Академический Документы
Профессиональный Документы
Культура Документы
This technical note was prepared by Saras D. Sarasvathy, associate professor of business administration.
Copyright 2006 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved.
To order copies, send an e-mail to sales@dardenpublishing.com. No part of this publication may be reproduced,
stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any meanselectronic,
mechanical, photocopying, recording, or otherwisewithout the permission of the Darden School Foundation.
-2-
UV0843
Figure 1. Framework for assessing whether a new venture idea is a good opportunity.
FEASIBILITY
Is it doable?
MARKET
YOU
Technical feasibility
Market feasibility
VALUE
Is it worth doing?
Financial feasibility
Can I do it?
Do I want to do it?
Is it doable?
Technological feasibility
If the former, is anyone else using it to develop the same product/service as you?
If so, who are they and how does that affect your prospects?
What kind of entry barriers for the future does your technology provide?
How long would those entry barriers last should your idea prove to be a high
potential opportunity?
What are your technological risks? List reasons why the end user might not want
to use your technology even though your product/service might be technologically
superior.
-3-
UV0843
Market feasibility
Product
Customer
What critical factors will lead you most quickly to your customer base?
Market
Economic feasibility
Are there any obvious roadblocks from the governmentboth local and national?
Timing
What is the shape and duration of the window for this opportunity?
-4-
UV0843
Is it worth doing?
Financial feasibility
If you personally owned those funds, would you invest them in this idea?
How is the financing connected to the timing issue? (breakeven, burn rate)
Can I do it?
What is it going to take?
Every idea is different in terms of exactly what it would take to build it into a business.
But some general negative expectations might include:
Setbacks and disappointments along the way including the possibility of major
failures
An arduous and sometimes awkward learning process with regard to dealing with
peopleincluding hiring and firing
Sustaining the best stakeholders through bad times such as cash crunches
A realistic understanding of some of the negative experiences, combined with a strong positive
motivation is considered the essential recipe for long-term success in entrepreneurship.
-5-
UV0843
Why you?
What are your relevant weaknesses and how will you overcome or compensate for
them?
Do I want to do it?
The established myth about the motivation of entrepreneurs is that they want to make
money. And in many cases, entrepreneurs do start out with the idea of making money. Indeed,
entrepreneurs are very good at keeping their eye on the bottom line at all times. Yet, most
entrepreneurs quickly face the fact that making money is but one necessary conditionnot even
the most necessary conditionfor successful entrepreneurship. Rather, making money is a
positive side effect of bringing together and managing resources and people to accomplish
something realistically doable and worth doing. Therefore, in building a robust business
organization, an entrepreneur has to want more than merely to make money. He or she has to
find more immediate reasons for getting up in the morning and facing the daily tasks of
entrepreneurship.
Some common motivations mentioned by successful entrepreneurs include:
A desire for independence: I did it my way or I do not want to work for someone else
Lifestyle: For example, a successful couple from Wall Street who give up high-paying
jobs to start a bed and breakfast in Vermont
While the framework discussed here is both useful and valuable in thinking through
whether to invest in a new venture idea or not, it might be important to also ask the question: to
what extent do actual entrepreneurs use such frameworks in starting new ventures? Moreover,
what does research tell us about how expert entrepreneurs came up with the ideas that have
resulted in enduring companies?
-6-
UV0843
-7-
UV0843
-8-
UV0843
themselvesjust a bit at a time, to reach higher and thrust fartheruntil eventually they had
transformed both their means and ends into unimagined new possibilities.
Sticking very closely to who you are, what you know, and whom you know not only tells
you what to do, it is also very useful in telling you what not to do. The problem with most novice
entrepreneurs is not that they do not have great new ideas for ventures, it is that they have too
many. They see opportunities everywhere and feel tempted to expand product lines too soon or
jump into too many new market segments all at once. Especially if they have some initial
success, it is easy to feel prescient (i.e., to believe they can clearly predict the future) as well as
omnipotent (i.e., to believe they can achieve the improbable).
The bird-in-hand principle does two things: (1) It tells you that you need not wait for the
blockbuster idea or the multibillion dollar opportunity to come your way. You can begin with a
simple problem for which you see an implementable solutionor even something that you
simply believe would be fun to attemptand go for it; and (2) it also tells you not to run after all
kinds of imagined fantastic opportunities that require you to chase money you do not have,
work with people you are not sure you like, or deal with technologies and markets about which
you know little and so have to run breathlessly to keep up with. In other words, when you use the
bird-in-hand principle, starting a new venture is no longer an incredibly risky act of heroism. It is
something you can do within the constraints and possibilities of your normal life. You can start a
new venture anytime you want. You can get started now.