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1.New Idea put to Road Test
2.Why will or won’t this work?
You may have capital and a talented management team but if your are fundamentally in a lousy business, you won’t get the results
What is the toolkit you should have before going for the road-test of your idea.?
Know about some common mistakes and not so common mistakes
Before converting IDEA into Business Plan we have to assess the opportunities and shape them to make it into successful venture
You may have capital and a talented management team but if your are fundamentally in a lousy business, you won’t get the results
What is the toolkit you should have before going for the road-test of your idea.?
Know about some common mistakes and not so common mistakes
Before converting IDEA into Business Plan we have to assess the opportunities and shape them to make it into successful venture
3.Attractive Opportunity ?
Entreprenuership divided into 3 elements to customer driven feasibility study
Markets
Industries
Team
Attractivenes of all three elements are to be checked
Market and Industries are not same
Market and Industries are to be considered at Macro and Micro level
Team is not simply resume’
Entreprenuership divided into 3 elements to customer driven feasibility study
Markets
Industries
Team
Attractivenes of all three elements are to be checked
Market and Industries are not same
Market and Industries are to be considered at Macro and Micro level
Team is not simply resume’
4.Market
It consists of a group of Current and potential Customers having the willingness and ability to buy a product-services to satisfy a particular class of need or want.
Market is group of people and not products
Example- market of nano car, market of workplace snacks
It consists of a group of Current and potential Customers having the willingness and ability to buy a product-services to satisfy a particular class of need or want.
Market is group of people and not products
Example- market of nano car, market of workplace snacks
5.Industry
Industry consists of sellers-organiations- that offer products or class of products that are similar and close subsitute for one another.
Example Market of workplace snacks is served by Snack industry, candy industry, fresh food industry, beverages industry , tea-coffee industry
Industry consists of Sellers
Industry consists of sellers-organiations- that offer products or class of products that are similar and close subsitute for one another.
Example Market of workplace snacks is served by Snack industry, candy industry, fresh food industry, beverages industry , tea-coffee industry
Industry consists of Sellers
6.Team
Can the team deliver?
Important factor of venture success is M-M-M
Management skill of the team member is more than Character and CV
It is more of Entrepreneur Attitude and mindset , which involves all the traits or attributes of the Entrepreneur.
Team in Business sense, human sense and well connected sense
7.Deriving 7 domains
Domain1 –Market Attractiveness at Macro Level
Domain 2- Market Attractiveness at Micro Level
Domain3 – Industry Attractiveness at Macro level
Domain4 – Industry Attractiveness at Micro Level
Domain5- Team’s mission, aspirations, propensity to risk
Domain6- Team’s ability to execute Critical Success Factor
Domain7- Team’s connectedness up and down the value chain
Can the team deliver?
Important factor of venture success is M-M-M
Management skill of the team member is more than Character and CV
It is more of Entrepreneur Attitude and mindset , which involves all the traits or attributes of the Entrepreneur.
Team in Business sense, human sense and well connected sense
7.Deriving 7 domains
Domain1 –Market Attractiveness at Macro Level
Domain 2- Market Attractiveness at Micro Level
Domain3 – Industry Attractiveness at Macro level
Domain4 – Industry Attractiveness at Micro Level
Domain5- Team’s mission, aspirations, propensity to risk
Domain6- Team’s ability to execute Critical Success Factor
Domain7- Team’s connectedness up and down the value chain
8.Domain1 –Market Attractiveness at Macro Level
conduct a macro level market assessment collect primary and secondary data from trade publications or business press- How large the market is? How fast it is growing? What is the forecast?
Mesurement include-
Number of Customers in the market-eg workplace snacks
The aggregate money spent by the customer on revelant class of goods- case workplace snacks
The number of units of relevant products
Assess broad macro-environmental trends- demographic,sociocultural,economic,technological,regulatory and natural –to determine if trends favor the opportunity or entrepreneur has to swim against the tide?
Assessment from- 30000ft high(macro) is necessary but one has to read the ground, so the next domain at micro level
conduct a macro level market assessment collect primary and secondary data from trade publications or business press- How large the market is? How fast it is growing? What is the forecast?
Mesurement include-
Number of Customers in the market-eg workplace snacks
The aggregate money spent by the customer on revelant class of goods- case workplace snacks
The number of units of relevant products
Assess broad macro-environmental trends- demographic,sociocultural,economic,technological,regulatory and natural –to determine if trends favor the opportunity or entrepreneur has to swim against the tide?
Assessment from- 30000ft high(macro) is necessary but one has to read the ground, so the next domain at micro level
9.Domain1- Is this a good market?
Q1- what sort of business do you want? One with potential to become a huge business or a small operation servicing niche market?
Q2-How large is the market you are seeking to serve? In how many way have you measured it?
Q3-How fast has it grown over last 1/2/5 years?
Q4-How fas t will it grow in next 1/2/5 years ?
Q5-What economic demografic, socioculture, technological,regulatory and natural trends can you identify that will affect your market and what will be the effect on your business?
These questions can be answered from primary and secondary sources or internet, suppliers, friends, customers.
If your market is not huge and growing rapidly then forget it
Q1- what sort of business do you want? One with potential to become a huge business or a small operation servicing niche market?
Q2-How large is the market you are seeking to serve? In how many way have you measured it?
Q3-How fast has it grown over last 1/2/5 years?
Q4-How fas t will it grow in next 1/2/5 years ?
Q5-What economic demografic, socioculture, technological,regulatory and natural trends can you identify that will affect your market and what will be the effect on your business?
These questions can be answered from primary and secondary sources or internet, suppliers, friends, customers.
If your market is not huge and growing rapidly then forget it
10.Domain 2- Market Attractiveness at Micro Level
Aspiring entrepreneur who says “we don’t have compititors” are naïve
Micro Level assessment involvels 4 questions
Is there a target market segment where we offer customer clear and compelling benefits at the price he/she willing to pay
Are these benefits, in the customers mind, superior in some way to what is currently offered by another
Aspiring entrepreneur who says “we don’t have compititors” are naïve
Micro Level assessment involvels 4 questions
Is there a target market segment where we offer customer clear and compelling benefits at the price he/she willing to pay
Are these benefits, in the customers mind, superior in some way to what is currently offered by another
11.Domain2- Will the fish bite?
Q1. What customer pain will your offering resolve? How strong incentive do customer have ,to you their money ? Will the fish bite at the price that works?
Q2. Who ,precisely are the customer who have the pain? Do you have the accurate, detailed and current information about how they are, where they live or do business or what they do?
Q3.What benefits does your offering provide that others don’t”
Q4 What evidence do you have that customers will buy what you propose to offer?
Q5.What evidence you have that your target market will grow?
Q6. What other segments exit that can benefit from related offering?
Q7. Can you develop capabilities that are transferable from one segment to another?
Q1. What customer pain will your offering resolve? How strong incentive do customer have ,to you their money ? Will the fish bite at the price that works?
Q2. Who ,precisely are the customer who have the pain? Do you have the accurate, detailed and current information about how they are, where they live or do business or what they do?
Q3.What benefits does your offering provide that others don’t”
Q4 What evidence do you have that customers will buy what you propose to offer?
Q5.What evidence you have that your target market will grow?
Q6. What other segments exit that can benefit from related offering?
Q7. Can you develop capabilities that are transferable from one segment to another?
12.Domain3- Industry Attractiveness at Macro level
How this analysis is to be done.?
How this judgement is to made- Study the forces that determine the industry Attractive
Michal Porter’s 5 force Model
Threat of new Entrant
Buyer’s Purchasing Power
Supplier’s Selling power
Threat of Subsititutes
Competitive Rivalary
Assessing these forces and any ongoing or likely future changes
How this analysis is to be done.?
How this judgement is to made- Study the forces that determine the industry Attractive
Michal Porter’s 5 force Model
Threat of new Entrant
Buyer’s Purchasing Power
Supplier’s Selling power
Threat of Subsititutes
Competitive Rivalary
Assessing these forces and any ongoing or likely future changes
13.Domain3-Is this a good Industry?
Example Small Soap Industry
Force 1- Threat of new entrant-Is it easy or difficult for companies to enter this industry
Force2 –Treat of Supplier Power-Do Suppliers to this industry have the power to set terms and conditions
Force 3- Buyer’s power – Do buyer has the Buyer has the power to set the terms and conditions
Force 4-Threat of Subsitute- Is it easy or difficult for subsititute product to steal my market
Force 5- Compititive Rivalry-Is Compititive rivalry intense or gentle
Based on the all 5 force analysis it can be decided wheather the industry is attractive or not.
Assignment- Rsturant industry,telecom industry, retail store, Cold-Drink Industry.
Example Small Soap Industry
Force 1- Threat of new entrant-Is it easy or difficult for companies to enter this industry
Force2 –Treat of Supplier Power-Do Suppliers to this industry have the power to set terms and conditions
Force 3- Buyer’s power – Do buyer has the Buyer has the power to set the terms and conditions
Force 4-Threat of Subsitute- Is it easy or difficult for subsititute product to steal my market
Force 5- Compititive Rivalry-Is Compititive rivalry intense or gentle
Based on the all 5 force analysis it can be decided wheather the industry is attractive or not.
Assignment- Rsturant industry,telecom industry, retail store, Cold-Drink Industry.
14. Macro Industry Test questions
Q1. What industry will you compete in? define it carefully?
Q2.Is it easy or difficult for the companies to enter?
Q3.Do suppliers has the power to set terms and conditions?
Q4. Do buyer has the power to set terms and conditions?
Q5.Is it easy for the substitute product to steal your product ?
Q6.Are rivalry genteel or intense ?
Q7. Based on all the forces what is your overall assessment of the industry?
Q8. If you industry is a poor performer overall ,are there persuasive reasons that you will fare differently?
Q1. What industry will you compete in? define it carefully?
Q2.Is it easy or difficult for the companies to enter?
Q3.Do suppliers has the power to set terms and conditions?
Q4. Do buyer has the power to set terms and conditions?
Q5.Is it easy for the substitute product to steal your product ?
Q6.Are rivalry genteel or intense ?
Q7. Based on all the forces what is your overall assessment of the industry?
Q8. If you industry is a poor performer overall ,are there persuasive reasons that you will fare differently?
15.Domain4 – Industry Attractiveness at Micro Level
How long will your Advantage last?
NOKIA case
Do you possess proprietary elemement- patents,trade,secrets, and so on-that other firms can not duplicate or imitate
Can your business develop and employ superior organizationl processes, capbilities, or resources that others will find difficult to duplicate or imitate? Evidence please!
Is your business model economically viable? Will you run out of cash? That depends on answering these questions
Will your revenue adequate enough in relation to capital investment you need and the margins you can get?
How much will cost you to acquire and retain customer?
How long will you take to attract customer?
Will your contribution margins sufficient to cover your fixed cost structure sometime soon?
How much cash must be tied for working capital and how long?
How quickly will customer pay?
How slowly suppliers and employees can be paid ?
16.Domain5- Team’s mission, aspirations, propensity to risk
What is Life without a Dream?
Mission that determines what kind of business to build or what kind of market to serve?
A set of personal aspiration that guides the level of achievement to be sought
A propensity of risk and what sort of sacrifices are to be made in pursuit of the dream
How long will your Advantage last?
NOKIA case
Do you possess proprietary elemement- patents,trade,secrets, and so on-that other firms can not duplicate or imitate
Can your business develop and employ superior organizationl processes, capbilities, or resources that others will find difficult to duplicate or imitate? Evidence please!
Is your business model economically viable? Will you run out of cash? That depends on answering these questions
Will your revenue adequate enough in relation to capital investment you need and the margins you can get?
How much will cost you to acquire and retain customer?
How long will you take to attract customer?
Will your contribution margins sufficient to cover your fixed cost structure sometime soon?
How much cash must be tied for working capital and how long?
How quickly will customer pay?
How slowly suppliers and employees can be paid ?
16.Domain5- Team’s mission, aspirations, propensity to risk
What is Life without a Dream?
Mission that determines what kind of business to build or what kind of market to serve?
A set of personal aspiration that guides the level of achievement to be sought
A propensity of risk and what sort of sacrifices are to be made in pursuit of the dream
17.What drives your entrepreneurial Drive?
What is your entrepreneurial mission?
To serve the particular market?
To change a particular industry?
To market a particular Product?
Is the passion really there?
What level of aspiration do you have for your entrepreneurial dream ?
To work for yourself?
To build something special?
To do? To manage? To Lead ?
To change the world in some way?
What sort of risk are you ready to take?
Will you risk a secure salary and other things that go along with you current employement? For how long ?
Will you risk losing control of your business?
Will you risk your own money ? How much?
Will you risk your home and your time with family or loved ones?
Do those you love accept the risk you will take?
What is your entrepreneurial mission?
To serve the particular market?
To change a particular industry?
To market a particular Product?
Is the passion really there?
What level of aspiration do you have for your entrepreneurial dream ?
To work for yourself?
To build something special?
To do? To manage? To Lead ?
To change the world in some way?
What sort of risk are you ready to take?
Will you risk a secure salary and other things that go along with you current employement? For how long ?
Will you risk losing control of your business?
Will you risk your own money ? How much?
Will you risk your home and your time with family or loved ones?
Do those you love accept the risk you will take?
18.Domain6- Team’s ability to execute Critical Success Factor
The sport of Entrepreneurship
A ability to score(to execute on the critical success factor) is the differnce between win and just lost
Identify the critical success factors of your industry
Assemble a team that can execute on these factors
The sport of Entrepreneurship
A ability to score(to execute on the critical success factor) is the differnce between win and just lost
Identify the critical success factors of your industry
Assemble a team that can execute on these factors
19.Can U and Ur team Execute?
What are the few CSF in your industry? Identify them clearly?
Can you demonstrate that your team taken together can execute on the CSFs?
Alternatively have you determined which CSFs your team is not well prepared to meet or for which you need help?
What are the few CSF in your industry? Identify them clearly?
Can you demonstrate that your team taken together can execute on the CSFs?
Alternatively have you determined which CSFs your team is not well prepared to meet or for which you need help?
20.Your Connections matters!
What you and your team Know up the value chain-Suppliers to you and your compititors, and to your subsitute product
What you and you team know down the value chain- Distributor, present and future customers-name ,title (details)
What you and your team know across your value chain among your competitors and subsitutes
What you and your team Know up the value chain-Suppliers to you and your compititors, and to your subsitute product
What you and you team know down the value chain- Distributor, present and future customers-name ,title (details)
What you and your team know across your value chain among your competitors and subsitutes
21.Domain7- Team’s connectedness up and down the value chain
Entrepreneurial Connections
It is what you know but it is who you know
Companies with strong network of contacts have an advantage
Without the information sources to tell you when midcourse correction is required, all the willingness in the world will do you no good
Connectedness in all direction is required
Compititors,Suppliers,distribution channel members, Customers,Stake Holders
Entrepreneurial Connections
It is what you know but it is who you know
Companies with strong network of contacts have an advantage
Without the information sources to tell you when midcourse correction is required, all the willingness in the world will do you no good
Connectedness in all direction is required
Compititors,Suppliers,distribution channel members, Customers,Stake Holders
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