Business Idea and Feasibility

IDENTIFICATION AND EVALUATION OF THE

OPPUTUNITY

• Identification and length of opportunity

• Real and perceived value of opportunity
• Risk and returns of opportunity
• Opportunity Vs personal skills and goals
• Competitive situation
Creativity and Innovation consists of...
……

SEEING…. what everyone else has not

seen,

THINKING….what no one else has thought,

and

DOING…. what no one else has dared

 Which Traits Describe You?
• Practical
• Determined
• life-of-party
• Individualistic
• Stern • Obedient
• Responsible • Peaceable
• Dynamic • Industrious
• Sociable • self-demanding
• Tolerant • Organized
• Polite • Dependable
• Sensitive
• Unassuming
• Independent
• Informal
• Moody
• Restless • absent-minded
• Inventive • Worrying
• Impulsive • Masculine
• Reflective • Logical
• Enthusiastic • Polished
• Excitable • Loyal
• Rational
• Versatile
• clear-thinking
• Popular
• Fashionable
• Preoccupied • good-natured
• Understanding
• Cheerful
 Highly creative individuals tend to describe themselves by these adjectives:
determined, independent, inventive, enthusiastic, individualistic, industrious,
absentminded, versatile, daring, dynamic, informal, impulsive, excitable, self-
demanding, unassuming, worrying, thorough, sensitive, restless, reflective,
preoccupied, moody.
Less creative, or noncreative, favor adjectives such as sincere, responsible,
tolerant, clear thinking, understanding, dependable, logical, life-of-the-party,
polite, popular, cheerful, obedient, polished, fashionable, stern, sociable, rational,
practical, peaceable, organized, masculine, loyal, good-natured.

The adjectives are taken from the Adjective Check List, developed by Dr. Harrison
G. Gough of the University of California, Berkeley. The actual test consists of 300
adjectives. Although not originally developed to assess creativity, this test has
successfully differentiated highly creative individuals from less creative or
noncreative.
CREATIVITY VS. INNOVATION
Creative as a prerequisite to innovation
• The terms creativity and innovation are often
used to mean the thing, but each has a unique
connotation.
• Creativity - is “the ability to bring something new
into existence. This definition emphasizes the
“ability”, not the “activity”, of bringing something
new into existence.
• Innovation - is the process of doing new thing.
• Innovation, therefore, is the transformation of
creative ideas into useful applications, but
creativity is a prerequisite to innovation.
Misconceptions About and the Realities of Great Ideas
 CONTEMPORARY PRACTICES
Ideate Frequently

At board meetings, people often feel its best to put a firm lid on any
suggestions that will lead to a clash of ideas and hurt the hierarchy.
Reliance Trends, however, follows the post-it system where members write
as many ideas they can think of to solve a problem. The postits are then put
on a board and ideas that are similar are clubbed together. Team members
vote to find out which can be better and this helps the company to "get every
bone to think out of the box and at the same time choose only those that are
practical," says CEO Arun Sirdeshmukh.

Get The Carrots Out

Incentives can get the best out of the team, and lend a healthy dose of
competition. At product services firm Adobe, patent bonuses are doled out,
which help in nudging employees to think differently. Events like Ideas
Unboxed, or Innovation Day, where the CEO gets a glimpse of the ideas,
help foster the right kind of creativity for the firm.

•
Bring In The Experts

Computer storage and data management company Netapp has hired a team of
lawyers who guide innovators in getting the right IP done. The lawyers, from all over
the world, assist those in the process of making the right products , says SR
Manjunath, HR head.

Don't Curb Ideas

"You can not ask employees to be creative and then put barriers saying they have to
be practical," says Prateek Srivastava, South head for advertising firm Ogilvy and
Mather (O&M ). Juniors tend to get burdened if they have to think whether their ideas
will get the returns. At O&M , there is a group of seniors whose job is to sift through the
ideas and select the appropriate ones. As the lower order rises up the ladder, they will
have the responsibility to do the same. "So at first, nine out of ten ideas will not work,
but as they become senior they will have the responsibility to get fewer but more
relevant ideas," says Srivastava.

Develop Leadership

A strong group of mentors at every step and act as a sounding board can help
companies let employees ideate and get the best out of them, keeping usability in
mind, says apparel and retail consultant, Ashesh Amin. . Reliance Trends uses the
'Ninja technique' , where a leader will be appointed to encourage more to think and
channelise ideating sessions.
 Barriers to creativity
1. Searching for the one right answer
2. Focusing on being logical
3. Blindly following rules
4. Constantly being practical
5. Viewing play as frivolous
6. Being overly specialized
7. Avoiding ambiguity
8. Fearing looking foolish
9. Fearing mistakes and failure
10. Believing “I am not creative “
 During periods of great change, answers don't last very long but a question is worth a lot.. We
have found that the most useful questions are open-ended; they allow a fresh, unanticipated
answer to reveal itself. These are the kind of questions children aren't afraid to ask. They seem
naive at first. But think how different our lives would be if certain questions of wonder were never
asked. Jon Collins of Stanford's Graduate School of Business has compiled the following list of
questions of wonder:

Albert Einstein: What would a light wave look like to someone keeping pace with it?

Bill Bowerman (inventor of Nike shoes): What happens if I pour rubber into my waffle iron?

Fred Smith (founder of Federal Express): Why can't there be reliable overnight mail service?

Godfrey Hounsfield (inventor of the CAT scanner): Why can't we see in three dimensions what is
inside a human body without cutting it open?

Masaru Ibuka (honorary chairman, Sony): Why don't we remove the recording function and
speakers and put headphones in the recorder? (Result: the Sony Walkman.)

Many of these questions are deemed ridiculous at first.

Other shoe companies thought Bowerman's waffle shoe was a "really stupid idea."

Godfrey Hounsfield was told the CAT scan was "impractical."

Masaru Ibuka got comments like: "A recorder with no speaker and no recorder -- are you crazy?"

Fred Smith proposed the idea of Federal Express in a paper at Yale and got a ‘C’.
 Generating Ideas

• Ways to Generate Ideas

– Environmental Scanning
– Creativity and Creative Problem Solving
– Brainstorming
– Focus Groups
TOOLS FOR BOOSTING
CREATIVITY
Reversal - Improving Products and
Services

How to use tool:

Reversal is a good tool for improving a
product or a service. To use it, ask the
opposite of the question you want to ask,
and apply the results.
The Method
State your problem in reverse. Change a positive statement into a negative one.
Figure out what everybody else is not doing.
Use the "What If" Compass
Change the direction or location of your perspective
Flip-flop results
Turn defeat into victory or victory into defeat
1. Make the statement negative For example, if you are dealing with Customer Service
issues, list all the ways you could make customer service bad. You will be pleasantly
surprised at some of the ideas you will come up with.
2. Doing what everybody else doesn't For example, Apple Computer did what IBM
didn't, Japan made small, fuel-efficient cars.
3. The "What-If Compass" The author (Charles Thompson) has a list of pairs of
opposing actions which can be applied to the problem. Just ask yourself "What if I
........" and plug in each one of the opposites. A small sample:-
Stretch it/Shrink It
Freeze it/Melt it
Personalise it/De-personalise it
...
4. Change the direction or location of your perspective Physical change of
perspective, Manage by Walking around, or doing something different.
5. Flip-flop results If you want to increase sales, think about decreasing them. What
would you have to do?
6. Turn defeat into victory or victory into defeat If something turns out bad, think
about the positive aspects of the situation. If I lost all of the files off this computer,
what good would come out of it? Maybe I would spend more time with my family?!
Who knows!
"
• SCAMPER is a checklist that helps you to think of
changes you can make to an existing product to create a
new one. You can use these changes either as direct
suggestions or as starting points for lateral thinking.

• The changes SCAMPER stands for are:

• S - Substitute - components, materials, people
• C - Combine - mix, combine with other assemblies or
services, integrate
• A - Adapt - alter, change function, use part of another
element
• M - Modify - increase or reduce in scale, change shape,
modify attributes (e.g. colour)
• P - Put to another use
• E - Eliminate - remove elements, simplify, reduce to core
functionality
• R - Reverse - turn inside out or upside down, also use of
Reversal.
• Substitute: Ask yourself what parts of the product, service or
process may be replaced by other things. This may include
components, objects, materials the product is made of, people and
roles involved in a process, etc. Example: use children instead of
adults to greet your restaurant guests.

• Combine: Look for ways to assemble together things which are

separate, to integrate steps and operations. Example: when
technicians make house service visits - have them suggest
upgrades or special offers to clients (e.g. Combine Technician and
Sales-person).

• Adapt/Adjust: Make the product or service or part of it better

suited to its environment or to things that come in contact with it, or
to a specific group of clients. Example: a real working telephone for
children - smaller grip, funny ring, colorful design.

• Modify: Change the properties of the product or service to make it

larger, smaller, of different colors, tastes, etc. Example: art pieces of
very small size, that must be viewed with a magnifying glass.
• Put to other use: Find other uses for the product or service,
that are different from the original intention. Example: a pencil or a
pen may also be used as a ruler if measures are drawn on its sides.

• Eliminate: Remove a major function or component of the product or

service. This may seem strange at first - as we are tempted to offer
ever more features to products. However - often it may lead to
innovative, simple and unexpected products that are high in
demand. Examples: shoes that have no color - "see-through"
shoes; A product that has no fixed price - the client chooses how
much they wish to pay after using it for a trial period.

• Rearrange or Reverse: Change the order of operation, turn things

upside down, or arrange the components in a new order. Example:
an online version of a book in which the chapters are arranged in
random order, not like the original printed version
For instance, imagine that you are a producer of computers
and printers, and you are looking for new products

• Substitute – use of high tech materials for specific

markets – use high-speed components?
• Combine – integrate computer and printer, printer and
scanner
• Adapt – put high quality ink in printer, use high quality
paper
• Modify – produce different shape, size and design of
printer and computer
• Put to another use – printers as photocopies or fax
machines
• Eliminate – eliminate speakers, colour screens, colour
ink etc…
• Reverse – make computer desks as well as computers
and printers, or computer chairs etc…
Brain storming

Provocation
•The consequences of the statement
•What the benefits would be
•What special circumstances would make it a sensible
solution
•The principles needed to support it and make it work
•How it would work moment-to-moment
•What would happen if a sequence of events was changed
•Etc.
Principles of Idea Evaluation
 Evaluating Ideas
• Four-questions approach
– Suggests evaluating entrepreneurial ideas revolves
around four basic questions
1. Do you love the business?
2. Are you skilled at the business?
3. Do you have experience at the business?
4. Is the business simply a fad or trend?
• Feasibility study
– A structured and systematic analysis of the
various aspects of a proposed entrepreneurial
venture designed to determine its workability.
 How to Evaluate Ideas
• Eight Questions to Consider
1. Do you have capabilities for the venture?
2. Are you ready to be an entrepreneur?
3. Do you have a passion for the venture?
4. Are you prepared emotionally to deal with the
challenges of being an entrepreneur?
5. Are you ready to work hard?
6. Do you have a realistic picture of the proposed
venture’s potential?
7. Are you educated about financing issues?
8. Are you willing and prepared to do continual analysis
of your venture?
 How to Evaluate Ideas
• Marketplace Potential Questions to
Consider
1. Who are the potential customers of your idea?
2. What similar or unique features do your proposed
idea have in relation to what’s on the market?
3. How and where will potential customers purchase
your product?
4. Have you considered how you will price your
proposed idea? Calculated your break-even point?
5. Have you considered how you will need to promote
and advertise your proposed entrepreneurial venture?
 Researching Competitors
• What is Competition?
– Competition is defined as organizations battling with
each other for some desired outcome
• Who are Competitors?
– Three ways to define possible competitors
1. The industry perspective (same product/service)
2. The marketing perspective (different industry/same
customer need)
3. The strategic perspective (groups of competitors with same
strategy)
Getting Competitor Information
• Evaluating Competitive Information
– Types of products or services offered by competitor?
– Major characteristics of these products or services?
– How do they handle marketing, pricing, distributing?
– What do they attempt to do differently from other
competitors?
– What are they good at?
– How large and profitable are these competitors?
– How do these competitors react when something (or
someone) new comes into the marketplace
Competitor Analysis Matrix
 Researching Financing Options

• Possible Funding Options

– Entrepreneur’s Personal Resources
– Angel Investors
– Financial Institutions
– Unusual Sources
– Venture Capitalists
– Public Offering
– Business Development programs
Evaluating Financing Options
Guidelines for Seeking Financing

1. Write a feasibility study and then a

business plan
2. Get professional advice and help
3. Get references
4. Go do it!
 • Main Components of a Business Plan
• A business plan can take many forms, depending on the venture. A four-person management consulting firm may
produce a leaner plan focused on service expertise and industry experience compared to a 20-employee widget
maker, which would also have to describe products, manufacturing techniques, competitive forces and marketing
needs, among other details. But most plans will include the following main sections:
•
• Executive summary
This is your five-minute elevator pitch. It may include a table of contents, company
background, market opportunity, management overviews, competitive advantages,
and financial highlights. It’s probably easiest to write the detailed sections first and
then extract the cream to create the executive summary. Try to keep it to just a
couple of pages.

• Business description and structure

This is where you explain why you're in business and what you're selling. If you sell
products, describe your manufacturing process, availability of materials, how you
handle inventory and fulfillment, and other operational details. If you provide services,
describe them and their value proposition to customers. Include other details such as
strategic relationships, administrative issues, intellectual property you may own,
expenses, and the legal structure of your company.
• Market research and strategies
Spell out your market analysis and describe your marketing strategy, including sales
forecasts, deadlines and milestones, advertising, public relations and how you stack
up against your competition. If you can’t produce a lot of data analysis, you can
provide testimonials from existing customers.

• Management and personnel

Provide bios of your company executives and managers and explain how their
expertise will help you meet business goals. Investors need to evaluate risk, and
often, a management team with lots of experience may lower perceived risk.

• Financial documents
This is where you provide the numbers that back up everything you described in your
organizational and marketing sections. Include conservative projections of your profit
and loss statements, balance sheet, and your cash flow statements for the next three
years. These are forward-looking projections, not your current accounting outputs.