Introduction

Marketing: drills Alice and Bob about estimated target market size and potential. Not sure they nailed the demographic and psychographic characteristics of their proposed customer base. Presume unprecedented success in customer acquisition for such an unprecedented product, price seems too high, no reasonable plan for allocating resources toward acquiring and retaining customers, you have no idea how fast you will plow through the budget, only a fuzzy vision of the target, not even the beginnings of a compelling narrative of what is the value proposition of a Mindwidget. Operations: what it costs to hold Mindwidgets in, effect on your working capital, didnt properly forecast the diffusion rate of product or calculate carrying costs due to shrinkage and obsolescence. Finance: Valuation? How did you choose this discount rate and terminal value? How many different scenarios for revenue growth did you play out? How much control will you have to give up with this valuation to get the $650,000 you need to raise from venture capital investors? Where you got such a high price/earnings multiple when you calculated the market-comparable valuation? Org Behavior: Alice is an engineer; Bob is a sales guy, no one who has run a business before or has operations experience, worried about lack of a strong business leader, who will make tough decisions when the two of you disagree? Strategist: presumes Mindwidget will succeed, identify what their firm should own in terms of investments in assets and capabilities that would be so valued by the other constituents at the bargaining table that their business would empower their negotiation for Mindwidgets share of the revenues it generates. The value of what the firm chooses to own is more valuable if Mindwidget can preempt the investment of other firms or if Mindwidgets rivals exhibit inertia in making the same investments. Does your business make the firms in its industry better off or worse off? How should firms in the industry respond to the entry of your business? How would the response of the typical firm differ from the potential response of the industry leader? Could the entry of a firm like yours have been anticipated? If so, how?