Will it work Walking through the process of evaluating an idea for feasibility
The DEC Education: Will it Work?
Apr 24, 2015
ABOUT THE CLASS
In this class, you'll learn how to talk directly to stakeholders - from potential customers to investors to advisors. Understand factors that will have a large financial impact on your business and learn how to mitigate risk. Students will work through the key elements necessary to sustain a business and how to ensure the company stays focused on key factors for sustainable growth and success. Learn the tasks that must be preformed in your business before getting to your first customer.
THE OBJECTIVES
To establish basic direction on uncovering a potential opportunity, developing a plan, and successfully implementing a short-term strategy for long term results.
To understand the basics of the competitive landscape in a market, potential threats and identifying differentiating factors.
To provide basic direction on conducting a feasibility analysis for new product or service ideas.
To determine the steps from idea to launch for a company and understanding what makes a company a company versus just an interesting idea.
ABOUT THE INSTRUCTOR, Stewart Youngblood
Stewart is Program Director of Tech Wildcatters in Dallas, TX. Tech Wildcatters top B2B mentorship-driven seed fund and startup accelerator. The 12-week accelerator “bootcamp” runs every spring, investing in B2B web, software, mobile and other startups. The companies get $25,000 in seed funding, intensive top-notch mentorship, and the opportunity to pitch to investors and corporate development/IT teams at the end of program “Pitch Day”.
PRESENTED BY, The Dallas Entrepreneur Center
The Dallas Entrepreneur Center (DEC) is an entrepreneurial support system dedicated to bringing together the resources, support and opportunities that Dallas-area entrepreneurs need to start, build and grow their businesses. Launched in 2013, the DEC connects entrepreneurs, corporations, investors, educators and other business and community leaders in order to advance the economic interests of the Dallas community. Learn more at thedec.co.
In this class, you'll learn how to talk directly to stakeholders - from potential customers to investors to advisors. Understand factors that will have a large financial impact on your business and learn how to mitigate risk. Students will work through the key elements necessary to sustain a business and how to ensure the company stays focused on key factors for sustainable growth and success. Learn the tasks that must be preformed in your business before getting to your first customer.
THE OBJECTIVES
To establish basic direction on uncovering a potential opportunity, developing a plan, and successfully implementing a short-term strategy for long term results.
To understand the basics of the competitive landscape in a market, potential threats and identifying differentiating factors.
To provide basic direction on conducting a feasibility analysis for new product or service ideas.
To determine the steps from idea to launch for a company and understanding what makes a company a company versus just an interesting idea.
ABOUT THE INSTRUCTOR, Stewart Youngblood
Stewart is Program Director of Tech Wildcatters in Dallas, TX. Tech Wildcatters top B2B mentorship-driven seed fund and startup accelerator. The 12-week accelerator “bootcamp” runs every spring, investing in B2B web, software, mobile and other startups. The companies get $25,000 in seed funding, intensive top-notch mentorship, and the opportunity to pitch to investors and corporate development/IT teams at the end of program “Pitch Day”.
PRESENTED BY, The Dallas Entrepreneur Center
The Dallas Entrepreneur Center (DEC) is an entrepreneurial support system dedicated to bringing together the resources, support and opportunities that Dallas-area entrepreneurs need to start, build and grow their businesses. Launched in 2013, the DEC connects entrepreneurs, corporations, investors, educators and other business and community leaders in order to advance the economic interests of the Dallas community. Learn more at thedec.co.
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Transcript
Will it workWalking through the process of evaluating an idea for feasibility
Hi, I’m Stewart Youngblood
• Program Director Tech Wildcatters
• B2B Forbes Top 10 seed accelerator
• Co-Founded Obvious Apps
• Specialties: Angel Investment, Venture Capital, Finance
Agenda
• Technical Feasibility• Evaluate Market
Opportunity• Competitive Analysis• Customer Validation• Develop Cost Model• Revenue Model• Scalability• Cash and Financing• Team and Capabilities• Pitches
Technical/Functional Feasibility
• The first step in any ideation process is evaluating whether something is technologically or functionally feasible (but actually, there’s a step 0!)
• Commit 1-2 hours to research online or through industry experts on whether your concept can actually be achieved
• Be wary of common mistakes (i.e. perpetual motion machine)
Exercise #1 - Idea Feasibility
• Discuss: Head’s Up display for driver of motor vehicle with GPS, phone/text, weather, and other information. Aftermarket product that uses modern LED/OLED tech to create banner across top of front windshield and car’s battery for operation
Evaluate Market Opportunity
• Define where your idea fits into a market category and research solutions that exist
• Decision criteria depends on players in the market, total size of market needed for you to feel comfortable
• Build a bottom’s up case (number of users/customers times price)
Competitive Analysis
• Evaluate size, scale, reach, key features, and pricing for top market owners and put into matrix
• Beware, sometimes no competition is NOT a good thing
• Find a market where competition lacks key features or customer pain
Exercise #2 - Competition
• Create a matrix of competitive solutions:
• GPS
• Smartphones
• Imbedded systems (i.e. Ford’s Sync)
Customer Validation
• Use competitive matrix to develop a set of key features and differentiators
• Contact as many potential customers you can via email or phone to generate feedback on key features and potential prices
Exercise #3: Customers
• Identify 3-4 key feature benefits and discuss among the group how you would acquire customer feedback
• Split into teams and interview other teams for feedback on your key benefits/value proposition
Develop Cost Model
• Research potential manufacturing or development cost of your idea and begin to build a cost model
• Don’t forget to add 10-20% to original estimates
• Include shipping, packaging, delivery, support, and other costs
Revenue/Business Model
• Determine how you will sell this product and make money in order to determine a price point (see cost model) and ensure profitability
• Evaluate 2-3 revenue models in order to test assumptions and generate highest rate of return
Exercise #4: Revenue Model
• Create a price point and process for generating revenue by evaluating and discussing 2-3 revenue models.
Scalability
• Look into how you will deliver your product/service for the first 10, 100, and 1,000 customers in order to understand whether the concept is scalable
• Research automation, outsourcing, and alternative manufacturing/development sources
Cash and Financing
• Use your assumptions on cost and pricing to build a basic one year cash flow projection to understand hard costs associated with launching
• Evaluate feasibility of net cash need versus potential upside of idea to consider whether you can fund this or if investors would fund this
Exercise #5: Financing
• Use initial costs/revenue assumptions to ascertain development costs, go to market and product launch costs, and implement these into a high level 12 month cash flow statement. Project early sales units based on conservative assumptions.
Team and Capabilities
• Evaluate and recognize your capabilities and strengths to determine whether you possess the necessary skills to execute
• Determine whether, based your evaluation, you can attract talent to supplement your own skills
Exercise #6: Team
• Split into teams and discuss experience, training, and skills to determine what role you would each take and what skills you would need to acquire. Develop a plan and timeline on how you would acquire skills (not everyone has to be full time)
Do It
• Understand that entrepreneurs are problem solvers and that risk is about calculation
• Jump in, with the knowledge that execution drives success, not the quality of the idea
The Pitch
•Leverage what you’ve learned to craft your 30-second elevator pitch
•Starting a pitch deck will help you continue to hone all items we’ve talked about
Q&A
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