Opportunity Assessment Launching New Products and Businesses What - PowerPoint PPT Presentation

Opportunity Assessment Launching New Products and Businesses

What is Entrepreneurship? “The Pursuit of Opportunity Without Regard to Resources Currently Controlled ” Howard Stevenson Harvard Business School

The Process Opportunity Creativity Value Proposition Making the World a Better Place

What’s An Opportunity? A product or service around which you can build a profitable business and generate a positive return to all stakeholders

Where are Opportunities Born?  Technology shifts Market shifts  Introduction of new disruptive  Value chain technologies disruption/obsol-  Application or aggregation of new escence technologies  New regulation / deregulation  Business Model shifts  New ecosystems  Market re-segmentation  Redefining existing markets Societal shifts  Changes in how we live, learn and work  Evolution of human preferences

How are Opportunities Created?  Customer Motivation addressed by Market Disruption Disruptive Market Shift New (Unmet Technology Need) New Business Societal Shifts Models (Entertainment) Credit to David Skok: http://www.forentrepreneurs.com/startup-ideation/

Opportunity Assessment Framework WHY: CUSTOMER MOTIVATION A well defined WHO: TEAM WHAT: SOLUTION market need The core execution A viable product or expertise (both internal service that coherently and advisors) addresses the need WHEN: TRENDS WHERE: MARKET Whyis this the right An interesting existing time to address this? or new emerging HOW: BUSINESS market MODEL How your solution reaches the customer and you make money

1 – WHY: Customer Motivation  WHY does a customer care?  Outline the market need that needs to be filled

1 – Customer Motivation  Burning Need - This is especially critical with enterprise (B2B) solutions  Who has a “hair -on- fire” need?  Are there large inefficiencies that can be addressed?  Cost, time, resources  Risk Management and Reduction  Often non revenue generating, but critical in operations and well-being  Prevention and mitigation of catastrophic failure and events  Growth  Opportunities to expand and manage income and revenue generating sources  Social and Emotional Desires  Are there products that satisfy non-critical customer desires?  Entertainment, status, pride, esthetics22

Customer Motivation  Are you uniquely positioned to understand and assessthis customer motivation?  Have new developments in the market created new needs that can be addressed?  Same product but with additional adjunctbenefits

2 – WHAT: Clearly Defined Solution  WHAT is the coherent solution that addresses the customer need? Its not sufficient to have only identified the problem!

2 – Clearly Defined Solution  Can you create a viable product development plan?  No magic warp drives  Is this a feature or a stand-alone product?  Do you need to replicate an existing product or ecosystem before you can offer your solution?  Are you offering a new and compelling user experience?  Is there substantialdifferentiation?  Do you have a complete understanding of how the user will benefit from your product?  Is the value of your solutionobvious?

2 – Clearly Defined Solution  Is this a Pain Killer or Vitamin? Which do you want tobe?  Do you envision a 10x improvement over existing offerings?  Is there a budget that can accommodate thissolution?  Is there an initial segment of the market that absolutely needs your product to startwith?  Do you have compelling use cases that matches the customer motivation with the solution’s features – Product market Fit?

3 – WHERE: Interesting Market  WHERE are your customers and how many are there? Are you addressing a need in an interesting or emerging market?

3 - Interesting Market  What is the size of the Total Addressable Market?  What is the Served Market you will DOMINATE? • What is the minimum market share needed to be relevant?  What is your beach-head market entry strategy?  How can you get to $100M annualrevenues? • 10 @ $10M each • 100M @ $1 each

3 - Some features of interesting markets  Large, often growing, market?  (or potentially large non-existent market with many target customers)  Fragmented market?  (else unfair access to highly concentrated markets)  Strategically interesting to incumbents?  (or the parent company)  Tolerant of risk and Forgiving?  (typically not selling into the critical path)  Sufficient margins?  (typically not commodity markets)  Accessible market?  (typically not highly regulated)

3 - Understanding Market Sizing TOP DOWNANALYSIS  Estimate of the theoretical capacity of the opportunity  Good for understanding Total Available Market the macro market dynamics Combined revenues of all T AM Method companies that can theortically  Analyst Data serve a market  Public market info Served Available Market  Proxy Modeling SAM The subset of the market BOTTOM UPANALYSIS that your sales team can  Sanity check on macro address or that the numbers and emerging, non product provides existent markets specific value  Good for understanding TM how to Target Market – Beach-head The penetrate the market initial focused customer base Method  that your product will reach Analyst Data  Empirical data  Qualitative research

4 – HOW: Business Model  HOW do you make money?  How do you reach your customers and how do you monetize the product or service?

4 - Business Model  What is your flow of cash vs. product flow?  Are there other organizations or products involved in the end solution to your customer?  What is the value to the customer?  Are the economic buyer and end-user one and the same?  Who is the actual customer? Where is the purchasing budget?  What are the fundamental economics of your business?  Unit economics? Potential pricing  How will you acquire your customers?  What are the customer acquisition costs? How will you reach your customers? How will they initially hear about your solution?

4 - Some elements of the business model  Sustainable Differentiation and positioning within the ecosystem • How is the product positioned vs other solutions and the Competition? • Local transportation example: – Uber, Sidecar, Flywheel, Lyft, Taxi  Network effects vs. virality • Does your solution improve with the number of other users, or is it just a means by which to acquire new customers cost effectively? • Groupon (viral) and Uber (network effects)  Economies of scale? • Do the economics become better with scale? Is there a large capital requirement up front?  Barriers to entry • Can you use your business model to help block out your competition?

5 – WHEN: Supporting Trends  WHEN is the ideal time for this product to exist?  Are there any events or developments that make this the optimal for your product to come to market?

5 – Trends – Why now?  New enabling technologies or aggregationopportunities  New regulatorylandscape  New or redefined societal preferences and needs  New modes and forms of entertainment  New user expectations and experiences carried from other sectors  Adoption of complimentary or symbiotictechnologies

6 – WHO: Core Team  WHO are the masterminds behind this opportunity?  Do you have unique insights, skills, and access to bring your product to market?

6 – Core Team Do you have the right operators, investors and advisors?  Expertise and credibility • Are the team’s capabilities aligned with execution required to take on the opportunity. • Do you have the right domain knowledge?  Authenticity • Do you have the heart? Are you a missionary or a mercenary?  Structure • Is the team honestly composed – no part-timers. • Are the incentives aligned  Culture and foundation • Do you have alignment of vision • Does everyone understand and believe in the final destination?

What Does a New Venture Achieve? 3C’s Brings new content to the market New product New Service Brings a new or improved method of creation Technological Breakthrough Improved manufacturing Higher productivity Designs a superior system for consumption Ease of receiving Ease of using Superior cost – benefit for the customers

From Mind to Market Product Development Cost-Benefit Value Equation Deliver Value Customer Opportunity Innovation Need New Venture Mindset Entrepreneur Networking People Raise Assets Resources Finance

Creating a New Value Equation Reduce What factors should be reduced well below the industry standard ? Eliminate Create What factors What factors should be should be created eliminated that the that the industry New Value industry has taken has never offered for granted ? ? Equation What factors should be raised well beyond the industry standards ? Raise

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