Scottish
Business
Awards
2016
Herald
Digital
Awards
2016
Inspiring
City Awards
2014
WINNER
Entrepreneur of theYear
SHORTLISTED
forEntrepreneur
of TheYear
WeDo
Scotland
2015
Entrepreneurial
Spark’s
Entrepreneuring
Awards
2015
SHORTLISTED
Glasgow’s Favourite
Business
Evening
Times
Awards
2015
WINNER
Corporate /Promotional
Literature (50Years ofVango)
SHORTLISTED
forEntrepreneur
of TheYear
The Scottish
Creative
Awards
2015
The Scottish
Business
Awards
2015
WINNER
Best Use ofTech
for Tech’sSake
SHORTLISTED
Tech Business ofthe Year
The Chip
Shop
Awards
2016
The Scottish
Business
Awards
2015
WINNER
Best PerformingBusiness
1–10Employees
Glasgow
Business
Awards
2013
SHORTLISTED
for Excellencein
Communications
Glasgow
Business
Awards
2014
SHORTLISTED
for Best NewBusiness
of theyear
The Scottish
Business
Awards
2014
SHORTLISTED
for Young Business Person
of theYear
Glasgow
Business
Awards
2014
SHORTLISTED
for Digital: Website
Scottish CanalsWebsite
The Scottish
Creative
Awards
2016
OUR AWARDS
241. A brand is simply an
organisation, or a
product, or service
with a personality
Wally Ollins
242. Your brand is what
other people say
about youwhen you're
not inthe room
Jeff Bezos,Amazon
243. A brand is not...
or
alogo aproduct
orservice
244. A brand is the thing
that humanisesyour
business, so that people
can connect with it the
way they would a friend.
245. Purpose
What is the heart & soul of the brand?
What does it bring to someone’s life?
Why does itexist?
Personality
What characteristics or traits
does the brandhave?
Tone of voice
How does the brand talk
& communicate?
Style
How does the brand look?
And what does this say about them?
Vision
What does it want to become in the
future? Where is it going?
Values
What do they believein?
Name /Logo
What’s the brandcalled?
247. “We make great computers.They’re
user friendly, beautifully designed,
and easy to use. Want to buyone?”
“With everything we do, we aim to
challenge the status quo. We aim to
think differently. Our products are
user friendly, beautifully designed, and
easy to use. We just happen to make
great computers. Want to buy one?”
WHY
HOW
WHAT
251. WHY
Weexist to inspire creativity
in everyone.
HOW
We refuse to play it safe and
never accept mediocrity.
WHAT
We design, brand, code and share.
And we just happen to have an
awesome time doing it.
279. George Elliott – Driving
Collaboration & Seizing
Opportunity
Digital Transformation Conference, Our Dynamic Earth, Edinburgh, 23 February 2017
280. George Elliott - snapshot
▪ Grant Thornton - 15 years (7 as a partner)
▪ Over 25 years working in the tech sector:
▪ Listed companies - Main Market (3) AIM (6)
▪ 3 IPOs – Wolfson, Craneware, Cupid
▪ Latterly focused on early stage and fast growing companies
▪ Board level/executive responsibility for:
▪ Business development
▪ Sales & marketing
▪ Production
▪ Finance
▪ Since 2007 non-executive chairman/director of 18 companies
Digital Transformation 2017, Our Dynamic Earth, Edinburgh - 23 February 2017 280
281. George Elliott - currently non-executive
chairman/director of
▪ Craneware plc Software Non-executive chairman
▪ Calnex Solutions Ltd Hardware Non-executive chairman
▪ Cooper Software Ltd ERP consultancy Non-executive chairman
▪ Optoscribe Ltd Component manufacturer Non-executive chairman
▪ Visionware Ltd Software Non-executive chairman
▪ Par Equity Holdings Ltd Venture capital Non-executive director
Digital Transformation 2017, Our Dynamic Earth, Edinburgh - 23 February 2017 281
282. Presentation is based on
▪ My personal observations and experiences over the last 25 years working with
tech companies that transformed themselves
▪ Why tech is important to Scotland
▪ The culture within Scottish tech companies and why it needs to change
▪ What Scottish tech companies can do to compete and win on the global stage
Digital Transformation 2017, Our Dynamic Earth, Edinburgh - 23 February 2017 282
283. George Elliott - innovative tech companies that I
have worked with
▪ Services “Claim to fame” Current Status
▪ McQueen First multi-lingual, multi-currency call centre in Europe Acquired by Sykes
▪ Hardware
▪ Calluna Invented the 1.8 inch hard disk drive Dissolved
▪ MicroEmissive Displays Invented the world’s smallest OLED micro display Dissolved
▪ Wolfson Audio chip designed into Apple’s iPod and iPhone Acquired by Cirrus
▪ Calnex First 100G tester for Ethernet synchronisation Private company
▪ Optoscribe Manufacture high performance waveguides Private company
▪ Software
▪ Craneware Software and support services for US hospitals Public company
▪ Two Big Ears 3D audio for VR and AR applications Acquired by Facebook
Digital Transformation 2017, Our Dynamic Earth, Edinburgh - 23 February 2017 283
284. Why tech is important to Scotland
▪ Scotland has the raw materials:
▪ Deep and long history of innovation and invention
▪ 14 campus based universities - 3 ranked in world top 100
▪ Cost structure and flexible working practices
▪ Ecosystem is growing - incubators, angel syndicates, private equity companies, network
organisations, government agencies, etc.
▪ It’s IP based therefore more flexible and less capital intensive than traditional
sectors
▪ One of the fastest growing sectors:
▪ Electronics sector in Scotland’s Top 500 companies grew by 63% to >£2b in 2016 (compared
with 7% decrease overall) (Source: Business Insider Jan/Feb 2017)
Digital Transformation 2017, Our Dynamic Earth, Edinburgh - 23 February 2017 284
285. Why tech is important to Scotland - but!
▪ <50 public companies in Scotland (excluding financial institutions)
▪ Only 4 listed tech companies in Scotland (150 UK):
▪ Craneware, FreeAgent, Indigovision, Iomart
▪ Fast growing companies in Scotland tend to sell-out rather than reach their
potential
▪ Building global tech companies is not in our DNA – yet!
▪ We should be punching above our weight:
▪ Skyscanner and FanDuel should be the norm
Digital Transformation 2017, Our Dynamic Earth, Edinburgh - 23 February 2017 285
286. Scotland’s ecosystem is not yet configured to
reach its potential
▪ Universities
▪ Research rather than commercially focussed
▪ Stakes in spin-outs much higher than in the US
▪ Government and other agencies
▪ “There is a dire need for Scotland to draw up a 30-year blueprint to achieve its immense
economic potential.” (Source: Sunday Times 5 February 2017)
▪ Lots of initiatives but not coordinated
▪ Business community
▪ Needs to become more entrepreneurial and commercially focussed
Digital Transformation 2017, Our Dynamic Earth, Edinburgh - 23 February 2017 286
287. Seizing the opportunity – “The State of European Tech
2016”, report by Atomico, November 2016
▪ The future is being invented in Europe
▪ Europe has acquired real traction in what is termed “deep tech”
▪ Artificial intelligence - machine learning, data mining, big data, speech recognition
▪ Frontier hardware - robotics, drones, radar, 3D printing, nanosatellites
▪ Virtual and augmented reality
▪ The internet of things - wearables, smart home, smart city
▪ Why Europe?
▪ Moving from the consumer internet to the industrial internet
▪ Europe has the technological, financial and human assets to flourish in the digital economy
▪ Cultural change – companies are now determined to shape their own destiny
Digital Transformation 2017, Our Dynamic Earth, Edinburgh - 23 February 2017 287
288. How do we change our culture?
▪ Concentrate more on building companies rather than products
▪ Think bigger - global rather than local
▪ Focus more on the market than the technology
▪ Get “real” about planning
▪ Recruit experienced people early
▪ Develop your leadership and management skills
▪ Get out and talk to potential customers, influencers, competitors, etc.
▪ Learn from successful companies
▪ “Fail” fast
Digital Transformation 2017, Our Dynamic Earth, Edinburgh - 23 February 2017 288
289. How to compete and win - simple questions
▪ What problems/issues does your company’s technology solve?
▪ Do you know your addressable market, the key drivers, competitors, trends, etc.?
▪ How should you position yourself?
▪ Is your business scalable?
▪ What are your channels to market?
▪ How do you protect your intellectual property?
▪ How do you recruit, retain and motivate the staff you need?
▪ How do you reverse into the future?
▪ Do you know what you are worth?
Digital Transformation 2017, Our Dynamic Earth, Edinburgh - 23 February 2017 289
290. Craneware – case study
▪ Keith Neilson and Gordon Craig founded the company in 1999
▪ Identified an opportunity for automating billing requirements in US hospitals
▪ IPO in 2007 on AIM
▪ Software used by >25% of all registered US hospitals
▪ Chargemaster Toolkit® ranked No1 product for revenue cycle by KLAS since
2006
▪ Headquartered in Edinburgh with US offices in Georgia, Tennessee,
Massachusetts and Arizona and employees over 200 staff
▪ Market capitalisation IPO £32m, currently £334m
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291. Two Big Ears – case study
▪ Abesh Thakur and Varun Nair two Indian nationals founded the company in 2013
▪ Company founded to commercialise research work undertaken by the founders on 3D
binaural audio technology and augmented reality systems at the University of Edinburgh
▪ May 2014 Neil Heywood and George Elliott put in seed capital and joined the board as
non-executive directors
▪ Company used social media to bring its technology to games developers who were
developing content for VR and AR applications.
▪ Main competitor Dolby
▪ Founders presented at seminars and trade shows in California to present technology and
meet key players in the industry
▪ Company purchased by Facebook in 2016 for an undisclosed sum. Founders now work for
Facebook
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292. Conclusion
If you have a technology/product that:
▪ provides a solution to a real problem for
▪ a large addressable market which
▪ you have worked out how to access
then you should be able to
▪ build a team that will
▪ build a company
that will potentially become a global player
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295. Hunting for growth – Technology sector’s enduring appeal
The Technology sector has delivered the highest median
earnings growth historically (2003-2012).
The sector is also expected to deliver the highest growth
median earnings growth in the period 2014-18
Structural drivers of growth with Technology pervasive in all
business sectors
Consistent earnings growth, particularly in Software and IT
services sub-sector.
Sector earnings growth, ex Oil & Gas, Mining and Financials Tech Sector earnings growth
Tech Sector earnings growth, ex-hardware
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296. Investing in the UK Technology sector
Highly attractive sector for growth
Relatively small investible universe, even
before ARM Plc’s sale to Softbank (de-listed
6/9/2016)
In the UK, the Tech sector (including
payment companies) represents c. 2% of the
market (Main List and AIM).
As a comparison, in the US, the Technology
sector represents c.21% of the S&P 500
UK sector size vs. earnings growth profile
Distribution by market cap
17% of companies (26 companies) represent
83% of market value
Average market cap is £272M but the
median market cap is £41m
Limited investor choice
Gap in the market
No. of companies %Market Cap (£'000) %
Over £1bn mkt cap 7 5% 24,903 61%
£500m-£1bn 9 6% 5,770 14%
£250m- £500m 10 7% 3,192 8%
£100m-£250m 21 14% 3,283 8%
£50m-£100m 31 21% 2,153 5%
Under £50m 72 48% 1,386 3%
Total Tech Sector 150 100% 40,686 100%
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