the entrepreneurs dilemma
DESCRIPTION
An analytical approach to discovering viable business ideasTRANSCRIPT
The Entrepreneur’s Dilemma
Solving “the problem problem”
A brief tutorial prepared by Arnold Wytenburg
September 2011 Based partly on previous work by Dan Roberts and Robert M. White
© Arnold Wytenburg & others 2
• Being successful as an entrepreneur is as
simple as “finding a problem and solving it”
© Arnold Wytenburg & others 3
• There are plenty of unsolved problems
these days, right?
• So…
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• Why then, with so many opportunities
available, is it still so hard to come up with
good business ideas?
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• Quite simply, “the problem” stems from a
lack of focus… there are just too many
interesting things to pursue, leaving us
without any clear idea of where to start
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• What’s needed is a straightforward and
systematic way to cut through the clutter of
the marketplace so you can quickly ‘focus
in’ on the best opportunities
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• Richard M. White devised such a method
called “market gap analysis”, aimed
squarely at helping entrepreneurs steer
themselves toward high-potential business
ideas
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Step 1
• Choose an industry
– Pick one that interests you
– Or, you can pick one at random
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Step 2
• State your objectives
– Define what sorts of opportunity you want to
pursue and those you don’t
– Aim for at least 15 items in your list
• Opportunities which don’t meet these
criteria will be eliminated so that you can
focus more clearly on those that matter
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Step 2
• Some examples:
– Must be a tangible product, not a service
– Must be Biz-2-Biz, not Biz-2-Consumer
– Must have a potential market capitalization of
at least $300 million
– Must leverage proprietary expertise with
information technologies
– Must be in a growth market
– Must require less than $50,000 seed capital
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Step 3
• Segment your chosen industry into its
major components
• Try a few different schemas, for example:
– Producers, consumers, wholesalers, retailers,
distributors
– Seniors, adults, teens, children, family
– Local, regional, national, international
– Spring, summer, fall, winter
– Professional, semi-professional, amateur
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Step 3
• Now pick one schema from your list, and
then choose one category from this
schema to use in the next step
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Step 4
• Segment again using the category you
picked at the end of Step 3
– As before, do this using multiple schemas
• Examples for the “professional” category
within the health industry:
– Doctor, nurse, technician, administrator
– Regulator, researcher, advisor
– Hospital, clinic, mobile facility
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Step 4
• Again, pick one schema from your list, and
choose one of the major categories in this
schema to use in Step 5
• FYI, if at any time you run into a dead end
with the category you choose, you can
always back up a level and pick another
one – as long as you follow only one ‘leg’
at a time
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Step 5
• Segment the market one more time using
the category you just picked in Step 4
• For example, for “researcher” I might
have:
– Clinical, field, academic
– Senior, supervising, junior, intern
• Again, try lots of different schemas
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Step 5
• Note that for a complex industry, you may
need to “divide, redivide, and redivide” to a
deeper level:
– There is no guideline for how deep is deep
enough… trust your instincts and remember
that you can back up or go deeper at any time
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Step 6
• Eliminate categories based on your stated
objectives from Step 2:
– Using the category breakdown you created in
Step 5, eliminate anything that doesn’t mesh
with your list of objectives
– Sometimes the cut is obvious, other times you
might need to do some further investigation
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Step 7
• Select a category from among those which
have not been eliminated and list any
problems that characterize this category
• List as many problems as you can identify,
even those which may seem trivial:
– Aim for at least 20 or 30 problems
– Ask others to contribute, especially anyone
with first-hand knowledge of the target domain
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Step 8
• Eliminate any problems that don’t mesh
with your list of objectives from Step 2
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Step 9
• Perform a gap analysis:
– List out all the remaining problems along the
left side of a matrix
– List out all of the objectives along the top row
of the matrix
– Check off any intersections where solving a
given problem (the rows) satisfies a stated
objective (the columns)
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Step 9
• From this matrix, identify the problem that
best meshes with your goals, interests,
and expertise
• This ‘problem domain’ is where you are
most likely to find high-potential business
ideas
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What next?
• At this stage, you should have a much
clearer idea of where to focus your
attention and resources
• Next steps will involve finding candidate
solutions for the problem domain you’ve
identified and translating each of these
into a value proposition