1/9/17

Turning ideas into compelling

opportunities
Reading:
Chapter 2, Recognizing opportunities and generating ideas
Chapter 3, Feasibility analysis
Chapter 5, Industry and competitor analysis
Chapter 6, Intellectual Property: protecting your ideas
Baron, R. (2012), Entrepreneurship, Edward Elgar Publishing,
Cheltenham, UK

Session’s Agenda

• Recognizing ideas
• Turning them into opportunities
• Determining if a business idea is viable
• Industry and competitor analysis
• Protecting your ideas: Intellectual Property

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SpaceX’s plan to colonize Mars

SpaceX’s plan to colonize Mars

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Ecohelmet: Inexpensive folding helmet

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Sonder Keyboard

Kissenger

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Pizza Pouch

What is an idea?
•An entrepreneur might generate an idea for a new
venture by seeing patterns that suggest a solution to a
compelling market need - one that customers may not
even have identified

•This idea can be converted into an opportunity by

crafting a business model

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What is an opportunity?
•An opportunity is a favorable set of circumstances that
creates a need for a new product, service or business

•It has four essential qualities (Jeffrey Timmons):

1. Attractive
2. Durable
3. Timely
4. Anchored in a product, service or business that
creates or adds value for its buyer or end user

How are opportunities identified?

1. Observing trends (economic and social trends,
technological advances, and political action and
regulatory changes). We are always looking for
trends and NOT Fads

2. Recognizing problems and finding ways to solve

them

3. Finding gaps in the marketplace

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1. Recognizing trends
Changing Examples Resulting new Companies that
environmental trends business, product, resulted
and service
opportunities
Economic trends Sales of upscale Sites that sell
items at a discount specialized items at
a discount
Social trends Increased interest in Fitness-focused
fitness smartphone apps
Technological Miniaturization of Laptop computers
advances electronics
Political and Political instability Back-up data
regulatory changes storage

Five global mega trends

(Inquentia Trend report 2015)
•Digital society

•Ageing population

•Urbanization

•Global growth

•Sustainability

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How to spot a game changer

(Aris, 2015)
•Does the new technology meet a fundamental
need?

•Is it easy to use?

•Is it affordable?

•Is the right ecosystem in place?

•…what do teenagers do in their leisure time?

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2. Solving a problem
•Observing challenges (or complaints, frustration) that
people encounter in their daily lives

•Own lives or by observing other people

3. Finding gaps in the marketplace

Gap in the marketplace Resulting new business Companies that resulted
opportunity

No fitness centers that 24-hour fitness centers

are open 24 hours a day

Restaurants that are Fast-casual restaurants that

both fast and serve combine the advantages of T
good food fast-food (fast service) and h
casual dining (good food)

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Personal characteristics of the

entrepreneur
Opportunity recognition - refers to the process of
perceiving the possibility of a profitable new business or a
new product or service
1. Prior experience - Prior experience in an industry helps
entrepreneurs recognize business opportunities (e.g.
Wiklund and Shepherd, 2008)
2. Cognitive factors – entrepreneurial alertness (largely a
learned skill), yet the crucial difference between
opportunity finders and non-finders is their relative
assessments of the marketplace (Kirzner, 1980)

Personal characteristics of the

entrepreneur
3. Social networks (tie relationships) - Somewhere
between 40% and 50% of those who start
businesses got their ideas through social contacts
(e.g. Harris and Rae, 2010)
4. Creativity - the process of generating a novel or
useful idea

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Techniques for generating ideas

1. Brainstorming
2. Focus groups
3. Observation
4. Desk research

Establishing a focal point for ideas

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Digital Animations Group

Five skills of disruptive innovators

(Dyer, et al. 2011)

1. Associating
2. Questioning
3. Observing
4. Networking
5. Experimenting

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1. Associating

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2. Questioning

1. “What is?” questions

2. “What caused?” questions
3. “Why?” and “Why not?” questions
4. “What if” questions

3. Observing
Seek as many external stimuli as possible and develop a
mindset that is not “if-then” but “how and how else?”:

1. Look outside your industry

2. Put yourself in a new environment and then observe
what is happening

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4. Networking

Reach out to (or create a roundtable with) venture

capitalists, executives, consultants, academics,
independent research groups, professional associations,
trade press (e.g. develop an experts rolodex)

5. Experimenting

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How can you tell if a new business will

succeed?
(Scott et al. 2015)
• Venture ideas that elicit a high degree of initial mentor interest are more
likely to ultimately reach commercialization

• The relationship between initial mentor interest and eventual

commercialization is strong and significant for ventures in R&D-intensive
sectors, and particularly for ventures with documented intellectual
capital

• Mentors’ industry-specific and scientific expertise is not a critical

determinant of their collective ability to assess commercial viability

Feasibility Analysis
Feasibility analysis is the process of determining if a
business idea is viable

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Product/Service Feasibility Analysis

1. What is the overall appeal of the product or service
being proposed?
a) Is it desirable and serves a need in the marketplace?
b) Develop a concept statement (product description,
intended target market, benefits, competition,
management team) to solicit feedback

2. Is there demand for the product or service?

a) Desk research
b) Buying intention survey

Industry/Target Market Feasibility Analysis

1. Industry attractiveness (Are young rather than old,
Are early rather than late in their life cycle, Are
fragmented rather than concentrated, Are growing
rather than shrinking)

2. Target market attractiveness (identify an attractive

target market that’s large enough for the proposed
business but is yet small enough to avoid attracting
larger competitors at least until the entrepreneurial
venture can get off to a successful start)

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Organizational Feasibility Analysis

1. Management prowess

2. Resource sufficiency

Financial Feasibility Analysis

1. Total start-up cash needed

2. Financial performance of similar businesses

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Some definitions
•Industry analysis, which is business research that
focuses on the potential of an industry

•An industry is a group of firms producing a similar

product or service, such as music, fitness drinks, or
electronic games

•A competitor analysis is a detailed evaluation of a

firm’s competitors

Industry Trends
•Environmental trends

•Business trends

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The External Environment

The Industry Environment

•Is the set of factors that directly influences a firm and
its competitive actions and competitive responses in
competitive environment

•An industry is a group of firms producing products

that are close substitutes

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Determining the potential success of a

new venture
Question 1: Is the industry a realistic place for our new venture to
enter?

Question 2: If we do enter the industry, can our firm do a better job

than the industry as a whole in avoiding or diminishing the impact of
the forces that suppress industry profitability?

Question 3: Is there a unique position in the industry that avoids or

diminishes the forces that suppress industry profitability?

Question 4: Is there a superior business model that can be put in

place that would be hard for industry incumbents to duplicate?

Industry Structure
Type Characteristics Opportunities Example

Emerging Recent changes in First-mover advantage

demand or technology

Fragmented Large number of firms of Consolidation

approximately equal size

Mature Slow increase in demand, Process and after-sale

numerous repeat service innovation
customers, and limited
product innovation

Declining Consistent reduction in Leaders, niche, harvest,

industry demand and divest

Global Significant international Multinational and global

sales

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Competitor Analysis
•Competitor analysis or competitive intelligence –
the way firms can gather and analyze information
on the industry competitors
• Identifying their actions, responses and intentions

•There are three different types of competitors:

direct, indirect and future

Sources of competitive advantage

•Conferences and trade shows

•Purchase competitors’ products

•Study competitors’ web sites

•Set up Google email alerts

•Read industry-related books, magazines, etc.

•Talk to customers

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Protecting your ideas: Intellectual

Property
•Who invented the telephone?

•Who invented a practical light bulb?

Antonio Meucci and Joseph Swan

Antonio Meucci
•Italian
•Studied mechanical engineering in Florence
•In 1830, moved to Cuba, where he worked on the task of
using electric shocks to treat various illnesses
•During that time, he discovered that sound could be
transmitted over a copper wire by electrical impulses
•Recognizing the potential of this discovery, he moved to
Staten Island, NYC, where he developed a system his wife
could use to signal him in his workshop
•He filed for a patent for a “talking telegraph” and tried to get
support from Western Union…he also run out of funds

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Antonio Meucci
•A few years later, Bell, who was
familiar with Meucci’s work and
invention filed for a patent on the
telephone
•Meucci sued but died before his
case could come to court
•It is in 2002, that the United States
Congress issued a resolution
recognizing Meucci as the real
inventor of the telephone

Sir Joseph Swan

•British inventor
•Developed a light bulb
•Filed for and received a patent
•Edison knew about Swan’s work
•Edison proceeded in manufacturing light
bulbs anyway
•Swan sued Edison and won…in the
British courts
•But Edison launched General Electric in
the US

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Intellectual Property: Its basic nature

•US constitution recognized that people who
originate an idea should, perhaps, retain special
rights in it

•Intellectual Property refers to creations of the

human mind – human creativity – for which legal
protection can be obtained. This raises several
complex questions: What specifically can be
protected? What kinds of protection exist? How
can they be obtained?

Most important forms of protection

•Copyrights: Can be applied to anything that is
original, non-functional (it doesn’t do anything), and
most important –fixed in a tangible medium of
expression (e.g. songs, books, plays, etc.)
•It protects the tangible expression of ideas, but not
the ideas themselves
•They stop others from reproducing the work,
distributing copies of it, performing it or displaying it
without the permission of the owner
•Easy to obtain

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Most important forms of protection

•Trademarks and Servicemarks: They refer to a
word, phrase, symbol, or design that identifies the
products/services of one person and distinguished
from those of others
•How? By actually using the the mark or by filing an
application with patent and trademark offices

Most important forms of protection

•Patents: They grant the patent holder (full
disclosure) the right to exclude others from making,
using or selling an invention
•They are granted by the Government and last for a
particular period of time (US, 20 years)
•Can all inventions be patented? No…the invention
must be useful, it must be new and it must be non-
obvious (prior art)
•Who determines whether the invention is eligible for
a patent? The patent examiner!

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Most important forms of protection

Most important forms of protection

•What can be patented? Various kinds of machines,
processes, chemical formulas, software, drugs
•Selling fast-food in drive-through windows cannot be
patented (Business ideas)

•Utility: patents for new processes - does something

or something happens
•Design: original designs for manufactured products
•Plant: grafted or crossbred plants

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Most important forms of protection

•How are patents obtained?
1. An inventor files an application to the
patent/trademark office
2. The patent examiner evaluates it in terms of: newness,
usefulness, and non-obviousness (Claims)
•It is a long and expensive process
•Many inventors first file a provisional patent application
•Also, “invent around” and not such thing as an
“international patent”

Some useful resources

• A/B Testing (http://pickfu.com)

• Feedback on ideas (http://www.conceptshare.com)
• Open-ended questions (http://www.quora.com)
• Survey (http://www.surveymonkey.com)
• Website usability test (http://www.usertesting.com)

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