Copyright 2013 Jack M. Kaplan & Anthony C. Warren Getting Started Patterns of Entrepreneurship Management 4 th Edition, Chapter 2 The Art of Innovation -Developing Ideas and Business Opportunities Idea to Opportunity Evaluating the Opportunity Why Innovate

Copyright 2013 Jack M. Kaplan & Anthony C. Warren Presentation Outline Idea to Opportunity Evaluating the Opportunity Why Innovate Chapter 2 Why Innovate? –Macro-economic Trends –Types of Innovation –Framework –Frameworks for Innovation Making an Idea an Opportunity Evaluating the Opportunity –Questions –Opportunity Costs –Framework

Copyright 2013 Jack M. Kaplan & Anthony C. Warren Why Innovate? The Growth of the Internet Shift to a Service Economy Reduction of International Trade Barriers International Free-Flows of Capital Rapid Technological Obsolescence Idea to Opportunity Evaluating the Opportunity Why Innovate Chapter 2

Copyright 2013 Jack M. Kaplan & Anthony C. Warren Types of Innovation The S-Curve of Innovation Derivative vs. Radical Disruptive Innovation -Candles to Incandescent Lighting Incremental Innovation -Evolution of Designer Candles Idea to Opportunity Evaluating the Opportunity Why Innovate Chapter 2

Derivative Innovation gives Incremental Improvements Time Performance The S-Curves with Incremental Innovation Copyright 2013 Jack M. Kaplan & Anthony C. Warren Derivative Innovation Idea to Opportunity Evaluating the Opportunity Why Innovate Chapter 2

S-Curves for a Disruptive Innovation Disruptive Innovation Leads to Radical Changes Time Performance Time to adopt radical innovation – before performance advantages. Disruptive Innovation Idea to Opportunity Evaluating the Opportunity Why Innovate Chapter 2 Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Time Candles Incandescent Lamps Discharge Lamps LED’s Performance Waves of Disruption in Lighting New Disruptive Technologies Changed the Lighting Industry Many Times – What’s Next? Idea to Opportunity Evaluating the Opportunity Why Innovate Chapter 2 Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Models for Innovation Analogs -Leafbusters Intersection of Technology Trends - Netflix and Streaming Video “Points of Pain” -SmartPak Analysis of Existing Businesses -SuperFast Pizza Idea to Opportunity Evaluating the Opportunity Why Innovate Chapter 3

Copyright 2013 Jack M. Kaplan & Anthony C. Warren Where Ideas for Opportunities Originate Idea to Opportunity Evaluating the Opportunity Why Innovate Chapter 3

Copyright 2013 Jack M. Kaplan & Anthony C. Warren Converting an Idea into an Opportunity What is an Opportunity? Identifying which business ideas have real commercial potential is one of the most difficult challenges that an entrepreneur will face. Seize the Opportunity Know what factors create opportunity out of an initial idea. Idea to Opportunity Evaluating the Opportunity Why Innovate Chapter 3

Copyright 2013 Jack M. Kaplan & Anthony C. Warren The Five Phases to Success Recognize the Opportunity and ACT Investigate the Need Develop the Plan Determine the Resources Needed Manage the Business Idea to Opportunity Evaluating the Opportunity Why Innovate Chapter 3

Copyright 2013 Jack M. Kaplan & Anthony C. Warren Questions to Evaluate the Business Opportunity  What indicators suggest the idea may be the basis of a valuable and viable opportunity?  What are the conditions that enable the opportunity to be successful?  How might the future of the initial product or service change over time?  How long (in terms of time) is the window of opportunity?  How big is the opportunity? Idea to Opportunity Evaluating the Opportunity Why Innovate Chapter 3

Copyright 2013 Jack M. Kaplan & Anthony C. Warren Evaluating the Opportunity Does the Opportunity…… Fill a need that customers will value? Show evidence of customer acceptance? Show that a substantial market exists now? Indicate that your solution is much better than the competition? Show a significant upside potential? Can be achieved with reasonable costs? Idea to Opportunity Evaluating the Opportunity Why Innovate Chapter 2

Copyright 2013 Jack M. Kaplan & Anthony C. Warren Frameworks for Evaluating an Opportunity - 1 Idea to Opportunity Evaluating the Opportunity Why Innovate Chapter 2

Copyright 2013 Jack M. Kaplan & Anthony C. Warren Frameworks for Evaluating an Opportunity – 2 Idea to Opportunity Evaluating the Opportunity Why Innovate Chapter 2

Copyright 2013 Jack M. Kaplan & Anthony C. Warren Frameworks for Evaluating an Opportunity - 3 Idea to Opportunity Evaluating the Opportunity Why Innovate Chapter 2

Copyright 2013 Jack M. Kaplan & Anthony C. Warren Frameworks for Evaluating an Opportunity - 4 Idea to Opportunity Evaluating the Opportunity Why Innovate Chapter 4