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Converting ideas into businesses


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Converting ideas into businesses

  1. 1. Converting ideas into businesses Prajakt Raut Co-founder - Applyifi Founder – The Hub for Startups
  2. 2. Idea Implementation
  3. 3. Can solve a problem Fulfill a need Improve quality of life Improve something
  4. 4. Examples of cheaper: Lower price 0r accessible to more people e.g .EMI? Cheaper Faster Better Fuller Nicer Nearer Improve something
  5. 5. Product Service Value Business model New users New uses
  6. 6. Having a good idea is not the same as having a business plan.
  7. 7. A coffee shop for teens is a cool idea… …but is not the same as Setting up a chain of coffee shops.
  8. 8. A coffee chain requires • Real estate/franchising • Brand identity • Pricing strategy • Marketing • Supply chain • HR, legal, finance • Training • MIS • Fund flow/cash flow • ROI & capacity utilization analysis • Facilities management • Processes • Standardization • Org structure • Vendors Etc. etc., etc….
  9. 9. How much of each of these elements depends on whether you want to have… A lifestyle business OR A scale business
  10. 10. Objective of today’s session To make a business case around a good idea.
  11. 11. Fall in love with a PROBLEM. Don’t get infatuated with a solution. [Allows you to try new solutions if one does not work]
  12. 12. To have one great idea, have many of them. Thomas Edison
  13. 13. An idea means nothing. Implementation is everything.
  14. 14. Plans are useless. Planning is priceless. Plans change. Planning allows you to adjust your plans in implementing your idea. Your idea or venture should not fail because your plan failed. Rework your plan. Adjust your solution.
  15. 15. Exercise 1 Identify the problem or need that you want to own Present it as: 1. The situation/environment [e.g. accommodation choices in Gurgaon are either too expensive or too basic & dirty] 2. The problem you want to address [e.g. “We want to address the problem of finding smart, cheerful accommodation at reasonable prices]
  16. 16. Exercise 2 State the ideas that address the problem that you chose Present all the ideas you considered and explain why you discarded some.
  17. 17. Evaluating the business potential of an idea 1) Concept 2) What will it take to deliver? 3) Team required for this 4) What is the size of the opportunity 5) Defensible competitive advantage? 6) Business model / financial model 7) Competitive landscape 8) Risk factors 9) Funds required and use of funds
  18. 18. Concept • No more than one short, unambiguous paragraph – Reader should not need to read it again to understand – Capture the essence in a one crisp line – Use simple language – Sell the potential
  19. 19. What does it take to deliver? Brand Strategy Value proposition & positioning Target Audience Pricing Brand Personality Product Procurement Production Supply chain Vendor management Capacity utilization Portal Technology Platform Look & Feel – user experience Ordering mechanisms – including ‘order on phone’ Payment gateways & methods Logistics Delivery & fulfillment mechanisms Warehousing Logistics partners Order Management Marketing Marketing strategy as well as tactical ideas Media Plan & Budgets CRM Strategies & Ideas including loyalty programs, referrals, etc. Team Roles & Responsibilities identification HR policies Team hiring & retention plan E-commerce
  20. 20. How many vendors are involved? 19 Partners / Vendors involved in the implementation process Technology & portal development partners 1. E-commerce capable Technology partners 2. Hosting partner 3. User Interface partner 4. Payment Gateway 5. Testing & bug fixing experts Operations partners 1. Packaging & printing partners 2. Logistics partners 3. Recruitment consultants 4. CRM partners/CRM platform vendors 5. Database vendors 6. Process Training Consultants 7. Soft Skill Training Consultants 8. Outsourced Call Centre Marketing & Brand Communication partners 1. Brand identity specialists 2. Photographer 3. Direct Marketing agency 4. Social Media Agency 5. Advertising Agency 6. Media Buying agency
  21. 21. Team required to deliver • “VCs prefer A-Class teams with mediocre business plans over B-Class teams with great business plans” • Diversity of skills, domain expertise critical but with similarity of passion • Ideally, find partners with similar aspirations, motivations and financial situations
  22. 22. Size of the opportunity • Break it down to last detail – Total market size – Addressable market size • What price point and how does that translate into revenue • Test the assumptions
  23. 23. Defensible competitive advantage? • Uniqueness • Scalability • IP • Replicability
  24. 24. Business model / financial model • Three key questions – How much will you sell at – How many will you sell – Where will you sell… and how • Who will pay for it – [user and buyer could be different] • Translate the above questions into a financial model
  25. 25. Competition • Who will you compete with? • Why would someone choose you over them? • Why do you have a chance to be a dominant player? In many cases, status quo [i.e. doing nothing] is the biggest competition
  26. 26. Risk factors • Market risks? • Financial risks? • Competitive risks? • Business model risks? • Execution risks?
  27. 27. Funding needs • What do you need the money for? – Be specific • How much do you need? – Be definitive
  28. 28. Exit potential • How is the investor going to earn a good return? Sale to a strategic investor Exit by selling stake to a growth stage investor IPO? [Note: Exit does not mean that the entrepreneurs has toExit]
  29. 29. Exercise 3 Make a business case for your idea
  30. 30. Evaluating the business potential of an idea 1) Concept 2) What will it take to deliver? 3) Team required for this 4) What is the size of the opportunity 5) Defensible competitive advantage? 6) Business model / financial model 7) Competitive landscape 8) Risk factors 9) Funds required and use of funds
  31. 31. Sleep over your ideas. More often than not you will get over them. Dream big. Dream often.