What Opportunity is Best For Your Business?

Dr Peter KellySchool of Science, Aalto University

What Can We Learn From Wile E Coyote ?

Analytical Thinkers PLAN

Analytical Thinkers Fire Up Excel

What do we teach?

IDEA

IDEA

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EXIT

EXIT

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PLAN

Traditional Roadmap• Search for new high potential opportunity• Light bulb goes on• Write business plan• Raise money• Hire great team• Build product/offering• Orchestrate big launch• Achieve steady or hockey stick growth• Trade sale or IPO• Retire on beach

Does Traditional Roadmap Work?

– 98% of all new US businesses do not raise funding from angels or venture capitalists

– 70% of new businesses start with less than $20.000 in founding capital

– 1 in 6 of INC 500 fastest growing companies started on less than $1.000 (including Dell Computer 1984)

Does Traditional Roadmap Work?

• Only 6 of 1.000 business plans get venture funding• Of those 60% go bankrupt• Fewer than 2% of ventures reach an IPO

• Yet what do we teach? And how?

Search and Select Strategy

• Market already exists in some form• Undertake detailed analysis to identify

opportunities• Assess market potential on basis of

segmentation and past demand• Assemble resources to exploit the opportunity

How Could You Predict?

• Budget airlines (Southwest 1971)• Microlending (Grameen Bank 1976)• Online book sales (Amazon 1995)• Internet search (Google 1998)• Social networking (Facebook 2004)

Intuitive Thinkers Ask Profound Questions

Buy Food

What Does Your Gut Tell You?

And here?

Or Here?

IDEA = ANYTHING + YOU

What is yourmotivation orpassion?

• I want to start a business• I want to be CEO• This is a “hot” sector• Investors like this space• I want to be rich• I am unemployed• My boss says I should

I want to investmy time doing this because ...

OPPORTUNITY = IDEA + ACTION

Opportunities Can Be Made

• Incomplete information• Market that defies definition• Consumers are not aware of their needs or

wants• Confusing and conflicting signals abound

What Can We Do With Our Means?

What Are My Means?

• Who I am?• Traits, abilities and attributes of entrepreneur/team

• What I know?• Education, experience and expertise

• Who I know?• Social networks

Risk Little, Fail Cheap

Affordable Loss

• Risking little implies thinking creatively about how to bring cost of discovery down while …

• Determining your walkaway cost in terms of time and money

• Time seems to be more expendable than money• Depends on which type of money (earned income

versus found money)

• Returns are not solely monetary in nature

VIABLE VENTURE = OPPORTUNITY + COMMITMENT

Co-Create Solutions With Partners

Co-Created Solution

Co-Creation: Securing Partners

• Stakeholders bring new means to table• Stakeholders invest what they can afford to

lose• Open minded approach to the opportunity• Buy-in as opposed to selling

• Look for partners with a “win-win” (reciprocation)• Who deliver on their promises• Who you like dealing with

The Element of Surprise

Who Could Have Guessed?

Could Be Transformed Into

Which Opens Up New Possibilities

Effectual EntrepreneurshipHolds Great Promise

• Why do we spend our time (means)• What do we spend our time doing (affordable

loss)• Who do we work with (co-creation)• Open to and seeking out new perspectives

(surprise)

Some Insightful Reads

peter.kelly@aalto.fi+358 41 503 4508