Opportunity ExplorationRAE 4

Developing ideas into

opportunities

1-Analysing the problem

Analyzing the problem

Example

2-Thinking creatively

Thinking creatively: Idea

space

Example

3-Opportunity mapping

Why mapping ?
Mindmap: is used to develop the
opportunity further. The importance
stage is to moving from implicit
understanding (information in
peoples heads) to explicit
information on paper, where different
pieces of information become
connected, leading to fresh ideas,
insights and possibilities. Its a
starting point of a problem or

3-1 Mindmap

Example

Reviewing if opportunity includes

DIFA so far (step 1,2 and 3.1)
Demand: What is the need, problem
or demand to be satisfied ?
Innovation: What is the product,
service, process or experience ?
Feasibility: Is it technologically
feasible ?
Attraction: Is it worth doing ? Why ?

Opportunity map

3.2 Opportunity map

Once an idea is identified, we can start drawing an
opportunity map of how these might work
Idea: creative connection between two or more pieces of
information

Opportunity : can exist where there is a need, problem,

and either actual or potential demand for a product or service.
We recognize and create opportunities in our subjective
consciousness
Opportunities are transient and temporary
Just because we recognize an opportunity that doesnt mean
it is a good opportunity for us

Opportunity map

3.3- Resource map

Opportunity map can be used to
create a resource map of the
resources and capabilities needed to
develop the opportunity

Resource map

Example

4-Exploring opportunities: market and

related investigation and research

4-1 Future thinking

Is it the opportunity current, or one which will exist in the
future ?
If it is in the future, how many years ahead will this be ?
Is it currently explored or exploited by others ?
Do all the conditions exist for it to be exploited ? Which dont?
Are you bringing a significant innovation or advantage to
exploit the opportunity ?
What assumptions about future conditions are you making ?
(e.g demand, innovation, technology, resource availability,
social trends etc)
What factors could change to affect these assumptions ?
What are the most significant risk factors in the opportunity ?
How could these be reduced?

Future thinking- example

Current opportunity: demand already exists and the innovation is feasible
now
Currently explored on a different form : app giving vouchers, not cash
All the conditions exist for it to be exploited
Significant advantage to exploit the opportunity : ability to make money
on demand
Assumptions about future : increasing demand of flexibility for jobs
Factors that could change to affect these assumptions: (in a good way):
none
Most significant risk factors in the opportunity: Accuracy of the identity
info entered by the users during registration
How could these be reduced? Sms confirmation sent by phone while
registering(to check a valid number) and using Paypal as payment
method(they already conducted verification. So its sort of benefiting
from the ID work they done). Those 2 elements should reduce the
incentives of putting wrong information by users

4-2 Market focus funnel

Exploring the market is a key learning process
for any opportunities
The market focus tunnel visualizes the market
exploration as a progression where we move
from an overview to detailed and specific
probing (moving from divergent to convergent
thinking)
The objective is to gather as much relevant
data which can be used later on in order to
evaluate the opportunity and reduce
uncertainty

Market focus funnel

Identify potential markets
Market characteristics: total value, growth,
accessibility
Decide on target market
Identify customer segments within market: total
value, growth, accessibility
Decide on target segment(s)
Identify customer needs, preferences
Decision-making factors, pricing
Identify media, promotional and sales channels
Develop marketing plan

44 questions of Market focus funnel

Market focus funnel &IPR

How would you gather the primary
market research information ?
What intellectual property could your
idea potentially produce ?
In which category or categories of
IPR(patents, trademarks, Design
protection, Design right, Copyright)
would this fall ?
How would you go about securing
your IPR ,

Market focus funnel &IPR - Example

How would you gather the primary market
research information ? Internet, magazines
What intellectual property could your idea
potentially produce ? None as its an app
In which category or categories of IPR(patents,
trademarks, Design protection, Design right,
Copyright) would this fall ? No IPR for apps
How would you go about securing your IPR ?
Its not a question to consider regarding the
type of service

Mullins, John (2010), The New Business Road Test, 3rd

Edition, London: FT Prentice Hall, chapter 1
My opportunity: Why will or wont this work ?

7 domains of attractive opportunities

(must reading)

Mullins, John (2010), The New Business Road Test, 3rd

Edition, London: FT Prentice Hall, chapter 2
Will the fish bite?

4 crucial micro-level questions about

target markets
1- Is there a market segment where we might
enter the market in which we offer the customer
clear and compelling benefits ?
2-Are these benefits, in the customers minds,
different from and superior in some way to
whats currently offered by other solutions ?
3-How large is the segment, and how fast is it
growing ?
4- Is it likely that our entry into this segment will
provide us entry in other segments that we may
wish to target in the future ?

Case history 1- iModes

Their success show how important it is to have a
product offering clear and compelling benefits to
a carefully targeted market
What Japenese were
interested in

What iModes put in

place for them

Consumers interested in
the financial markets
and tjeir own personal
finances

Contents coming from

320 banks

Consumers interested in
comics

Contracted publishing
firm to provide weekly
comic strip

Dial-up telephone was

Use internet without
expensive
dialing the phone
Success came from the adjustment of their site to
Internet users

Case history 2- Light beer

How Miller identified a new
target market

How it appealed to this market

and results of its efforts

Realized that its customer

demographics were
changing

Advertising predominantly
on sports

Conducted consumer
research
Miller realized there was a
beer-drinking market
segment of young men who
were interested in a lowercalorie beer

Reached this testosteronefuelled group(real man) by

hiring ex-athletes on ads :
appeals to a mans kind of
man

The rising trend this last decade of frozen yoghurt is a similar

example, where customers dont want to give up on ice creams but
still are concerned by their health/shape

Case history 3- Nike

Bowerman believed distance runners could benefit from

shoes that provided greater cushioning, that gave better
lateral stability, more flexible and lighter than the shoes on
the market
Promoting at track meets -> Exposure on 1972 Olympic
marathon -> Brand created
One segment lead to another (Running ->Tennis ->
Basketball)

Case history 4OurBeginning.com

They thought they would gain 5 million cutomers(database)

if they spend an overall of $5 million to advertise on
Superbowl 2000 event, as 130 million people follow this
event.
Wrong assessment as : among 130 million, 45 million were
women, and if there are 8,3 weddings per 1000 adults that
would lead to a potential of 750,000 wedings in the works
among this audience. So far from the 5 million people of
potential customers they assessed.
Results: In February 510,730 unique visitors. In March
92,292 visitors.
The company spent $2800 to acquire a customer
or ten times what the customer spent.
-> Failure come from the lack of understanding of who
its target market.

What investors want to

know
The customer pain that you are offering to resolve
Who the target customer who has the pain is, evidence that
the target customer will buy whats to be offered at a price
that works for you (hard evidence is what attracts money)
Types of evidence: Marketing research, actual sales,
customer commitment -> YOU WILL NEED THIS EVIDENCE
BEFORE WRITING YOUR BUSINESS PLAN
Is it a large and/or growing market ?
Industry competitively brutal ?
Are you and your team committed entrepreneurs ?
Cash flow (not profit)
Ways to get clients

3 ways to define market

segments

Mullins, John (2010), The New Business Road Test, 3rd

Edition, London: FT Prentice Hall, chapter 10
What to do before you write your business plan

Before the business Plan

1- Come up with an idea
2- Assess it and shape it using the 7
domains framework
3- Write a customer driven feasibilty
study, that lays out the conclusions
youve reached from your data and
analysis

Great opportunities where do they

come from ?
Created by macro-trends
-> Study todays trends systematically
Found by living and experiencing
customer problem
Created through scientific research
->Spotting how scientific research founding
might solve some customers problem
Proven elsewhere that you can pursue
where you hope to do business

Assessing and shaping the

idea
Look for secondary data, that someone has
already collected and reported
Assess for the macro-level domains
If it doesnt kill your idea, then collect primary
data that can answer remaining macro questions
and assess at the micro-level
An evidence-based sales forecast: of market
potential then how much you will sell

The customer-driven feasibility

study
Purpose: write what you have learned to
confront the clarity of the logic that underlines
the attractiveness of the opportunity assessed
Format: 1 page for each of the seven domains.
Executive summary up front summary and a
final summary and conclusion at the end
Begin in the lower left corner of 7 domains, then
proceeds clockwise
If feasibility study satisfy you, on the
opportunity meeting your mission and
aspiration -> Business plan

Mullins, John (2010), The New Business Road Test, 3rd Edition,
London: FT Prentice Hall, chapter 6
What drives your entrepreneurial dream?

 Each successful entrepreneur brings to their venture an important set of

elements that drives their entrepreneurial dream:
A mission that determines what kind of business to build or what kinds of
market to serve
A set of personal aspirations that guides the level of achievement to be
sought
Some level of risk propensity that indicates what sort of sacrifices are to be
made in pursuit of the dream.
Entrepreneurship is a very personal game: requires a clear vision about
what you as an entrepreneur want out of the effort. Whats your mission?
What level of aspirations do you have? Will you put your own money on the
line? Must you have the control or taking the risk to sharing it ? Only you
can decide these things.
Without a clear vision, understanding your own aspirations, identifying your
own level of risk propensity, sharing the risk you probably wont raise any
money, you have chances to fail.

 3 elements that drive your entrepreneurial dream: mission, personal

aspirations and risk propensity must fit together in a coherent and
cohesive way.
Going it alone can work for a lifestyle business, but its unlikely to
enable you to become the next Branson or Knight You cannot aspire
greatness without a willingness to share ownership and control.
What investors want to know ?
Matching your mission to their mission is important.
Most investors want a clear understanding of the kind of company you
plan to build.
Someone who is ready to grow and ultimately sell the venture.
Someone that will make extraordinary efforts and commitments to beat
the long odds(they will measure your willingness to share in the risks)

 Starbucks case, Howard Shultz

Lessons learned:- Was clear about his mission(driven
by passion)
His personal aspirations were audacious. If you want
to achieve widespread impact and lasting value, be
bold. 3 questions that every aspiring entrepreneur
should ask:
-How big do I want this business to become?
-What role do I want in this venture: manage or to lead?
-For how long do I want to remain involved with it?
Was willing to repeatedly take risks

Krueger, N., 1993. The Impact of Prior Entrepreneurial

Exposure on Perceptions of New Venture Feasibility
and Desirability. Entrepreneurship: Theory and Practice,
18(1).

 Confirmation of Shapero's Model

This exploratory study found significant support for Shapero's
propositions that entrepreneurial intentions derive largely from
perceptions of feasibility, perceptions of desirability, and a propensity to
act which derives from control beliefs. Path analysis demonstrated that
the impact of prior entrepreneurial exposure on intentions is indirect,
operating through perceived feasibility. The positiveness of those
experiences also indirectly influences intentions through perceived
desirability. Finally, we found suggestions that intentions formation may
be more complicated than the tested model (e.g., propensity to act might
be a significant, complex moderator of key relationships in the model).
Intentional behavior typically involves identifying goals before identifying
the means to achieve them. This helps explain Brockhaus's findings that
a majority of entrepreneurs decide to start a business prior to deciding
what type of business to start; it is characteristic of intentional behavior.

Creative thinking
Creative v Logical Thinking

Left brain

Creative

Seeks questions
Diverges
Explores different views
Restructures
Seeks ways an idea might
help
Welcomes discontinuous
leaps
Welcomes chance intrusions
Open ended

Logical

Right brain

Seeks answers
Converges
Asserts best or right view
Uses existing structure
Says when an idea will not
work
Uses logical steps
Focuses on what is relevant
Closed