Idea Generation & Opportunity Assessment

Presented byRich Bendis, CEO

Innovation America

Temple Entrepreneurship

Temple is: A national leader in entrepreneurship education and

applied learning Ranked 6th in the U.S. for undergraduate programs by

Entrepreneur magazine and the Princeton Review Cited for excellence in entrepreneurship by Fortune

Small Business, forbes.com and U.S. News and World Report

Characteristics of Successful Entrepreneurs

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

The Power of Entrepreneurial Thinking

What makes a successful entrepreneur?– Seeing opportunity where

others don’t– Innovation: better, faster,

cheaper, easier– “Fire in the Belly”– Willingness to take risks– Extreme work ethic

Increasing Relevance to Founding Venture

Three Key Processes

Idea Generation Creativity Opportunit

y Recognitio

n

Kinds of Intelligence 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.

PracticalIntelligence

CreativeIntelligence

AnalyticIntelligence SuccessSuccessful

Intelligence

Successful Intelligence

Confluence Approach

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

Additional Aspects

Active searchEntrepreneurial

alertnessPrior knowledgeSocial networks

Opportunityrecognition

Pattern Recognition

Seeing links between seemingly unconnected trends, changes, events

Connections form an identifiable pattern

Entrepreneurial Opportunity

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

Opportunities from Change

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.

Change Leads to Potential

New technology Political and regulatory shifts Social and demographic change

Potential

Forms of Opportunity

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

Recognizing Opportunities & Generating Ideas

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

Recognizing Opportunities & Generating Ideas

Observing/Study Trends• Economic factors• Social factors• Technological

Advances• Political Action and

regulatory statutes

Recognizing Opportunities & Generating Ideas

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

Recognizing Opportunities & Generating Ideas

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: allows people to be mobile– E-commerce: accommodates busy schedules

and working from home/remote locations Political Action

– New laws: help companies comply; ex: SoX– Terrorism: Products & services to protect

Recognizing Opportunities & Generating Ideas

Solving a Problem Observe people’s challenges Look for problems Listen to people’s complaints Think of your own challenges

Recognizing Opportunities & Generating Ideas

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

Focus groups• People selected are familiar with

issues• What’s on customers mind• Conducted by trained moderator• Success depends on moderator’s

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

Product/Service Feasibility Analysis

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 product’s ease of use and the user’s 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 group’s idea using the first two screens

Markets and Margins

Need/want/problem

Identified Unfocused

Customers Reachable, receptive

Unreachable, loyal to others

Market Size $100 million +

Less than $10 million

Market Growth Rate

More than 20%

Less than 20% or shrinking

Gross Margin >40%, durable

<20%, fragile

Competitive Advantages

Barriers to Competitors’ Entry

Defensible None

Contacts and Networks

Key access Limited

Degree of Control

High Low

Prices and Cost

High Low

Supply/distributionChannels

High Low

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