Themes_slideshow_PROOF

7

Investable Themes Driving Global Economic Growth

Summit Creek

capital

This Venn Diagram

encompasses the themes that we see as important drivers of growth and productivity in the world economy for years to come. It is laid out so that each theme intersects with every other theme, in any Food combination. While there are compelling “pure play� stories in every theme, it is the intersections between these big ideas that are intriguing. By filtering a company through these themes, a clearer picture is formed of how that company relates to the evolving global marketplace.

Demand

Efficiency

Mobility

Energy

Resources

Connectivity

1

Connectivity

The Connectivity theme continues to drive grass roots, as well as global growth and innovation with no signs of slowing, by redefining and reshaping how we manage our daily lives.

Connectivity is instant and ubiquitous.

It envelops nearly every aspect of our daily lives -- from the way we manage relationships, to the way we manufacture goods and research, and shop for products and services.

Connectivity enables relationships, industries, currencies, and communities to form at warp speed, along with global security issues, border disputes and trade wars. Summit Creek Capital would never underestimate the influence and impact of The Connectivity theme.

Neither should you.

New Industry In 2010, 3 million tablets were connected to the mobile network, and each tablet generated 5 times more traffic than the average smartphone.

www.cisco.com

World Wide Internet Traffic www.cisco.com

to Quadruple from 2009-2014

69% of us are already in the cloud picasa, facebook, salesforce.com http://computinginthecloud.files.wordpress.com/2008/09/ pip_cloudmemo.pdf

InternetDating The online dating industry is now worth $4 billion worldwide.

The Daily Deal Spending on U.S. daily deals could soar as much as $3.9 billion in the next four years, which seems a little conservative based on the figures known about the largest players in the space.

$6 Billion by 2015 ** Source: emoney.allthingsd.com

SOCIAL MEDIA

47

BILLION INSTANT MESSAGES SENT PER DAY IN 2009 * Data provided by Pingdom.

Workers in the Cloud*** 919.4 Million in 2008

1.19 Bill i by 2 on 013

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Demand

e Before the Global Financial Crisis spawned buzzwords like the ‘new normal,’ there was an entire subset of buzzwords regarding the shifting economic paradigm. Acronyms, new words, and phrases such as ‘BRIC,’ ‘Chindia,’ ‘emerging markets,’ ‘developing economies,’ and ‘globalization’ were tossed around in the media with increasing frequency. The phenomena that these terms refer to is the economic growth of a group of countries that were once considered ‘third world.’ Countries such as Brazil, China, India, Indonesia, Malaysia, and Russia, are experiencing growth rates that are far in excess of their larger counterparts in the ‘developed’ world. A generational shift is occurring as the developed world hands off the baton of the world’s consumer to the developing, global middle class.

Investing in newly minted consumers is a theme that will drive growth for the foreseeable future.

Africa & Asia’s

urban population is expected to double between 2000 & 2030***

of urban population growth will take place in the developing world***

U.S.A

China

China overtook the U.S. as the largest buyer of cars in 2009*

100 years ago less than 5% of the world’s population lived in Cities ****

NOW 50.5%

live in Cities

New Economies = DEMAND

BeT Ween 2007 & 2009

consumption in emerging m a r k e t s

SURPaSSed

U. S . c o n s u m p t i o n

FOR THe FIRST TIme*

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Efficiency

e Efficiencies are created as all the themes interact with one another.

Corporations become more efficient, doing more with fewer employees. Consumers become more efficient, ditching landlines, computers, TVs, and video game consoles for smartphones. When smartphones met e-commerce, the excitement spawned m-commerce, the global marketplace in your pocket. Price checking has never been easier.

Nor has growing a small business: start from the ground up, and extend to the cloud. Cloud computing has created operational efficiencies for companies of all sizes, but as server farms grow larger, their proprietors are seeking to become more energy efficient. Energy efficiency discussions extend to appliances, buildings, power grids, server farms,vehicles and pretty much all corners of the physical world.

Investing in efficiency will continue to be one of Summit Creek’s focal points in years to come.

mobility + connectivity: making

a1 click purchase from the ski lift of the book that was recommended by the guy sitting next to you on the lift chair.

Food + Resources: center pivot irrigation increases water efficiency 40-90% versus flood irrigation, yet 90% of the world’s farmland is flood irrigated.

Food + Energy + Resources: LED lights and temperature-controlled rooms allow for agricultural products to be grown in cities, reducing transportation costs and water usage.

Energy + Connectivity + Resources + Mobility + Food: Allows farmers to turn off irrigation pumps during peak hours from a smartphone; reducing their energy bill and reducing peak power prices. (m2m communications)

Energy + Resources + Connectivity: Smart Grid: Monitoring and Metering consumption of electricity, fuel, and water to better balance usage and define chokepoints.

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Energy

e From mitosis to manufacturing, our world is shaped by energy. Oil has had a good run as the king of energy, and though its reign will continue for decades more, the realization that it is a finite resource with some severe social and environmental side effects has spurred research into alternatives. Charlie Munger once said “I never miss an opportunity to NOT install solar systems, because I think they’re going to get cheaper. I’m not worried about what comes after oil, because solutions are on the horizon.”

References to a paradigm shift have become common in mainstream media; have you heard of the United States referred to as the ‘Saudi Arabia of Wind’ or the ‘Saudi Arabia of Natural Gas?’ From our food supply to our transportation network, from the way we communicate to the clothes we wear, energy is the common theme. And, as a theme, it will continue to drive investment and innovation.

34.30% 30.46%

23.41%

oil

coal

Natural Gas

5.36% Nuclear

Hydro

6.47%

Global Energy Use by Source 2010 (estimate) www.gregor.us

Wind was the 2nd largest US energy resource added for the 5th straight year.

10 GW of wind power added in 2009, bringing total to ~35 GW www1.eere.energy.gov

et the ne e m for a

sruface i n t

pe uro an

Union

inu ty m tes to en w

En ou

of the E s ed year

hs art ee

nergy falls on e r th ola s gh

40

30

20

10

0

(Peak Power, MW) Waldpolenz Solar Park Germany

Moura Photovoltaic Park Portugal

Puertollano Photovoltaic Park Spain

Lieberose Photovoltaic Park Germany

Olmedilla Photovoltaic Park Spain

Worlds Largest Photovoltaic Power Stations The top 10 largest solar power stations are all in Europe

60

50

Currently, the world consumes more than 85 million barrels of oil per day. That amounts to nearly 31.6 billion barrels annually.

http://1bog.org/blog/a-world-without-oil/#more-12807

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Food

e Human beings, when it comes down to it, have few basic necessities: Food, water, shelter, and connectivity with others. Overlay life, liberty, and the pursuit of happiness, and necessities morph into luxuries. Producing enough food to feed an ever increasing population, with ever increasing standards of living, is a necessity. As demand for protein like meat and dairy products increases there is an even larger increase in demand for grains and arable land. In that light, Agriculture is one of the themes that we believe will be more important in years to come.

8 Billion = 8,000,000,000 With more people, it means we’ll need to produce more food in the next 50 years than we’ve produced in the past 10,000 years combined.****

B

R

I

C

A g r i c u l t u r e Brazil leads the pack, with growth of more than 40% through 2019.**

The other three BRIC nations Russia, India & China forecast notching up their growth by 26%, 21% and 26% through 2019**

Global Population Growth

eight billion

seven billion

six billion

It took only 12 years to go from five billion to six billion people (in 1999).*

four billion

three billion

New Stone Age commences two billion

2-5 million years

New Stone Age

Bronze Age

Iron Age

The Bl ack De ath - T he

7000 B.C. 6000 B.C. 5000 B.C. 4000 B.C. 3000 B.C. 2000 B.C. 1000 B.C.

Middle Ages

Modern Age

Billions of People

five billion

It took 123 years for the world to go from one billion people to two billion (in 1930).*

Plague AD

1000 A.D.

2030 A.D.

Just 13.31% of global land area is considered arable*

global water requirements are likely to rise at least 40% more than the current accessible & reliable supply.***

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Mobility

We’ve reached a tipping point in the last few years. We’ve had the internet for awhile now. We’ve also had cell phones for long enough that most of us can remember a briefcase-sized box with a shoulderstrap that you could talk on. And computers have been around since World War II. But, for the first time, internet access is available on a mobile device that has more computing power than PCs during Y2K, weighs less than a quarter-pounder with fries, and you can talk (or video conference) on it to boot. This always available computing power is a modern marvel, but combined with Connectivity, is truly a game-changer.

Being mobile and connected allows for rapid decision making, accelerated product development, and a consumer base that can shop from anywhere.

of purchases are already made using a mobile device. according to ATT, Aug 26,2010

72% 2009 vs 2010

smartphone sales up 72% compared 2009

*Gartner

Total mobile device sales in 2010

1.6 Billion

*Gartner

Price checking has never been easier With barcode scanning apps, you can use your phone to instantly compare prices with other merchants while on-the-go. Apps enable you to compare products across physical and ecommerce merchants, optimizing the shopping experience.

9 9 .

16

RESULTS

$

just d n ) a ess e away l % l ( 15 ne mi o

Expected Growth of Smartphones in Units

2011

95 million units

2010

*Gartner

67 million units

Whatever it is...

?

I’m sure there’s an app for that.

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Resources

e Humans have always been dependent on the Earth’s resources. Some of those resource dependencies have developed as trade and commerce grew; coal and oil were not extremely useful before the industrial revolution. Others have never been excessively useful, but have captivated our attention for millenia (one shiny yellow metal, in particular, comes to mind). Still others, like water, have been taken for granted; regarded as free, misuse and overuse have been commonplace. Though mispricings are frequent, the laws of supply and demand hold strong for resources.

There will be enormous opportunities in the way we account for and use our resources, especially as essential resource needs become scarce and new resources see increased demand. Resources have increasingly become viewed as national security issues: dependence on foreign oil has been cited as a funding source for terrorism; bottlenecks in the supply of rare earth elements threaten developed economies around the world.

2%

Less than of the Earth’s water supply is fresh water. Of that, only 1% is available for drinking water.***

Average water use per person per day (liters)*** Top 5

575

1. US 493

2. Australia 3. Italy 4. Japan 5. Mexico

386 374 366

China produces & exports 95 % of rare earth elements.****

95%

~.05 ~.25

1980 1990

year

~2 ~5

copper in millions of tons

2000 2008

1980 1990

year 2000 2008

U.S.A.

U.S.A.

U.S.A.

<8

>11

>10 Rest of the World

Rest of the World

U.S.A.

>6

copper in millions of tons

<2

>2

Rest of the World

2

Rest of the World

>2

The average car contains * nearly one mile of copper wire

725 pounds of oven足dried wood

One barrel of oil equals approximately

520 pounds of coal

580 cubic feet of natural gas 19 gallons of motor gasoline

Sources

all source information can be found by going to www.summitcreekcapital.com/infographic_sources

Summit Creek

capital