I G N I T I N G YO U R B U S I N E S S I D E A S

Not all ideas are Business Ideas

What makes a good business idea?

It starts with a good idea.Good ideas fill a void or solve a problem:

How?

It makes somebody... Happier Healthier Richer More attractive

...at a price they are willing to pay

But...

Great ideas alone don’t make great businesses!

How is a great business idea different?

You have to consider more than just the idea Micro level market attractiveness Macro level market attractiveness Macro level industry attractiveness Sustainable advantage Team

Micro level market attractiveness

Vs.

Macro level market attractiveness

Market sizeShort term market growthLong term market growth

Macro level industry attractiveness

Porter’s five forces:1. Threat of entry2. Supplier power3. Buyer power4. Threat of substitutes5. Competitive rivalry

Macro level industry attractiveness1. Threat of entry Is it easy or difficult for

companies to enter this industry?

Cost Specialist knowledge Route to market

Macro level industry attractiveness2. Supplier power Do suppliers to this

industry have the power to set the terms and conditions?

How many suppliers are there?

How transparent are they?

Macro level industry attractiveness3. Buyer power Do Buyers have the power

to set terms and conditions?

What are their alternatives? How easy is it to find them?

Macro level industry attractiveness4. Threat of substitutes Is it easy or difficult for

substitute products to steal my market?

Think about the customer need

Macro level industry attractiveness5. Competitive rivalry Is the competitive rivalry

intense?

Assess your competitors fairly.

If you know about them, they may well be smarter and better funded than you.

Sustainable comparative advantage

Firstly, there must be an advantage (for your customers) Better Faster Cheaper

Then, you have to sustain it.

Sustainable comparative advantage

Proprietary elements Patents Trademarks Trade Secrets

Superior organisational processes

(Vs. )Business model is economically viableCommitment to innovation

“Best beats first”Jim Collins

Team

Ability Team as a whole Find the gaps and fill them Experience counts

Alignment Commitment to the same goals Passion It will be hard

Team

Network How connected are you?

Suppliers to your business (and your competitors) Distributors and customers (today and in the future) Competitors and substitutes

Names, titles, & contact information please.

It’s not what you know, it’s who you know, so get networking!

What makes a great business idea?

A good idea – Somebody needs/wants itA good market – Large and growingA good industry – You can enter (with an advantage)A great team – Find the right people (they might not be

your friends)