The business paradox mc gill university 17 05 2011

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Do we understand why business fail; perhaps we're not looking at the right things?

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The business paradox mc gill university 17 05 2011

  1. 1. Presentation to McGill University, Montreal May 17 th 2011 <ul><li></li></ul>
  2. 2. <ul><li>Value ≥ ƒ (Risk) </li></ul><ul><li></li></ul>The Business Paradox ©
  3. 3. <ul><li></li></ul>The Business Paradox ©
  4. 4. <ul><li></li></ul>The Business Paradox ©
  5. 5. <ul><li>Source AUTM </li></ul><ul><li>Extrait: Conseil de la Science et de la Tecnologie – Nouvelles perspectives et pistes d’action </li></ul><ul><li></li></ul><ul><li>Copyright </li></ul>
  6. 6. <ul><li>Abandon - Transition Rate - Licenses </li></ul><ul><li></li></ul><ul><li>1:20 </li></ul><ul><li>1:5 </li></ul><ul><li>1:25 </li></ul><ul><li>1 </li></ul>1 commercial success ~ $50M Total cost: $ 331.25M (minus ~ $3M license revenue) 5 VC projects @ $10M Cost: $50M 125 Spin-off @ $250k Cost: $31.25M 2,500 R&D projects @ $100k Cost: $250M The Business Paradox ©
  7. 7. <ul><ul><li>Is the market big enough? </li></ul></ul><ul><ul><li>Do we solve a market issue? </li></ul></ul><ul><ul><li>Is the solution better than the competition? </li></ul></ul><ul><ul><li>Is the management team competent? </li></ul></ul><ul><ul><li>Can we raise money? </li></ul></ul><ul><li>In other words, is it good enough? </li></ul><ul><li></li></ul>The Business Paradox ©
  8. 8. <ul><li></li></ul>Opportunity A vs. Opportunity B The Business Paradox ©
  9. 9. <ul><li>Cause #1: Push strategy ; </li></ul><ul><li>Cause #2: Little interaction with the market; </li></ul><ul><li>Cause #3: Opportunistic approach for project selection; </li></ul><ul><li>Cause #4: Lack of experienced entrepreneur; </li></ul><ul><li>Cause #5: Dysfunctional value creation chain; </li></ul><ul><li>Cause #6: Dysfunctional financial community; </li></ul><ul><li>Cause #7: Reactive governance; </li></ul><ul><li>Cause #8: Short-term vision. </li></ul><ul><li></li></ul>The Business Paradox ©
  10. 10. <ul><li>“ Ultimately, most business will fail to create value as the leaders reject the importance of setting a trusting environment. Trust is the ultimate ingredient that enables risk factors to be exposed and openly discussed. Considering the risks will bring rapid alignment on the priorities, instigate mitigation plans and create the momentum essential to value creation.” </li></ul><ul><li></li></ul>The Business Paradox ©
  11. 11. <ul><li></li></ul>The Business Paradox ©
  12. 12. <ul><li>Identification of Value Creation Opportunity; </li></ul><ul><ul><li>Attainable; </li></ul></ul><ul><ul><li>Sustainable </li></ul></ul><ul><ul><li>Valuable . </li></ul></ul><ul><li></li></ul>The Business Paradox ©
  13. 13. <ul><li>fundamental and observable trends; </li></ul><ul><li>Known drivers; </li></ul><ul><li>Destined for growth; </li></ul><ul><li>Ready to move; </li></ul><ul><li>Known to the stakeholders; </li></ul><ul><li></li></ul>The Business Paradox ©
  14. 14. <ul><li>The existing players; </li></ul><ul><ul><li>The Clients (the prize); </li></ul></ul><ul><ul><li>Potential Partners (Friends or Foes); </li></ul></ul><ul><ul><li>The competition (the enemies); </li></ul></ul><ul><li>Market dynamics (Procurement Practices and Regulation); </li></ul><ul><li>The gaps and strongholds. </li></ul><ul><li></li></ul>The Business Paradox ©
  15. 15. <ul><li>Climbing the food chain; </li></ul><ul><li>Becoming the gate keeper; </li></ul><ul><li>Creating the momentum - Time to market; </li></ul><ul><li>Partnering; </li></ul><ul><li>Exit planning. </li></ul><ul><li></li></ul>The Business Paradox ©
  16. 16. <ul><li>Market Need vs. Business Opportunity; </li></ul><ul><li>Core value; </li></ul><ul><li>Value Proposition; </li></ul><ul><li>Competitive distinction; </li></ul><ul><li>Deployment; </li></ul><ul><li>Product Road Map; </li></ul><ul><li>Branding. </li></ul><ul><li></li></ul>The Business Paradox ©
  17. 17. <ul><li>Relevancy to the plan; </li></ul><ul><li>Timing; </li></ul><ul><li>Commitment & Performance; </li></ul><ul><li>Extended Management Team </li></ul><ul><li></li></ul>The Business Paradox ©
  18. 18. <ul><li></li></ul>The Business Paradox ©
  19. 19. <ul><li></li></ul>Creation Phase Sowing Momentum Phase Accelerating Growth Depletion Phase Harvest Declining Phase Rest The Business Paradox ©
  20. 20. <ul><li></li></ul>VCO 1 VCO 2 VCO 3 VCO 4 Total value creation The Business Paradox ©
  21. 21. <ul><li>Are the Basics checked? </li></ul><ul><li>Do we understand HOW to do the job? </li></ul><ul><li>Is the critical path defined? </li></ul><ul><ul><li>The deliverables? </li></ul></ul><ul><ul><li>The risks? </li></ul></ul><ul><ul><li>The priorities? </li></ul></ul><ul><li>Can we assemble the Right team? </li></ul><ul><ul><li>The competencies? </li></ul></ul><ul><ul><li>The Attitude? </li></ul></ul><ul><li>Can we go the distance (Cash & Time)? </li></ul><ul><li>Is the team aligned? </li></ul><ul><li></li></ul>The Business Paradox ©
  22. 22. <ul><li>Only then you are ready! </li></ul><ul><li></li></ul>The Business Paradox ©
  23. 23. <ul><li>Thank you </li></ul><ul><li>Jacques Denommee </li></ul><ul><li>Director – Investments </li></ul><ul><li>BDC Capital </li></ul><ul><li>[email_address] </li></ul><ul><li></li></ul>The Business Paradox ©

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