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GoSolo Workshop 2: Evaluating your Idea
 

GoSolo Workshop 2: Evaluating your Idea

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This session provides an overview of a framework called the 7 domains of attractive opportunities (developed by Professor John Mullins of London Business School). We define the framework and provide ...

This session provides an overview of a framework called the 7 domains of attractive opportunities (developed by Professor John Mullins of London Business School). We define the framework and provide real life examples. The go

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    GoSolo Workshop 2: Evaluating your Idea GoSolo Workshop 2: Evaluating your Idea Presentation Transcript

    • evaluating your idea
    • agenda introduction to tandem and the team why should you evaluate your idea? the 7 domains of attractive opportunities the toolman maintenance company q & a session with an entrepreneur upcoming GoSolo workshops
    • about us “tandem strives to nurture innovation, entrepreneurship and SMEs through quality, strategic services” startups small business medium business business intelligence financial consulting startup services investment services
    • our services startup services financial consulting • business planning • corporate governance • market research • financial planning and reporting • financial modeling • restructuring and business realignment • strategy and business model development • accounting systems, manuals and processes • business development • succession and acquisition planning • mentorship, guidance and support • cfo representation business intelligence investment services • market research and evaluation • pitch development • data analysis • investment analysis • benchmarking • business valuation • innovative practices • fundraising • surveying • exit planning and execution • competitive intelligence • portfolio and investment monitoring
    • the team amir farha Amir started his career in London at CLS Capital Partners, a venture capital firm targeting opportunities in TMT and clean energy sectors in Sweden and the UK. During his time there, he helped structure the acquisition of Sweden’s largest online social network, Lunarworks, the exit of a cable company in the UK, WightCable (North), and the sale of a portfolio of minority investments held by the group. After almost 3 years in the UK, Amir relocated to Dubai, where he worked at the Arab Business Angel Network (ABAN) and was responsible for screening, analyzing and developing business plans, sourcing and evaluating investment opportunities, coordinating due diligence, negotiating and executing transactions. Amir holds a BSc (Hons) in Computer Information Systems and an MSc in Management from the University of Bath in England. Amir has also completed executive courses at London Business School. rabih brair Rabih began his professional career at Andersen in Montreal where he worked in both corporate finance and audit. After obtaining his CPA, Rabih returned to Dubai and continued his audit career at PwC. He then joined the FMCG sector holding a number of positions in finance at Mars. Throughout his 5 year tenure at Mars, his responsibilities progressed from regional financial planning and budget control to become the Finance Manager for Mars’ UAE operations encompassing accounting, planning, credit control and senior management team responsibilities. Rabih managed a team of 8 people and most notably led the local roll-out of a Mars Inc. global cash flow improvement initiative. Rabih holds a B.Comm in Accounting from Concordia University in Montreal Canada and a CPA from the State of Delaware. The team is supported by an experienced advisory board of sophisticated investors and entrepreneurs
    • agenda introduction to tandem and the team why should you evaluate your idea? the 7 domains of attractive opportunities the toolman maintenance company q & a session with an entrepreneur upcoming GoSolo workshops
    • starting up a business
    • why evaluate your idea? “when a business with a reputation for poor fundamentals meets a management team with a reputation for brilliance, it’s the former that remains intact” - Warren Buffet • Identify the risks involved and how they can be mitigated • Identify key strengths in your business • Help assess the market opportunity • Help assess the skill set of the entrepreneur • Saves time (and money) before writing a business plan or starting your business • Understand your weaknesses • Become better prepared and increase the likelihood of getting financing
    • agenda introduction to tandem and the team why should you evaluate your idea? the 7 domains of attractive opportunities the toolman maintenance company q & a session with an entrepreneur our next workshop
    • the 7 domains framework what is it? • Developed by John W. Mullins, Professor and Chair of the Entrepreneurship faculty at London Business School (The New Business Road Test) • It addresses 7 domains that characterize attractive opportunities • It is a toolkit that resolves any issues, questions or uncertainties before writing a business plan • It allows you to identify, assess and reshape market opportunities • Allows you to understand the gaps in your idea and gives you a chance to mitigate them • It addresses the central elements in the assessment of any market opportunity 1. Are the market and industry attractive? 2. Does the opportunity offer compelling customer benefits as well as a sustainable advantage over other solutions to customer’s needs? 3. Can the team deliver the results they seek and promise to others?
    • the 7 domains framework an overview market domain industry domain market attractiveness industry attractiveness macro-level mission, aspirations, ability to propensity for execute on risk CSFs team domain micro-level connectedness up, down, across value chain target segment benefits sustainable advantage and attractiveness
    • the 7 domains framework market attractiveness • This is a macro-level market assessment which usually involves gathering secondary data on how large the market is • This helps determine whether the opportunity is a substantial one serving a large and attractive market, or a niche opportunity with limited potential Measures include: 1. Number of customers in the market 2. The total money spent by these customers on these goods or services 3. The number of units of goods / number of times the service was used, annually 4. Looking at historical data to understand the rate of growth 5. Looking at available forecasts on how fast the market is likely to grow in the future 6. Assessing any macro-economical trends – demographic, cultural, economic, technological and regulatory – to determine if things are likely to get better in the future
    • the 7 domains framework target segment benefits and attractiveness • This is a micro-level market assessment which usually involves gathering primary and secondary data and identifying a much smaller segment of customers within the overall market • This helps identify differentiated benefits that you can provide to customers and a pathway to growth for potential investors. Questions to address: 1. Is there a segment in the market which we can offer the customer clear benefits at a price they are willing to pay? 2. Are these benefits different from and superior to what’s currently being offered (e.g. better, faster, cheaper? Can you differentiate yourself from competition? 3. How large is this segment, and how fast is it growing? 4. Is it likely that our entry into this segment will provide us entry to other segments we may wish to target in the future?
    • the 7 domains framework industry attractiveness • This is a macro-level industry assessment which usually involves using Porter’s 5 Forces to determine the structure of the industry and the overall profitability. • You must first identify the industry you’re in – retailing, manufacturing, software etc, and then assess the industry based on the following: 1. Threat of Entry 2. Buyer Power 3. Supplier Power 4. Threat of Substitutes 5. Competitive Rivalry • Industries with low forces are the most attractive to target. However, most industries are not very attractive. The trick is to identify such problems or unfavorable forces and devise a plan to deal with them. • Investors are interested in learning about where the industry is heading and factors affect it
    • the 7 domains framework industry attractiveness • This is a macro-level industry assessment which usually involves using Porter’s 5 Forces to determine the structure of the industry and the overall profitability. • You must first identify the industry you’re in – retailing, manufacturing, software etc, and then assess the industry based on the following: 1. Threat of Entry: how expensive is it to setup a business? how profitable is the industry? Is it hard to build brand equity? How loyal are consumers? 2. Buyer Power: how many consumers are there relative to companies? How price sensitive are they? How much pressure are they able to exert on companies? 3. Supplier Power: how many suppliers are there? What are the switching costs? 4. Threat of Substitutes: how many substitute products are there? What is the perceived level of differentiation? 5. Competitive Rivalry: how many players are there in the market? Is rivalry based on price, innovation, quality or even advertising spend? • Industries with low forces are the most attractive to target. However, most industries are not very attractive. The trick is to identify such problems or unfavorable forces and devise a plan to deal with them.
    • the 7 domains framework sustainable advantage • This is a micro-level industry assessment which involves identifying and assessing the sustainability of the proposed new firm’s competitive advantage. • The goal is to determine whether certain factors are present that would increase the chances of sustaining an advantage over a long period of time. 1. Intellectual Property: patents, trade secrets etc 2. Processes: superior capabilities and processes or resources that are difficult to duplicate 3. Business model: a scalable business model that doesn’t run out of cash (look at the revenue and margins obtainable, operating cash cycle etc) 4. Reputation: achieving customer loyalty and superior brand equity • It is important to attain first-hand experience in this industry to address these issues. If you don’t have it, get someone who does. • It is not crucial to have a sustainable competitive advantage in order to succeed, but it will definitely increase the likelihood of success and a bring a stronger case to investors
    • the 7 domains framework team domains 1 The mission, personal aspirations and risk appetite of both entrepreneurs and investors • Markets they wish to serve • Industries they are willing to compete in • Own aspirations and how long are they committed to this opportunity • Risks they are willing to undertake (with how much money) 2 The team’s ability to execute on the critical success factors • Backgrounds and experience of entrepreneurs • Understanding the CSFs relevant to the opportunity and matching them against the teams ability to perform 3 The team’s connectedness up, down and across the value chain • Willingness to change course due to changes in the marketplace • Be informed and connected with suppliers, customers and across their industry
    • the 7 domains framework putting it into practice • No opportunity is perfect – all have significant question marks or negatives at the outset • The trick in developing an opportunity is to:  RESHAPE: turn ‘minuses’ into ‘pluses’ (different market, industry or team)  MITIGATE: compensate weaknesses with strengths • Identify key weaknesses – questions to be answered • Suggest avenues for reshaping the opportunity • Identify key strengths – this helps jump start the business plan and provide you with a story to potential investors, partners etc • Score each domain. It doesn’t matter if you score badly on one domain. • Strong scores at the micro level can mitigate poor scores at the macro level
    • agenda introduction to tandem and the team why should you evaluate your idea? the 7 domains of attractive opportunities the toolman maintenance company q & a session with an entrepreneur upcoming GoSolo workshops
    • toolman maintenance co.
    • toolman maintenance co. The TOOLMAN Company offers a full range of home maintenance services in Dubai. You can choose to either call on a case-by-case basis or enjoy worry-free home maintenance through yearly coverage. Services include: • maintenance and repair of all plumbing, electrical and A/C problems • preventive maintenance and cleaning of A/C filters • painting of homes and offices • installation of light fittings and fixtures • general handyman jobs such as drilling, hanging and furniture assembly • interiors fit-outs for homes and offices
    • toolman maintenance co. the 7 domains framework market domain industry domain Huge numbers of residential units. Homeowners, Low-medium barriers. Low market attractiveness industry attractiveness price sensitivity. Almost no occupants. Number of units macro-level will continue to grow?. Units substitutes. Relatively high will need more and more competition overall. Low maintenance. competition in the niche. mission, aspirations, ability to propensity for execute on Founded by MEPCSFs risk construction expert, small team business experts. Self- domain funded. micro-level connectedness up, down, across value chain No IP other than expertise of Occupant home-owners, non- the team. Focus on timing & occupant home-owners, target segment benefits sustainable advantage scheduling, presentable, leasing occupants. and attractiveness friendly staff. Scale is limited on Maintenance needs/average home maintenance, spend will grow. Convenient, opportunity lies in office, retail friendly, punctual service. & building contracts.
    • agenda introduction to tandem and the team why should you evaluate your idea? the 7 domains of attractive opportunities the toolman maintenance company q & a session with an entrepreneur upcoming GoSolo workshops
    • agenda introduction to tandem and the team why should you evaluate your idea? the 7 domains of attractive opportunities the toolman maintenance company q & a session with an entrepreneur upcoming GoSolo workshops
    • upcoming GoSolo workshops • wednesday august 11th 2010 business planning • wednesday september 8th 2010 fundraising • wednesday october 13th 2010 incorporation register at events@shelter.ae