1. On Ideas MGT 709 New Venture Creation

2. Agenda  Readings  Elevator Pitches  IceDelights  EastWind

3. Adams On Ideas  Think you idea has to be unique? You’re deluded  Good ideas are not scarce, what is rare is a team that can execute = execution intelligence  Want me to sign a nondisclosure? Instead, say “I’m clueless”  The 1:8:20 rule  Ideas are commodities  Getting to market first? Big deal.  Execute to dominate, not define, a market space  Think there’s no competition? You’re naïve.  I want to keep my money, laziness, and DIYers if nothing else  The existence of competition suggests that the idea itself is competitive

4. What is a solid business concept?  A new approach to existing business processes (perhaps using new technology)  Same problem, different solution  Alternative solutions (corollaries) already exist  The garage sale as alternative to eBay  Proves there is a pain in the market  A market size of at least $1 billion (for hi tech)  You need ancillary markets  Vertical or horizontal of $1 billion each  Execution intelligence  Domain knowledge, fast-growth scar tissue, experience in hyper-competitive markets, risk management (anticipate customer pain) balanced team, leadership know-how  Not many teams have all six attributes

5. Questions every entrepreneur must answer  Are my goals well defined?  Do I have the right strategy?  Clear definition  Profit and growth potential  Sustainable  Can I execute the strategy?  Right resources & relationships  Necessary infrastructure  Founder’s role

6. Drivers of growth  Economies of scale, scope, or customer network  Need to lock in customers or scarce resources  Competitors’ growth  Resource constraints  Internal financing capability  Tolerant customers  Personal temperament and goals

7. Creativity & the Business Idea  Sources of new ideas  Consumers, improving existing products/services, feedback from distribution channels, government, R&D  Methods  Focus groups, brainstorming (incl. reverse and brain writing), problem inventory analysis, free association, checklist, forced relationships…  Innovation  Breakthrough innovation is rare

8. Other issues  Opportunity recognition analysis  Idea and competition  Market and opportunity  Entrepreneur & team  Product planning & development  Staged model  E-Commerce

9. ELEVATOR PITCHES

10. IceDelights  What do you think of the different paths to having your own business?  Sentry position, industry focus, do it now  What are your plans?  What do you think of their search strategy?  Was the specification sheet effective?  Is the opportunity a good one?  The market? The rewards? Career wise?  The option? The price? The support package?  What are the key success factors (and risks)?  Did they do a good job raising capital and a team?

11. EastWind  Are Martha and Gail’s goals well defined?  Is this an attractive opportunity?  Do they have the right strategy?  Can they execute?  How should they finance the business?  How should Martha and Gail split the equity?  How should the business be organized and managed?  Aftermath?