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Idea	
  Identification	
  
                                                         Will	
  Your	
  Business	
  Idea	
  Fly...
“There	
  is	
  nothing	
  more	
  
         powerful	
  than	
  an	
  IDEA	
  whose	
  
              time	
  has	
  come...
We	
  all	
  know	
  this	
  phrase	
  in	
  respect	
  
   to	
  politics	
  and	
  social	
  change,	
  but	
  
   have	...
Ideas	
  are	
  the	
  basis	
  of	
  the	
  new	
  
               digital	
  and	
  knowledge	
  based	
  
             ...
For	
  decades,	
  business	
  ideas	
  
   required	
  huge	
  capital	
  investment	
  
   to	
  setup	
  factories,	
  ...
Now,	
  the	
  best	
  ideas	
  can	
  be	
  
             implemented	
  with	
  3	
  –	
  4	
  driven	
  
              ...
But	
  the	
  idea	
  must	
  be	
  the	
  right	
  
                                idea…	
  




http://emagine-­‐group....
Three	
  Types	
  of	
  Ideas	
  
                                                Useless,	
  Workable	
  and	
  Quick	
  ...
Useless	
  Ideas	
  




http://emagine-­‐group.com	
             Brand	
  Focused,	
  Socially	
  Active,	
  Digitally	
 ...
A	
  Useless	
  Idea	
  is	
  something	
  that	
  is	
  
   dreamed	
  up	
  but	
  the	
  entrepreneur	
  
   has	
  no	...
When	
  you	
  don’t	
  have	
  the	
  
   experience	
  to	
  back	
  up	
  the	
  idea,	
  
   you	
  are	
  dependent	
...
That	
  makes	
  you	
  –	
  replaceable	
  –	
  
   and	
  that	
  is	
  not	
  a	
  viable	
  idea	
  for	
  a	
  
   ve...
VCs,	
  Angels	
  and	
  banks	
  only	
  invest	
  
   into	
  ideas	
  where	
  the	
  person	
  sitting	
  
   in	
  fr...
They	
  are	
  either	
  the	
  vision	
  that	
  
   drives	
  the	
  organization,	
  the	
  force	
  
   that	
  runs	
...
The	
  world	
  is	
  full	
  of	
  idea	
  men,	
  very	
  
        few	
  of	
  them	
  can	
  deliver	
  on	
  their	
 ...
Examples	
  of	
  a	
  Useless	
  Idea	
  




http://emagine-­‐group.com	
          Brand	
  Focused,	
  Socially	
  Acti...
A	
  farmer	
  starting	
  a	
  manufacturing	
  
   plant	
  that	
  produces	
  auto	
  parts	
  




http://emagine-­‐g...
An	
  MBA	
  starting	
  a	
  game	
  
   development	
  house	
  




http://emagine-­‐group.com	
     Brand	
  Focused,	...
A	
  plumber	
  starting	
  an	
  electrical	
  
   business.	
  




http://emagine-­‐group.com	
     Brand	
  Focused,	
...
I	
  think	
  you	
  get	
  the	
  idea	
  –	
  if	
  you	
  
   don’t	
  have	
  any	
  real,	
  measurable	
  
   experi...
Workable	
  Ideas	
  




http://emagine-­‐group.com	
              Brand	
  Focused,	
  Socially	
  Active,	
  Digitally	...
A	
  Workable	
  Idea	
  is	
  something	
  that	
  
   will	
  take	
  time	
  and	
  effort	
  to	
  develop	
  
   but	
...
These	
  ideas	
  are	
  the	
  basis	
  of	
  the	
  
   knowledge	
  economy	
  because	
  they	
  
   will	
  continue	...
VCs,	
  Angels	
  and	
  banks	
  love	
  these	
  
   types	
  of	
  ventures	
  because	
  they	
  are	
  
   able	
  to...
Allowing	
  them	
  to	
  cash	
  out	
  –	
  or	
  
   capitalize	
  –	
  when	
  the	
  venture	
  is	
  
   mature	
  w...
Software	
  Development	
  Companies	
  




http://emagine-­‐group.com	
     Brand	
  Focused,	
  Socially	
  Active,	
  ...
Consulting	
  Firms	
  




http://emagine-­‐group.com	
     Brand	
  Focused,	
  Socially	
  Active,	
  Digitally	
  Enab...
Research	
  Houses	
  




http://emagine-­‐group.com	
     Brand	
  Focused,	
  Socially	
  Active,	
  Digitally	
  Enabl...
Technology	
  Planners	
  




http://emagine-­‐group.com	
     Brand	
  Focused,	
  Socially	
  Active,	
  Digitally	
  E...
These	
  are	
  all	
  ventures	
  that	
  take	
  
   time	
  to	
  build	
  and	
  become	
  
   successful,	
  but	
  w...
Quick	
  Hit	
  Ideas	
  




http://emagine-­‐group.com	
               Brand	
  Focused,	
  Socially	
  Active,	
  Digit...
A	
  Quick	
  Hit	
  Idea	
  is	
  one	
  that	
  will	
  
   generate	
  revenue	
  from	
  day	
  1	
  of	
  
   operati...
These	
  ventures	
  are	
  typically	
  called	
  
   quick	
  hit	
  ideas	
  because	
  they	
  return	
  
   the	
  in...
Experience	
  doesn’t	
  matter	
  because	
  
   you	
  are	
  only	
  looking	
  to	
  capitalize	
  
   on	
  a	
  temp...
Quick	
  hit	
  ventures	
  are	
  also	
  low-­‐
   experience,	
  low	
  intelligence	
  
   businesses	
  –	
  and	
  I...
Take	
  for	
  example,	
  your	
  local	
  
   general	
  store	
  –	
  what	
  does	
  he	
  offer	
  
   that	
  the	
  ...
In	
  other	
  words,	
  the	
  revenue	
  
   generation	
  of	
  this	
  idea	
  is	
  limited	
  
   until	
  someone	
...
So	
  now	
  that	
  we	
  have	
  identified	
  the	
  
   different	
  idea	
  types	
  –	
  how	
  do	
  we	
  
   judge	...
Idea	
  Proofing	
  
                                           Determining	
  If	
  Your	
  Idea	
  Will	
  Last	
  




h...
People	
  will	
  give	
  you	
  a	
  lot	
  of	
  ways	
  
   to	
  judge	
  your	
  idea,	
  but	
  most	
  of	
  
   th...
What	
  is	
  Idea	
  Proofing?	
  




http://emagine-­‐group.com	
           Brand	
  Focused,	
  Socially	
  Active,	
  ...
Idea	
  Proofing	
  is	
  something	
  we	
  do	
  
   at	
  emagine	
  to	
  determine	
  whether	
  
   an	
  idea	
  is	...
It	
  is	
  not	
  difficult,	
  but	
  it	
  requires	
  
   removing	
  the	
  emotion,	
  excitement	
  
   and	
  passio...
Ideas	
  can	
  not	
  be	
  judged	
  based	
  on	
  
   what	
  the	
  entrepreneur	
  says,	
  but	
  
   how	
  it	
  ...
So	
  what	
  are	
  we	
  looking	
  for?	
  




http://emagine-­‐group.com	
      Brand	
  Focused,	
  Socially	
  Acti...
Does	
  it	
  solve	
  compelling	
  
   unserved	
  need?	
  



http://emagine-­‐group.com	
     Brand	
  Focused,	
  So...
Every	
  entrepreneur	
  thinks	
  they	
  
   have	
  the	
  million	
  dollar	
  idea,	
  but	
  
   deciding	
  if	
  i...
Ask	
  people	
  if	
  the	
  need	
  you	
  see	
  is	
  
   really	
  a	
  need.	
  Society	
  is	
  the	
  best	
  
   ...
But	
  here’s	
  the	
  trick,	
  you	
  can’t	
  
   explain	
  the	
  business	
  idea	
  to	
  them	
  –	
  
   only	
 ...
If	
  they	
  can’t	
  see	
  it	
  from	
  that,	
  your	
  
   idea	
  is	
  not	
  going	
  to	
  work	
  without	
  a	...
How	
  much	
  money	
  will	
  you	
  need	
  
   and	
  how	
  will	
  you	
  use	
  it?	
  



http://emagine-­‐group.c...
This	
  is	
  a	
  big	
  question	
  because	
  
   capital	
  is	
  what	
  makes	
  businesses	
  
   run	
  and	
  gro...
If	
  you	
  need	
  too	
  much	
  capital	
  or	
  
   can’t	
  explain	
  how	
  the	
  capital	
  will	
  
   be	
  us...
What	
  are	
  you	
  offering	
  and	
  how	
  
   does	
  it	
  work?	
  



http://emagine-­‐group.com	
     Brand	
  Fo...
Exactly	
  what	
  product/service	
  are	
  
   you	
  offering	
  and	
  how	
  will	
  it	
  work?	
  




http://emagin...
You	
  must	
  be	
  clear	
  with	
  this	
  
   definition	
  because	
  if	
  you	
  are	
  not	
  
   clear,	
  how	
  ...
We	
  have	
  talked	
  to	
  people	
  with	
  
   great	
  ideas	
  and	
  what	
  could	
  be	
  
   outstanding	
  pro...
Our	
  test	
  –	
  if	
  you	
  can’t	
  explain	
  the	
  
   product/service	
  in	
  15	
  words	
  or	
  less,	
  
  ...
More	
  importantly,	
  if	
  it	
  takes	
  more	
  
   than	
  2	
  minutes	
  to	
  explain	
  how	
  to	
  
   use	
  ...
Customers	
  don’t	
  read	
  manuals,	
  
   instruction	
  booklets	
  or	
  websites	
  –	
  
   they	
  either	
  unde...
Who	
  exactly	
  is	
  your	
  customer?	
  




http://emagine-­‐group.com	
     Brand	
  Focused,	
  Socially	
  Active...
The	
  answer	
  to	
  this	
  question	
  is	
  not	
  
   everyone	
  –	
  no	
  product	
  or	
  service	
  
   has	
  ...
You	
  need	
  to	
  be	
  able	
  to	
  define	
  who	
  
   will	
  buy	
  your	
  product/service.	
  




http://emagin...
B2B,	
  B2C,	
  B2G,	
  Fortune	
  500,	
  SME,	
  
   NGO,	
  Men,	
  Women,	
  Housewives,	
  
   Bachelors,	
  Students...
Another	
  question	
  you	
  have	
  to	
  
   answer	
  with	
  this	
  question	
  is	
  –	
  




http://emagine-­‐gro...
Is	
  there	
  a	
  specific	
  situation	
  that	
  
   will	
  drive	
  the	
  purchase	
  or	
  use	
  of	
  
   my	
  p...
The	
  more	
  precise	
  you	
  are,	
  the	
  
   better	
  you	
  idea	
  proof	
  your	
  idea.	
  




http://emagine...
How	
  will	
  you	
  provide	
  your	
  
   product/service?	
  



http://emagine-­‐group.com	
     Brand	
  Focused,	
 ...
One	
  of	
  the	
  biggest	
  questions	
  is	
  
   HOW	
  you	
  plan	
  to	
  win	
  customers	
  –	
  
   what	
  is	...
Do	
  they	
  need	
  to	
  come	
  to	
  your	
  
   office	
  or	
  shop	
  to	
  buy?	
  Will	
  you	
  go	
  
   to	
  t...
Who	
  is	
  involved	
  in	
  your	
  
   venture’s	
  success?	
  Who	
  are	
  the	
  
   stakeholders?	
  



http://e...
Every	
  entrepreneur	
  would	
  like	
  to	
  
   believe	
  that	
  they	
  can	
  do	
  everything	
  
   –	
  we	
  a...
Of	
  course,	
  the	
  entrepreneur	
  must	
  
   have	
  a	
  strong	
  foundation	
  of	
  
   experience	
  and	
  st...
The	
  first	
  way	
  to	
  destroy	
  your	
  
   business	
  is	
  to	
  hire	
  friends	
  because	
  
   they	
  are	
...
Business	
  relationships	
  are	
  very	
  
   stressful	
  and	
  can	
  destroy	
  
   friendships,	
  especially	
  if...
But	
  does	
  that	
  mean	
  you	
  don’t	
  
                    hire	
  friends?	
  



http://emagine-­‐group.com	
  ...
Of	
  course	
  not	
  –	
  it	
  just	
  means	
  that	
  
   you	
  must	
  be	
  very	
  clear	
  about	
  the	
  
   s...
Who	
  will	
  be	
  your	
  competition?	
  




http://emagine-­‐group.com	
     Brand	
  Focused,	
  Socially	
  Active...
Ideas	
  are	
  great	
  things,	
  but	
  you	
  
   have	
  to	
  look	
  at	
  the	
  whole	
  
   environment	
  befor...
Competitors	
  go	
  a	
  long	
  way	
  to	
  
   helping	
  you	
  understand	
  if	
  your	
  idea	
  
   can	
  succee...
There	
  are	
  no	
  businesses	
  that	
  have	
  
   no	
  competition	
  –	
  that	
  idea	
  only	
  
   exists	
  in...
If	
  there	
  are	
  a	
  great	
  deal	
  of	
  
   companies,	
  you	
  will	
  only	
  get	
  a	
  
   limited	
  shar...
Talk	
  about	
  your	
  competitors,	
  
   understand	
  them,	
  figure	
  out	
  how	
  
   your	
  business	
  will	
 ...
What	
  makes	
  your	
  venture	
  
   special?	
  What	
  makes	
  you	
  
   different?	
  



http://emagine-­‐group.co...
Startups	
  are	
  risky	
  for	
  investors,	
  so	
  
   they	
  want	
  to	
  know	
  what	
  will	
  make	
  
   you	
...
Does	
  your	
  business	
  have	
  a	
  unique	
  
   skill	
  set	
  or	
  knowledge?	
  Proprietary	
  
   methods?	
  ...
The	
  thing	
  that	
  makes	
  you	
  different	
  
   will	
  usually	
  make	
  you	
  successful	
  
   because	
  it	...
These	
  are	
  all	
  questions	
  that	
  we	
  ask	
  
   when	
  we	
  idea	
  proof	
  a	
  venture	
  
   before	
  ...
Anywhere,	
  we	
  have	
  hesitation	
  will	
  
   cause	
  us,	
  and	
  any	
  other	
  VC,	
  to	
  stop	
  
   and	
...
VCs	
  have	
  to	
  be	
  sure	
  before	
  they	
  
   release	
  the	
  money	
  to	
  the	
  
   entrepreneur	
  becau...
We	
  also	
  use	
  a	
  Buyer	
  Utility	
  Map	
  




http://emagine-­‐group.com	
     Brand	
  Focused,	
  Socially	
...
http://emagine-­‐group.com	
     Brand	
  Focused,	
  Socially	
  Active,	
  Digitally	
  Enabled	
  
This	
  6	
  x	
  6	
  table	
  is	
  one	
  of	
  the	
  best	
  
   tools	
  we	
  have	
  for	
  determining	
  if	
  a...
Why	
  is	
  this	
  a	
  great	
  tool?	
  




http://emagine-­‐group.com	
            Brand	
  Focused,	
  Socially	
  ...
The	
  Buyer	
  Utility	
  Table	
  forces	
  you	
  
   to	
  look	
  at	
  your	
  business	
  idea	
  from	
  
   the	
...
So	
  let’s	
  look	
  at	
  both	
  sides	
  of	
  the	
  
   table	
  




http://emagine-­‐group.com	
     Brand	
  Foc...
The	
  Six	
  Stages	
  of	
  Buyer	
  Experience	
  
Purchase	
                  How	
  &	
  where	
  do	
  they	
  get	
...
The	
  Six	
  U7lity	
  Levers	
  
Environmental	
  
                            In	
  today’s	
  world,	
  everyone	
  is...
You	
  now	
  have	
  a	
  basis	
  for	
  
   understanding	
  how	
  to	
  idea	
  proof	
  
   your	
  venture.	
  



...
Next	
  Lecture:	
  
   	
  
   The	
  Business	
  Model	
  




http://emagine-­‐group.com	
     Brand	
  Focused,	
  Soc...
Readings	
  for	
  Next	
  Week:	
  
   	
  
   Knowing	
  a	
  Winning	
  Business	
  Idea	
  When	
  You	
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Lecture 2 - Idea Identification

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Lecture 2 of the New Venture Creation series

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Lecture 2 - Idea Identification

  1. 1. Idea  Identification   Will  Your  Business  Idea  Fly?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  2. 2. “There  is  nothing  more   powerful  than  an  IDEA  whose   time  has  come.”   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  3. 3. We  all  know  this  phrase  in  respect   to  politics  and  social  change,  but   have  you  ever  thought  about  it   from  the  business  point  of  view?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  4. 4. Ideas  are  the  basis  of  the  new   digital  and  knowledge  based   economies.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  5. 5. For  decades,  business  ideas   required  huge  capital  investment   to  setup  factories,  distribution  and   sales  engines.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  6. 6. Now,  the  best  ideas  can  be   implemented  with  3  –  4  driven   individuals.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  7. 7. But  the  idea  must  be  the  right   idea…   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  8. 8. Three  Types  of  Ideas   Useless,  Workable  and  Quick  Hit   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  9. 9. Useless  Ideas   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  10. 10. A  Useless  Idea  is  something  that  is   dreamed  up  but  the  entrepreneur   has  no  personal  understanding  or   experience  in  the  business  they  are   proposing.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  11. 11. When  you  don’t  have  the   experience  to  back  up  the  idea,   you  are  dependent  on  other   people  to  make  it  successful  and   personally  have  no  buy-­‐in  with  the   venture   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  12. 12. That  makes  you  –  replaceable  –   and  that  is  not  a  viable  idea  for  a   venture  capitalist,  angel  investor  or   bank.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  13. 13. VCs,  Angels  and  banks  only  invest   into  ideas  where  the  person  sitting   in  front  of  them  has  a  personal   buy-­‐in  with  the  venture   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  14. 14. They  are  either  the  vision  that   drives  the  organization,  the  force   that  runs  it  or  the  intelligence  that   builds  it   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  15. 15. The  world  is  full  of  idea  men,  very   few  of  them  can  deliver  on  their   ideas.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  16. 16. Examples  of  a  Useless  Idea   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  17. 17. A  farmer  starting  a  manufacturing   plant  that  produces  auto  parts   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  18. 18. An  MBA  starting  a  game   development  house   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  19. 19. A  plumber  starting  an  electrical   business.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  20. 20. I  think  you  get  the  idea  –  if  you   don’t  have  any  real,  measurable   experience  in  the  industry  that  you   want  to  start  –  you  have  the  wrong   idea.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  21. 21. Workable  Ideas   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  22. 22. A  Workable  Idea  is  something  that   will  take  time  and  effort  to  develop   but  will  be  profitable  once  stable.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  23. 23. These  ideas  are  the  basis  of  the   knowledge  economy  because  they   will  continue  to  grow  and  develop   as  the  venture  grows  –  in  other   words,  they  don’t  stagnate   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  24. 24. VCs,  Angels  and  banks  love  these   types  of  ventures  because  they  are   able  to  invest  into  the  initial  start-­‐ up  and  reap  their  returns  during   the  growth  stage   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  25. 25. Allowing  them  to  cash  out  –  or   capitalize  –  when  the  venture  is   mature  with  very  high  returns  on   their  investments.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  26. 26. Software  Development  Companies   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  27. 27. Consulting  Firms   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  28. 28. Research  Houses   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  29. 29. Technology  Planners   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  30. 30. These  are  all  ventures  that  take   time  to  build  and  become   successful,  but  will  continue  to   expand  and  develop  over  time   increasing  their  product/service   offering  with  each  expansion.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  31. 31. Quick  Hit  Ideas   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  32. 32. A  Quick  Hit  Idea  is  one  that  will   generate  revenue  from  day  1  of   operations.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  33. 33. These  ventures  are  typically  called   quick  hit  ideas  because  they  return   the  investment  immediately  but   the  returns  are  minimal  at  best.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  34. 34. Experience  doesn’t  matter  because   you  are  only  looking  to  capitalize   on  a  temporary  need  in  the  market   and  know  that  you  will  be  “out  of   business”  once  the  need   disappears.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  35. 35. Quick  hit  ventures  are  also  low-­‐ experience,  low  intelligence   businesses  –  and  I  don’t  mean  that   to  be  rude.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  36. 36. Take  for  example,  your  local   general  store  –  what  does  he  offer   that  the  general  store  next  door  or   down  the  street  doesn’t?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  37. 37. In  other  words,  the  revenue   generation  of  this  idea  is  limited   until  someone  opens  another  store   in  the  area  that  cuts  into  their   limited  customer  base.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  38. 38. So  now  that  we  have  identified  the   different  idea  types  –  how  do  we   judge  our  own  ideas?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  39. 39. Idea  Proofing   Determining  If  Your  Idea  Will  Last   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  40. 40. People  will  give  you  a  lot  of  ways   to  judge  your  idea,  but  most  of   them  are  not  useful  from  the  point   of  view  of  “idea  proofing.”   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  41. 41. What  is  Idea  Proofing?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  42. 42. Idea  Proofing  is  something  we  do   at  emagine  to  determine  whether   an  idea  is  viable  and  feasible  or  not.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  43. 43. It  is  not  difficult,  but  it  requires   removing  the  emotion,  excitement   and  passion  of  the  entrepreneur   from  the  equation.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  44. 44. Ideas  can  not  be  judged  based  on   what  the  entrepreneur  says,  but   how  it  looks  on  paper   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  45. 45. So  what  are  we  looking  for?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  46. 46. Does  it  solve  compelling   unserved  need?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  47. 47. Every  entrepreneur  thinks  they   have  the  million  dollar  idea,  but   deciding  if  it  really  is  starts  with   this  question  –  what  need  does  it   solve?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  48. 48. Ask  people  if  the  need  you  see  is   really  a  need.  Society  is  the  best   judge  of  the  idea  because  they  are   your  future  customers.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  49. 49. But  here’s  the  trick,  you  can’t   explain  the  business  idea  to  them  –   only  the  end  result  product/service   you  will  provide  them.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  50. 50. If  they  can’t  see  it  from  that,  your   idea  is  not  going  to  work  without  a   lot  of  work,  education  and   marketing  –  all  of  which  means  the   need  is  not  really  there.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  51. 51. How  much  money  will  you  need   and  how  will  you  use  it?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  52. 52. This  is  a  big  question  because   capital  is  what  makes  businesses   run  and  grow.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  53. 53. If  you  need  too  much  capital  or   can’t  explain  how  the  capital  will   be  used  to  build  the  business,   attract  the  customer  or  grow  it,   your  idea  may  not  be  the  right  one.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  54. 54. What  are  you  offering  and  how   does  it  work?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  55. 55. Exactly  what  product/service  are   you  offering  and  how  will  it  work?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  56. 56. You  must  be  clear  with  this   definition  because  if  you  are  not   clear,  how  do  you  expect  anyone   else  to  understand  it?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  57. 57. We  have  talked  to  people  with   great  ideas  and  what  could  be   outstanding  products,  but  they  are   unable  to  explain  their  product/ solution  in  simple   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  58. 58. Our  test  –  if  you  can’t  explain  the   product/service  in  15  words  or  less,   you  are  not  clear.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  59. 59. More  importantly,  if  it  takes  more   than  2  minutes  to  explain  how  to   use  it  –  it’s  game  over.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  60. 60. Customers  don’t  read  manuals,   instruction  booklets  or  websites  –   they  either  understand  how  to  use   it  or  call  you.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  61. 61. Who  exactly  is  your  customer?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  62. 62. The  answer  to  this  question  is  not   everyone  –  no  product  or  service   has  ever  been  designed  for   everyone’s  use.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  63. 63. You  need  to  be  able  to  define  who   will  buy  your  product/service.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  64. 64. B2B,  B2C,  B2G,  Fortune  500,  SME,   NGO,  Men,  Women,  Housewives,   Bachelors,  Students,  Athletes….   And  the  list  goes  on  and  on….   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  65. 65. Another  question  you  have  to   answer  with  this  question  is  –   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  66. 66. Is  there  a  specific  situation  that   will  drive  the  purchase  or  use  of   my  product/service?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  67. 67. The  more  precise  you  are,  the   better  you  idea  proof  your  idea.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  68. 68. How  will  you  provide  your   product/service?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  69. 69. One  of  the  biggest  questions  is   HOW  you  plan  to  win  customers  –   what  is  your  strategy  for  product/ service  delivery?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  70. 70. Do  they  need  to  come  to  your   office  or  shop  to  buy?  Will  you  go   to  them?  Can  it  be  bought  and   installed  online?  What  hours  will   you  keep?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  71. 71. Who  is  involved  in  your   venture’s  success?  Who  are  the   stakeholders?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  72. 72. Every  entrepreneur  would  like  to   believe  that  they  can  do  everything   –  we  are  all  Superman  when  it   comes  to  our  ideas,  but  that  is  not   possible.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  73. 73. Of  course,  the  entrepreneur  must   have  a  strong  foundation  of   experience  and  stability  in  their   professional  life,  but  who  are  the   other  key  resources?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  74. 74. The  first  way  to  destroy  your   business  is  to  hire  friends  because   they  are  friends  and  you  like  to   hang  out  together  –  hanging  out  is   very  different  than  working   together.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  75. 75. Business  relationships  are  very   stressful  and  can  destroy   friendships,  especially  if  you  have   to  fire  a  friend…   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  76. 76. But  does  that  mean  you  don’t   hire  friends?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  77. 77. Of  course  not  –  it  just  means  that   you  must  be  very  clear  about  the   skill  set  and  abilities  of  your  friend   before  hiring  them  –  this  is   business.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  78. 78. Who  will  be  your  competition?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  79. 79. Ideas  are  great  things,  but  you   have  to  look  at  the  whole   environment  before  deciding  if  the   idea  is  viable  or  not.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  80. 80. Competitors  go  a  long  way  to   helping  you  understand  if  your  idea   can  succeed  or  not.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  81. 81. There  are  no  businesses  that  have   no  competition  –  that  idea  only   exists  inside  an  entrepreneur’s   head.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  82. 82. If  there  are  a  great  deal  of   companies,  you  will  only  get  a   limited  share  of  the  existing  pie.  If   there  are  few  competitors,  you   need  to  understand  why.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  83. 83. Talk  about  your  competitors,   understand  them,  figure  out  how   your  business  will  be  better  and   how  you  will  beat  them  –   otherwise  get  ready  to  fail.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  84. 84. What  makes  your  venture   special?  What  makes  you   different?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  85. 85. Startups  are  risky  for  investors,  so   they  want  to  know  what  will  make   you  successful  compared  to   everyone  else.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  86. 86. Does  your  business  have  a  unique   skill  set  or  knowledge?  Proprietary   methods?  Unique  brands  that   aren’t  available  anywhere  else?   Innovative  technologies?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  87. 87. The  thing  that  makes  you  different   will  usually  make  you  successful   because  it  changes  the  way  the   consumer  does  something  –  or   what  we  call  revolutionizes  service   delivery.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  88. 88. These  are  all  questions  that  we  ask   when  we  idea  proof  a  venture   before  investing   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  89. 89. Anywhere,  we  have  hesitation  will   cause  us,  and  any  other  VC,  to  stop   and  think  –  even  if  it  is  days  before   the  check  is  written.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  90. 90. VCs  have  to  be  sure  before  they   release  the  money  to  the   entrepreneur  because  getting  it   back  is  very  difficult.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  91. 91. We  also  use  a  Buyer  Utility  Map   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  92. 92. http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  93. 93. This  6  x  6  table  is  one  of  the  best   tools  we  have  for  determining  if  an   idea  will  be  successful  or  not.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  94. 94. Why  is  this  a  great  tool?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  95. 95. The  Buyer  Utility  Table  forces  you   to  look  at  your  business  idea  from   the  view  of  the  consumer  to   determine  whether  the  idea  will   work  or  not.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  96. 96. So  let’s  look  at  both  sides  of  the   table   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  97. 97. The  Six  Stages  of  Buyer  Experience   Purchase   How  &  where  do  they  get  it?     Delivery   Can  it  be  delivered  to  their  home  or  office?   Use   How  do  they  use  it?   Supplements   Does  it  require  any  special  or  addi@onal  items  to  use?   Maintenance   How  oBen  will  it  need  to  be  serviced  or  checked?   Disposal   What  does  the  consumer  do  with  it  when  they  are  done?   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  98. 98. The  Six  U7lity  Levers   Environmental   In  today’s  world,  everyone  is  environment  friendly  –  is  your  product?   Friendliness   Fun  &  Image   Does  it  improve  the  consumer’s  image  or  give  them  more  enjoyment?   Risk   Is  there  any  risk  involved  with  product/service  usage?   Convenience   How  easy  is  it  to  carry  and  store?   Simplicity   How  easy  is  it  to  use?   Customer   Does  it  improve  their  produc@vity  in  any  part  of  their  lives?   Produc@vity   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  99. 99. You  now  have  a  basis  for   understanding  how  to  idea  proof   your  venture.   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  100. 100. Next  Lecture:     The  Business  Model   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  101. 101. Readings  for  Next  Week:     Knowing  a  Winning  Business  Idea  When  You  See   One   Launching  a  World  Class  Venture   The  Questions  Every  Entrepreneur  Must  Answer   http://emagine-­‐group.com   Brand  Focused,  Socially  Active,  Digitally  Enabled  
  • IeuchariaHr

    Oct. 26, 2019
  • PaulMutua1

    Jun. 18, 2016
  • jpxgen

    Jan. 16, 2014

Lecture 2 of the New Venture Creation series

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