Lecture 1: Introduction, Identifying Ideas & Business Opportunities

Dr Bernard LeongCTO & Co-founder

MPS 812 Course Taught in:

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Course Objectives: I am not teaching you to be an entrepreneur.

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Learn the tools of setting up new enterprises.

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To Introduce the Entrepreneurial Process & Preparation of Business Plan for New Ventures.

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Basic Understanding and Application of Business Strategies, Marketing Strategies and Accounting for New Ventures.

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Basic Understanding of Intellectual Property Issues that any businesses may face.

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Entrepreneurship: the activity of organizing, managing, and assuming the risks of a business or enterprise.

Entrepreneur: an entrepreneur is a person who engages in the activities mentioned above.

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“The Entrepreneur always searches for change, responds to it & exploits it as an opportunity” -

Peter Drucker

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Inventor(Ivory Tower) Entrepreneur

Promoter(Evangelist)

Manager,Adminstrator

GENERAL MANAGEMENT SKILLS

LOW

LOW

HIGH

HIGH

CREA

TIVI

TY &

INNO

VATI

ON

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Core & Desirable Attributes

Core AttributesCommitment & DeterminationLeadership, Opportunity SeekerTolerant of Risk, CreativityAbility to work in chaosA d a p t a b i l i t y, C o u r a g e , Motivation to Excel

Desirable Attributes

INTELLIGENCE

CREATIVITY &INNOVATIVENESS

ENERGY, HEALTH &EMOTIONAL STABILITY

VALUES

INSPIRATIONAL

KNOWS ITALL

IMPULSIVENESSANTI-ESTABLISHMENT

PERFECTIONIST

LACK OF DISCIPLINE

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Types of Entrepreneurship

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Social Entrepreneurship: Creation of Business or Innovation focus on solving a social or worldly cause.

Example: World Toilet Organization - Jack Sim (Singapore)http://sgentrepreneurs.com/social-entrepreneurship-sustainable-development/2009/06/30/jack-sim-world-toilet-organization/

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• In 1991, India has 20M people suffering from blindness (Population of 850M at that time).

• Required to provide cataract removal so that the patient has 95% of improved vision.

• Common method used in developing countries: Intracapsular surgery without intraocular lens (ICCE)

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• Aravind Eye Hospital founded in 1976 by Dr Govindappa Venkataswamy.

• Aravind evolved itself not just as a healthcare service giver but also as a social enterprise that helps to deal with the blindness problem in India. It treated 2.4M poor Indians over 30 years.

• Interesting Features: Eye Surgeries run 24 hours with doctors focus on surgery and nurses focus on pre and post eye care. Free surgeries for the poor and also a top class R&D centre on eye treatment in the world.

• Invested by the Acumen Fund

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Intra-preneurship: Creation of a new business withinan existing organization (tech oriented)

Corporate Entrepreneurship: refers to the process whereby firms engage in diversification thru internal development

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How do we understand Entrepreneurship & Entrepreneurs as an economic activity for a

country?

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Organizations in Singapore Government

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Key Organizations within NTU for Entrepreneurship

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Enterprises in SG• Small & Medium Enterprises are

defined in SPRING Singapore in terms of fixed assets investment & number of employees.

• Manufacturing enterprises with net fixed assets investment of S$15M and below.

• Non-manufacturing enterprises with 200 employees and below.

• 99% of enterprises are SMEs, and employ 6 out of 10 workers & contribute half to National GDP.

http://www.business.gov.sghttp://www.spring.gov.sg

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The Global Entrepreneurship Monitor Frameworkhttp://www.gemconsortium.org

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Early Stage Entrepreneurial Activity by Country

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Level of Entrepreneurial Activity by Age in Singapore (GEM 2006)

TEA = Total Entrepreneurial Rate (Early Stage Startup Rate)

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World Bank: DoingBusiness.Org

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The Big Picture

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What  is  the  problem  you  are  trying  to  solve?

Are  there  customers  or  there  is  an  exis8ng  market  for  your  solu8on?

Who  are  the  exis8ng  players  from  partners  to  compe88ors?  How  are  they  benchmarked  against  your  idea?

What  type  of  resourcesdo  you  need  to  solve  your  problem?  Mentors,  Partnerships  orResources?

Once  you  work  that  out,  Execu8on  is  key.

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Window of Opportunity• Describes the time period in

which a new firm can realistically enter into the market.

• New entrants (2nd movers onwards) will enter into the market once the window is opened.

• Interesting to note: Google is not the first in the search business nor Facebook in the social network business.

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When is an idea an opportunity?• Create or add value to

customer.• Solve a significant problem,

removing a pain point or meeting demand.• Have robust market, profit

margin and money marketing.• Good fit with founder &

management team at the right time & place

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Focus on idea and market of the idea.

Talk to industry leaders and players in the same space as the idea.

A typical opportunity analysis plan has four sections:

1. Description of the idea and its competition.

2. Assessment of the domestic and international market for the idea.

3. Assessment of the entrepreneur and the team.

4. Discussion of the steps needed to make the idea the basis for a viable business venture.

Opportunity Analysis

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Observing Market Trends

Solving the ProblemFinding Gaps in the

marketplace

How to Identify an Opportunity

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1. Observing Trends

Observing Market Trends

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Solving the Problem

2. Solving a Problem/Pain Point

• Notice a problem & finding a way or solution to solve it.

• Observing trends and ask people around what their problems are.

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Finding Gaps in the marketplace

• Finding a gap in the marketplace.

• Oftentimes, big corporations might give up niche markets which new companies can take advantage of.

• Niche markets can be scaled up to a mainstream market or allow disruptive technologies to go mainstream.

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Root of Change/Chaos/Discontinuity Opportunity Creation

Regulatory Changes/Change in Government Legislation or laws

Telecommunications, Social (New) Media, Medical,CPF changes

10-fold change in 10 years or less Moore’s law, Real Estate market boom or bust

Reconstruction of value chain and channels of distribution

Superstores, Internet Stores

Existing management/investors burnt out/under-managed

Turnaround, New capital structure

Market leaders and customers obsessed or customer blinded

Ignore small and niche customers, creation of niche businesses

Entrepreneurial Leadership New vision and strategy, generation X thinking

Proprietary or contractual changeTechnology innovation: Patent, license, contract, franchise or

copyrights or distributorship

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Feasibility Analysis37

Feasibility Analysis Process

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Feasibility Analysis• The process of determining

whether a business idea is viable.

• Preliminary evaluation of a business idea .

• Conducted for the purpose of determining whether the idea is worth pursuing

• Determine to a certain degree of probability the possibility of whether idea is viable

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Product/Service Feasibility Analysis

• Assessment of overall appeal of product or service being proposed.

• Determine whether there is a market for the product or service.

• The two components of a product/service feasibility: Concept & Usability Testing.

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Preparing a Concept Statement• A concept statement is

developed before a company undertakes product/service feasibility analysis.

• One page description of a business that is distributed by entrepreneur for startups to people who are asked to provide feedback on the potential of the business idea.

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Preparing a Concept Statement• Description of product or service being

offered.

• Intended target market

• Benefits of product or service.

• Description of how product will be positioned relative to similar ones in the market.

• Description of how product or service will be sold & distributed.

• Information about founder or founders of the firm

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Model for Opportunity Recognition

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References• McKinsey & Co., “Starting Up”

• Robert et al, “New Business Ventures & the Entrepreneur”

• Kotler et al, “Marketing Management: An Asian Perspective”

• Megginson & Byrd, “Small Business Management”

• Timmons & Spinelli, “New Venture Creation”

• Thompson, Strickland & Gamble, “Crafting & Executing Strategy”

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