On Ideas

					       On Ideas
MGT 709 New Venture Creation
 Readings
 Elevator Pitches
 IceDelights
 EastWind
                Adams On Ideas
 Think you idea has to be unique? You’re deluded
    Good ideas are not scarce, what is rare is a team that can
     execute = execution intelligence
 Want me to sign a nondisclosure? Instead, say “I’m
    The 1:8:20 rule
    Ideas are commodities
 Getting to market first? Big deal.
    Execute to dominate, not define, a market space
 Think there’s no competition? You’re naïve.
    I want to keep my money, laziness, and DIYers if nothing else
    The existence of competition suggests that the idea itself is
   What is a solid business concept?
 A new approach to existing business processes
  (perhaps using new technology)
    Same problem, different solution
 Alternative solutions (corollaries) already exist
    The garage sale as alternative to eBay
    Proves there is a pain in the market
 A market size of at least $1 billion (for hi tech)
 You need ancillary markets
    Vertical or horizontal of $1 billion each
 Execution intelligence
    Domain knowledge, fast-growth scar tissue, experience in
     hyper-competitive markets, risk management (anticipate
     customer pain) balanced team, leadership know-how
    Not many teams have all six attributes
Questions every entrepreneur must answer

 Are my goals well defined?
 Do I have the right strategy?
   Clear definition
   Profit and growth potential
   Sustainable
 Can I execute the strategy?
   Right resources & relationships
   Necessary infrastructure
   Founder’s role
            Drivers of growth
 Economies of scale, scope, or customer
   Need to lock in customers or scarce
   Competitors’ growth
   Resource constraints
   Internal financing capability
   Tolerant customers
   Personal temperament and goals
 Creativity & the Business Idea
 Sources of new ideas
   Consumers, improving existing products/services,
    feedback from distribution channels, government,
 Methods
   Focus groups, brainstorming (incl. reverse and brain
    writing), problem inventory analysis, free association,
    checklist, forced relationships…
 Innovation
   Breakthrough innovation is rare
              Other issues
 Opportunity recognition analysis
   Idea and competition
   Market and opportunity
   Entrepreneur & team
 Product planning & development
   Staged model
 E-Commerce
 What do you think of the different paths to having
  your own business?
   Sentry position, industry focus, do it now
   What are your plans?
 What do you think of their search strategy?
   Was the specification sheet effective?
 Is the opportunity a good one?
   The market? The rewards? Career wise?
   The option? The price? The support package?
 What are the key success factors (and risks)?
 Did they do a good job raising capital and a team?
 Are Martha and Gail’s goals well defined?
   Is this an attractive opportunity?
 Do they have the right strategy?
 Can they execute?
   How should they finance the business?
   How should Martha and Gail split the equity?
   How should the business be organized and
 Aftermath?

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