Opportunity definition 2011


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Opportunity definition 2011

  1. 1. Defining the opportunityInnovation, Entrepreneurship& Design Toolbox © Imperial College Business School
  2. 2. What? – Why? – How? – Example – ConclusionThe origins of a business ideaBroadly, business ideas have two sources: 1.  ”Demand-Pull Idea” based on an observed market opportunity 2.  ”Knowledge-Push Idea” based on a new technology or capability © Imperial College Business School
  3. 3. What? – Why? – How? – Example – Conclusion1. Demand-Pull Idea•  An entrepreneur spots a problem that is currently unsolved. It could be: •  a problem encountered in personal experience •  encountered through friends’ or relatives’ experiences •  Observed in the news or in current trends ...Often referred to as ‘customer pain’ or an unmet demand•  The entrepreneur studies the reasons behind the problem then conceives and develops a product/service to solve it.•  The solution might incorporate technology, but the technology solution is created and tailored specifically for the problem. © Imperial College Business School
  4. 4. What? – Why? – How? – Example – Conclusion2. Knowledge-Push Idea•  A scientist/inventor makes a new discovery or develops a new technical capability, which could have many possible applications   Also known as a ‘platform technology’•  She then needs to identify a suitable commercial application   Find the most compelling industry market likely to need or adopt the new technology at an early date – find a problem to solve!•  And develop the raw technology further so it can deliver the applications envisioned   develop for “Market readiness” © Imperial College Business School
  5. 5. What? – Why? – How? – Example – Conclusion...Knowledge-Push, continued•  Once the technology is sufficiently developed, the inventor/entrepreneur start-up can either: 1.  Manufacture its own products using the technology, and sell them to customers; 2.  License the protected tech to other companies, which will develop and sell their own products using the technology; OR 3.  Sell the start-up company, with its Intellectual Property and its highly specialised managers and staff (‘human capital’), to another (usually larger) company. © Imperial College Business School
  6. 6. What? – Why? – How? – Example – ConclusionLooking ahead: Market for Products or TechnologyDemand-pull ideas usually go into the Market for Products  Make products/services and sell directly to customersKnowledge-push ideas may end up in either  The Market for products (option 1 on last slide)  Or the Market for Technology (options 2 and 3, last slide) © Imperial College Business School
  7. 7. What? – Why? – How? – Example – ConclusionDemand-pull example: eCourier.comEntrepreneur Tom Allason noticed that courier services are tremendously unreliable and inefficient.After studying the problem and its causes, he got the idea to develop a software system that could  track the progress and whereabouts of each courier using GPS, thus assigning delivery jobs to couriers intelligently  Reduce operating overheads by using a web interface with the customer, employing less call centre staff and paying a better wage to bike couriersHe found a logistics expert who could plan and supervise the building of this software and founded eCourier.co.ukFurther observations about ‘customer pain’ led to a second start- up, Shutl. (full story in Ch. 1 of The Smart Entrepreneur) © Imperial College Business School
  8. 8. What? – Why? – How? – Example – ConclusionKnowledge-push exampleProf. Colin Caro of Imperial College discovered that blood vessels are helically shaped, helping blood to flow more efficiently by swirling, avoiding stagnation or slowdownThis discovery could lead to several ‘Biomimicry’ applications in situations where fluid flow is important, such as •  Medical stents •  Oil and gas industry, risers, pipelines, etc.Two companies were formed: •  Veryan Medical – designs and develops stents •  Heliswirl – develops engineering solutions to increase fluid flow efficiency for industrial processes, increase yield and reduce cost.(Full story in Ch. 1 of The Smart Entrepreneur) © Imperial College Business School
  9. 9. What? – Why? – How? – Example – ConclusionSuggested next steps...If you have a demand-pull ideaGo to ‘Idea generation and evaluation’ exercise in the IE&D Toolbox •  benchmark your idea against other solutions •  Improve your ideaIf you have a knowledge-push ideaGo to the ‘Technology/Application Matrix’ in the IE&D Toolbox •  Compare and evaluate commercial applicationsAfterwards you can further reality-test your assumptions and conclusions using Entrepreneurial Market Research and Value Chain/Value Network analysis. © Imperial College Business School
  10. 10. What? – Why? – How? – Example – ConclusionTwo possible journeys... Your Idea/Project Did you start with a problem or a technology/capability? Demand-pull case Knowledge push case Idea Generation and evaluation Technology/Application matrix Evaluate, improve Evaluate, choose Entrepreneurial Market ResearchReconsider? Value Chain/Network analysis Reconsider? Reality -test © Imperial College Business School
  11. 11. Further readingClarysse, B. and Kiefer, S. (2011): The Smart Entrepreneur. London, Elliot & Thompson. Chapter 1: “Understanding the fit between Opportunities and Ideas” © Imperial College Business School