1. VeMBA
Semester Project
Business Plan

2. Final Innovation Project
Describe
An ‘innovative’ product or service
Remember: Innovation = Invention + Commercialization
Money is important
Innovation  Utility  Commercial value
A potential customer set
This can sometimes the most difficult challenge; it is determined before determining the product
The associated business model
Track the value flows in the business model
Please be prepared to hand-in your PPT slides at the time of the presentation

3. Activity #1: Identify your Customer
Commercialization is about targeting a customer
Determine the overlap of your Capabilities with your Potential Customer Base
Describe the target customer for the company’s product (age, income, medical history, and other demographics
Talk about what will differentiate your product from competitors’ in the customer’s minds, and
list the three features that are important to the target customer.
What will differentiate your product from competitors’ in the customer’s minds?
List the three features that are important to the target customer, and rank them from most to least important.

4. Overview of Feature Set demanded by Customers
Prioritize and choose the major features of your innovation from the main branches of the Mind Map
Review the main innovation features with a feature-attribute map for the entire innovation
Basic
Discriminator
Energizer
Positive
Nonnegotiable
Differentiator
Exciter
Negative
Tolerable
Dissatisfier
Enrager
Neutral
So What?
Parallel

5. Quizzing
Detailed look at target customer usage and decision making regarding your product
Looks at the customers “stream of consciousness”
Through a series of questions
Looks for ideas to Change the Customer’s Experience (i.e., redifferentiate your product)
Remember: Experience is dynamic
So are the questions in quizzing
Over a time period prior to the first time customer is exposed to the product
To a time well after the customer has stopped using it

6. Toolsets Organize Answers with a Mind Map

7. Activity #2: Design a Product or Service
Select a Product or Service that you are interested in turning into a business
The design balances your market features (defined in step #1)
And your Core Capabilities
Capabilities =Assets + Competences
Remember: Innovation = Invention + Commercialization
Money is important
Innovation  Utility  Commercial value

8. Activity #3: Define your Channels and Customer Relationship Management (CRM)
Determine the main steps in consumption
Each step on the consumption chain has an attribute map
You should only list the 3 or 4 most important steps
These will determine whether the potential customer proceeds to the next step (good)
Or leaves the consumption process (not good)

9. Activity #4: Commercialization (Business Model) Create a Profitable Business
Tell a good story
Part of selling your strategy / investment
Tying Narrative to Financial Numbers
Strategy becomes less philosophy
More performance and outcome
When business models don’t work
It’s because the fail either
The ‘Financial Narrative’ test
Or the ‘Story’ test
Are you selling Low-cost or Differentiated Products?

10. They require complementary products from many firms to be of value
Activity #5: Complementary Assets What else is needed to complete your Commercialization?
Most economically significant modern products have little value on their own
They require complementary products from many firms to be of value
Petroleum has little use without internal combustion engines
Or Cars without Roads (US Road costs are around $5-10 per gallon of gasoline)
Or Electricity without Electric Motors
Or iPods without MP3s
… you get the idea
What are your ‘Killer Apps’?
The complements that sell your product

11. Activity #6: Market Entry
Define how you will measure the usefulness or attractiveness of each of these features to the target customer.
This performance metric should be a numerical measure
Define your product’s top competitor in each of these 3 features
A company marketing a competitive product or service
Are these companies profitable?
How big (approximately) is their business?
How will you compete with these companies?

12. Activity #7: IP Protection (Outline your Patent)
1. Provide a short, descriptive and specific title for your invention.
2. Write a specification of the invention and of the manner and process of making and using the invention that concludes with the claims to the invention.
3. Use Google Patent Search to identify 3 related inventions, and specify any “prior art.”
4. Present the substance or general idea of your invention; for example, the advantages of the invention and how it solves previously existing problems
5. Explain the invention along with the process of making and using the invention.
6. Construct two independent claims, and one dependent claim for your invention.

13. Presentation
Each group will have around 25 minutes total time for presentation
I will monitor this strictly
The project will comprise the following:
Work in groups of three to four
25 second ‘elevator pitch’
5 minute summary of product and business model
15 Minutes for presentation and Q&A (by class and myself) for each group
Possible second round (time permitting)
Please be prepared to hand-in your PPT slides at the time of the presentation

14. Presentation: The Communication Challenge
Provide a ‘lead in’ which will ‘hook’ your listener (the elevator pitch)
Provide a brief ‘sales pitch’ presenting the major components of your innovation and business
Consider what parts you most want to emphasize about the business model
Describe your business in one paragraph (equivalent to the 25 second pitch)
Numbers
Behavioral model and capabilities required
Strategy model
Investment Risk
A summary financial analysis to show risk and ROI for the project
Answer your investors question:
Why should I give you My money?"

15. Presentation: The Framing Challenge
What Is the Real Business Problem?
Accurately define your customers and what motives them
Properly framing a problem in terms of
the reality of the situation and
the objectives of the organization
is an important step in the decision-making process.
Mental frames act to channel our thinking and are important tools to help navigate complex decisions

16. Presentation: The Venture Capital Challenge
What is your business worth, and why?
Your new venture competes in two markets:
Product
Financial
How will you tie this to your business model
tying narrative to numbers
What are the activities, operations and products?
What are the significant environmental influences?
major competitive forces outside management control
How does value flow through your business model?
What is the Net Present Value of future activities

17. Workout #2 Channels + Venture Capital Challenge
Determine the main steps in consumption chain – conversion cone
One of these should be your AdWords campaign
Venture Capital Challenge
What is your business worth, and why?
Costs of each of the consumption chain activities
How will these expenditures keep the customer from leaving the chain-cone
Conversion value, rate and risk

18. Workout #3 Communication +Venture Capital Challenge
Provide a brief ‘sales pitch’ to describe your product and the main points of the business
Answer your investors’ question about customers:
“Why do they want what you’re selling, and why should they pay for it?”
Answer potential investors’ questions:
Why should I give you My money?”
How much money do you need, for what percentage of the company
How will you negotiate? Your counteroffers?

19. Workout #3 Negotiations and Counteroffers (Shark Tank Part)
Create pro forma financial statements for up to 3 years
Balance Sheet containing cash, AR, Inventory, Fixed assets, Liabilities and RE
Income Statement containing Sales, SG&A Expenses, Gross Margin, Net Profit
Provide pro forma forecasts of ROI, and Scenarios
(Best, Worst, Expected)
Tie this to conversions, consumption chain & business model
How will you deal with competitors and competitive forces outside management control