1. MS&E 273 Technology Venture Formation Opportunity Assessment
Session 2
Opportunity Assessment

2. Definition of Entrepreneurship
“The Pursuit of Opportunity Without Regard to Resources Controlled”
Howard Stevenson
Harvard Business School

3. Opportunity Assessment
How to Think About
Opportunities

4. What’s an Opportunity?
Product or service you build a profitable company around, resulting in a positive return to investors.

5. What's an Assessment?
A quick way for you to evaluate whether your opportunity is worth spending years of time and money on

6. What are the questions that need to be answered?
What is the need you are trying to satisfy?
Clearly define the need you are trying to satisfy, who the customer is, what drives the need and any other customer criteria that may be important

7. What are the questions that need to be answered?
What is the potential market size?
Size up the primary market, know the growth projections and current incumbents’ shares of the market, determine share you can acquire and identify possible secondary or tertiary markets

8. What are the questions that need to be answered?
What is your competitive advantage?
Scope out the competitive landscape and identify your competitive advantages (IP, processing expertise, new marketing channel or innovative use of existing one, etc.)

9. What are the questions that need to be answered?
What is your marketing/sales channel?
Define how you will bring your product to market and identify major hurdles to distribution/sales with possible solutions

10. What are the questions that need to be answered?
What is your business model (i.e., how are you making money)?
Clearly define your revenue model and show that you can make money (and how much) with this model

11. What are the questions that need to be answered?
What resources do you need to launch this business?
Estimate the capital resources you will need to launch this business and in what timeframe you will need these resources

12. What are the questions that need to be answered?
What are the major show-stoppers?
Highlight the major hurdles with the business concept and put forward solid arguments as to why you think you can overcome these hurdles

13. MS&E 273 Technology Venture Formation
How do we get started?

14. Idea/Opportunity Brainstorming
All ideas/opportunities are welcome
But you are Stanford Engineers - start with an engineering idea!
There are no “dumb” ideas
Go off on tangents
Each idea gets deeply explored, tossed or morphed
Analyze - strengths, weaknesses, opportunities, threats

15. Have We Answered These? What is the need you are trying to satisfy?
What is the potential market size?
What is your competitive advantage?
What is your marketing/sales channel?
What is your business model (i.e., how are you making money)?
What resources do you need to launch this business?
What are the major show-stoppers?

16. Type of Venture Changes Everything
InfoTech
CleanTech
MedTech
Everything = market, customer, product, capital

17. InfoTech InfoTech It’s all about the Customer Market Trends Sales
Channel
Product
Issues
Capital
Needs
Software
as service
Cloud Computing
Virtualization
Mobility
Low-cost service
Viral propagation
Direct/Indirect sales
Embedded technology design wins
Open source tools
Cloud computing-scale
Low-cost hardware
Breakthrough technology
$500K is the new $5M
$50M or more
InfoTech It’s all about the Customer

18. CleanTech CleanTech It’s all about Price and Regulations Market Trends
Customer
Adoption
Product
Issues
Capital
Needs
Demand for energy rising faster than supply
Global warming concern leading to carbon emissions regulation
$6 trillion market
VC shift to CleanTech
Financial/tax incentives
Renewable energy standards
Carbon cap
Not many off-the-shelf production tools
Computational models inadequate – trial and error
Production facilities often overseas
Tens of millions
Hundreds of millions
CleanTech It’s all about Price and Regulations

19. MedTech/BioTech MedTech BioTech
Incremental innovation - existing FDA and reimbursements codes
Breakthrough innovation – new FDA and reimbursement codes and clinical trials
Capital needs can vary dramatically – Tens of millions
BioTech
Discovered in science based research
All drugs follow FDA Phase I, II, III, IV clinical trials
Capital intensive – often over $100M
MedTech It’s all about the FDA and Reimbursements
BioTech It’s all about the Science

20. Get Started Now
Form a Team
Find an Idea
Don’t Stop There

21. TA Announcements
Enrollment forms due today – TAs will 48 students and 12 on waitlist by midnight tonight
Mandatory Mixer I on Wed Sep 23rd at 5PM outside of Treehouse (team formation) - you MUST come and sign the attendance sheet in order to secure a spot in the class
Mandatory Mixer II on Thurs Sep 24th at 5PM outside of Treehouse – Send team name, team members (name & ), preferred mentor to TAs by 10pm on Thursday Sep 24th
Team concept MUST be ed to TAs no later than noon on Sep 28th
We will assign mentors by midnight on the 28th with mentor introductions at the beginning of class next Tuesday (29th) – be sure to sit with your teammates in the next class
Office hours -- sign-up on the teaching team website
Faculty – Yang 278A & 278B, Tues 3-4PM
Craig, Jia – will be posted on website shortly
Slides, reading assignments & schedule will be posted online