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

2. Today’s Agenda Opportunity Recognition
Tech Transfer Office representatives
Feasibility Plan
ICEDELIGHT’s
Mid-term alternative Week 10
Nature of Opportunity

3. Next Week’s Schedule Entrepreneurs at early stage
Entrepreneurial market research – bring laptops
Read
BZ-3
M-2
Noodles’ case
Speakers
Aaron Kennedy
Joseph Yu
Nature of Opportunity

4. Entrepreneurial Characteristics
Entrepreneurial Characteristics
Motivated by achievement
Internal locus of control
Risk-taking
Tolerance for ambiguity
Sense of independence
Passion
Motivated by achievement – money to keep score
Internal locus of control – believe can change the environment (market, workplace, industry)
Risk-taking – calculated assessed risk and attempts to mitigate and manage
Tolerance for ambiguity – nature of the situation, not poor planning
Sense of independence – self motivated, perseverance
Passion – to get through the hard times
Nature of Opportunity

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

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

7. Market Demand Is Strong
Market Demand Is Strong
Favorable trends
Market is growing
Size is big enough for your venture to be worth the effort
Market share is attainable
Favorable window of opportunity
30%+ per year
$100 million with $1 billion potential
Minimum 20%
Nature of Opportunity

8. 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
Fragmented market strategy
Ownership of resources
Low cost producer
Consolidation
If dominant player(s) are: old, traditional, slow
Response of competitors:
Airlines, but Southwest
Personal computers, but Dell
Organized crime
PC software, no buts
Access to channels
Air Florida
Toothpaste, but Tom’s of Maine
Will make lots of mistakes. Why need
Hi margins
Growth
Resources
Experience
Nature of Opportunity

9. Compelling Need Solves a problem Unfulfilled niche
Compelling Need
Solves a problem
Unfulfilled niche
Dissatisfaction with current products/services
Poor quality or service
Needs
Physical Physiological
Emotional Social
Financial Intellectual
Manage information: Google
Physical: food, warmth, shelter, sleep, etc.
Physiological: health, cleanliness, comfort, fitness, safety, etc.
Emotional: euphoria, love, prestige, stress, etc
Social: ethical, honesty, power, competitiveness, integrity, friendship, etc.
Intellectual: achievement, better decisions, artistry, etc.
Economic: revenues, productivity, cost savings, maintenance, etc.
Financial: ROI, DCF, payback, burn rate, etc.
Nature of Opportunity

10. Competitive Advantage
Competitive Advantage
Understand the market
Understand the competition
Sustainable
Innovation
Differentiation
Resources & capabilities
Really understand the market & competition
Major competitor is inertia
Nature of Opportunity

11. 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

12. High Margins Advantages of high gross profit margins
Funding
Cash flow
Development & marketing
Mind-set of high & low margin thinking
Can solve the screw-up problem
Slippery slope of low margin thinking
Example of 40% vs 60% gross profit margin business
Nature of Opportunity

13. 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

14. 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

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

16. New Ventures Are Opportunity Driven
New Ventures Are Opportunity Driven
Not technology driven
Not product driven
Not solution driven
Not asset driven
Not resource driven
Product: Famous Amos Cookies. Wally Amos got recipe from back of package of Nestlé's Chocolate Chips. Source: Tom O’Malia of USC
Innovation: takes time and/or money
Ford: meat packing to autos
Dell: supply chain management and on-line sales
Nature of Opportunity

17. When Opportunity Driven
When Opportunity Driven
Uncertainty is good!
Lack of information is good!
Being small & flexible can be good!
E is a full contact sport
Nature of Opportunity

18. Ideas Are Overrated Build a better mouse trap
Ideas Are Overrated
Build a better mouse trap
Most ideas already thought of
Process of refinement is essential
2.7 venture attempts in 5 to 7 years to succeed.
Nature of Opportunity

19. Feasibility Plan Objectives Assessment Framework Assignment
Nature of Opportunity

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

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

22. Approach Start with broad perspective
Answer questions in each part of the Framework
Talk to wide variety of people
Qualitative customer survey
Secondary research of industry and competition
Nature of Opportunity

23. 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 15
Parts I & II revised based on feedback and further research
Presentations week 15
DECK format
Nature of Opportunity

24. Just Do It
“Millions of people have “an idea”, but unless they do something with it, their ideas aren’t worth a damn. There are a lot of quacks and kooks out there who claim they invented the Weed Eater, and I don’t doubt that there are some people who genuinely thought of this idea--but what did they do with it? Nothing.
What do they deserve? Nothing.”
George C. Ballas, inventor of Weed Eater
Nature of Opportunity