Entrepreneurship Boot Camp Opportunity Recognition

Mind Buster How did Paul Orfalea get the idea for Kinko’s? How did Fred Smith get the idea for Fed Express?

Opportunity Stoppers

You got here by knowing the rules and doing what was asked – a formula approach – coloring inside the lines You have been trained to expect a correct answer Students ask me if I like their idea. I tell them no one knows if it is good. Rule 1: Entrepreneurship is not a formula. Getting Over Your Success

Need to be curious, perceptive, open to new, open to change, prepared to listen without challenge Must tolerate and then thrive on ambiguity Look for opportunity in situations that appear to be negative on the surface Rule 2: Slow down and see the opportunity Your Mindset

Thousand spend time on ideas. It’s not about ideas, it is about customers. Many exciting successes come from modest offerings, often imitating other things. People and situations create ideas, isolation does not. Rule 3:Don’t spend time trying to come up with a new widget, spend time out there. Ideas Don’t Make Opportunities

Your Knowledge Base Counts Game is not played at 30,000 feet Prior experience and industry knowledge account for 87% of successes Most entrepreneurs are not successful on their first venture You need to know the territory Rule 4: Get physical fast, get into the hunt

Ideas come everyday You see them in different form Ask people their business problems People come to you to have you create their solution – the organizational entrepreneur Rule 5:Develop a filtering process to determine value of idea

Inventory Yourself How open are you to embarrassment? Can you tolerate rejection? Will you quit before it is time? What is your tolerance of failure? Rank your level of Perseverance and Perception

Prior knowledge and the Discovery of Entrepreneurial Opportunities Scott Shane Shane shares the result of his research which suggests that entrepreneurs discovery is dependent on what they know (often referred to as industry knowledge) and that most opportunity recognition is by chance and not by a methodical search. In more common terms, entrepreneurs use the phrase – W ho can spot a twenty-dollar bill? Someone who knows what it looks like and is looking for it.

Why Wilbur and Orville Wright? Some thoughts on the Wright Brothers and the process of invention Tom Crouch How can two brothers who owned a bicycle shop in Ohio be responsible for the first flight of man at Kitty Hawk, North Carolina? Several major efforts by the best research universities and companies had failed to answer the riddle of man flight. The article contains a great deal about their home environment and early work experience – both factors found often in successful entrepreneurs.

Why the Wright Brothers were the first to fly. Known as Intelligent Failure.

Consider Stages Four stages of entrepreneurial growth Stage One Idea to First Customer

Stage 1 - idea to first customer Total focus on customer –Never assume you are the customer –Your market is not your customer Big guys fail 99% of the time Why will E win?? Because you are driving to a single customer, not to a market share

Consider Stages Four stages of entrepreneurial growth Stage One Idea to First Customer Stage Two First Customer to Multiple Customers

Stage 2 - first to multiple customers Initial customers provide credibility Growing from one to many is first sign of change –move from “I” to “We” –execution team starts to form –selling benefit through others

Consider Stages Four stages of entrepreneurial growth Stage One Idea to First Customer Stage Two First Customer to Multiple Customers Stage Three Multiple Customers to Multiple Customer & Multiple Products

Stage 3 - multiple customers to multiple customers and multiple products Benefit offerings more critical –Establish needs and fulfill them –Don’t revert to classic management

Consider Stages Four stages of entrepreneurial growth Stage One Idea to First Customer Stage Two First Customer to Multiple Customers Stage Three Multiple Customers to Multiple Customer & Multiple Products Stage Four Multiple Customers to & Multiple Products to Harvest \ Reinvention

Stage 4 - multiple to harvest \ reinvention Policies and procedures - necessary evil Two primary options - sell or reinvent and reposition

Reading Review New Venture Ideas: do not overlook experience factor Karl H. Vesper What are the best sources for new ideas? Vesper gives a checklist to all who are looking for the opportunity they can turn into a venture. Vesper confirms the importance of know what you know; what some call industry knowledge and what he calls experience.

Tom O’Malia Orfalea Chair for Entrepreneurial Studies Lloyd Greif Center Marshall School of Business University of Southern California Bridge Hall One Los Angeles, CA