The New Business Road Test by John Mullins

Prepared by Colin Post – find me at www.expat-chronicles.com

The New Business Road Testby John W. Mullins

• “…provide[s] a reality check for anyone poised to jump into a new

venture without thinking.”– Financial Times


Slideshow put together by:

Colin [email protected] development and e-marketing campaignsImport / export management for US-South AmericaInmersiones ingleses en CundinamarcaFreelance writingwww.expat-chronicles.com

http://www.expat-chronicles.com/


Business Road Test

Market Domain Industry Domain

Macro-Level Market attractiveness Industry attractiveness

Micro-Level Target segment benefits and attractiveness

Sustainable advantage


Team Domain

Mission, aspirations, propensity for risk

Ability to execute on critical success factors (CSFs)

Connectedness up, down, across value chain


Stage 1: Market Domain, Micro-Level1. What customer pain will you resolve? How

strongly will they want to pay? Will they pay a price that works?

2. Who, precisely, are the customers with the pain? Detailed info about who, where, etc.?

3. What benefits does your solution have that other solutions don’t?

4. What evidence do you have to show that your potential customers will buy, or that your target segment will grow?


Stage 2: Market Domain, Macro-Level

1. How large is the market? How many ways have you measured it?

2. How fast has it grown over last 1 / 3 / 5 years?

3. How quickly will it grow over next 2 / 5 / 10 years?

4. What economical, demographic, sociocultural, technological, regulatory, or natural trends will affect your market?


Stage 3: Industry Domain, Macro-Level

1. What industry will you compete in? Define it carefully.2. Is it easy or difficult for companies to enter the

industry?3. Do industry suppliers have the power to set terms and

conditions?4. Do buyers have the power to set terms and

conditions?5. Is it easy or difficult for substitute products to steal

your market?6. Is competitive rivalry intense or genteel?7. Based on the 5 forces, how attractive is this industry?


1. Do you possess proprietary elements (patents, secrets, etc.) that other firms can’t imitate or duplicate?

2. Can you develop processes, capabilities, or resources that other firms can’t imitate or duplicate?

3. Is your business economically viable? Can you show you won’t run out of money quickly?

1. Revenue adequate to investment and margins needed?2. How much will it cost to acquire and retain customers?3. How long will it take to attract customers?4. Will margins cover fixed costs soon?5. How much cash will be tied up in working capital? For how long?6. How quickly will customers pay?7. How slowly can suppliers and employees be paid?

Stage 4: Industry Domain, Micro-Level


Team Domain: What drives your team?

1. What’s your mission?1. e.g. serve market, change industry, market

product…

2. What’s your aspiration?1. Work for yourself, change world, build big or

small business?

3. What risks are you willing and not willing to take?

1. Invest your own money? Give up control? Secure salary? Time with family?


Team Domain: Can you execute?

1. What are the few critical success factors (CSF) in your industry? How can you show you’ve identified them correctly?

2. Can you demonstrate that you can execute on each and every CSF?

3. Can you identify which CSF(s) your team is not well-prepared to meet?


Team Domain: Connections matter1. Who do you know up the value chain among

likely suppliers to you and your competitors? Who do you know among suppliers to substitute products?

2. Who do you know down the value chain among distributors and customers?

3. Who do you know across the value chain among competitors and substitute products?

The New Business Road Test by John Mullins

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