Nature of Opportunity MBAX 6100 Entrepreneurship & Small Business Management Frank Moyes Leeds College of Business University of Colorado Boulder, Colorado

Nature of Opportunity Today’s Agenda  Tech Transfer concepts  Interview  Opportunity Recognition  Feasibility Plan  Status of Entrepreneurship Interview

Nature of Opportunity Next Week’s Schedule  Corporate Entrepreneurship  Read  Building Breakthrough Businesses  Understanding Obstacles  M-3 Is This a Good Market?

Nature of Opportunity When Is an Idea an Opportunity?  Attractive  Durable  Timely  Adds value  Open window  Entry is feasible  Management team  Competitive advantage  Economics  Rewarding  Forgiving  Growth Timmons, New Venture Creation

Nature of Opportunity Good Opportunity  Market is strong & accessible  Compelling need  Sustainable competitive advantage  Unique/different  High margins  Management

Nature of Opportunity Market Demand Is Strong  Favorable trends  Growing market  Size is big enough to be worth the effort  Market share attainable  Favorable window of opportunity Venture Capital  30%+ per year  $100 million to $1 billion potential  Minimum 20%

Nature of Opportunity Market Is Accessible  Market Structure  Fragmented  No dominant player  SOT’s (slow, old or traditional)  Response of competitors to new entrants is indifferent  No proprietary barriers to entry  Access to channels is possible  Forgiving of mistakes

Nature of Opportunity Compelling Need  Solves a problem  Unfulfilled niche  Dissatisfaction with current products/services  Poor quality or service  Needs  Physical Physiological  EmotionalSocial  FinancialIntellectual

Nature of Opportunity Competitive Advantage  Understand the market  Understand the competition  Sustainable  Innovation  Differentiation  Resources & capabilities  Really understand the market & competition

Nature of Opportunity Unique/Different  You must differentiate your business – it’s already being done by someone  More than unique product/service design  Marketing – positioning  Operations – process or value chain  Channels – create a new channel  Benefits

Nature of Opportunity High Margins  Mind-set of high & low margin thinking  Advantages of high gross profit margins  Funding  Cash flow  Development & marketing  Can solve the screw-up problem

Nature of Opportunity Management  Meets your personal interests & objectives  Takes advantage of your experience  Would your potential customers buy from you?  You can put a management team together  You are passionate and commit

Nature of Opportunity Commitment “Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative and creation there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: That the moment one definitely commits oneself, Providence moves too. All sorts of things occur to help one that would never other wise have occurred. A whole stream of events issue from the decision, raising in one’s favor all manner of unforeseen incidents and meetings and material assistance, which no man could have dreamed would have come his way. Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it.” Goethe’s Faust.

Nature of Opportunity Good Opportunity  Market is strong & accessible  Compelling need  Sustainable competitive advantage  Unique/Different  High margins  Management

Nature of Opportunity New Ventures Are Opportunity Driven  Not technology driven  Not product driven  Not solution driven  Not asset driven  Not resource driven

Nature of Opportunity Ideas Are Overrated  Build a better mouse trap  Most ideas already thought of  Process of refinement is essential “He who builds a better mousetrap these days runs into material shortages, patent-infringement suits, work stoppages, collusive bidding, discount discrimination--and taxes.” H.E. Martz

Nature of Opportunity When Opportunity Driven  Uncertainty is good!  Lack of information is good!  Being small & flexible can be good!

Nature of Opportunity Feasibility Plan  Objectives  Assessment Framework  Assignment

Nature of Opportunity Objectives of a Feasibility Plan  Will anyone buy it?  Can you make money? Is this a good opportunity? Is this a good opportunity?

Nature of Opportunity Assessment Framework  Part I Market Analysis  Part II Industry Analysis  Part III Venture Analysis

Nature of Opportunity Approach  Start with broad perspective  Talk to wide variety of people  Qualitative customer survey  Secondary research of industry and competition

Nature of Opportunity Assignment  Answer questions in Feasibility Plan Framework  Conduct interviews with business people (5 per person)  Prepare Call Reports  Conduct customer survey (5 per person)  Prepare answers to surveys  Deliverable  Parts I & II due week 10  Parts I, II & III due week 14  Parts I & II revised based on feedback and further research  DECK format