DO I HAVE A GOOD IDEA? - SESSION 6
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Transcript of DO I HAVE A GOOD IDEA? - SESSION 6
www.solvayentrepreneurs.be
DO I HAVE A GOOD IDEA? SESSION 6 (out of 10)
OPPORTUNITY ASSESSMENT
This session is part of a 10-weeks course given to master students of the SOLVAY BRUSSELS SCHOOL OF ECONOMICS AND MANAGEMENT by professor Olivier WITMEUR.
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
• What makes a good idea?
• How to assess it?
• The role of the business plan
• Opportunity validation framework
• Introduction to the business plan
• Solvay Entrepreneurs Checklist (in French)
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Desired Outcomes of the Session
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
The main steps towards your final project.
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VALUE PROPOSITION
BUSINESS MODEL ROADMAP
Key activities, resources & partners Revenues model & costs structure
Problem-Solution fit Product-Market fit Market sizing Competition
Stages & milestones Get-Keep-Grow Risks & scenario
FINANCE
P&L, cash and balance sheet Financing
CREATE
TEST =
BUILD MEASURE
LEARN
YOU
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
How many squares do you see?
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Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
OPPORTUNITY ASSESSMENT FRAMEWORK
#1
Beyond technical feasibility, financial return and additional developments…
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Opportunity Validation Framework
6
Market attractiveness
Industry attractiveness
Customer readiness to buy
Understanding of the industry KSF
MARKET (Buyers)
INDUSTRY (Sellers)
MACRO LEVEL
MICRO LEVEL
* Adapted from John Mullins, The New Business Road Test (2006)
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Opportunity Validation Framework
7
Market attractiveness
Industry attractiveness
Customer readiness to buy
Understanding of the industry KSF
MARKET (Buyers)
INDUSTRY (Sellers)
MACRO LEVEL
MICRO LEVEL
* Adapted from John Mullins, The New Business Road Test (2006)
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Total Available Market (TAM)
– How large is the market if
all customers buy your product?
– Example: total LED market
Served/Serviceable Available Market (SAM)
– Focus on your own technology/services
– Example: Living colors LED market < segment of total LED market
Serviceable Obtainable Market (SOM)
– Which realistic market share can be obtained by myself, considering competition, countries, my sales/distribution channels and other market influences?
What are the supporting trends (PESTEL)
How fast will the market grow?
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Marking sizing TAM
SAM
SOM
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Influencing trends
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Political
Economical
Sociological / Demographical
Technological
Environmental
Legal / Regulation
P
E
S
T
E
L
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Time to market
10
Sales
Time
Early adaptors
Early majority
Late majority LaggardsInnovators
Opportunity Window
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
• Market (niche) size
• Market growth (Compound Annual Growth Rate)
• Market share
Market > 20M€ CAGR > 20% Potential market share > 20%
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Easy to keep in mind
3 x 20
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Opportunity Validation Framework
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Market attractiveness
Industry attractiveness
Customer readiness to buy
Understanding of the industry KSF
MARKET (Buyers)
INDUSTRY (Sellers)
MACRO LEVEL
MICRO LEVEL
* Adapted from John Mullins, The New Business Road Test (2006)
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
• Back to Design Challenge and Empathy Map
• Segment definition using:
– Who the customers are (e.g. sociological, behavioral description)
– Where the customers are
• Customer’s benefits à Easiness to sell
– Where is the need / the pain
– Ideal = Customer ROI calculation
• Customer gain / Price = Pay-back (in months)
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Market Micro Level: Will the customer buy it?
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Opportunity Validation Framework
14
Market attractiveness
Industry attractiveness
Customer readiness to buy
Understanding of the industry KSF
MARKET (Buyers)
INDUSTRY (Sellers)
MACRO LEVEL
MICRO LEVEL
* Adapted from John Mullins, The New Business Road Test (2006)
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Porter’s five forces
15
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Identify the key players of your business ecosystem
– Your customers … and their customers (often the end-user)
– Your suppliers … and their suppliers
– Direct and indirect competitors (substitutes)
– Possible new entrants
– Opinion or policy makers
– Other key players/factors if any
Analyse the logic of their evolution
Define your relationship with these players:
– Competition
– Co-evolution
– Alliance
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Business Ecosystems
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Opportunity Validation Framework
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Market attractiveness
Industry attractiveness
Customer readiness to buy
Understanding of the industry KSF
MARKET (Buyers)
INDUSTRY (Sellers)
MACRO LEVEL
MICRO LEVEL
* Adapted from John Mullins, The New Business Road Test (2006)
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Back to Key Activities, Key resources and Key partners in the Business Model Canvas
• What does it take to be successful in this industry
• Resource-based view of the firm: Resources, Capabilities & Processes
Valuable
Rare
Inimatable = Proprietary Elements
Non substituable
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Understanding Key Success Factors (KSF)
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
About virtual companies (Sometimes a good starting point and/or food for thoughts)
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Virtual company
Centres de recherche Research
centers
R&D Subcontracting License agreement
Centres de recherche
Industrial partners Production/Sourcing
subcontracting Confidentiality agreement
Investors
Investment agreement
Accountant Consultants
Management agreement Centres de
recherche Distributors
Distribution agreement
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Why you are unique including core/unique resources as a source oc Sustainable Competitive Advantage (SCA)
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Sustainable Competitive Advantage
Team, know-how…
Technology, secrets, patents…
Partnerships, exclusivity…
Business model
First Mover Advantage Brand, location…
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Competition
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X Y YOU
General information • Turnover/sales • Headcount • … (nationality, age…)
Offering • Product range description • Main features (Feat.1, Feat.2; Feat.3, …) • Brands
Sales & Marketing • Pricing • Distribution channels / sales force • Localization
Strengths
Weaknesses
Positioning • Differentiation factor #1 • Differentiation factor #2 • …
WHY YOU ARE
UNIQUE
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Blue Ocean – Value curves
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Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Useful techniques
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Statistics and press Industry Analysts
+ Specialized press
Interviews with customers / Focus
Groups / Pools +
Observation
Interviews with experts
+ Observation
MARKET INDUSTRY
MACRO LEVEL
MICRO LEVEL
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
INTRODUCTION TO BUSINESS PLANNING
#2
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Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
• Prove the quality of the opportunity
• Explain the business strategy
• Define realistic and measurable targets
• Convince potential partners
• Create a benchmark for the management team in charge of implementing the
plan
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Main targets of a business plan
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
• Who is in the management team?
• What do you sell? Why is it unique? To what needs do you answer?
• Who are the customers?
• What are your goals (the strategy)?
• What are the main risks?
• What are the development stages of the venture? What need to be done (the
action plan)?
• How do you sell?
• How and when go you make profits (the financial plan)?
• What is missing before you start?
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The big questions
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
The Great Equalizer
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Orientation Content Time Horizon
Short
Long Map
Itinerary Strategy Operations
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
The Great Equalizer
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Use Output Format
PPT Text
Milestones
Budget External Internal
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
The Business Plan Process
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Forecasts
Financings
Production
Marketing & Sales
Research & Development
Administration
Vision
Business model
Team
Product or service
Market & industry
CONTEXT
1 STRATEGY
2 ACTION PLAN
3 FINANCES
4
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Typical business plan construction
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Management Team
Vision Business Model
Production & Supply Chain
Sales & Marketing
Research & Development
Organization & Administration
Financial Plan
Opportunity Market & Industry
Stages Milestones
Risk analysis Plan B
Financing
Sensitivity analysis
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
A more realistic process view
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Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR 32
NEVER STOP WONDERING
& ASKING!
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
A real passion for entrepreneurship education and entrepreneurs.
• Student entrepreneurs: 2x
• Full time entrepreneur: once, in a team of 5
• Coach: 500+ projects over the last 20 years
• (Advisory) Board member in multiple new ventures
• Policy making: 2x
• Director of Solvay Entrepreneurs
• PhD in entrepreneurship in 2008
• … never as an investor
My wife (as Colombo), no kids, one dog (Vicky).
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Olivier Witmeur (Belgian, 46)
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Solvay entrepreneurs is the entrepreneurship center of the Université Libre de Bruxelles. We support entrepreneurs through the development of their venture, from an idea to a successful and sustainable business.
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Solvay Entrepreneurs
Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Let’s keep in touch!
35 2014%©%Olivier%Witmeur
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