On Ideas

1
On Ideas

• MGT 709 New Venture Creation

2
Agenda

• Readings
• Elevator Pitches
• IceDelights
• EastWind

3
Adams On Ideas

• Think you idea has to be unique? Youre deluded
• Good ideas are not scarce, what is rare is a team
  that can execute execution intelligence
• Want me to sign a nondisclosure? Instead, say
  Im clueless
• The 1820 rule
• Ideas are commodities
• Getting to market first? Big deal.
• Execute to dominate, not define, a market space
• Think theres no competition? Youre naïve.
• I want to keep my money, laziness, and DIYers if
  nothing else
• The existence of competition suggests that the
  idea itself is competitive

4
What is a solid business concept?

• A new approach to existing business processes
  (perhaps using new technology)
• Same problem, different solution
• Alternative solutions (corollaries) already exist
• The garage sale as alternative to eBay
• Proves there is a pain in the market
• A market size of at least 1 billion (for hi
  tech)
• You need ancillary markets
• Vertical or horizontal of 1 billion each
• Execution intelligence
• Domain knowledge, fast-growth scar tissue,
  experience in hyper-competitive markets, risk
  management (anticipate customer pain) balanced
  team, leadership know-how
• Not many teams have all six attributes

5
Questions every entrepreneur must answer

• Are my goals well defined?
• Do I have the right strategy?
• Clear definition
• Profit and growth potential
• Sustainable
• Can I execute the strategy?
• Right resources relationships
• Necessary infrastructure
• Founders role

6
Drivers of growth

• Economies of scale, scope, or customer network
• Need to lock in customers or scarce resources
• Competitors growth
• Resource constraints
• Internal financing capability
• Tolerant customers
• Personal temperament and goals

7
Creativity the Business Idea

• Sources of new ideas
• Consumers, improving existing products/services,
  feedback from distribution channels, government,
  RD
• Methods
• Focus groups, brainstorming (incl. reverse and
  brain writing), problem inventory analysis, free
  association, checklist, forced relationships
• Innovation
• Breakthrough innovation is rare

8
Other issues

• Opportunity recognition analysis
• Idea and competition
• Market and opportunity
• Entrepreneur team
• Product planning development
• Staged model
• E-Commerce

9
ELEVATOR PITCHES
10
IceDelights

• What do you think of the different paths to
  having your own business?
• Sentry position, industry focus, do it now
• What are your plans?
• What do you think of their search strategy?
• Was the specification sheet effective?
• Is the opportunity a good one?
• The market? The rewards? Career wise?
• The option? The price? The support package?
• What are the key success factors (and risks)?
• Did they do a good job raising capital and a
  team?

11
EastWind

• Are Martha and Gails goals well defined?
• Is this an attractive opportunity?
• Do they have the right strategy?
• Can they execute?
• How should they finance the business?
• How should Martha and Gail split the equity?
• How should the business be organized and managed?
• Aftermath?