DO I HAVE A GOOD IDEA? - SESSION 6
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DO I HAVE A GOOD IDEA? - SESSION 6

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MAIN TOPICS: ...

MAIN TOPICS:
- What makes a good idea?
- How to assess it?
- The role of the business plan
- Opportunity validation framework
- Introduction to the business plan

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This session is part of a 10-weeks course given to master students of the SOLVAY BRUSSELS SCHOOL OF ECONOMICS AND MANAGEMENT by professor Olivier WITMEUR.

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  • Hello Olivier, I liked your 10 week course on entrepreneurship. I could not find the presentation of Session 10 out of 10. Would it be possible to email it to me at seivomv@yahoo.com. Thanks and Best Regards,
    Vikram
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DO I HAVE A GOOD IDEA? - SESSION 6 Presentation Transcript

  • 1. www.solvayentrepreneurs.be DO I HAVE A GOOD IDEA? SESSION 6 (out of 10) OPPORTUNITY ASSESSMENT This session is part of a 10-weeks course given to master students of the SOLVAY BRUSSELS SCHOOL OF ECONOMICS AND MANAGEMENT by professor Olivier WITMEUR.
  • 2. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR •  What makes a good idea? •  How to assess it? •  The role of the business plan •  Opportunity validation framework •  Introduction to the business plan •  Solvay Entrepreneurs Checklist (in French) 2 Desired Outcomes of the Session
  • 3. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR The main steps towards your final project. 3 VALUE PROPOSITION BUSINESS MODEL ROADMAP Key activities, resources & partners Revenues model & costs structure Problem-Solution fit Product-Market fit Market sizing Competition Stages & milestones Get-Keep-Grow Risks & scenario FINANCE P&L, cash and balance sheet Financing CREATE TEST = BUILD MEASURE LEARN YOU
  • 4. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR How many squares do you see? 4
  • 5. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR OPPORTUNITY ASSESSMENT FRAMEWORK #1 Beyond technical feasibility, financial return and additional developments…
  • 6. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Opportunity Validation Framework 6 Market attractiveness Industry attractiveness Customer readiness to buy Understanding of the industry KSF MARKET (Buyers) INDUSTRY (Sellers) MACRO LEVEL MICRO LEVEL * Adapted from John Mullins, The New Business Road Test (2006)
  • 7. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Opportunity Validation Framework 7 Market attractiveness Industry attractiveness Customer readiness to buy Understanding of the industry KSF MARKET (Buyers) INDUSTRY (Sellers) MACRO LEVEL MICRO LEVEL * Adapted from John Mullins, The New Business Road Test (2006)
  • 8. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Total Available Market (TAM) –  How large is the market if all customers buy your product? –  Example: total LED market Served/Serviceable Available Market (SAM) –  Focus on your own technology/services –  Example: Living colors LED market < segment of total LED market Serviceable Obtainable Market (SOM) –  Which realistic market share can be obtained by myself, considering competition, countries, my sales/distribution channels and other market influences? What are the supporting trends (PESTEL) How fast will the market grow? 8 Marking sizing TAM SAM SOM
  • 9. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Influencing trends 9 Political Economical Sociological / Demographical Technological Environmental Legal / Regulation P E S T E L
  • 10. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Time to market 10 Sales Time Early adaptors Early majority Late majority LaggardsInnovators Opportunity Window
  • 11. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR •  Market (niche) size •  Market growth (Compound Annual Growth Rate) •  Market share Market > 20M€ CAGR > 20% Potential market share > 20%   11 Easy to keep in mind 3 x 20
  • 12. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Opportunity Validation Framework 12 Market attractiveness Industry attractiveness Customer readiness to buy Understanding of the industry KSF MARKET (Buyers) INDUSTRY (Sellers) MACRO LEVEL MICRO LEVEL * Adapted from John Mullins, The New Business Road Test (2006)
  • 13. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR •  Back to Design Challenge and Empathy Map •  Segment definition using: –  Who the customers are (e.g. sociological, behavioral description) –  Where the customers are •  Customer’s benefits à Easiness to sell –  Where is the need / the pain –  Ideal = Customer ROI calculation •  Customer gain / Price = Pay-back (in months) 13 Market Micro Level: Will the customer buy it?
  • 14. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Opportunity Validation Framework 14 Market attractiveness Industry attractiveness Customer readiness to buy Understanding of the industry KSF MARKET (Buyers) INDUSTRY (Sellers) MACRO LEVEL MICRO LEVEL * Adapted from John Mullins, The New Business Road Test (2006)
  • 15. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Porter’s five forces 15
  • 16. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Identify the key players of your business ecosystem –  Your customers … and their customers (often the end-user) –  Your suppliers … and their suppliers –  Direct and indirect competitors (substitutes) –  Possible new entrants –  Opinion or policy makers –  Other key players/factors if any Analyse the logic of their evolution Define your relationship with these players: –  Competition –  Co-evolution –  Alliance 16 Business Ecosystems
  • 17. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Opportunity Validation Framework 17 Market attractiveness Industry attractiveness Customer readiness to buy Understanding of the industry KSF MARKET (Buyers) INDUSTRY (Sellers) MACRO LEVEL MICRO LEVEL * Adapted from John Mullins, The New Business Road Test (2006)
  • 18. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Back to Key Activities, Key resources and Key partners in the Business Model Canvas •  What does it take to be successful in this industry •  Resource-based view of the firm: Resources, Capabilities & Processes Valuable Rare Inimatable = Proprietary Elements Non substituable 18 Understanding Key Success Factors (KSF)
  • 19. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR About virtual companies (Sometimes a good starting point and/or food for thoughts) 19 Virtual company Centres de recherche Research centers R&D Subcontracting License agreement Centres de recherche Industrial partnersProduction/Sourcing subcontracting Confidentiality agreement Investors Investment agreement Accountant Consultants Management agreementCentres de rechercheDistributors Distribution agreement
  • 20. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Why you are unique including core/unique resources as a source oc Sustainable Competitive Advantage (SCA) 20 Sustainable Competitive Advantage Team, know-how… Technology, secrets, patents… Partnerships, exclusivity… Business model First Mover Advantage Brand, location…
  • 21. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Competition 21 X Y YOU General information •  Turnover/sales •  Headcount •  … (nationality, age…) Offering •  Product range description •  Main features (Feat.1, Feat.2; Feat.3, …) •  Brands Sales & Marketing •  Pricing •  Distribution channels / sales force •  Localization Strengths Weaknesses Positioning •  Differentiation factor #1 •  Differentiation factor #2 •  … WHY YOU ARE UNIQUE
  • 22. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Blue Ocean – Value curves 22
  • 23. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Useful techniques 23 Statistics and press Industry Analysts + Specialized press Interviews with customers / Focus Groups / Pools + Observation Interviews with experts + Observation MARKET INDUSTRY MACRO LEVEL MICRO LEVEL
  • 24. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR INTRODUCTION TO BUSINESS PLANNING #2 24
  • 25. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR •  Prove the quality of the opportunity •  Explain the business strategy •  Define realistic and measurable targets •  Convince potential partners •  Create a benchmark for the management team in charge of implementing the plan 25 Main targets of a business plan
  • 26. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR •  Who is in the management team? •  What do you sell? Why is it unique? To what needs do you answer? •  Who are the customers? •  What are your goals (the strategy)? •  What are the main risks? •  What are the development stages of the venture? What need to be done (the action plan)? •  How do you sell? •  How and when go you make profits (the financial plan)? •  What is missing before you start? 26 The big questions
  • 27. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR The Great Equalizer 27 Orientation Content Time Horizon Short Long Map Itinerary Strategy Operations
  • 28. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR The Great Equalizer 28 Use Output Format PPT Text Milestones Budget External Internal
  • 29. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR The Business Plan Process 29 Forecasts Financings Production Marketing & Sales Research & Development Administration Vision Business model Team Product or service Market & industry CONTEXT 1 STRATEGY 2 ACTION PLAN 3 FINANCES 4
  • 30. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Typical business plan construction 30 Management Team Vision Business Model Production & Supply Chain Sales & Marketing Research & Development Organization & Administration Financial Plan Opportunity Market & Industry Stages Milestones Risk analysis Plan B Financing Sensitivity analysis
  • 31. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR A more realistic process view 31
  • 32. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR 32 NEVER STOP WONDERING & ASKING!
  • 33. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR A real passion for entrepreneurship education and entrepreneurs. •  Student entrepreneurs: 2x •  Full time entrepreneur: once, in a team of 5 •  Coach: 500+ projects over the last 20 years •  (Advisory) Board member in multiple new ventures •  Policy making: 2x •  Director of Solvay Entrepreneurs •  PhD in entrepreneurship in 2008 •  … never as an investor My wife (as Colombo), no kids, one dog (Vicky). 33 Olivier Witmeur (Belgian, 46)
  • 34. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Solvay entrepreneurs is the entrepreneurship center of the Université Libre de Bruxelles. We support entrepreneurs through the development of their venture, from an idea to a successful and sustainable business. 34 Solvay Entrepreneurs
  • 35. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR Let’s keep in touch! 352014%©%Olivier%Witmeur FOLLOW US ON LinkedIn.com/company/ Solvay-Entrepreneurs in Facebook.com/ SolvayEntrepreneurs f Twitter.com/ SolvayStart t SolvayEntrepreneurs.be www YouTube.com/user/ SolvayEntrepreneurs Foursquare.com/ SolvayStart