Opportunity Analysis

Opportunity Recognition & Business Concept: Paying attention to both the external world and your internal mind set.

Remember the

definition of ENTREPRENEURSHIP It is the process of recognizing, seizing, pursuing and exploiting opportunities without regard to the resources you currently control.

OPPORTUNITY RECOGNITION • What is an opportunity? • How do you recognize opportunities? • How do you screen opportunities • How are concepts different from ideas? • What is a business concept? • Is the business concept worthwhile? • How do you define a superior opportunity and concept?

OPPORTUNITY RECOGNITION

An opportunity is not an idea nor is it a business concept.

An Opportunity is External • It is in the environment • It is a need to be fulfilled • It is a want to be addressed • It is a fear to be relieved • It is time limited • It is not a technology, service, or product but an application to situation

Ideas vs. Concepts • Ideas are often seeing a need, want or fear and saying, “Lets meet that” • Ideas are sometimes a technology hunting for an application or “opportunity” • Concepts are when you put a technology together with the customer and understand the business and revenue models that lead to sales.

Thinking About the Concept Distribution & Marketing Products & Services

Resources Needed & Earned

Customer s Groups

Entrepreneurs Bet • Motto • Be risk averse. • Don’t stretch too much, too fast • Know your concept

Opportunity, Ideas & Concepts • Good ideas are not always good

opportunities nor viable concepts. • Concepts are built using ideas & entrepreneurial creativity in real time, take time & address real problems. • Opportunities are attractive, durable, timely, and anchored in a product or service which creates real value for its buyer and end user. • Concepts provide Need or Want Satisfaction, Pain and/or Suffering Relief. • Opportunities yield measurable net benefits to the entrepreneur and to society.

Opportunity Recognition • Opportunities are also situational – The Window of Opportunity

• Opportunities take form in real world conditions – – – – – –

Changing conditions Leads and lags Knowledge gaps Chaos and/or confusion Inconsistencies Uncertainties

Some Global Trends • Social • Political • Economic • Technological • Demographic • Global • Local

The External Environment Macro-Environment Industry Environment

Economic

Demographics

Competition

Customers

Social

FIRM

Substitutes

Political/Legal Technological

Suppliers

Global

Some Important Environmental Factors Economic Conditions

Demographic Trends

Socio-Cultural Trends

Political/Legal Technological

GNP Trends

Population Growth

Lifestyle Changes

Legislation

Family Formations

Welfare

Govt. Spending Age Distribution Interest Rates

Population Shifts

Health Trends

Housing

Unemployment Levels

Immigration

Environmental Concerns

Agriculture

Income Levels

Birth Rates

Education

Heuristic Model for Opportunity Identification PREVISION

Market Demands

Personal Attributes

Social Forces Technology Cultural Forces

Personal Experiences

Environmental Forces etc.

VISION

DEVELOPMENT Evaluate Elaborate Modify

DECISION Go ahead or Quit

Alertness Model of Opportunity Identification PERSON

SITUATION

Person does not have alertness

Situation No Ability No Gain

COGNITIVE BEHAVIOR

OUTCOME

Maximization

No Opportunity Funding

Situation Ability No Gain Situation No Ability Gain

Person has alertness

Situation Ability Gain

Optimization Assessment

Opportunity Funding

Person-Place Framework for Right Opportunity Identification Person (has entrepreneurial alertness)

Right Situation (person has ability to grasp and has potential for gain)

Assessment 1) Perceptual - attend to new info. - put self in position to get exposure to new info, etc. 2) Reasoning - tolerance of ambiguity - interpretation of information -

Break Create Perception Means- New of Viable Ends Frame Opportunity Frame

Ideas Versus Concepts Avoid spending too much time and money You may turn out the best product in the world, but the entire world needs only have limited requirements. These are great ideas, but poor business opportunities or concepts.

Questions to Answer • Is this really an adequate business

opportunity and concept? • Is this one I/we want to pursue? • What resources are required to exploit it? • How do I/we acquire them? • How do I/we manage the operation? • How and when do I/we harvest?

Harvest Issues • Profitability • Positive Cash flow • ROI on Required I • Investor Demands/Expectations • Value at exit • Life style issues –Personal wants –Family issues

“Visionary leadership rather than managerial skill will be the most valued standard for tomorrow’s top officers.” Lester Korn Co-Founder -- Korn Ferry

Management Team Issues • Team, Founder(s) • Fit with Opportunity • Track Record • Gaps in Capabilities & Competencies • Values and Ethics • Personal Goals and Objectives

Differentiation Issues • Technology • Service • Team, talent, fit • Channels of distribution and marketing • Pricing • Opportunistic, adaptive

Principles of Opportunity Seeking • Systematically analyze all sources • Go out: – – –

look, ask, & l isten

• Keep it simple, stay focused • Start small (specific) • Aim for leadership • Be market focused, be market driven

More Principles of Innovative Opportunity Seeking

• Don’t: – Be clever – Do do too much at once – Innovate for the future

• Focus on opportunity, not risk

Concept Feasibility • Compelling Interest • Customer Opportunities • Customers • financial Resources • Entrepreneurial Team • Venture Evaluation

Compelling Interest “Choose a job you love, and you will never have to work a day in your life.” – Confucius

Customer Opportunities “The secret of life is to be ready for the opportunity when it comes.” – Benjamin Disraeli

Customers “I cannot give you the formula for success, but I can give you the formula for failure...which is: try to please everyone.” – Herbert Bayard Swope

Financial Resources "Happiness is a positive cash flow.” – Fred Adler

Entrepreneurial Assessment

"The true entrepreneur acknowledges that he or she cannot succeed alone." – Dr. An Wang

Reality Check

"Never tell me the odds." – Han Solo in "Star Wars"

Venture Evaluation

"Confidence is what you feel before you comprehend the situation." – Old Proverb

Success

"Success, as I see it, is a result, not a goal." – Gustavae Flaubert

SUCCESS CRITERIA IT IS NOT ONLY MONEY!!!

• Growth • Profitability • Technological Innovation • Market Impact • Institutionalization of Success

Conclusion

Be Realistic, but Demand the Possible