Idea Generation & Opportunity Assessment

2007-8 Business Plan Workshop Series

Presented by: Chris Pavlides Executive Director Innovation & Entrepreneurship Institute 9/6/07

Temple Entrepreneurship
Princeton Review and Entrepreneur Magazine (Nov.06 issue) ranked Temple as 4th in the nation for its undergraduate entrepreneurship program and 7th for its graduate program Fortune Small Business Magazine (Sept.07) issue ranked Temple among top 25 entrepreneurial colleges in the nation

The Power of Entrepreneurial Thinking

What makes an entrepreneur?

Seeing opportunity where others dont Innovation: Better, Faster, Cheaper, Easier Fire in the Belly Willingness to take risks

Why think like an entrepreneur?

Changing economy new career options Corporate Intrapreneurship

Why become an Entrepreneur?

Be my own boss Pursue my own ideas Make lots of money Control my own career/destiny Develop a unique product or service Help people Become famous

Characteristics of Successful Entrepreneurs

Passion for the Business: change peoples lives. Critical for investors. Product/Customer Focus: Must satisfy customer needs Persevere through setbacks and failures Execution Intelligence: Translate creativity into action & measurable returns

Common Traits & Characteristics of Entrepreneurs

Achievement driven Alert to opportunities Creative Decisive Energetic Strong work ethic Moderate risk taker Networker Lengthy attention span

Optimistic Persuasive Promoter Resource assembler/lever Self-confident Self-starter Tenacious Tolerant of ambiguity Visionary

Recognizing Opportunities & Generating Ideas

1.

Idea is thought, impression, notion Opportunity: favorable set of circumstances that create need for product or service Externally stimulated: e.g. Jeff Bezos/Amazon Internally stimulated: e.g. BrainReactions

2.

Opportunity has 4 essential qualities 1. Attractive 2. Durable 3. Timely 4. Creates/adds value for buyer/user

Recognizing Opportunities & Generating Ideas

1.
2. 3. 4.

Observing/Study Trends Economic factors Social factors Technological Advances Political Action/Regulatory statutes

Recognizing Opportunities & Generating Ideas

Economic Forces Consumers level of disposable income Interest rate changes More women in workforce Social Forces Both parents working: fast food People too busy: Sony Walkman Life stress: spas, wellness clinics

Recognizing Opportunities & Generating Ideas

1.

2.
3. 4. 5. 6. 7. 8.

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

Recognizing Opportunities & Generating Ideas

Technological Advances Cell phones: people very mobile E-commerce: people very busy Political Action New laws: help companies comply Terrorism: Products & services to protect

Recognizing Opportunities & Generating Ideas

1.
2. 3. 4.

Solving a Problem Observe people challenges Look for problems Listen to people complains Think of your own problems

Recognizing Opportunities & Generating Ideas

1. 2. 3. 4.

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

Small Group Exercise: What Opportunities Exist?

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

Techniques in Generating Ideas

Brainstorming: generate ideas quickly, no analysis or decision making. Enthusiasm, originality, lots of ideas Freewheeling, lively No criticism allowed Session moves quickly Leapfrogging encouraged

Techniques in Generating Ideas

1.
2. 3. 4.

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

Techniques in Generating Ideas

Surveys: gathering info from sample of individuals By phone, mail, online, in person Random portions of population

Customer Advisory Boards

Feasibility Analysis

The process to determine if a business idea is viable worth pursuing Product/service feasibility analysis Industry/market feasibility Organizational feasibility Financial feasibility

1. 2. 3.

4.

Product/Service Feasibility Analysis

1. 2. 3.

Concept testing: validate customer interest, desirability & purchase intent Validate underlying premise Help develop the idea Try to estimate sales

Product/Service Feasibility Analysis

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.

Product/Service Feasibility Analysis

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

Industry/Market Feasibility Analysis

Industry attractiveness Market timeliness Identification of niche market

Industry/Market Feasibility Analysis

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

Industry/Market Feasibility Analysis

Market Timeliness - Improved product= market exists - Breakthrough product: - first mover advantage - second mover advantage Identifying a niche market

Organizational Feasibility Analysis

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

Financial Feasibility Analysis

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

Evaluating Opportunities: Quick Screen

Looks at:
Markets and Margins Competitive Advantages Value Realization Overall Potential

Exercise: Evaluate your groups idea using the first two screens

Markets and Margins

Need/want/proble Identified m
Customers Market Size Market Growth Rate Gross Margin
Reachable, receptive $100 million + More than 20% >40%, durable Unfocused Unreachable, loyal to others Less than $10 million Less than 20% or shrinking <20%, fragile

Competitive Advantages
Barriers to Competitors Entry
Contacts and Networks Degree of Control: Prices and Cost Channels of supply, distribution
Defensible None

Key access High High High

Limited Low Low Low