by Dr. Joachim Behrendt

2. INTRODUCTION
StartNowHow
• Open seminar series for active and prospective entrepreneurs
• 10 sessions on monthly basis until summer 2017
• Covers relevant theoretical and practical aspects of entrepreneurship
• Based on lecture „entrepreneurship“ @Bogazici University
• Based on experiences of entrepreneurs, investors, mentors and consultants
• Each session with guest speaker (entrepreneurs, investors, mentors, etc.)
• Certificate provided for participants (from BIC Angels / Bogazici University
Entrepreneurship Center) joining at least 70% of the sessions
• Language: English / Turkish
• Thursdays 17.15h – 19.30h
• Next session: Thu 9. February 2017
• Topic: Market and Competitor Research
• Early registration for each session required (eventbrite), limited capacity!
• Priority for regular participants
Startnowhow – Seminar 212.01.2017 2

3. INTRODUCTION
StartNowHow - Seminar Topics (preliminary)
1. Thu 22.09.16: The entrepreneurial ecosystem in Turkey
2. Thu 20.10.16: Entrepreneurship as a profession
3. Thu 17.11.16: Financial planning for startups
4. Thu 15.12.16: Planning, developing and testing a business model
5. Thu 12.01.17: Opportunity recognition and evaluation
6. Thu 09.02.17: Market and competitor research
7. Thu 09.03.17: Funding the startup – stage financing for ventures
8. Thu 06.04.17: Startup valuation
9. Thu 04.05.17: The investment process – pitching, negotiations and termsheet
10. Thu 01.06.17: Success and failure as an entrepreneur
Startnowhow – Seminar 112.01.2017 3

4. INTRODUCTION
StartNowHow - Literature
• Bowers, Brent, 8 Patterns of Highly Effective Entrepreneurs, Doubleday, New York, NY 2008
• Bygrave, William D. / Zacharaiks, Andrew, The Portable MBA in Entrepreneurship, 4th ed., Wiley,
Hoboken, NJ 2010
• Drucker, Peter F., Innovation and Entrepreneurship, 1st ed. 1985, reprinted 2010, Elsevier, Kiddlington,
2010
• Harper, Stephen C., Extraordinary Entrepreneurship: The Professional’s Guide to Starting an Exceptional
Enterprise, Wiley, Hoboken, NJ 2005
• Hirshberg, Meg Cadoux, For Better or for Work, All Inc., New York, NY 2012
• Hisrich, Robert D. / Peters, Michael P. / Shepherd, Dean A., Entrepreneurship, 9th ed., McGraw-Hill, New
York, NY 2012
• Kuratko, Donald F., Entrepreneurship: Theory, Process, Practice, 8th ed., South-Western, Mason, OH 2009
• Leach, J. Chris / Melicher, Ronald W., Entrepreneurial Finance, International Edition, 4th ed., South-
Western, Hampshire 2012
• Osterwalder, Alexander / Pigneur, Yves, Business Model Generation, Wiley, Hoboken, NJ 2010
• Ries, Eric, The Lean Startup, Crown Business, New York, NY 2011
• Smith, Janet Kiholm / Smith, Richard L. / Bliss, Richard T.,Entrepreneurial Finance – Strategy, Valuation,
and Deal Structure, Standford University Press, Stanford, CA 2011
• Stokes, David / Wilson, Nick, Small Business Management and Entrepreneurship, 6th ed., South-Western,
Hampshire 2010
• Taleb, Nassim Nicholas, The Black Swan – The Impact of the Highly Improbable, revised ed., Penguin,
London 2010
• Timmons, Jeffry A. / Spinelli, Stephen, New Venture Creation – Entrepreneurship for the 21st Century, 9th
ed., McGraw-Hill, New York, NY 2011
Startnowhow – Seminar 112.01.2017 4

5. OPPORTUNITYRECOGNITION
Entrepreneur Profiles – Motivations
• Pull influences („opportunity-based entrepreneurship“)
• Desire for independence
• Desire to exploit an opportunity
• Turning a hobby / previous work experience into a business
• Financial incentive
• Push influences („necessity-based entrepreneurship“)
• Redundancy
• (Threat of) unemployment
• Disagreement with previous employer
• Desire for independence
• (Source: Stokes / Wilson, Small Business Management, pp.37-38)
• .... But: „Who is the Entrepreneur“?
12.01.2017 5Entrepreneurship
Source: Timmons / Spinelli, New Venture Creation, p. 55

6. OPPORTUNITYRECOGNITION
Entrepreneurship and Innovation
Startnowhow – Seminar 1
Source: Bygrave / Zacharakis, The Portable MBA in Entrepreneurship,, p.32
12.01.2017 6

7. OPPORTUNITYRECOGNITION
Paths of Idea Generation
• The Alertness Path:
• Discovery by constant alertness, constant scanning of environment for opportunities
• Source of ideas: Environment
• Source of differentiation: Learning
• Process: Spontaneous
• Basis of discovery: Subconscious
• Fit with entrepreneur: Typically poor
• The Search Path:
• Discovery by systematic search for a problem solution
• Source of ideas: Information channel
• Source of differentiation: Knowledge
• Process: Deliberate
• Basis of discovery: Conscious
• Fit with entrepreneur: Typically strong
• Often, idea generation is a mix of both paths
• Ideas are often generated by a combination of play, improvisation, and observation
• (from: Bygrave / Zacharias, The Portable MBA in Entrepreneurship, pp.30-31)
12.01.2017 7Startnowhow – Seminar 3

8. OPPORTUNITYRECOGNITION
The Seven Sources for Innovative Opportunities
• The Unexpected
• Example: Unexpected success of IBM PC
• The Incongruous
• Examples: Invention of container ships / roll-on-roll-off ships, overnight package delivery
• Process Needs
• Examples: McDonalds, microwave ovens
• Industry and Market Structures
• Examples: Printing industry, ERP software, media industry
• Demographics
• Examples: Health care industry, universities in Turkey
• Changes in Perception
• Examples: Fashion industry, organic food
• New Knowledge
• Examples: Electricity, light bulb, internet, mobile phone, robotics, ...
• Source: Drucker, Innovation and Entrepreneurship, pp.27-117
12.01.2017 8Startnowhow – Seminar 3

9. OPPORTUNITYRECOGNITION
Creativity – The Fear Factor
12.01.2017 9Startnowhow – Seminar 3
Source: Bygrave / Zacharakis, The Portable MBA in Entrepreneurship, p. 37

10. OPPORTUNITYEVALUATION
Characteristics of Superior Business Opportunities
• Added value
• Venture creates or adds significant value to a customer or end user
• Venture solves a significant problem
• Venture adds value by solving a significant problem, removing a serious pain, or meeting
a significant want or need
• Someone is willing to pay a premium for solving this problem
• Venture has robust market, margin, and money-making characteristics
• Large enough market (min. 50 Mio $)
• High growth expectation (min. 20% p.a.)
• High gross margins (min. 40%)
• Strong and early cash flow (recurring revenue, low assets, low working capital)
• High profit potential (min. 10% - 15% after tax income)
• Attractive, realizable return for investors (Internal Rate of Return IRR min. 25%- 30%)
• Venture fits to skillset
• Good fit with founder(s) and managment team skills for that time and marketplace
• Attractive risk-reward balance
• Source: Timmons / Spinelli, New Venture Creation, p.150
12.01.2017 10Startnowhow – Seminar 3

11. OPPORTUNITYEVALUATION
Sustainable Competitive Advantage
• Necessary: Resource bundle that is valuable, rare and inimitable
• Resources are all inputs to production process – land, raw materials, machinery, other
fixed assets, patents, licenses, employee skills, management skills, knowledge, ...
• Resource bundle is valuable when it enables the firm to pursue opportunities, neutralize
threats, and offer products and services that are valued by customer
• Resource bundle is rare when it is possessed by few, if any, (potential) competitors
• Resource bundle is inimitable when replication of this combination of resources would
be difficult and / or costly for (potential) competitors.
• Core resource: Entrepreneurial knowledge
• In mind of entrepreneur, or in collective mind of employees / management team
• Source: Market knowledge
• Source: Technology knowledge
• Source: Hisrich / Peters / Shepherd, Entrepreneurship, pp.67-70
12.01.2017 11Startnowhow – Seminar 3

12. OPPORTUNITYEVALUATION
Opportunity Screening Process Funnel
12.01.2017 12Startnowhow – Seminar 3
Source: Harper, Extraordinary Entrepreneurship,, p.127

13. OPPORTUNITYEVALUATION
Classification Guidelines for the VOS Indicator
12.01.2017 13Startnowhow – Seminar 3
Source: Leach / Melicher, Entrepreneurial Finance, p.55

14. BIC ANGEL INVESTMENTS
Dr. Joachim Behrendt
Phone: +90 212 328 1939
Fax: +90 212 328 1933
www.bicangels.com
http:/twitter.com/joachimbehrendt
http://tr.linkedin.com/pub/joachim-behrendt/18/706/a7a
Email: j.behrendt@bicangels.com