MGT 709 New Venture Creation
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
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?
Profit and growth potential
Can I execute the strategy?
Right resources & relationships
Drivers of growth
Economies of scale, scope, or customer
Need to lock in customers or scarce
Internal financing capability
Personal temperament and goals
Creativity & the Business Idea
Sources of new ideas
Consumers, improving existing products/services,
feedback from distribution channels, government,
Focus groups, brainstorming (incl. reverse and brain
writing), problem inventory analysis, free association,
checklist, forced relationships…
Breakthrough innovation is rare
Opportunity recognition analysis
Idea and competition
Market and opportunity
Entrepreneur & team
Product planning & development
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