What to Run  Before  Your Business Plan Course John W. Mullins London Business School
What’s Terrific About  Your  Business Plan Course? <ul><li>Pulls things together  </li></ul><ul><li>Applies theory learned...
What’s  Not  So Good About Your Business Plan Course? <ul><li>A “sales” mindset: no critical thinking  </li></ul><ul><li>P...
One Solution:  Opportunity Assessment Course <ul><li>Course project: a feasibility study for an opportunity they choose </...
How Do You Build It? <ul><li>The seven domains of attractive opportunities </li></ul>
Motivated by Warren Buffett… “ When a business with a reputation for poor fundamentals meets a management team with a repu...
ProCom <ul><li>Bootstrapped the business with money from 3Fs to prove the model </li></ul><ul><li>Raised $4 million from G...
Oxiden <ul><li>Raised  £ 5  million from 3i </li></ul><ul><li>Took two years to get product to market </li></ul><ul><li>Th...
Darian Holdings <ul><li>Raised small amount of angel money </li></ul><ul><li>An opportunity arose to buy a competitor at a...
Glencoren <ul><li>Turned down by several investors, but did eventually raise a small amount for proof of concept </li></ul...
Research Question <ul><li>How can entrepreneurs (and investors, too?) best assess market opportunities? </li></ul>
Point of Confusion #1:  The Market / Industry   Distinction <ul><li>What’s a market? </li></ul><ul><li>What’s an industry?...
The Seven Domains of  Attractive Opportunities   Market Domains   Industry Domains   Market Attractiveness   Industry Attr...
Point of Confusion #2: The Macro / Micro Distinction <ul><li>Large and growing markets are important, but… </li></ul><ul><...
The Seven Domains of  Attractive Opportunities   Macro  Level   Micro  Level   Market Domains   Industry Domains   Market ...
Point of Confusion #3: What’s Crucial about Entrepreneurs and Their Teams… <ul><li>It’s not found on their CVs </li></ul><...
The Seven Domains of  Attractive Opportunities   Macro  Level   Micro  Level   Market Domains   Industry Domains   Mission...
In Summary, for the Seven Domains… <ul><li>Scores are not additive: summing the scores across the seven domains is meaning...
What to Do  Before  (Or in?) Your Business Plan Course?  <ul><li>The seven domains </li></ul><ul><ul><li>Identify key weak...
Remember  Warren Buffett’s Words <ul><li>“ When a business with a reputation for poor fundamentals meets a management team...
For the Rest of the Story… The   New Business Road Test
To Download an Examination Copy of Chapter 1… <ul><li>www.faculty.london.edu/jmullins  </li></ul><ul><li>Instructor websit...
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What to Run Before Your Business Plan Course What to Run Before Your Business Plan Course

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What to Run Before Your Business Plan Course What to Run Before Your Business Plan Course

  1. 1. What to Run Before Your Business Plan Course John W. Mullins London Business School
  2. 2. What’s Terrific About Your Business Plan Course? <ul><li>Pulls things together </li></ul><ul><li>Applies theory learned in the core </li></ul><ul><li>Gets students engaged: work on their own ideas </li></ul><ul><li>Learning by doing </li></ul>
  3. 3. What’s Not So Good About Your Business Plan Course? <ul><li>A “sales” mindset: no critical thinking </li></ul><ul><li>Puts them in a difficult position vs. judges </li></ul><ul><li>Some students disengage if the idea is not theirs </li></ul><ul><li>Most plans are pretty bad! Why? </li></ul>
  4. 4. One Solution: Opportunity Assessment Course <ul><li>Course project: a feasibility study for an opportunity they choose </li></ul><ul><li>No confirmation bias: “go” or “no-go” are both OK </li></ul><ul><li>No embarrassment with judges </li></ul><ul><li>Brings together strategy, marketing, OB </li></ul><ul><li>Jump-starts the business planning </li></ul>
  5. 5. How Do You Build It? <ul><li>The seven domains of attractive opportunities </li></ul>
  6. 6. Motivated by Warren Buffett… “ When a business with a reputation for poor fundamentals meets a management team with a reputation for brilliance… it’s the reputation of the former that remains intact.”
  7. 7. ProCom <ul><li>Bootstrapped the business with money from 3Fs to prove the model </li></ul><ul><li>Raised $4 million from GE Capital when e-learning was all the rage </li></ul><ul><li>Have treaded water since, no exit, but still around: the “living dead” </li></ul>
  8. 8. Oxiden <ul><li>Raised £ 5 million from 3i </li></ul><ul><li>Took two years to get product to market </li></ul><ul><li>Then, a very lengthy sales cycle followed </li></ul><ul><li>There was another solution… </li></ul><ul><li>Died after 4 years </li></ul>
  9. 9. Darian Holdings <ul><li>Raised small amount of angel money </li></ul><ul><li>An opportunity arose to buy a competitor at a very attractive price </li></ul><ul><li>Having considerable success </li></ul>
  10. 10. Glencoren <ul><li>Turned down by several investors, but did eventually raise a small amount for proof of concept </li></ul><ul><li>Now trying to raise the next round </li></ul><ul><li>A very long lead time play – changing surgeons’ behavior takes a long time </li></ul>
  11. 11. Research Question <ul><li>How can entrepreneurs (and investors, too?) best assess market opportunities? </li></ul>
  12. 12. Point of Confusion #1: The Market / Industry Distinction <ul><li>What’s a market? </li></ul><ul><li>What’s an industry? </li></ul><ul><li>These are frequently confused! </li></ul>
  13. 13. The Seven Domains of Attractive Opportunities Market Domains Industry Domains Market Attractiveness Industry Attractiveness
  14. 14. Point of Confusion #2: The Macro / Micro Distinction <ul><li>Large and growing markets are important, but… </li></ul><ul><li>Structurally attractive industries (in a five forces sense) are also important, but… </li></ul>
  15. 15. The Seven Domains of Attractive Opportunities Macro Level Micro Level Market Domains Industry Domains Market Attractiveness Target Segment Benefits and Attractiveness Industry Attractiveness Sustainable Advantage
  16. 16. Point of Confusion #3: What’s Crucial about Entrepreneurs and Their Teams… <ul><li>It’s not found on their CVs </li></ul><ul><li>Not simply about “chemistry” or “character” or “entrepreneurial drive” </li></ul>
  17. 17. The Seven Domains of Attractive Opportunities Macro Level Micro Level Market Domains Industry Domains Mission, Ability to Aspirations, Execute Propensity on CSFs for Risk Connectedness up and down Value Chain Team Domains Market Attractiveness Target Segment Benefits and Attractiveness Industry Attractiveness Sustainable Advantage
  18. 18. In Summary, for the Seven Domains… <ul><li>Scores are not additive: summing the scores across the seven domains is meaningless </li></ul><ul><li>Strong scores at the micro level can mitigate poor macro-level scores </li></ul>
  19. 19. What to Do Before (Or in?) Your Business Plan Course? <ul><li>The seven domains </li></ul><ul><ul><li>Identify key weaknesses </li></ul></ul><ul><ul><ul><li>Questions to be answered </li></ul></ul></ul><ul><ul><li>Suggest avenues for reshaping the opportunity if not mitigated by other domains </li></ul></ul><ul><ul><li>Identify key strengths </li></ul></ul><ul><ul><ul><li>Crucial in telling your story to resource providers </li></ul></ul></ul>
  20. 20. Remember Warren Buffett’s Words <ul><li>“ When a business with a reputation for poor fundamentals meets a management team with a reputation for brilliance, it’s the reputation of the former that remains intact.” </li></ul>
  21. 21. For the Rest of the Story… The New Business Road Test
  22. 22. To Download an Examination Copy of Chapter 1… <ul><li>www.faculty.london.edu/jmullins </li></ul><ul><li>Instructor website at www.pearson-books.com/roadtest </li></ul><ul><li>See Amazon for Reader Reviews </li></ul>
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