Chapter 3 - Opportunity recognition, shaping, & reshaping. This chapter focuses on evaluating ideas and assessing whether they are indeed good opportunities. While an idea is necessary to entrepreneurship, it isn’t sufficient. To have a successful entrepreneurial endeavor, your idea needs to be an opportunity.
OPPORTUNI TY RECOGNI TI ON, SHAPI NG, & RESHAPI NG Chapt e r Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 © Visualizing Opportunity Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© Visualizing Opportunity Find Your Passion How you spend your spare time? What activities provide you with happiness? Talk to people in your sphere of influence • • • See the Competition Test the Market How are customers currently meeting the need that you propose to fill? Can you differentiate between your direct and indirect competition? • • • • Is this an attractive opportunity? A series of Market Tests will allow you to gauge the viability of your opportunity Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© Idea-to-Opportunity Transition Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© See Yourself Experience/Knowledge is often the “long pole in the tent” Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© Idea Multiplication: IDEO Technique Optimize Practicality • • • • • Observe Ask Record Brain storm /write No judging Multiply Stimuli Create Concepts • • • • • Observe Ask Record Build a simple mockup Plan to iterate Gather Stimuli Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© The Opportunity Space (Global) Business Environment Supplier s Your Company Customer s Government Regulations Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© Competitor s Competitors Competitors The Customer Target Audience Categories Primary Target Audience Secondary Target Audience Tertiary Target Audience Common Demographic/Psychographic Categories Demographics • • • • • • • • • • • Age Gender Household Income Family Size/Family Lifecycle Occupation Education Level Religion Ethnicity/Heritage Nationality Social Class Marital Status Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, â 2017â Psychographics ã ã • • Social group (white collar, blue collar, etc.) Lifestyle (mainstream, sexual orientation, materialistic, active, athletic, etc.) Personality Traits (worriers, type-A’s, shy, extroverted, etc.) Values (liberal, conservative, openminded, traditional, etc.) Macro Trends: Last 50 years Trend Impact Dual Income Households Child care, In-Home Services – landscaping, housecleaning, prepared meals Touch Computing Tablet computers and eReaders—iPad, Amazon Kindle Fire, Samsung Galaxy, Motorola Xoom Touch-based operating systems—Windows and Mac OS X Lion Obesity Drain on healthcare system, growth of diet industry, changes in food industry, health clubs, home gyms Sharing Economy Connecting people to excess capacity, like Uber, Lyft, AirBnB Urbanization Growth and densification of urban areas Urban renewal Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© S-Curve: O bs o Ph lesc as en e ce C om Ne w En pet te ito r rs O Wi pp nd or ow tu o ni f ty Market Adoption The Diffusion of Product Acceptance Over Time Time Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© 10 Setting Prices Click icon to add SmartArt graphic Price Penetration Pricing Strategy Cost-plus Pricing Strategy Assessing Market Prices for Competing Products Strategy Requires Enormous Financing Price May Not Match The Value The Best Option Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© 11 The Value Chain: Reaching Customers Example: Value Chain of Gourmet Stew % GM 10 25% Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© GM 20 30 % Beef, Sauce, etc Grocery Stores GM 25 30 Food Distributors Gourmet Stew - GM 15 35% Base Ingredients 12 Find “Stealth” Competitors Click icon to add SmartArt graphic Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© 13 Opportunity Checklist Customer Competition Vendors Government Global Environment Trends Market size Price, Frequency, Value Market Growth Distribution Key Success Factors Evaluate your idea to see if it is a strong opportunity Evaluate several ideas simultaneously to see which is most promising Examine weaknesses and see how you can modify your business model Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© 14 Recap q q q q q All opportunities start with an idea There should be an established and growing market Entrepreneur should have passion for the idea and know the customer Reach customer better than the competition can Four favorable elements: customer, competitors, suppliers and government Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© 15 ... opportunity Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© Idea-to-Opportunity Transition Bygrave & Zacharakis,. .. Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© GM 20 ? ?30 % Beef, Sauce, etc Grocery Stores GM 25 30 Food Distributors Gourmet Stew - GM 15 35 % Base Ingredients... urban areas Urban renewal Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© S-Curve: O bs o Ph lesc as en e