Passion for the business Vision and endless ideas Product/customer focus: Must satisfy customer needs Persevere

through setbacks and failures Executional excellence: Translate creativity into action & generate measurable returns

What makes a successful entrepreneur?

Seeing opportunity where others dont Innovation: better, faster, cheaper, easier Fire in the Belly Willingness to take risks Extreme work ethic

Idea Generation

Creativity

Opportunity Recognition

Increasing Relevance to Founding Venture

Analytic intelligence - The ability to analyze

and evaluate ideas, solve problems and make decisions Creative intelligence - Going beyond what is given to generate novel and interesting ideas. Practical intelligence - The ability that individuals use to find the best fit between themselves and the demands of the environment Social intelligence - The ability to understand and manage all types of people and to act wisely in human relations Successful intelligence - The acquisition and use of what you need to know to be successful in a particular environment.

Practical Intelligence

Analytic Intelligence

Successful Intelligence

Success

Creative Intelligence

Creativity emerges from a confluence of Intellectual abilities Broad, rich knowledge base Appropriate style of thinking Personality attributes Intrinsic, task-focused motivation Environment supportive of creative ideas

Active search Entrepreneurial alertness Prior knowledge

Opportunity recognition

Social networks

Seeing links between seemingly unconnected trends, changes, events Connections form an identifiable pattern

Situation in which a person can develop a new business idea that has potential to generate profit

Truly valuable entrepreneurial opportunities come from an external change that either: Makes it possible to do things that had not been done before Makes it possible to do something in a more valuable way.

New technology Political and regulatory shifts Social and demographic change

Potential

Entrepreneurs develop business ideas by: Developing new products and services Tapping new markets Formulating new methods of production Identifying new raw materials Developing new ways of organizing processes

Idea is thought, impression, notion Opportunity: favorable set of circumstances that create need for product or service. Ex: Jeff Bezos/Amazon Opportunity has four essential qualities Attractive Durable Timely Creates/adds value for buyer/user

Observing/Study Trends

Economic factors Social factors Technological Advances Political Action and regulatory statutes

Economic Forces

Consumers level of disposable income Interest rate changes More women in workforce Currently: global recession

Social Forces

Both parents working: fast food People too busy: digital organizers Life stress: spas, wellness clinics

Family & work patterns Aging of the population Increasing diversity in the workplace Globalization of industries Increased focus in health care & fitness Proliferation of computers & Internet Increase in numbers of cell phone users New forms of music & entertainment

Technological Advances

Cell phones: allows people to be mobile E-commerce: accommodates busy schedules and working from home/remote locations New laws: help companies comply; ex: SoX Terrorism: Products & services to protect

Political Action

Solving a Problem

Observe peoples challenges Look for problems Listen to peoples complaints Think of your own challenges

Personal characteristics for opportunity recognition

Prior experience in an industry Entrepreneurial alertness/6th sense Social networks Creativity: preparation, incubation, insight, evaluation, elaboration

Group should choose a market and identify a BIG PERVASIVE PROBLEM customers face. Brainstorm some products or services to solve those problems Share ideas with larger group

Brainstorming: generate ideas quickly, no analysis or decision making

Enthusiasm, originality, lots of ideas Freewheeling, lively No criticism allowed Session moves quickly Leapfrogging encouraged

Focus groups

People selected are familiar with issues Whats on customers mind Conducted by trained moderator Success depends on moderators ability to ask questions and keep on track

Surveys: gathering information from sample of individuals

By phone, mail, online, in person Random portions of population Customer Advisory Boards

The process to determine if a business idea is viable worth pursuing

Product/service feasibility analysis Industry/market feasibility Organizational feasibility Financial feasibility

Concept testing: validate customer interest, desirability & purchase intent

Validate underlying premise Help develop the idea Try to estimate sales

New Business Concept Paper - Description of product/service offered - Intended target market - Benefits of product/service - Description of how the product will be positioned versus similar ones in market - Description how the product would be sold or distributed.

Usability Testing: measures products ease of use and the users perception of the experience using model/prototype

Industry attractiveness Market timeliness Identification of niche market

Industry Attractiveness Large and growing Important to the customer Fairly young rather than older/mature High rather low operating margins Not being crowded

Primary and secondary research is needed

Market Timeliness - Improved product = market exists - Breakthrough product: - First mover advantage - Second mover advantage Identifying a niche market

Sufficient management expertise, organizational competence & resources to successfully launch a business - Management ability - Resource sufficiency

Total start-up cash needed Financial performance of similar businesses Overall financial attractiveness of the proposed venture

Looks at:

Markets and Margins Competitive Advantages Value Realization Overall Potential

Exercise: Evaluate your groups idea using the first two screens

Need/want/prob Identified lem

Customers

Unfocused
Unreachable, loyal to others

Reachable, receptive

Market Size
Market Growth Rate Gross Margin

$100 million + More than 20%

>40%, durable

Less than $10 million Less than 20% or shrinking <20%, fragile

Barriers to Competitors Entry

Contacts and Networks Degree of Control

Defensible
Key access High

None
Limited Low Low Low

Prices and Cost High

Supply/distributi High on Channels

I know quite certainly that I myself have no special talent; curiosity, obsession and dogged endurance, combined with self-criticism, have brought me to my ideas. - Albert Einstein
The air is full of ideas. They are knocking you in the head all the time. You only have to know what you want, then forget it, and go about your business. Suddenly, the idea will come through. It was there all the time. - Henry Ford

A mediocre idea that generates enthusiasm will go further than a great idea that inspires no one. - Mary Kay Ash