Opportunity Assessment Launching New Products and Businesses What - - PowerPoint PPT Presentation

Launching New Products and Businesses

Opportunity Assessment

What is Entrepreneurship?

“The Pursuit of Opportunity Without Regard to Resources Currently Controlled”

Howard Stevenson Harvard Business School

The Process

Opportunity Creativity Value Proposition Making the World a Better Place

A product or service around which you can build a profitable business and generate a positive return to all stakeholders

What’s An Opportunity?

Where are Opportunities Born?

• Technology shifts
• Introduction of new disruptive

technologies

• Application or aggregation of new

technologies

• Business Model shifts
• Market re-segmentation
• Redefining existing markets

Market shifts

• Value chain

disruption/obsol- escence

• New regulation /

deregulation

• New ecosystems

Societal shifts

• Changes in how we

live, learn and work

• Evolution of human

preferences

• Customer Motivation addressed by Market Disruption

How are Opportunities Created?

Credit to David Skok: http://www.forentrepreneurs.com/startup-ideation/

Disruptive New Technology New Business Models Market Shift (Unmet Need) Societal Shifts (Entertainment)

Opportunity Assessment Framework

WHY: CUSTOMER MOTIVATION A well defined market need HOW: BUSINESS MODEL How your solution reaches the customer and you make money WHAT: SOLUTION A viable product or service that coherently addresses the need WHERE: MARKET An interesting existing

• r new emerging

market WHEN: TRENDS Whyis this the right time to address this? WHO: TEAM The core execution expertise (both internal and advisors)

• WHY does a customer care?
• Outline the market need that needs to be filled

1 – WHY: Customer Motivation

• Burning Need - This is especially critical with enterprise (B2B) solutions
• Who has a “hair-on-fire” need?
• Are there large inefficiencies that can be addressed?
• Cost, time, resources
• Risk Management and Reduction
• Often non revenue generating, but critical in operations and well-being
• Prevention and mitigation of catastrophic failure and events
• Growth
• Opportunities to expand and manage income and revenue generating

sources

• Social and Emotional Desires
• Are there products that satisfy non-critical customer desires?
• Entertainment, status, pride, esthetics22

1 – Customer Motivation

• Are you uniquely positioned to understand and

assessthis customer motivation?

• Have new developments in the market created new

needs that can be addressed?

• Same product but with additional adjunctbenefits

Customer Motivation

• WHAT is the coherent solution that

addresses the customer need? Its not sufficient to have only identified the problem!

2 – WHAT: Clearly Defined Solution

2 – Clearly Defined Solution

• Can you create a viable product development plan?
• No magic warp drives
• Is this a feature or a stand-alone product?
• Do you need to replicate an existing product or ecosystem

before you can offer your solution?

• Are you offering a new and compelling user experience?
• Is there substantialdifferentiation?
• Do you have a complete understanding of how the user will

benefit from your product?

• Is the value of your solutionobvious?

• Is this a Pain Killer or Vitamin? Which do you want tobe?
• Do you envision a 10x improvement over existing offerings?
• Is there a budget that can accommodate thissolution?
• Is there an initial segment of the market that absolutely

needs your product to startwith?

• Do you have compelling use cases that matches the

customer motivation with the solution’s features – Product market Fit?

2 – Clearly Defined Solution

• WHERE are your customers and how many

are there? Are you addressing a need in an interesting or emerging market?

3 – WHERE: Interesting Market

• What is the size of the Total Addressable Market?
• What is the Served Market you will DOMINATE?
• What is the minimum market share needed to be

relevant?

• What is your beach-head market entry strategy?
• How can you get to $100M annualrevenues?
• 10 @ $10M each
• 100M @ $1 each

3 - Interesting Market

• Large, often growing, market?
• (or potentially large non-existent market with many target customers)
• Fragmented market?
• (else unfair access to highly concentrated markets)
• Strategically interesting to incumbents?
• (or the parent company)
• Tolerant of risk and Forgiving?
• (typically not selling into the critical path)
• Sufficient margins?
• (typically not commodity markets)
• Accessible market?
• (typically not highly regulated)

3 - Some features of interesting markets

3 - Understanding Market Sizing

T AM

Total Available Market Combined revenues of all companies that can theortically serve a market Served Available Market The subset of the market that your sales team can address or that the product provides specific value

TM

Target Market – Beach-head The initial focused customer base that your product will reach

TOP DOWNANALYSIS

• Estimate of the theoretical

capacity of the

• pportunity
• Good for understanding

the macro market dynamics Method

• Analyst Data
• Public market info
• Proxy Modeling

BOTTOM UPANALYSIS

• Sanity check on macro

numbers and emerging, non existent markets

• Good for understanding

how to penetrate the market Method

• Analyst Data
• Empirical data
• Qualitative research

SAM

• HOW do you make money?
• How do you reach your customers and how do you

monetize the product or service?

4 – HOW: Business Model

• What is your flow of cash vs. product flow?
• Are there other organizations or products involved in the end solution

to your customer?

• What is the value to the customer?
• Are the economic buyer and end-user one and the same?
• Who is the actual customer? Where is the purchasing budget?
• What are the fundamental economics of your business?
• Unit economics? Potential pricing
• How will you acquire your customers?
• What are the customer acquisition costs? How will you reach your

customers? How will they initially hear about your solution?

4 - Business Model

• Sustainable Differentiation and positioning within the ecosystem
• How is the product positioned vs other solutions and the

Competition?

• Local transportation example:

– Uber, Sidecar, Flywheel, Lyft, Taxi

• Network effects vs. virality
• Does your solution improve with the number of other users, or is it just a

means by which to acquire new customers cost effectively?

• Groupon (viral) and Uber (network effects)
• Economies of scale?
• Do the economics become better with scale? Is there a large capital

requirement up front?

• Barriers to entry
• Can you use your business model to help block out your competition?

4 - Some elements of the business model

• WHEN is the ideal time for this product to

exist?

• Are there any events or developments that

make this the optimal for your product to come to market?

5 – WHEN: Supporting Trends

• New enabling technologies or aggregationopportunities
• New regulatorylandscape
• New or redefined societal preferences and needs
• New modes and forms of entertainment
• New user expectations and experiences carried from other

sectors

• Adoption of complimentary or symbiotictechnologies

5 – Trends – Why now?

• WHO are the masterminds behind this
• pportunity?
• Do you have unique insights, skills, and

access to bring your product to market?

6 – WHO: Core Team

Do you have the right operators, investors and advisors?

• Expertise and credibility
• Are the team’s capabilities aligned with execution required to

take on the

• pportunity.
• Do you have the right domain knowledge?
• Authenticity
• Do you have the heart? Are you a missionary or a mercenary?
• Structure
• Is the team honestly composed – no part-timers.
• Are the incentives aligned
• Culture and foundation
• Do you have alignment of vision
• Does everyone understand and believe in the final destination?

6 – Core Team

What Does a New Venture Achieve? 3C’s

Brings new content to the market New product New Service Brings a new or improved method of creation Technological Breakthrough Improved manufacturing Higher productivity Designs a superior system for consumption Ease of receiving Ease of using

Superior cost – benefit for the customers

New Venture

Entrepreneur Innovation Raise Resources Deliver Value

Product Development Cost-Benefit Value Equation Opportunity Customer Need Mindset Networking Finance People Assets

From Mind to Market

Creating a New Value Equation

What factors should be reduced well below the industry standard ? What factors should be raised well beyond the industry standards ? What factors should be eliminated that the industry has taken for granted ? What factors should be created that the industry has never offered ?

Reduce Eliminate Create Raise New Value Equation

Thank You