Idea Generation

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Idea Generation WorkshopIdea Generation Workshop

Gary DushnitskyGary DushnitskyAssistant Professor of ManagementAssistant Professor of Management

2031 SH2031 [email protected]@wharton.upenn.edu

Wharton School, University of Pennsylvania

Wharton Entrepreneurial Program

©© G. DushnitskyG. Dushnitsky 22

AgendaAgenda

DefinitionsDefinitions

Windows of opportunityWindows of opportunity

Techniques for generating new ideasTechniques for generating new ideas


Opportunity Opportunity –– DefinitionsDefinitions

An idea that is attractive, durable, timely An idea that is attractive, durable, timely and anchored in a product or service that and anchored in a product or service that creates or adds value for its buyer and user creates or adds value for its buyer and user

A novel combination of resources A novel combination of resources the value of which may exceed that of the value of which may exceed that of alternative deployments of these resourcesalternative deployments of these resources


A difficult taskA difficult task……

Generating a good ideaGenerating a good idea

Recognizing a good idea when faced by oneRecognizing a good idea when faced by oneEven for professionals (Bessemer Venture Partners) Even for professionals (Bessemer Venture Partners)

Apple Computer Apple Computer –– ""outrageously expensiveoutrageously expensive""eBay eBay –– ““nono--brainer passbrainer pass””Federal Express Federal Express –– passed on seven timespassed on seven timesLotus Lotus –– ""they had just missed a payrollthey had just missed a payroll""Compaq Compaq –– ""no real future in transportable computersno real future in transportable computers

since IBM can do itsince IBM can do it””

Source: The Bessemer Venture Partners’ Anti-Portfolio, at http://www.bvp.com/port/anti.asp


Technological ChangesTechnological Changes

Do you own a cell phone?Do you own a cell phone?Gartner Group (2002)Gartner Group (2002)

Mobile connections worldwide:Mobile connections worldwide: 1,157 M 1,157 M Service revenue worldwide:Service revenue worldwide: $360.1 B$360.1 B

““Moving Ideas Off CampusMoving Ideas Off Campus””, NY Times, NY Timeswww.upenn.edu/cttwww.upenn.edu/ctt

New technologies allows us toNew technologies allows us toBe more productiveBe more productiveDo new thingsDo new things


Political & Regulatory ChangesPolitical & Regulatory Changes

Deregulation allows us to Deregulation allows us to Be more productiveBe more productiveDo new things Do new things

Airline industryAirline industryAirline Deregulation Act of 1978Airline Deregulation Act of 1978Profitable players: Profitable players: AirTranAirTran, , JetBlueJetBlue, , SouthWestSouthWest

Banking, TelecomBanking, Telecom……


Political & Regulatory ChangesPolitical & Regulatory Changes

RegulationsRegulationsGenerate demand / Subsidize certain businessesGenerate demand / Subsidize certain businesses

SarbanesSarbanes--Oxley Act Oxley Act (Gartner Group report)(Gartner Group report)Compliance cost Fortune 1000 : Compliance cost Fortune 1000 : Exp. Exp. $2B$2BAuditing fees: Auditing fees: Exp. auditing fees to rise Exp. auditing fees to rise 35% 35% -- 50%50%

Homeland Security Advanced Research Homeland Security Advanced Research Projects AgencyProjects Agency

Current fiscal year expected spending: Current fiscal year expected spending: $390M$390MInterested? VisitInterested? Visit www.hsarpabaa.comwww.hsarpabaa.com, , www.hsarpasbir.comwww.hsarpasbir.com


Social ChangesSocial Changes

Changes in social normsChanges in social normsAlter demand patternsAlter demand patternsOpen demand for new products and servicesOpen demand for new products and services

SmokingSmokingAn industry in declineAn industry in decline

Have you eaten Have you eaten carbscarbs latelylately44 million American pursue low44 million American pursue low--carbcarb dietdieteDiets.comeDiets.com $38M revenues for 2003 $38M revenues for 2003


Demographic ChangesDemographic Changes

Demographic patterns highlightDemographic patterns highlightOpportunities for new products and servicesOpportunities for new products and services

The growing U.S. Hispanic population The growing U.S. Hispanic population (Forrester Research)(Forrester Research)Almost twoAlmost two--thirds of the 38.8 million US Hispanics prefer thirds of the 38.8 million US Hispanics prefer Spanish to English, but automotive sites that offer SpanishSpanish to English, but automotive sites that offer Spanish--language content are still in the minority. language content are still in the minority.

Aging baby bomberAging baby bomber (Forrester Research)(Forrester Research)Combine baby boomers caring for aging parents, and beginning Combine baby boomers caring for aging parents, and beginning to face ageto face age--related conditions themselves, with a growing base related conditions themselves, with a growing base of technologyof technology…… Forrester projects that healthcare unbound will Forrester projects that healthcare unbound will struggle to top $5B by 2010, but will skyrocket to $34B by 2015.struggle to top $5B by 2010, but will skyrocket to $34B by 2015.


Generating New IdeasGenerating New Ideas

An An oldold approach approach to a to a newnew problem problem

Start with the solution Start with the solution or technology to be or technology to be used and brainstorm used and brainstorm potential applicationspotential applications

A A newnew approach approach to an to an oldold problemproblem

Start with the problem Start with the problem to be addressed and to be addressed and brainstorm potential brainstorm potential solutionssolutions

Two techniques for generating innovative ideasTwo techniques for generating innovative ideas

Source: Why Not? By B. Nalebuff and I. Ayres (also visit www.whynot.net)


AnAn OldOld Approach to a Approach to a NewNew ProblemProblem

TranslationTranslationWhere else would it work?Where else would it work?

Take a solution from one context and apply it to anotherTake a solution from one context and apply it to anotherArbitrage + AdaptationArbitrage + Adaptation

SpinbrushSpinbrush, , ClearPlayClearPlay

SymmetrySymmetryWould flipping it work?Would flipping it work?

Within a given context, turn an existing solution on its headWithin a given context, turn an existing solution on its head

Priceline.comPriceline.com, ING Direct, ING Direct


AA NewNew Approach to an Approach to an Old Old ProblemProblem

No constraintsNo constraintsWhat would Croesus do?What would Croesus do?

Focus on identifying a solution, rather than providing itFocus on identifying a solution, rather than providing itStimulate radical, nonStimulate radical, non--incremental, ideas incremental, ideas

CallCall--BackBack

InternalizationInternalizationWhy arenWhy aren’’t you feeling my pain?t you feeling my pain?

Internalize to mitigate negative externalitiesInternalize to mitigate negative externalities

Blockbuster & the studiosBlockbuster & the studios


Your TurnYour Turn……

Reversing Reversing the 900 servicethe 900 service

By dialing a 900 number, By dialing a 900 number, you trigger a payment that you trigger a payment that will be charged to your will be charged to your phone bill. phone bill. Can you think of a Can you think of a business that will be willing business that will be willing to credit your phone bill if to credit your phone bill if you call its number?you call its number?

LevelLevel--sensitive sensitive gauges gauges

A popular idea is for a A popular idea is for a brake light that includes a brake light that includes a gauge to show how quickly gauge to show how quickly the vehicle is decelerating. the vehicle is decelerating. Where else would you like Where else would you like to see an indication of level to see an indication of level or intensity, rather than just or intensity, rather than just "on" or "off"?"on" or "off"?

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Good Luck!Good Luck!

Idea Generation

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