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We have a sort of a natural current base on our society of entrepreneurs.
That's a cultural difference that stands in the United States.
And it produces about 700,000 people
who want to start a new firm every year.
Now our question...
if you want more growth and this is an issue really important in times of
recession.
We need more of people because they create jobs
and make the country wealthier.
How do you get them?
No one has ever probed that idea before.
So the Kauffman Foundation is taking as a challenge.
We have an idea that we should democratize the process
of our entrepreneurship, make it look easier and be easier
for people to go pursue.
Wow, wow, what this guy just said?
Please play it back again.
We have an idea that we should democratize the process
of our entrepreneurship, make it look easier and be easier
for people to go pursue.
Can this really happen?
Can we Democratize Entrepreneurship?
Is that even possible?
According to the Kauffman Foundation that advises the American government
on entrepreneurship, this is the only solution to unemployment.
Let's see… Hang on! Here is an idea!
In Greece we have StartingUP
a very novel Innovation Competition
organised by
the Centre for the Promotion of Youth Entrepreneurship and Technology.
In the context of this competition
a new idea will be implemented, for the first time.
In collaboration with the Federation of the Hellenic Associations of
Young Entrepreneurs, which is promoting this endeavour
we will carry out an experiment throughout Greece.
We will try out the iDEA Framework.
iDEA aims to make democratizing of entrepreneurship a reality
not only in Greece, but throughout the world.
How? Through CrowdSourcing.
Not Crowdfunding, don’t be mistaken.
Crowdsourcing.
But let’s see how.
This is Maria.
Hello Maria!
Maria is a graphic designer, with lots of ideas. Sadly she is unemployed.
It’s the crisis you see.
This is George.
Hi George!
Competent business developer
and insurance salesman by necessity.
Also unemployed, but restless
searching for opportunities.
And there’s Mike.
Accomplished business consultant with long experience.
Unfortunately these days clients are hard to come by.
John, CEO of a large company
wants to use his experience and his knowledge to help young people
on a voluntary basis.
Peter is a self-made entrepreneur
who is looking to invest in new ideas.
It’s not just them.
There are many among us with the same qualities
and the same concerns.
Maria is at a loss.
Everythings seems difficult.
But she is not giving up.
She has seen on Facebook that there is a new concept
startingup.gr
She registers on the site
and submits her idea.
Just like Maria, many others, from all over Greece
are registering at startingup.gr and submitting their ideas.
George, with his eye for business opportunities
sees an ad of startingup.gr on Linkedin
and, he too, decides to give it a try.
On the site he can see ideas from all over Greece
and assess them, together with many others like him.
They can also vote for the most interesting idea
that is to say the idea they would be willing to develop
and invest their time in.
The ideas that receive the most votes proceed to the next phase.
Mike has also gone to the StartingUP platform
and expressed his intention to participate
given his wish to help with the development of new ideas.
He receives a phone call from the StartingUP team
and he is given the task of helping Maria to improve her proposal.
Mike and Maria meet up in a CoWorking space
to work on the idea.
A few days later, they upload the improved idea
to the StartingUP platform.
On the StartingUP platform, George and the other business developers
can assess the improved ideas
and choose which one they want to commit to and develop.
They can only pick one.
The ideas with the most votes proceed to the next phase.
Great news!
Maria finds out that her idea has been selected
to go on to the final phase.
She can also see which Business Developers voted for her idea.
So far everyone has been assessing Maria.
Now the time has come for her to choose.
Quite a novel approach, isnt’ it?
Let’s see what comes next.
Maria assesses those who selected her, her potential partners
by reading their CVs on Linkedin and picks some of them.
A few days later, Maria and the Business Developers
she has selected meet up in the CoWorking space
to get to know each other.
John also joins the team to help Maria decide which
of the Business Developers she will finally choose as her partner
after getting to know them better and working together with them.
They all aim to prepare a first, short, business plan.
Maria has decided.
Her idea has better chances with George.
The two of them now can work together in the CoWorking space
that is made available, free of charge, by StartingUP.
The Investors have already received the short business plans
of the entrepreneurial ideas.
Now the time has come for them to get to know the teams.
Maria and George, like all other contestants
present their ideas.
Peter is able to invest in the idea of his choosing
using the virtual capital he has in his hands, courtesy of StartingUP.
Why not Maria’s idea?
The competition has come to an end!
The Investors submit their choices.
And Maria’s team, which has received the most virtual capital
is announced to be the winner.
Wow, wow, wait a minute! Not so fast.
So far only the winners are happy.
But StartingUP isn’t just another innovation competition.
Let’s not forget.
This is an experiment, whose purpose is to prove
that it is possible to democratize entrepreneurship.
In other words, to demonstrate that it is possible
to provide opportunities to many more Marias and Georges
so that everyone can be happy.
Let’s see.
Today if Maria and George don’t have money to put their ideas into practice
they only have one option.
To get financing from the State.
In order for this to happen, they must have at least half of
the investment already in their hands or they must have a proven record of
previous successful business ventures to get a loan.
But what if Maria and George have neither money
nor a track record as entrepreneurs?
Then they find Peter who has invested 20 million euros
in a Venture Capital Fund.
The Fund has experts
who assess and then invest in new business ideas.
The State, which wants to help Maria and George
contributes 70%. That is 50 million euros, to the Fund.
So together with Peter’s 20 million euros
we now have 70 million euros available.
But let’s see how the Fund works.
Maria and the other young entrepreneurs submit their ideas
and Peter’ Venture Capital Fund, through its experts
first assesses and then provides finance to some of them.
However, Peter has a constraint.
In order for his Fund to be viable
he needs to cover his operating costs
and the salaries of the experts he employs.
So for every idea he tries out
he has high, inelastic management costs
which in the end limit his ability to make
a large number of small seed investments.
So with a capital of 70 million euros
in 3 years, he ends up, with roughly 60 opportunities to try out new ideas.
According to statistics, only 6 of these ideas will survive
and become profitable businesses.
Furthermore, with so few investment tries on his hands
Peter is forced to seek ideas that
if successful, will bring returns in the order
of tens of millions of euros within the first five years.
With only 60 investment tries
that Peter has, Maria and George
have very little chance of getting funded!
And especially, if we are talking about twenty million euro ideas
then they really have no hope.
Let’s see, because we talk about how to democratize entrepreneurship.
The basic service Peter and his investment fund provide
is to assess, finance and assist entrepreneurs to develop their ideas.
But to do this, 70% of the money they invest comes from public funds.
That is to say, from every Maria and George of this country.
With the same state contribution of 50 million euros
could we perhaps make Maria and George happy
whilst also helping Peter to overcome his constraints?
In other words, could we turn these 60 tryout ideas into 600?
While lowering the profitability benchmark
from tens of millions of euros to something more realistic.
Whilst, at the same time giving Peter as well as every
investor in Greece and abroad the possibility to invest in
more mature ideas with much greater chances of success
than what he has had so far.
This is exactly what iDEA is all about.
Let’s remind ourselves what just happened in the StartingUP competition.
Maria submitted her idea to an online platform
and was assessed, in a democratic way, by the market.
That is, by many people with George’s abilities
who would be willing to invest their time in her idea.
Time that they had
unlike the money that people like George do not have.
Then Maria was assisted in improving her idea.
And then, in her turn, assessed and picked George.
So together they formed a team and developed the idea further.
At the end, when things were mature enough
they went to see Peter.
Not at the beginning... at the end...
This is precisely what the Federation of Hellenic Associations
of Young Entrepreneurs proposes to the Greek Government
but also to Europe, with iDEA.
To democratize entrepreneurship
during the first, difficult seed and start-up phases
by ensuring that things are done in the right order
and by the right people.
Moving the investors, who represent 1% of the crowd
from the beginning of the procedure to the end.
Thus enabling society, that is to say 99% of the crowd
ultimately the market
to assess, finance and assist new ideas
exploiting all available resources
such as production facilities, research centres, incubators
coworking spaces, consultants, mentors, and many others.
With the help of the 99% by activating Crowdsourcing
we attain huge economies of scale
and manage to reduce spectacularly the management costs
associated with each new business startup idea.
A change that results, with the same Public Investment
a tenfold lift of the likelihood that Maria and George
will get 100% finance and commercialize their ideas.
Whilst at the same time Peter and other investors and experts
have numerous and more mature business proposals in which to invest
at their disposal.
Well away from the risky seed and start-up phases
with much greater chances of success.
Finally, with a fraction of Peter’s investments in the businesses
exiting successfully from the iDEA mechanism
the state recycles a big part of its funds.
In this way, we will all together show that
entrepreneurship can be democratized.
The power of opportunity is thus
disconnected from economic power
and reconnects itself with the people’s creative potential.
So with the same amount of money
we increase opportunities for all by a tenfold.
This means more companies like Maria's and George's
more growth, which in turn leads to less unemployment.
That’s why now everyone is happy.
If you have ideas to commercialize or questions about the iDea Framework
you can go to www.starting.gr.
Register on the platform and find out everything about
this novel innovation competition that wants to change the world.
StartingUP is jointly organised by the Centre for the Promotion of
Youth Entrepreneurship and Technology
the Federation of the Hellenic Associations of Young Entrepreneurs
the Centre of Volunteer Managers of Greece
the Municipality of Athens the European Parliament
and the European Commission.