MBAX 6100 Entrepreneurship Small Business Management Frank

MBAX 6100 Entrepreneurship & Small Business Management Frank Moyes Leeds College of Business University of Colorado Boulder, Colorado Nature of Opportunity

Today’s Agenda Ø Opportunity Recognition Ø Tech Transfer Office representatives Ø Feasibility Plan Ø ICEDELIGHT’s Ø Feasibility Plan Ø Mid-term alternative Week 10 Nature of Opportunity 2

Next Week’s Schedule Ø Entrepreneurs at early stage Ø Entrepreneurial market research – bring laptops Ø Read 4 BZ-3 4 M-2 Ø Noodles’ case Ø Speakers 4 Aaron Kennedy Nature of Opportunity 4 Joseph Yu 3

Entrepreneurial Characteristics Ø Motivated by achievement Ø Internal locus of control Ø Risk-taking Ø Tolerance for ambiguity Ø Sense of independence Ø Passion Nature of Opportunity 4

When Is an Idea an Opportunity? Ø Attractive Ø Durable Ø Timely Ø Adds value Ø Open window Ø Entry is feasible Ø Management team Ø Competitive advantage Ø Economics 4 Rewarding 4 Forgiving 4 Growth Timmons, New Venture Creation Nature of Opportunity 5

Good Opportunity Ø Market is strong & accessible Ø Compelling need Ø Sustainable competitive advantage Ø Unique/different Ø High margins Ø Management Nature of Opportunity 6

Market Demand Is Strong Ø Favorable trends Ø Market is growing Ø Size is big enough for your venture to be worth the effort Ø Market share is attainable Ø Favorable window of opportunity Ø 30%+ per year Ø $100 million with $1 billion potential Ø Minimum 20% Nature of Opportunity 7

Market Is Accessible Ø Market Structure 4 Fragmented 4 No dominant player 4 SOT’s (slow, old or traditional) Ø Response of competitors to new entrants is indifferent Ø No proprietary barriers to entry Ø Access to channels is possible Ø Forgiving of mistakes Nature of Opportunity 8

Compelling Need Ø Solves a problem Ø Unfulfilled niche Ø Dissatisfaction with current products/services Ø Poor quality or service Ø Needs 4 Physical 4 Emotional 4 Financial Physiological Social Intellectual Nature of Opportunity 9

Competitive Advantage Ø Understand the market Ø Understand the competition Ø Sustainable 4 Innovation 4 Differentiation 4 Resources & capabilities Ø Really understand the market & competition Nature of Opportunity 10

Unique/Different Ø You must differentiate your business – it’s already being done by someone Ø More than unique product/service design 4 Marketing – positioning 4 Operations – process or value chain 4 Channels – create a new channel Ø Benefits Nature of Opportunity 11

High Margins Ø Advantages of high gross profit margins 4 Funding 4 Cash flow 4 Development & marketing Ø Mind-set of high & low margin thinking Ø Can solve the screw-up problem Nature of Opportunity 12

Management Ø Meets your personal interests & objectives Ø Takes advantage of your experience Ø Would your potential customers buy from you? Ø You can put a management team together Ø You are passionate and commit Nature of Opportunity 13

Commitment “Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative and creation there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: That the moment one definitely commits oneself, Providence moves too. All sorts of things occur to help one that would never other wise have occurred. A whole stream of events issue from the decision, raising in one’s favor all manner of unforeseen incidents and meetings and material assistance, which no man could have dreamed would have come his way. Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it. ” Nature of Opportunity Goethe’s Faust. 14

Good Opportunity Ø Market is strong & accessible Ø Compelling need Ø Sustainable competitive advantage Ø Unique/Different Ø High margins Ø Management Nature of Opportunity 15

New Ventures Are Opportunity Driven Ø Not technology driven Ø Not product driven Ø Not solution driven Ø Not asset driven Ø Not resource driven Nature of Opportunity 16

When Opportunity Driven Ø Uncertainty is good! Ø Lack of information is good! Ø Being small & flexible can be good! Nature of Opportunity 17

Ideas Are Overrated Ø Build a better mouse trap Ø Most ideas already thought of Ø Process of refinement is essential Nature of Opportunity 18

Feasibility Plan Ø Objectives Ø Assessment Framework Ø Assignment Nature of Opportunity 19

Objectives of a Feasibility Plan Ø Will anyone buy it? Ø Can you make money? Is this a good opportunity? Nature of Opportunity 20

Assessment Framework Ø Part I Market Analysis Ø Part II Industry Analysis Ø Part III Venture Analysis Nature of Opportunity 21

Approach Ø Start with broad perspective Ø Answer questions in each part of the Framework Ø Talk to wide variety of people Ø Qualitative customer survey Ø Secondary research of industry and competition Nature of Opportunity 22

Assignment Ø Answer questions in Feasibility Plan Framework Ø Conduct interviews with business people (5 person) 4 Prepare Call Reports Ø Conduct customer survey (5 person) 4 Prepare answers to surveys Ø Deliverable 4 Parts I & II due week 10 4 Parts I, II & III due week 15 s Parts I & II revised based on feedback and further research 4 Presentations week 15 Ø DECK format Nature of Opportunity 23

Just Do It “Millions of people have “an idea”, but unless they do something with it, their ideas aren’t worth a damn. There a lot of quacks and kooks out there who claim they invented the Weed Eater, and I don’t doubt that there are some people who genuinely thought of this idea--but what did they do with it? Nothing. What do they deserve? Nothing. ” George C. Ballas, inventor of Weed Eater Nature of Opportunity 24