SUSAN YAMADA EXECUTIVE DIRECTOR Analyzing An Opportunity

Entrepreneurship as a Process Identifying an Opportunity Develop the Concept Determine the Required Resources Acquire the Necessary Resources Implement and Manage Harvest the Venture

Entrepreneurship as a Process Identifying an Opportunity Develop the Concept Determine the Required Resources Acquire the Necessary Resources Implement and Manage Harvest the Venture Opportunity Evaluation

Market Opportunities (Timmons) Market IssuesStronger Opportunity Weaker Opportunity NeedIdentifiedUnclear CustomersReachable; receptiveUnreachable or loyalties established Payback to User/Customer Less than one yearThree years or more Potential for Value Added or Created HighLow Likely Product LifeLong; beyond time to recover investment plus profit Short; less than time to recover investment Industry StructureDisorganized competition or emerging industry Aggressively competitive or highly concentrated

Market Opportunities-II Market IssuesStronger Opportunity Weaker Opportunity Potential Market SizeLarge marketSmaller market Market Growth RateGrowing quickly (30- 50% or more) Stagnant, contracting or slow Gross Margins40-50% or more; sustainable Less than 20%; volatile Market Share Attainable Leader; 20% or moreFollower; less than 5%

Economic Opportunities Economic/ Harvest Issues Stronger Opportunity Weaker Opportunity Profit After Tax10-15% or more, durableLess than 5%, fragile Time to Break Even Time to Positive Cash Flow Under 2 years More than 3 years ROI Potential25% or more per yearLess than 15-20% per year ValueHigh strategic valueLow strategic value Capital RequirementsLow to moderate; fundable Very high; unfundable Exit MechanismPresent or envisioned harvest options Undefined; illiquid investment

Competitive Advantages Competitive Advantage Issues Stronger Opportunity Weaker Opportunity Fixed & Variable Costs Production Marketing Distribution Lowest Highest Degree of Control Prices Costs Channels of Supply/Resources Channels of Distrib. Moderate to strong Weak

Competitive Advantages-II Barriers to Entry Issues Stronger Opportunity Weaker Opportunity Proprietary Protection (IP)/ Regulation Advantage Have or can gainNone Response/Lead-Time Advantage Resilient and responsive; have or can gain None Legal Contractual Advantage Proprietary or exclusivity None Sources of DifferentiationNumerous, substantive, sustainable Few or none, nominal replicable Competitor’s Mindset and Strategies Live and let live; not self destructive Defensive and strongly reactive

Other Opportunities Other Issues Stronger Opportunity Weaker Opportunity Management Team Existing, strong, proven performance Weak, inexperienced, lacking key skills Contacts and Networks (i.e. advisory boards) Well-developed; high quality; accessible Crude; limited; inaccessible RiskLowHigh Fatal FlawsNoneOne or more

The Importance of Feedback Rapid Prototype  Quick and dirty  Fail fast, fail forward  Plans are dynamic, don’t be afraid to pivot Talk to 100 people you don’t know  Prospective customers, suppliers, industry insiders, distributors, competitors

Mitigating Risk Is the “pain” clearly identified?  Focus s/b on the customer, not the product Know the industry better than anyone else  Political, regulatory, competitive landscapes Clearly understand how you can reach customers-channels, marketing

PACE Informational Resources PACE website   UH business plan competition resources Next Entrepreneur’s Bootcamp  March 16 Professional-in-Residence  Every Wednesday afternoon Virtual Professional-in-Residence

Thank You!! Susan Yamada