Day 10 Lecture Slides Winning Innovation Strategy For A Unicorn Version3

Winning Innovation Strategy for a
Unicorn
Preparing for the Group Assignment
Birmingham Business School (BBS)

Birmingham Business School (BBS)
Advanced Engineering Management (AEM)
Advanced Engineering Management (AEM)
Strategic Innovation Management (SIM) Module
2021/2022
2022/2023
1
Overview day 10
• We have come to the end of our odyssey in innovation strategy. Exploring various kinds of innovation
strategies, the role of the customer and customer relationships in various contexts (industries)
today we turn the focus to a new kind of creature: unicorns and decacorns - privately held start-up
companies valued at over $1 billion.
• We will seek to explain how they succeed in a fragmented value pool of the world called Europe. We
will argue that successful European tech start-ups follow one of four core ‘strategic plays’ each
of which has different requirements. We therefore introduce (the) Winning Formula for a European
start-up to become a Unicorn, which is based on a study of Europe’s top 1000 start-ups.
• A key mechanism for Unicorns to grow rapidly is scale. Scale can be accomplished through
automation capabilities, leveraging artificial intelligence (AI) and other technologies to drive value.
When done right, automation has proven to deliver real benefits to target customers (which can be
illustrated through a UVP). We will argue that leading start-up companies capture exponential
returns (scale) through breakthroughs in learning how to use AI.
• Equipped with these insights we are ready for the group assignment, which is about applying the
Winning Formula (including) on a start-up in a start-up company in the fast-growing industry (such as
Biotech, Healthcare, B2B SaaS and Fintechs) in Europe to explain why and how it can transform into a
Unicorn by formulating a Winning Innovation Strategy with the aim to turn the start-up company
into a Unicorn.
2
Innovation Strategy – Case Study Geo Pei in French Haute Couture
Learning objectives - statements that define the expected goal of today in

terms of demonstrable skills or knowledge that will be acquired by a student
as a result of instruction
1. Identify and define different kinds of start-up

companies
2. Introduce (the) winning formula for a European start-up
to become a unicorn
3. Understand what scale is and how to accomplish it
4. Apply the Winning Formula (including scale) on a start-
up in a start-up company in the fast-growing industry
(such as Biotech, Healthcare, B2B SaaS and Fintechs)
in Europe to explain why and how it can transform into
a Unicorn
3

1. Identify and define different kinds of start-up

to become a unicorn
4. Apply the Winning Formula (including) on a start-up in
a start-up company in the fast-growing industry (such
as Biotech, Healthcare, B2B SaaS and Fintechs) in
Europe to explain why and how it can transform into a
Unicorn
4
There are four different kinds of start-up companies
• Minicorn startups are startups with a valuation of $1 million and over. These
startups have a strong vision and they strive to become a unicorn in upcoming future
• Startups (soon to be unicorns) have growth potential and are likely to join the unicorn
club called Soonicorn.
• Unicorn companies are those that reach a valuation of $1 billion without being listed
on the stock market and are the dream of any tech startup
• And startups that exceed the valuation of $10 billion are called decacorns.
• A tech, financial, or fintech companies worth more than $ 100 billion is called
Hectocorn or "Super Unicorn“, such as Apple, Google, Microsoft, Facebook, Oracle and
Cisco.
• For the group assignment you should choose a tech start-up company with a market cap
less than 10 billion USdollars: Mini-Sooni or Unicorn!
5
What is a Unicorn company?
• In business, a unicorn is a privately held start-up

company valued at over $1 billion
• The term was first popularised in 2013 by venture
capitalist Aileen Lee choosing the mythical animal to
represent the statistical rarity of such successful
ventures
• CB Insights, there are more than 803 unicorns as of
August 2021
• The largest unicorn are
– ByteDance a Chinese multinational internet technology
company headquartered in Beijing
– Stripe a technology company that builds economic
infrastructure for the internet. Businesses of every size
—from new startups to public companies—use our
software to accept payments and manage their businesses
online.
• Also according to CB Insights, there are now 30
unicorns with over $10 billions valuation in the world,
including Stripe, SpaceX, and Klarna - decacorn
6
Some Unicorn Startups in the UK
https://startupsoflondon.com/the-complete-list-of-unicorn-startups-in-the-uk-2021/
1. Benevolent AI
2. Oxford Nanopore Technologies
3. Brewdog
4. Oaknorth
5. Improbable
6. Darktrace
7. Graphcore
8. Ovo
9. Gousto
10. Gymshark
7
1. Define a Unicorn and distinguish it to a Decacorn

2. Introduce (the) winning formula for a European
start-up to become a unicorn
3. Understand what scale and how to accomplish it
Unicorn
8
9
2. Introduce (the) winning formula for a European start-up to become a unicorn
Almost two-thirds of the top 1,000 start-ups and scale-ups in Europe were
founded in the United Kingdom, Germany, and France
10
Top 12 countries of origin of top European start-ups and scale-ups, number
11
Biotech and healthcare, B2B SaaS, and fintechs make up more than half of
Europe’s top start-ups and scale-ups
12
Successful European tech start-ups follow one of four core ‘strategic plays’
13
Each ‘strategic play’ has different requirements
14

1. Identify and define different start up companies

to become a unicorn
Unicorn
15
Economies of scale and learning effects
• Economies of scale are cost advantages reaped

by companies when production becomes
efficient.
• Companies can achieve economies of scale by
increasing production and lowering costs.
• This happens because costs are spread over a
larger number of goods.
• Learning effects are cost savings that come
from learning by doing, such as learning by
repetition how to best carry out a task and run a
new operation
• The unit cost value added to a standard product
declines by a constant % (typically 20-30%) each
time cumulative output doubles.
• Reduced cost of goods sold as a percentage of
revenues enables a company to earn a higher
return on sales (ROS) and return on invested
capital (ROIC)
16
The nature of cost advantage: the experience curve
The Law of Experience:

”The unit cost value added to a standard product
declines by a constant % (typically 20-30%) each time
cumulative output doubles.”
1994 Limitations:
When a single segment should be targeted with a
differentiation strategy.
Cost per 1996 In a dynamic environment that requires a high level of
unit of flexibility.
output (in Problems of motivation and coordination (costs).
real $) 1998
2000
2002
2004
Cumulative Output 17
The strategic implication of the experience curve is that a company’s primary

strategic goals should be market share
If all firms in an industry have the same experience curve, then:

relative costs = f (relative market share)
This is supported by PIMS data:

10
ROS (%)
5-2 0
0-10 10-20 20-30 30-40 over 40

Market Share (%)
BUT: - Association does not imply causation

- Pursuing experience economies through pricing for market share is
risky
18
19
20
21
22
Leaders get disproportional impact from their AI investments
These AI leaders get on a different performance trajectory from

the outset because they understand that AI is about mastering the
long haul. They prepare for that journey by anticipating the types
of things that will make it easier to navigate the ups and downs,
such as feedback loops that allow data quality and user adoption
to compound and AI investments to become self-boosting. Where
some companies tire of marginal gains from weeks of effort,
leaders recognize that the real breakthroughs in AI learning and
scale come from working through those small steps.
23

1. Identify and define different start up companies

to become a unicorn
4. Apply the Winning Formula (including) on a start-
up in a start-up company in the fast-growing
industry (such as Biotech, Healthcare, B2B SaaS
and Fintechs) in Europe to explain why and how it
can transform into a Unicorn
24
Group assignment
• You have recently joined a start-up company in the fast-growing industry (such as
Biotech, Healthcare, B2B SaaS and Fintechs) in Europe. Recognized as a young
promising talent, you have been assigned to an internal high-performing team that should
be dedicated to one specific task. Your group task is to:
• Formulate a Winning Innovation Strategy with the aim to turn the start-up company
into a Unicorn
• Refer your answer that should be descriptive AND critically analytic to appropriate
literature only from this module.
25
Specific questions
1. What are the sources of change the provide an opportunity for your company? What was the impact
of Covid-19? What kind of innovation is the result of this change?
2. What is the strategic play? What kind of skills and capabilities is the strategic play based on? (the
requirements)
3. What kind of innovation strategy is it?
4. How is the company scaling the business?
5. What are the major ethical considerations?
6. Who are the target customers? Illustrate with a target customer profile
7. What kind of value does your company provide the target customers? Illustrate with a UVP
8. What is the competitive advantage? How is it reflected in the company’s business performance?
9. What are the major risks and limitations of this strategy?
10. What funding is required to make the start up a Unicorn? If it already is a Unicorn, what is the next
step?
11. Formulate three recommendations for government business policy that support the sustainable
development of Unicorns
26
Instructions
• The presentation should have a frontpage on which it should be stated: the names and ID numbers of
all group members
• Choose a case company in any of the designated industries; it should be a real, existing start-up
company in Europe – make sure you can access information about the company
• Answer each question by referring and using theory, concepts and terminology provided in the
course, that is the models and terminology of SIM – this is very important!
• Each question should be on one slide only, so if eleven questions then twelve slides for your
answers!
• Yes, summarize your answers as bullet points on the twelvth slide – do your answers make sense!!!
• The language should be (bad) English – you are not evaluate for your language skills
• The assignment should be made in groups: max 6 students per group
• The assignment should be submitted on our canvas page on the 18th of October
• If anything is unclear and/or you have questions then contact Dr Joachim Timlon on J
.Timlon@bham.ac.uk
27
1. What are the sources of change the provide an opportunity for your company? What was the impact of Covid-19?
Answer:
• Support for your answer

• Description (data from the company) Illustrative example
• Theory from the module
28
2. What kind of innovation is the result of this change?
Answer:
• Support for your answer

• Description (data from the company) Illustrative example
• Theory from the module
29
The individual assignment
• Why is business building the new growth priority in the post-covid-era and what role
can Innovation Strategy play? Refer your answer that should be descriptive AND
critically analytic to appropriate literature only from this module and illustrate with
one or several examples of companies only from the Biotech, Healthcare, B2B SaaS or
Fintechs industries.
• Submission deadline: 10th of November
30
Individual essay - a short piece of writing (2000 words) outlining the writer's
perspective to tackle a serious topic in an academic way
Introduction
– Reiterate the assignment question
– In this essay I will argue as well as …
but also I will argue and finally I will
argue that…
Description
– Case company introduction
Analysis
– Theory from this module
– Data
– Interpretation/analysis
– Sum up your analysis to support your
arguments
Conclusions
– No case company
– In relation to theory
31

1. Define a Unicorn and distinguish it to a Decacorn

to become a unicorn
Unicorn
32
Learnings from today’s lecture, ‘what I take away’
• Today I learned something I did not know

before, which is…
• …but also…
• …as well as…
33
Extra slide
34
What is a use case?
• A use case is a document or diagram describing why and how a person is expected
to interact with a system (or a product, service, etc.) in a selected situation.
• Each use case is represented as a sequence of simple steps, beginning with a user's
goal and ending when that goal is fulfilled.
• Examples of a business use case name: Complete Sales Transaction.
35
36
37
38
Leaders invest more in talent across the full suite of capabilities, and
automate to improve developer productivity
AI leaders hire 65 percent more

AI-related workers than other
companies do, varying the mix of
capabilities they hire in proportion
to their organization’s learning
curve; that means engaging more
data analysts and translators in
the beginning of the AI journey,
then shifting their hiring mix
toward engineering and data
science as the organization gains
AI experience (Exhibit 4). This is
when AI leaders begin to reap
significant scale effects in terms of
productivity and performance. By
helping the organization build the
muscle needed to engineer and
deploy AI applications, they can
scale to multiple domains and
capture the exponential gains
sooner.
39

Day 10 Lecture Slides Winning Innovation Strategy For A Unicorn Version3

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Day 10 Lecture Slides Winning Innovation Strategy For A Unicorn Version3

Uploaded by

Copyright:

Available Formats

Winning Innovation Strategy for a

Preparing for the Group Assignment

Birmingham Business School (BBS)

Learning objectives - statements that define the expected goal of today in

1. Identify and define different kinds of start-up

Learning objectives - statements that define the expected goal of today in

1. Identify and define different kinds of start-up

• In business, a unicorn is a privately held start-up

1. Define a Unicorn and distinguish it to a Decacorn

Top 12 countries of origin of top European start-ups and scale-ups, number

Each ‘strategic play’ has different requirements

Learning objectives - statements that define the expected goal of today in

1. Identify and define different start up companies

Economies of scale and learning effects

• Economies of scale are cost advantages reaped

The nature of cost advantage: the experience curve

The Law of Experience:

The strategic implication of the experience curve is that a company’s primary

If all firms in an industry have the same experience curve, then:

This is supported by PIMS data:

0-10 10-20 20-30 30-40 over 40

BUT: - Association does not imply causation

Leaders get disproportional impact from their AI investments

These AI leaders get on a different performance trajectory from

Learning objectives - statements that define the expected goal of today in

1. Identify and define different start up companies

• Support for your answer

• Support for your answer

Learning objectives - statements that define the expected goal of today in

1. Define a Unicorn and distinguish it to a Decacorn

• Today I learned something I did not know

AI leaders hire 65 percent more

You might also like