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Opportunity recognition and evaluation
Prof. Tyler WryWharton School
but first, a little poll
Takes a well-rounded approach to opportunity.
Looking for opportunity, as long as it stays on point.
No ideas: Obsessed withtrying to figure out
What’s Up With Kanye!
some popular myths.
Popular myths
1. the solitary genius / great man myth2. innovation
Good ideas come from bolts of insight and visionary geniuses
myth 1
Popular myths
1. Innovation is free flowing
Entrepreneurs are cavalier risk-takers
myth 2
myth 3
the best ideas are fully baked
Popular myths
1. the solitary genius / great man myth2. innovation
Good ideas come from bolts of insight and visionary geniuses
myth 1
Good ideas come from outsiders and Rebels
myth 1(a)
Popular myths
1. the solitary genius / great man myth2. innovation
Good ideas come from bolts of insight and visionary geniuses
myth 1
Popular myths
1. the solitary genius / great man myth2. innovation
myth 1
Good ideas come from knowledge and need
Where do breakthroughs comes from?
Where (most) breakthroughs actually come from.
Where (most) breakthroughs actually come from.
knowledge + recombination
Popular myths
1. Innovation is free flowing
myth 2
Entrepreneurs are cavalier risk-takers
Popular myths
1. Innovation is free flowing
(good) entrepreneurs are ruthless at reducing risk!
myth 2
What helps?
– First: you need to think about what you want to get out of a venture – this determines success metrics that you apply
– Then you need to engage in rigorous analysis to assess the opportunity
• this is lots of work; whether an idea is good or not only becomes apparent over time
• Systematic and disciplined research is the key
Foundational Issues• Does the idea seem feasible?
• How will the idea make money?
• Who will it make money from?– Size/growth?– Segments? – Ability to pay?– Key trends
(growth, regulatory changes, broader societal trends)– Investment climate (hot areas? VCs? Corp acquisitions?)
• Competitive analysis– Competitors? Competitive intensity?– Substitutes? Threat of New Entrants?
Data sources
Stop 1
Marcella Barhnardt, Wharton Librarian (part-time magician)
Stop 2
Stop 3
Where do I find these people?
Personal networks
Professional networks
Online
myth 3
the best venture ideas are fully baked
myth 3
the best venture ideas are the accumulation of small experiments
What if your innovation is something no one wants?
Eric Ries @ IMVU
“We launch and then iterate, learning what the market wants and making it great”
[marissa meyer]
“grit is often the single-most predictor of entrepreneurial success”
[jonah leher]
Four Principles of Entrepreneurial Opportunity
1. The best opportunities come from knowledge and need
2. Breakthroughs ideas come from knowledge recombination
3. A disciplined approach to evaluating opportunities is crucial!
4. Good ideas only become apparent over time. Ongoing learning is key!
Opportunity recognition and evaluation
Prof. Tyler WryWharton School