Nature of Opportunity

MBAX 6100MBAX 6100

Entrepreneurship & Entrepreneurship &

Small Business ManagementSmall Business Management

MBAX 6100MBAX 6100

Entrepreneurship & Entrepreneurship &

Small Business ManagementSmall Business Management

Frank MoyesFrank MoyesLeeds College of Business Leeds College of Business University of ColoradoUniversity of ColoradoBoulder, ColoradoBoulder, Colorado

Nature of Opportunity

Today’s AgendaToday’s Agenda

Tech Transfer conceptsTech Transfer concepts InterviewInterview Opportunity RecognitionOpportunity Recognition Feasibility PlanFeasibility Plan Status of Entrepreneurship Interview Status of Entrepreneurship Interview

Nature of Opportunity

Next Week’s ScheduleNext Week’s Schedule

Corporate EntrepreneurshipCorporate Entrepreneurship Read Read

Building Breakthrough BusinessesBuilding Breakthrough Businesses Understanding ObstaclesUnderstanding Obstacles M-3 Is This a Good Market?M-3 Is This a Good Market?

Nature of Opportunity

When Is an Idea an Opportunity?When Is an Idea an Opportunity?

AttractiveAttractive DurableDurable TimelyTimely Adds valueAdds value

Open windowOpen window Entry is feasibleEntry is feasible Management teamManagement team Competitive advantageCompetitive advantage Economics Economics

RewardingRewarding ForgivingForgiving GrowthGrowth

Timmons, New Venture Creation

Nature of Opportunity

Good OpportunityGood Opportunity

Market is strong & accessibleMarket is strong & accessible Compelling needCompelling need Sustainable competitive advantageSustainable competitive advantage Unique/differentUnique/different High marginsHigh margins ManagementManagement

Nature of Opportunity

Market Demand Is StrongMarket Demand Is Strong

Favorable trendsFavorable trends Growing market Growing market Size is big enough to be Size is big enough to be

worth the effortworth the effort Market share attainableMarket share attainable Favorable window of Favorable window of

opportunityopportunity

Venture CapitalVenture Capital 30%+ per year30%+ per year $100 million to $1 billion $100 million to $1 billion

potentialpotential Minimum 20%Minimum 20%

Nature of Opportunity

Market Is AccessibleMarket Is Accessible

Market StructureMarket Structure FragmentedFragmented No dominant playerNo dominant player SOT’s (slow, old or traditional)SOT’s (slow, old or traditional)

Response of competitors to new entrants is indifferentResponse of competitors to new entrants is indifferent No proprietary barriers to entryNo proprietary barriers to entry Access to channels is possibleAccess to channels is possible Forgiving of mistakesForgiving of mistakes

Nature of Opportunity

Compelling NeedCompelling Need

Solves a problemSolves a problem Unfulfilled nicheUnfulfilled niche Dissatisfaction with current products/servicesDissatisfaction with current products/services Poor quality or servicePoor quality or service NeedsNeeds

Physical Physical PhysiologicalPhysiological EmotionalEmotional SocialSocial FinancialFinancial IntellectualIntellectual

Nature of Opportunity

Competitive AdvantageCompetitive Advantage

Understand the marketUnderstand the market Understand the competitionUnderstand the competition SustainableSustainable

InnovationInnovation DifferentiationDifferentiation Resources & capabilitiesResources & capabilities

Really understand the market & competitionReally understand the market & competition

Nature of Opportunity

Unique/DifferentUnique/Different

You must differentiate your business – it’s already being You must differentiate your business – it’s already being done by someonedone by someone

More than unique product/service designMore than unique product/service design Marketing – positioningMarketing – positioning Operations – process or value chainOperations – process or value chain Channels – create a new channelChannels – create a new channel

BenefitsBenefits

Nature of Opportunity

High MarginsHigh Margins

Mind-set of high & low margin thinkingMind-set of high & low margin thinking Advantages of high gross profit marginsAdvantages of high gross profit margins

FundingFunding Cash flowCash flow Development & marketingDevelopment & marketing

Can solve the screw-up problemCan solve the screw-up problem

Nature of Opportunity

ManagementManagement

Meets your personal interests & objectivesMeets your personal interests & objectives Takes advantage of your experienceTakes advantage of your experience Would your potential customers buy from you?Would your potential customers buy from you? You can put a management team togetherYou can put a management team together You are passionate and commitYou are passionate and commit

Nature of Opportunity

CommitmentCommitment““Until one is committed, there is hesitancy, the chance to draw Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative and back, always ineffectiveness. Concerning all acts of initiative and creation there is one elementary truth, the ignorance of which creation there is one elementary truth, the ignorance of which kills countless ideas and splendid plans:kills countless ideas and splendid plans:

That the moment one definitely commits oneself, Providence That the moment one definitely commits oneself, Providence moves too. All sorts of things occur to help one that would never moves too. All sorts of things occur to help one that would never other wise have occurred. A whole stream of events issue from other wise have occurred. A whole stream of events issue from the decision, raising in one’s favor all manner of unforeseen the decision, raising in one’s favor all manner of unforeseen incidents and meetings and material assistance, which no man incidents and meetings and material assistance, which no man could have dreamed would have come his way. Whatever you could have dreamed would have come his way. Whatever you can do or dream you can, begin it. Boldness has genius, power can do or dream you can, begin it. Boldness has genius, power and magic in it.”and magic in it.”

Goethe’s Faust.Goethe’s Faust.

Nature of Opportunity

Good OpportunityGood Opportunity

Market is strong & accessibleMarket is strong & accessible Compelling needCompelling need Sustainable competitive advantageSustainable competitive advantage Unique/DifferentUnique/Different High marginsHigh margins ManagementManagement

Nature of Opportunity

New Ventures Are Opportunity DrivenNew Ventures Are Opportunity Driven

Not technology drivenNot technology driven Not product drivenNot product driven Not solution drivenNot solution driven Not asset drivenNot asset driven Not resource drivenNot resource driven

Nature of Opportunity

Ideas Are OverratedIdeas Are Overrated

Build a better mouse trapBuild a better mouse trap Most ideas already thought of Most ideas already thought of Process of refinement is essentialProcess of refinement is essential

“He who builds a better mousetrap these days runs into material shortages, patent-infringement suits, work stoppages, collusive bidding, discount discrimination--and taxes.” H.E. Martz

Nature of Opportunity

When Opportunity DrivenWhen Opportunity Driven

Uncertainty is good!Uncertainty is good! Lack of information is good!Lack of information is good! Being small & flexible can be good!Being small & flexible can be good!

Nature of Opportunity

Feasibility PlanFeasibility Plan

ObjectivesObjectives Assessment FrameworkAssessment Framework AssignmentAssignment

Nature of Opportunity

Objectives of a Feasibility PlanObjectives of a Feasibility Plan

Will anyone buy it?Will anyone buy it? Can you make money?Can you make money?

Is this a good opportunity?Is this a good opportunity?

Nature of Opportunity

Assessment FrameworkAssessment Framework

Part I Market AnalysisPart I Market Analysis Part II Industry AnalysisPart II Industry Analysis Part III Venture AnalysisPart III Venture Analysis

Nature of Opportunity

ApproachApproach

Start with broad perspectiveStart with broad perspective Talk to wide variety of peopleTalk to wide variety of people Qualitative customer surveyQualitative customer survey Secondary research of industry and competitionSecondary research of industry and competition

Nature of Opportunity

AssignmentAssignment

Answer questions in Feasibility Plan FrameworkAnswer questions in Feasibility Plan Framework Conduct interviews with business people (5 per person)Conduct interviews with business people (5 per person)

Prepare Call ReportsPrepare Call Reports Conduct customer survey (5 per person)Conduct customer survey (5 per person)

Prepare answers to surveysPrepare answers to surveys DeliverableDeliverable

Parts I & II due week 10Parts I & II due week 10 Parts I, II & III due week 14Parts I, II & III due week 14

Parts I & II revised based on feedback and further researchParts I & II revised based on feedback and further research DECK formatDECK format