IDENTIFYING ENTREPRENEURIAL OPPORTUNITIES. The Entrepreneurs Club September 27, 2004. IDEAS …last for ever …are free …everybody has ideas …do not need customers to survive. OPPORTUNITIES …are perishable …require work …require fit …must create customer value.
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IDENTIFYING ENTREPRENEURIAL OPPORTUNITIES
The Entrepreneurs Club
September 27, 2004
…last for ever
…everybody has ideas
…do not need customers to survive
…must create customer value
Always consider investing in a Grade A man with a Grade B idea.
Never invest in a Grade B man with a Grade A idea.
George Doriot, ‘father’ of the VC industry
APPROPRIATE RISK/REWARD ALLOCATION AND INCENTIVES
FAVORABLE TECHNOLOGY MACROECONOMY
FAVORABLE RULES OF THE GAME
Process need (Dell&Chang/Taiwan Semiconductors)
Industry and Market structures
Changes in perception (Case/AOL, Omidyar/eBay, Yang/Yahoo)
New Knowledge (Noyce&Moore/Intel, Boyer&Swanson/Genentech)
Reading trade publications (Gates&Allen/Microsoft)
Engaging in consulting projects (Kelleher/SWA)
Idea arbitrage (Schultz/Starbucks)
Business Models (Amazon)
Source: Based on Fig.3 from Ardichvili, Cardozo, Ray (2003) "A theory of entrepreneurial opportunity identification and development« , Journal of Business Venturing
Systematic search 4%
Swept in by PC revolution
Discovered by luck
Idea from previous job
Source: Amar Bhide (1994), “How entrepreneurs craft strategies that work,” Harvard Business Review (March-April).
Top of the list
Bottom of the list
VI= Very Important, SI= Somewhat Important, NI= Not Important, VI+SI+NI=100%
Hills and Schrader, « Successful Entrepreneur’s Insights into Opportunity Recognition », 1998