IDEAS AND MORE IDEAS

Week 3Dr. Thomas Webb

BA 346

Chapter 4 – Ideas and CreativityFrom Ideas to Feasibility

• Great list of places to look for ideas.• Scamper – from ideas to opportunities. This

is a great tool you will be able to use in future.

• Avoid the pitfalls – a good list.• Testing the Feasibility – excellent outline in

4.4 and example at end of chapter• Some GREAT resources on creativity:

– “Here’s an Idea…,” Taylor– “A Whack on the Side of the Head,” Oech.– Boak Sells has great ideas– “Ten Ways to Restore……”– Other references in notes.

Chapter 5-6 – Part time or Full time?

It all depends!

• Chapter 5. The mini case raises the type of ethical issues part timers often face.

• Chapter 6. Some great examples and stories.• Five way to get into business – a good list with

good information.– Start one– Buy one– Franchise– Inherit– Get your foot in the door.

• Ways to increase chances of success – great, read it!

• Do diligence and valuation – great, read it!

SCAMPERFrom ideas to opportunities – a great methodology!

• S Substitute – Substitute one part of product for something else.

• C Combine – Take two ideas not usually linked an see if they’ll work together.

• A Adapt – Make a variation of the product or service.

• M Magnify or modify – Make one part larger or smaller.

• P Put in other uses – Are there other uses

• E Eliminate – Can you cut out part of product or one aspect

• R Rearrange – Can it be done in a different order or reversed?

One More! Look in the holes, the niches, the ends of a product, service, a channel,

a price. There are often great opportunities there.

Avoid the PitfallsMajor mistakes made even by the big guys!

• Identifying the wrong problem• Judging ideas too quickly• Stopping with the first good ideas• Failing to get the “bandits on the train” and

ask for support• Obeying rules that don’t exist [or shouldn’t

exist]

Testing The FeasibilityWhat do you have to know about the idea!

• The Product & Market. Will enough people buy it? [customer and markets]

• Competition. Can you beat or get around the competition?

• Financials. Can you price it and produce it to make a profit?

• People. Do you have the people to make it successful?

• Plan. Do you have a strategy to succeed?

Outline [4.4] is one you should keep.The feasibility study at the end of the chapter is excellent.

These are not exactly the same as the book [product, industry/market, financial feasibility, plan]

Here’s An Idea: Let Everyone Have Ideas

William Taylor• What is the story?• Why does it work?

Free market conceptThe less structure the betterFlexibility

• What does it tell us about creativity in an organization.

The top doesn’t necessarily know betterExperience doesn’t always workNo one has a monopoly. just because they

are “important”

• What do the sites tell us about friendship?– http://www.ritesolutions.com/home.html– http://www.innocentive.com/

Roger van OechA Whack On The Side Of The Head!

• You will be able to use it. Haven’t been in an organization that didn’t want to increase creativity and have some forums to do it.

• What are the mental locks?– There is a right answer– That is not logical– Follow the rules– Be practical– BSAINXLEATNTEARS– To err is wrong– Play is frivolous– That isn’t my area– Don’t be foolish– I’m not creative

• Name a big error you made. What are the beneficial consequences for you?

• Name a troublesome situation you face. List 3 “what if” statements.

“Nothing clouds your mind like dogma” Roger van Oech

“Think Sideways.” Edward deBono

Roger van OechA Whack On The Side Of The Head!

Remove six letters and come up with a common food most of you eat. You have

30 seconds!

BSAINXLEATNTEARS

Roger van OechA Whack On The Side Of The Head!

Remove six letters and come up with a common food most of you eat. You have

30 seconds!

BSAINXLEATNTEARS

Roger van OechA Whack On The Side Of The Head!

Remove six letters and come up with a common food most of you eat. You have 30 seconds!

BSAINXLEATNTEARS

BANANA

DeBono’s Elevator Problem“Think Sideways”

People are waiting too long for the elevator and everyone complains. They get a group together to propose solutions.

They suggest:

1. Speed up elevators2. Have them stop at only certain floors3. Stagger working hours4. Put in a new elevator5. Install mirrors around entrances to all elevators.

1-4 are traditional solutions. 5 is lateral thinking.They did 5 and it worked!

People became preoccupied with looking at themselves and others so they didn’t notice the wait. The problem was more impatience vs. lack of

elevators!

SCAMPER – LET’S TRY IT!From ideas to opportunities – a great methodology!

• S Substitute

• C Combine

• A Adapt

• M Magnify or modify

• P Put in other uses

• E Eliminate

• R Rearrange

• S Dig in the dirt

Baby Boomers, SBA Minor in Bus.,Pets, Dating Services, Fitness, Bars, Sports, Entertainment

SO!

There are ideas out thereLots of them

Find out which ones are any good!

Where did the ideas come from?How different are they really?

• AltiTunes,Amy WolfEntrepreneurial alertness – walking through airport and saw an opportunity

• Auntie Anne’s PretzelsSerendipity, just tried to make an improvement.

• Stroller Strides, LisaEntrepreneurial Alertness – two needs combined

• Dippin Dots, Kurt JonesScience background and a yearn to invent.

Where did the ideas come from?What would a SCAMPER looks like then and

now?

• AltiTunes,Amy WolfTo start – Adapt

Ideas for now – Combine? Modify? Gap?

• Auntie Anne’s PretzelsTo start – Substitute, adapt, modifyIdeas for now – Substitute? Put to other uses?

• Stroller Strides, LisaTo start – Adapt, combineIdeas for now – Gap? Rearrange?

• Dippin Dots, Kurt JonesTo Start – Substitute, adapt, modifyIdea for now – Elminate,? Reverse?

Lyle Wong Wants to be a millionaire!

He started very young and has been doing little

ventures since he was very young.He has no idea what he is going to do.

How do we develop a plan for him?

Lyle Wong - The almost millionaire!

• What constitutes being a millionaire? Sell a business, profit generated, net worth on balance sheet?

• What are some of the characteristics of a venture that will get him there?Growth, multiplier, expandability

• How can we define an opportunity if he was a student here at PSU?Who has a need that is big enough?

What is going on that is big enough?

What areas to look in?

A service, a product, production, distribution, sales?

A store, an office, a plant, the internet?

Lyle Wong - The almost millionaire!Where do we look?

• Food• Drink• Entertainment• Events• Classes• Books• Dating• Cheating• Real Estate• A product gadget

S C A M P E R +Substitute Combine Adapt Modify Put to other Eliminate Rearrange Get in the

Uses Dirt

Lyle Wong - The almost millionaire!What did he do!

• Identified a problem – unsold tickets to events. It was very common for arenas and events to hold unsold tickets the day of the event.

• He decided to offer to sell those tickets for a discount plus commission, using a computer in his dorm room.

• He set up a system and worked out the bugs• He expanded it to cover virtually an public event that was not

sold out within 24-48 hours of show time.• This was a win/win for everyone.

He almost made it!

Dave Kapell – Poetry in MotionFrom Serendipity to Success in 1000 steps!

The Keys to his success• Serendipity• Entrepreneurial Alertness• Took it out• Went to the experts• Did it in steps.

Dave Kapell – Poetry in MotionFrom Serendipity to Success in 1000 steps!

• How did he discover whether his idea would work?Serendipity, entrepreneurial alertness and he took it out.

• How did he evaluate whether it could be successful?He took it out, he went to people in the know.

• What other opportunities are there– Substitute– Combine– Adapt– Modify– Put into other uses– Eliminate– Rearrange– Search for a hole.

Product Market Matrix for Poetry in Motion

EXISTING PRODUCTS NEW PRODUCTS

EXISTINGMARKETS

Market Penetration

SizesDistributionColorWords

Product Development

Other puzzlesOther magnet piecesAffirmation stuffWord gamesLeave off the wordsLeave off the magnets

NEWMARKETS

Market Development

DogsSeniorsMentally illSmall business ownersHomework for studentsMedicineReligious

Diversification

Poetry in motionMagnetic relationships

The Grande General StoreHow do you go about figuring how much it is worth and

whether you ought to buy it?

• Where do you look for valuation?Lots of places, what did you find?

• What questions should be asked on the financials?Why sales are up so much?Where is the owner paid from?Who did the valuation?What personal expenses are in the income statements

• What are some of the other due diligence questions to askInspectionCompetitionExternal factors such as zoningLaw suitesSuppliersKey employees.

The Grande General StoreHow do you go about figuring how much it is worth and

whether you ought to buy it?

I looked under lots of headings. The one that worked was Valuation

Rules of Thumb. Finally lots of entries. Rules of Thump are mostly for the “smell test”.

http://www.bizstats.com/rulesofthumb.htm

http://www.mergers-acquisitions.com/valu.html#thumb

http://www.bizbuysell.com/guide/s_value_1.htm

http://www.dinkytown.net/java/BusinessValuation.html

http://www.sba.gov/idc/groups/public/documents/wi_milwaukee/wi_salebusiness.pdf

http://www.sba.gov/idc/groups/public/documents/mi_detroit/mi_business-valuation-methods.pdf

http://www.valuadder.com/index.html

The Grande General StoreWhat is “Due Diligence”?

• Investigation to see:

If you are getting the truth

To find out what is really going on

To look for hidden plusses and minuses.• A large part financial [audit, tax returns, accountant]

Income statements what is in and not in

Balance sheet valuations, especially intangible assets

Cash Flow and profitability

• But every aspect should be included in analysis.

Misrepresentations of seller, why for sale really, key employees, etc.

Litigation, land title, environmental issues.

External factors – competition, suppliers, city/zoning, etc.

SO!

Think Sideways!