Ideas are everywhere Raj Bhat. Change as a Source of Opportunity Status-quo is good for incumbent players (established companies) – they have products.

Ideas are everywhere

Raj Bhat

Change as a Source of Opportunity Status-quo is good for incumbent players (established

companies) – they have products or services, smooth operations, established business models, loyal set of customers, functional teams ……

Change brings in disruption – that in consumer tastes, cost structures, business models, expectations, level of expertise needed, distribution channels, payment mechanisms, availability of finance

Change produces a level-playing field which is actually loaded in favour of a new player because of his flexibility, adaptiveness

Examples of Entrepreneurs Exploiting Change

Japanese car manufacturers (1973)

Microsoft (1976-78)

Amazon and Dell (1990s)

Infosys (1989)

Broad Categories of Change Demographic – whole population (age distribution)

Economic – Emerging markets

Socio-Cultural -- Value systems, role models

Technological -- Variety, performance, cost

Political – democratic, authoritarian/totalitarian regimes. Free market vs socialistic policies (Britain in early 1980’s)

Legal and Regulatory -- liberalization (internal and external), enforcement of IP protection laws

Demographic Changes Median age

Working population as the % of total population

Life expectancy

Healthcare and Social Security Needs

Urban-Rural Ratio

Literacy

Male-Female ratio

Socio-Cultural Changes Value systems -- globalization and local assertions

Accepted norms of behaviour

Role of religion and spirituality

Pursuit of expertise, knowledge, wealth, possessions

Aspirations, fears, desires, anxieties

Measure of “time” – attention span, priorities, conveniences

Technological Changes Availability and wide-spread assimilation of

technology

Information Technology and it pervasiveness

Costs and disposable incomes

Performance, variety, ease of acquisition

Cross applications – interdisciplinary developments

Comfort level of technology usage

Examples: CD ROM drives and mobile phones

Economic Changes Gross Domestic Product and Per Capita Income

Level of exports and imports

Inflation and interest rates

Availability of credit at all levels

Size of the middle class

Various growth rates – industrial growth, productivity growth, exports growth

Level of unemployment

Political and Regulatory Changes

Transition from centrally planned to market economy (India, 1991)

Transition from communism to “market socialism” (China, 1978-1980)

Regulated, protected, closed economy

No IPRs (copyrights, patent laws)

Contract Enforcement and right to property

Labour and land reforms

India in the New Millennium “Young” country with rising literacy and prosperity

GDP growth rate of 7-8 % per annum

Growing middle class

Liberal, business like values, pursuit of wealth

High unemployment, imbalance in the development

India in the New Millennium Passages of IP laws (new patent regime)

Respect in the global community (functional democracy)

Atmosphere conducive to business -- no xenophobia, no insularity, no misplaced importance to “self-reliance”

Well developed “Institutions” – judiciary, capital markets, stock exchanges, media (free and independent), educational institutions, regulatory bodies (SEBI, FDA, ISI)

Analysis of Existing Entrepreneurs Truly new, novel and innovative ideas: 3-4%

Rest 96%

Enhancement -- improvement / refinement of features – cheaper, better, faster, more user-friendly

Extension to features

Specialization -- niche’ creation

Enhancement, Extensions and Specializations

Enhancements Extensions

Specialization

Examples of Enhancement DOS to Windows

Mechanical watch to quartz watch

Modem to ADSL modem

Ordinary TV to a flat screen TV

Desktop PC to a laptop PC to a tablet PC

Propeller engine to a jet engine

Most industrial innovations

Examples of Extensions Toothbrush with a built in toothpaste

Pen with a torchlight

Mobile handset with camera, FM radio,MP3 player ….

Memory sticks with MP3 players

Wristwatch with a calculator

Cinema Multiplexes

Day care centers (crèche) with tuitions

Swiss army knife

Examples of Specialization Low cost airlines (Ryanair, Easyjet, Air Deccan)

Boutique financial advisory services

Super-specialty hospitals

Finishing schools

Executive search firms (CxOs only, finance professionals only)

Possible Service Opportunities

Schools

Restaurants

Travel agency and tour operators

Pet shops

Bookshops

Gyms / weight loss clinics

Oxygen bars

Screening Ideas: Are they Opportunities?5 Questions

1. What important customer problem can you solve?

2. How are you going to do it?3. How many customers are there that are

willing to buy from you?4. Why can only you provide the solution?5. How can you defend against others?

Ask these questions BEFORE somebody else does!

Screening an Opportunity:5 Questions

1. What important customer problem can you solve?

How valuable?

How painful?

Remember, you need to change somebody’s behavior to buy your product.

Screening an Opportunity:5 Questions

2. How are you going to do it?

Business model:Product

Distribution

Location

Technology/Innovation

Service

Brand

Screening an Opportunity:5 Questions

3. How many customers are there that are willing to buy from you?

How many customers are there? (Market size)

How many will buy from you? (Market share)

Who will be your first customer (besides your Mom)?

Who will be your 100th?

Screening an Opportunity:5 Questions

4. Why can only you provide the solution?

How are you unique? What do you provide that nobody else can?

Screening an Opportunity:5 Questions

5. How can you defend against others?

Location, brand, patent (or other IP), great service, great taste, great fashion sense….