Tom Kalchik Ideas and Innovation: Creating ideas you can profit from

Tom Kalchik, Assoc. Dir. Michigan State University Product Center

MSU Product Center for Agriculture and Natural Resources MSU Product Center What it is Structure –Strategic Marketing Institute –Client Services –Innovation Academy Process –Three phase model

MSU Product Center for Agriculture and Natural Resources The Intuition about Process First, can you tell a plausible “fairy tale” about the idea of the venture? –Market/customer driven –Internally consistent and appealing Then, can you reasonably make a profit from the venture if everything goes well? Finally, can you “prove” to yourself and to others the venture’s potential to work (feasibility)?

MSU Product Center for Agriculture and Natural Resources What Is Needed to Launch a New Venture? What is a New Venture? –A New Business or a New Product/Service The Key Elements –An Innovative Idea –The Entrepreneurial Drive –The Resources to Go to Market The Prerequisite for Success: A Business Plan that Puts the Key Elements Together!

MSU Product Center for Agriculture and Natural Resources Entrepreneurship is a way of thinking, reasoning, and acting that is opportunity obsessed, holistic in approach, and leadership balanced. Habitual entrepreneurs – make a career out of starting businesses, some working within existing businesses and some in independent startups. All have in common finely honed skills in forging opportunity from uncertainty. (“The Entrepreneurial Mindset : Strategies for Continuously Creating Opportunity in an Age of Uncertainty,” Rita McGrath and Ian MacMillan, Harvard Business School Press, 2000)

MSU Product Center for Agriculture and Natural Resources Month of March 6 workshops throughout the State

MSU Product Center for Agriculture and Natural Resources Agenda What makes an idea unique, marketable and profitable? Does the idea match what consumers want today? What does it take to be an innovative entrepreneur? How do you take a new and unique idea to market? Are you ready to take the first step?

MSU Product Center for Agriculture and Natural Resources What makes an idea unique, marketable and profitable? Differentiation Customer segmentation Supply chain issues Creating differentiated products Sources of differentiation Means of creating differentiation

MSU Product Center for Agriculture and Natural Resources Creating Differentiation Physical Change Perceptual Change Service Change Supply Chain Change Quality Functionality Form Place Time Ease of Posession Means Source X X X X X X X X X

MSU Product Center for Agriculture and Natural Resources Does the idea match what consumers want today? The Drivers – key functionalities –Wellness –Indulgence –Convenience –Value –Ethnicity –Demographics

MSU Product Center for Agriculture and Natural Resources What does it take to be an innovative entrepreneur? Definition Inventory of ideas Paradoxes Myths and Realities Entrepreneurial test-self assessment

MSU Product Center for Agriculture and Natural Resources Who can be an entrepreneur? Anyone who wants to experience the deep, dark canyons of uncertainty and ambiguity; and who wants to walk the breathtaking highlands of success. But caution, do not plan to walk the latter until you have experienced the former. Quote from an entrepreneur

MSU Product Center for Agriculture and Natural Resources Create your own inventory of ideas NOW

MSU Product Center for Agriculture and Natural Resources Paradoxes An opportunity with no or very low potential can be an enormously big opportunity To make money you have to first lose money To create and build wealth one must relinquish wealth

MSU Product Center for Agriculture and Natural Resources TechnologyYear DevelopedYears to Reach 25% of US Population Household Electricity1873 Telephone1875 Automobile1885 Airplane Travel1903 Radio1906 Television1925 Videocassette Recorder 1952 Personal Computer1975 Cellular Phone1981 World Wide Web1990 Source: Wall Street Journal 46 years 35 years 55 years 54 years 22 years 26 years 34 years 15 years 13 years 7 years

MSU Product Center for Agriculture and Natural Resources TechnologyYear DevelopedYears to Reach 25% of US Population Household Electricity1873 Telephone1875 Automobile1885 Airplane Travel1903 Radio1906 Television1925 Videocassette Recorder 1952 Personal Computer1975 Cellular Phone1981 World Wide Web1990 Source: Wall Street Journal

MSU Product Center for Agriculture and Natural Resources Myths and Realities Anyone can start a business –Must recognize difference between an idea and an opportunity –Luck requires preparation –Easy to start –Hard to survive, sustain and build a venture

MSU Product Center for Agriculture and Natural Resources Myths and Realities Entrepreneurs are gamblers –Successful entrepreneurs take careful, calculated risks –Get other to share risks with them Entrepreneurs want to run the whole show –High potential entrepreneurs build a team, an organization, a company

MSU Product Center for Agriculture and Natural Resources How do you take a new and unique idea to market? You’ve got the unique, marketable, innovative idea! You’ve got the entrepreneurial drive! Now, how do you get the idea to market –Gather the resources –Put them into action –The Prerequisite: A Business Plan A three-phase process!!!

MSU Product Center for Agriculture and Natural Resources Are you ready to take the first step? The Challenge Will the idea work? How do I get started? Working time with counselor

MSU Product Center for Agriculture and Natural Resources The Challenge You Face To systematically turn a business or product idea into a real start-up or launch. Desire often overwhelms reason. –The glory of the idea “Build it and they will come.” “Everyone will want it.” “It’s the greatest thing since sliced bread.” –Missing the logical flow of development Operational detail before concept/strategy development Production before marketing No consideration of the real return potential

MSU Product Center for Agriculture and Natural Resources Results 336 participants Average of 23 years of business experience Average of 14 years in current business Average of 62 miles traveled to attend Usefulness of program – 4.15 out to 5 Met expectations – 4.28 out of 5 Improved understanding – 4.13 out of 5 70 new projects started

MSU Product Center for Agriculture and Natural Resources Future Program More details on idea generation More information on business planning

MSU Product Center for Agriculture and Natural Resources