The University of Dayton Business Plan Competition Coaching Session Two: Adding “Wow” to your opportunity statement that judges will like www. UDBPC. com

Elevator Pitch Stage: Synopsis of Key Dates November 11 th : Application deadline November 21 st : Elevator Pitches December 2 nd Five Finalist teams announced December 11 th : Finalist team rosters finalized

Goals for Today’s session Reminder: What is an opportunity? Reminder: What do judges want to see? Now that you have a problem statement, what makes an opportunity out of it What adds Wow?

Review: What is an Opportunity? An Opportunity has four elements 1. Newness (Product/Service/Process) 2. Potential for profit/benefit/advantage 3. Legitimized by society and stakeholders 4. Technical feasibility DEF: An opportunity leads to the development of something new that society will accept, that has potential to be accomplished in a beneficial manner.

An Opportunity must have all four elements Newness by itself is only a concept or idea. Lacking profit or potential means it isn’t worth pursuing If it isn’t technically feasible it is merely wishful thinking – (but solving that can lead to an opportunity) – Magic isn’t technically feasible, but would be very profitable—just ask J.K. Rowling

What do judges want to see?

Review: What Judges like A problem that needs solving. A solution to the problem, that is profitable as well. This is the opportunity. A solution that can be expanded, replicated, scaled, or otherwise rolled out. – This shows growth An idea they “can get” quickly--It will seem viable more easily. What is the key insight to the idea—here’s where to add Wow! – It is what makes the idea really work—why it is clever, novel, useful

Now that you have a problem statement, How do you create an Opportunity? Systematic search for opportunities

Review: The car tires problem statement from coaching session 1

Review: Problem: Under-inflated car tires Under-inflated tires can cause unsafe driving conditions, and lower fuel efficiency. The National Highway Traffic Safety Administration estimates that hundreds of thousands of crashes could be prevented if vehicle owners kept their tires properly inflated. The wasted fuel adds 30 cents a gallon to gas prices for all Americans, billions each month. This problem affects almost all cars sold prior to 2006, when premium cars began installing dash-based low tire alerts. That’s over 100 million cars and trucks The problem is one of training--Visual inspection means you’ve waited too long. If you can see it is low, you waited too long. People lack the time to check tire pressure daily or weekly, and cannot afford to have someone check it for them. People don’t want unsafe tires, and they want better gas mileage, but current solutions take too long or cost too much money.

Review: the solution we discussed in coaching session 1 Accue pressure safety caps “pop up red” when it is time to add air to tires. Checking them is visual (30 seconds a day at most), and they are modestly priced. Quick and Cheap.

What makes for a good opportunity statement?

Good Opportunity Statements 1. Describe the product or service quickly 2. Discusses benefits it provides to customers (your benefits emerge in the financial section) 3. Discuss some key attributes for the customer buying motivation 4. Highlight Customer demographics 5. Highlight any IPR protections available 6. Discuss the “hook” what makes this valuable 7. Why you should be the one to do this. We’ll write 1-2 sentence for our sample problem and then combine them at the end

1. Describe the product/service quickly Use affect words, but avoid Puffery! – Never say “Greatest product ever”. – The product reduces “X” problem by doing “Y” In the Business Model section, we discuss how to get this to market. “The Accue Safety stem cap replaces your car’s current stem cap with one that changes colors when tire pressure drops more than 5 psi below where it should be. “

2a. Discuss benefits it provides customers How does this save them time/money/space? How much does it save Accue stem caps alert you when it is time to add air to your tires. Just glance at them once a day and you’ll know when it is time to add air. It takes about 30 seconds to swap out your stem caps—if you’ve added air to a tire, then you know you can do it! We price them cheap—they pay for themselves in less than six months.

2b. Discuss benefits it provides other stakeholders Provide insights on why others want you to sell this product/Service and why “Retailers love this high margin low cost impulse buy”. It doesn’t take much shelf space and it encourages customers to increase their buying.

3. Customer Buying Motivation Customers want an easy to use product Customers want a quick to use product Customers want a cheap to use product “Accue stem customers are not car mechanics— they want a solution they can do themselves cheaply and quickly”

4. Highlight Customer Demographics How many target customers are there, and how much will they spend? Use a “profiler” approach—what are they thinking? VALS (see next page) are good shortcuts to description “Accue Stem caps appeal to professionals who are wary of “miraculous fuel efficiency” products. Improving fuel efficiency for the sake of saving money appeals to their sense of cleverness; but the appearance of sophistication this product provides is even stronger. VALS demographics indicate these customers are achievers, roughly $10 million Americans willing to spend $5 billion annually on aftermarket car products”.

5. IPRs (Intellectual property Rights) This is a benefit for investors—IPRs mean they are more likely to get a return on their investment Why? By blocking some competition, your margins should remain healthy.

6. What’s the hook—the secret sauce, what makes it clever? Don’t give away the secret sauce, just let the judges sample it. Indicating you have a beta/prototype/trial sales validates it well “Accue Stem caps are as quick as visual inspection and as reliable as a tire gauge inspection. We’ve put 10,000 on the road and customers love them!”

7. Why should you be the one to do this? Never say “I should do this because X”. Better to describe your experience in the industry and the expertise you provide. “I’ve spent ten years in this industry, and know what it takes to sell these stem caps”

Putting all this together The Accue Safety stem cap replaces your car’s current stem cap with one that changes colors when tire pressure drops more than 5 psi below where it should be, alerting you when it is time to add air to your tires. It takes about 30 seconds to replace your stem caps—if you’ve added air to a tire, then you know you can do it! We price them cheap—they pay for themselves in less than six months. Retailers love this high margin low cost impulse buy”. It doesn’t take much shelf space and it encourages customers to increase their buying. Accue stem customers are not car mechanics—they want a solution they can do themselves cheaply and quickly” Accue Stem caps appeal to professionals who are wary of “miraculous fuel efficiency” products. Improving fuel efficiency for the sake of saving money appeals to their sense of cleverness; but the appearance of sophistication this product provides is even stronger. VALS demographics indicate these customers are achievers, roughly $10 million Americans willing to spend $5 billion annually on aftermarket car products”. “Accue Stem caps are as quick as visual inspection and as reliable as a tire gauge inspection. We’ve put 10,000 on the road and customers love them!” “I’ve spent ten years in this industry, and know what it takes to sell these stem caps”

What Adds Wow?

Showing a market exists through trial sales Getting 1,000 people to try your product tells the investors that there is a market. It sets you ahead of 90% of other entrepreneurs

An endorsement from a credible source If a NASCAR driver is using Accue stem caps on his/her personal car, that will mean a lot to large numbers of customers Getting your product into the hands of an influential person matters

Explaining why this is clever If you can show how this removes a trade-off, it really strengthens the concept “Accue Stems are as reliable as tire gauges—but as quick as a normal visual inspection”

Give a key insight and label it as such. Visual inspection is quickest, but least reliable – People cannot see when a tire is 5psi below where it should be But visual is about as much as people will do to check air pressure in tires

Upselling and cost shifting make it a more compelling Business case 7 tactics that lead to upselling 1. Sell it outright 2. Lease it to the customer 3. Sell subscriptions to use the product 4. “grazing rights” 5. Advertising/sponsorships 6. Insourcing from others (e.g. generic and private label brands) 7. Unbundle Utility--DIY 9 tactics that lower costs 1. Purchase 2. Borrow 3. Share 4. Lease 5. Rent 6. Outsource 7. Contract 8. License 9. Clever

Next Up: Building a reason for the business itself