IDEA GENERATION

AND EVALUATION
Dalhia Mani
nsrcel
Myths
 Good Ideas usually involve high technology

K.KUMAR & Adam Grant

“Farmers get only 30% of the ultimate price of the crop sold”, Laxminarayan
Srinivasaiah, co-founder of Jivabhumi
 CONTEXT:
Banks favor a wealthy clientele, to whom
they lend large sums and request
guarantees to hedge their risks.
Poorer population are excluded from this
systems which push them further into
poverty.

Grameen idea:
Become a bank for the poor; lend
small sums to group of people
enabling them to set up small
businesses and use social
pressure in place of guarantees.
10
Myth 2
Low cost models are less profitable
 CONTEXT:
Poor customers with very small amounts in
their bank accounts are not a profitable
segment for banks.

NICKEL idea:
Provide a bank account at the
corner store : a basic account
opening, simple debit card, and no
overdraft options.
 CONTEXT:
Cut hassle, cut cost of real estate

Beauty Bubble idea:

Offer an inexpensive haircut (no
shampoo) in convenient location. A
haircut takes 10 min, costs 10 € and
does not require an appointment.
22
Myth 3
External constraints kill ideas

K.KUMAR & Adam Grant

 CONTEXT:
Local food, land for farming

BRIGHT FARMS idea:

Fresh produce from the
roof. Install hydroponic
(without soil) greenhouses
on roofs or near
supermarkets. 26
More Myths
 Ideas are scarce
 Ideas should not be shared or they will be stolen
 Brilliant people create brilliant ideas,
Which lead to success/fame/money
If I failed my idea must be stupid
So I must be stupid

K.KUMAR & Adam Grant

Thomas Edison’s creepy talking doll
..and his ghost busting machine
Nikola Tesla’s portable earthquake
maker
Myths……
 Good Ideas usually involve high technology
 External constraints kill ideas
 Ideas are scarce
 Ideas should not be shared or they will be stolen
 rBrilliant people create brilliant ideas
 Brilliant ideas lead to success/fame/money
 If I failed my idea must be stupid
 If I failed, I must be stupid

K.KUMAR & Adam Grant

Myth Busting…..
 Good Ideas often use existing technology
 External constraints are breeding grounds for ideas
 Ideas are everywhere.
 Ideas become better when shared.
 Create 100 ideas and you will hit a few brilliant ones.
 “Doing” leads to success/fame/money.
Idea generation techniques
 Brainstorming: Don't put on your evaluating hat.

 Painstorming: Come up with a list of problems you

or those around you face, and that you think are
interesting to be solved.

 Hobbystorming: Think about your hobbies or

passions and use that as the source of your business
idea.
Evaluating Ideas
 Is there a market? How big is the market? Is it likely
to grow?
 Is it doable? For me?
 Will it be profitable? Is it scalable? Is it durable?
Opportunity identification matrix TM
Prof Ramachandran, ISB

High
Discontentment

Good potential Highest potential

For success For success

Low Criticality High Criticality

Not for Challenges in

now innovation

Low
Discontentment
Assessing Opportunity Doability
Feasibility
Is it doable?
Market Technical Feasibility
Market Feasibility
Can I do it?
Personal What will it take to do it?
Whom else do I nee?
Value
Is it worth doing?
Financial Feasibility
Do I want to do it?
What turns me on about it?
Why do I want to do it?
Opportunity Characteristics: Significant profit
potential

 To qualify as an opportunity, a business must offer

the potential for significant profit

 But what is significant?

 Person seeking a lifestyle business will look for one

that can be passed on to the children
Profit potential (Contd.)

 Ambitious entrepreneurs may want a business that is

capable of
 turninga profit in 2-3 yrs,
 $10 million in sales within 5 yrs

 a 10-15% ROI

 a 20% annual revenue growth for 5 years

Opportunity Characteristics:
Durability/scalability

 Some opportunities are not durable because

 Thedemand dries up – fads?
 Low entry barrier lets in too much competition

 Some opportunities are not scalable because the

model relies on skills/resources that are not easily
replicable
Key Learnings
 Ideas are everywhere
 Problems/constraints are a great source of ideas
 Ideas don’t appear in a vacuum – Ideas are “You”
 Ideas change (improve?) in conversation
 Generating ideas is not hard
 Evaluating ideas based on:
 Isthere a market? How big?
 Doability. For me?
 Profitability/scalability/durability
References
 Suresh Bhagavatula, EM course Slides
 K. Kumar, EM Course Slides
 “Knowing a winning business idea when you see one,” W. Chan Kim and
Renee Mauborgne
 Odyssey 3.14, Laurence Lehman-Ortega and Helene Musikas