Entrepreneurial Entrepreneurial OpportunitiesOpportunities

Start-Ups & Growth Businesses

Professor Ed Hess

May 6, 2009

What Is A Good Business What Is A Good Business Opportunity?Opportunity?

(1) Differentiating Customer Value Proposition (“CVP”)

(a) Better

(b) Faster

(c) Cheaper

(2) It “pencils”

(3) You have done it or can do it

(4) You love it

Mandatory HomeworkMandatory Homework

(1) Customers- Why will they buy?

(2) What is a real customer?

(3) What is their compelling need or “pain” they seek to relieve?

(4) Do they have money to pay now?

(5) Do enough people have this same need or “pain”?

(6) How can you solve their problem better, faster, and/or cheaper than the competition?

(7) Who are the competitors ?

(8) Study their products/services

(9) Study similar entrepreneurs in different geographies

(10) Reverse income computation

What Do We Know About What Do We Know About Success?Success?(1) Not linked to education, family background,

gender, age, race, or income level

(2) Listening to customers & learning as you go

(3) Bias for trying- action

(4) Do NOT bet “the ranch”- start small

(5) Most end up different place than started

(6) Constantly getting better !

Common MistakesCommon Mistakes

(1)Thinking customers will love your product as much as you do

(2) Underestimating customer inertia

(3) Not making it easy for people to try it

(4) Not listening - being defensive – not adapting

(5) Underestimating costs and overestimating revenue

3 Secret Sauces3 Secret Sauces

What do customers want?

1. Defect Free

2. On-time

3. Great caring service.

Starting A Business in a Starting A Business in a RecessionRecession(1) Need compelling CVP

(2) Do not borrow money to start

(3) Start part-time: keep your day job

(4) Get CVP right and get customer references

Opportunities For Existing Opportunities For Existing BusinessesBusinesses

(1) 2009- Goal is survival !

(2) Manage costs

(3) Focus on helping key customers- work with them

(4) Selective targeted customer acquisition

(5) Add low-cost differentiator(s)

(6) Contingency plans- costs/people/cash

(7) Show your employees the “love”

(8) Manage inventory

(9) Keep an eye out for opportunity