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1、The Opportunity: Creating, Shaping, Recognizing, Seizing Chapter Four,Dowling BA 560 Fall 2006,BA560 Venture Planning Prof. Dowling,2,The Opportunity,When is an idea an opportunity? An opportunity has the qualities of being attractive, durable, and timely and is anchored in a product or service whic
2、h creates or adds value for its buyer or end user.,BA560 Venture Planning Prof. Dowling,3,The Opportunity,Opportunities Are created, or built, using ideas and entrepreneurial creativity. Are spawned, in a free market society, when there are changing circumstances, chaos, confusion, inconsistencies,
3、lags or leads, knowledge and information gaps. Are situational. Conditions can be idiosyncratic or generalizable.,BA560 Venture Planning Prof. Dowling,4,New Ventures,Fundamental realities Most new ventures are works in process and works of art Most business plans are obsolete at the printer Speed, a
4、droitness of reflex, and adaptability are crucial The key to succeeding is failing quickly and recouping quickly,BA560 Venture Planning Prof. Dowling,5,New Ventures,Fundamental realities Success is highly situational, depending on time, space, context, and stakeholders The best entrepreneurs special
5、ize in making “new mistakes” only Starting a company is much harder than it looks, or you think it will be; but you can last a lot longer and do more than you think if you do not try to do it solo,BA560 Venture Planning Prof. Dowling,6,Exhibit 4.1 Circle of Venture Capital Ecstasy,BA560 Venture Plan
6、ning Prof. Dowling,7,The Opportunity,Opportunity Spawners & Drivers Regulatory Changes 10-fold change in 10 years or less Reconstruction of value chain and channels of distribution Proprietary or contractual advantage Existing management/investors burned out or under managed Entrepreneurial leadersh
7、ip Market leaders are customer-obsessed or customer-blind,BA560 Venture Planning Prof. Dowling,8,Where are Opportunities Born?,Technology sea change Moores Law Metcalfs Law Disruption Market sea change Value chain disruption/obsolescence/vulnerability Deregulation,BA560 Venture Planning Prof. Dowlin
8、g,9,Where are Opportunities Born?,Societal sea change Changes in ways we live, learn, work, etc. Gilders Law 10xs in 10 years Brontosaurus factor Arrogance Loss of peripheral vision Deadened reflexes turning the tanker Irrational exuberance Undervalued assets,BA560 Venture Planning Prof. Dowling,10,
9、The Opportunity,The highly organic and situational character of the entrepreneurial process underscores the criticality of determining fit and balancing risk and reward. -Timmons,BA560 Venture Planning Prof. Dowling,11,The Opportunity,Ideas: Over-rated? Flashes of brilliance are rare: Instead, its m
10、ore common to see a series of trial-and-error iterations before a promising idea fits with what the market wants.,BA560 Venture Planning Prof. Dowling,12,The Opportunity,First-Mover Advantage Though not a guarantor of success, there is tremendous potential value in being first with an idea, so long
11、as you have the capacity to capitalize on being first and establishing market share or erecting other barriers to entry.,BA560 Venture Planning Prof. Dowling,13,The Opportunity,The Great Mousetrap Fallacy If a man can make a better mousetrap the world will make a beaten path to his door. Emerson The
12、 truth of the matter is that ideas are inert and, for all practical purposes, worthless. Timmons,BA560 Venture Planning Prof. Dowling,14,The Opportunity,Experience: Herbert Simon The entrepreneurs pattern- recognition skills The 50,000 Chunks of experience Seeing what others dont see,BA560 Venture P
13、lanning Prof. Dowling,15,The Opportunity,$1 billion,$500 million,$250 million,$100 million,5 Years,10 Years,20 Years,Window of Opportunity,Market,Market Size,BA560 Venture Planning Prof. Dowling,16,Exhibit 4.7,BA560 Venture Planning Prof. Dowling,17,Evaluating,Criteria for evaluating venture opportu
14、nity Industry and market Economics Harvest issues Competitive advantage issues Management team issues Personal criteria Strategic differentiation,BA560 Venture Planning Prof. Dowling,18,The Opportunity,Criteria for Evaluating Venture Opportunities Exhibit 4.8 - Timmons,Industry & Market Market Marke
15、t structure Market size Market capacity Growth rate Market share attainable in year 5 Cost Structure,BA560 Venture Planning Prof. Dowling,19,The Opportunity,Criteria for Evaluating Venture Opportunities Exhibit 4.8 - Timmons,Economics Time to breakeven/positive cash flow ROI potential Capital requir
16、ements Internal rate of return potential Free cash flow characteristics,BA560 Venture Planning Prof. Dowling,20,The Opportunity,Criteria for Evaluating Venture Opportunities Exhibit 4.8 - Timmons,Harvest Issues Value-added potential Valuation multiples and comparables,BA560 Venture Planning Prof. Dowling,21,The Opportunity,Criteria for Evaluating Venture Opportunities Exhibit 4.8 - Timmons,Competitive Advantage Issues Fixed and variable costs Control over costs
