susan yamada executive director analyzing an opportunity
TRANSCRIPT
SUSAN YAMADAEXECUTIVE DIRECTOR
Analyzing An Opportunity
Entrepreneurship as a Process
Identifying an Opportunity
Develop the Concept
Determine the Required Resources
Acquire the Necessary Resources
Implement and Manage
Harvest the Venture
Entrepreneurship as a Process
Identifying an Opportunity
Develop the Concept
Determine the Required Resources
Acquire the Necessary Resources
Implement and Manage
Harvest the Venture
Opportunity Evaluation
Market Opportunities (Timmons)
Market Issues Stronger Opportunity
Weaker Opportunity
Need Identified Unclear
Customers Reachable; receptive Unreachable or loyalties established
Payback to User/Customer
Less than one year Three years or more
Potential for Value Added or Created
High Low
Likely Product Life Long; beyond time to recover investment plus profit
Short; less than time to recover investment
Industry Structure Disorganized competition or emerging industry
Aggressively competitive or highly concentrated
Market Opportunities-II
Market Issues Stronger Opportunity
Weaker Opportunity
Potential Market Size Large market Smaller market
Market Growth Rate Growing quickly (30-50% or more)
Stagnant, contracting or slow
Gross Margins 40-50% or more; sustainable
Less than 20%; volatile
Market Share Attainable
Leader; 20% or more Follower; less than 5%
Economic Opportunities
Economic/Harvest Issues
Stronger Opportunity
Weaker Opportunity
Profit After Tax 10-15% or more, durable Less than 5%, fragile
Time to Break Even
Time to Positive Cash Flow
Under 2 years
Under 2 years
More than 3 years
More than 3 years
ROI Potential 25% or more per year Less than 15-20% per year
Value High strategic value Low strategic value
Capital Requirements Low to moderate; fundable
Very high; unfundable
Exit Mechanism Present or envisioned harvest options
Undefined; illiquid investment
Competitive Advantages
Competitive Advantage Issues
Stronger Opportunity
Weaker Opportunity
Fixed & Variable Costs
Production
Marketing
Distribution
Lowest
Lowest
Lowest
Highest
Highest
Highest
Degree of Control
Prices
Costs
Channels of Supply/Resources
Channels of Distrib.
Moderate to strong
Moderate to strong
Moderate to strong
Moderate to strong
Weak
Weak
Weak
Weak
Competitive Advantages-II
Barriers to Entry Issues
Stronger Opportunity
Weaker Opportunity
Proprietary Protection (IP)/ Regulation Advantage
Have or can gain None
Response/Lead-Time Advantage
Resilient and responsive; have or can gain
None
Legal Contractual Advantage
Proprietary or exclusivity
None
Sources of Differentiation Numerous, substantive, sustainable
Few or none, nominal replicable
Competitor’s Mindset and Strategies
Live and let live; not self destructive
Defensive and strongly reactive
Other Opportunities
Other Issues
Stronger Opportunity
Weaker Opportunity
Management Team
Existing, strong, proven performance
Weak, inexperienced, lacking key skills
Contacts and Networks (i.e. advisory boards)
Well-developed; high quality; accessible
Crude; limited; inaccessible
Risk Low High
Fatal Flaws None One or more
The Importance of Feedback
Rapid Prototype Quick and dirty Fail fast, fail forward Plans are dynamic, don’t be afraid to pivot
Talk to 100 people you don’t know Prospective customers, suppliers, industry
insiders, distributors, competitors
Mitigating Risk
Is the “pain” clearly identified? Focus s/b on the customer, not the product
Know the industry better than anyone else Political, regulatory, competitive landscapes
Clearly understand how you can reach customers-channels, marketing
PACE Informational Resources
PACE website www.shidler.hawaii.edu/PACE UH business plan competition resources
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