What Opportunity is Best
For Your Business?
Dr Peter Kelly
School of Science, Aalto University
What Can We Learn From Wile E Coyote ?
Analytical Thinkers PLAN
Analytical Thinkers Fire Up Excel
What do we teach?
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Traditional Roadmap
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Search for new high potential opportunity
Light bulb goes on
Write business plan
Raise money
Hire great team
Build product/offering
Orchestrate big launch
Achieve steady or hockey stick growth
Trade sale or IPO
Retire on beach
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Does Traditional Roadmap Work?
– 98% of all new US businesses do not raise funding
from angels or venture capitalists
– 70% of new businesses start with less than
$20.000 in founding capital
– 1 in 6 of INC 500 fastest growing companies
started on less than $1.000 (including Dell
Computer 1984)
Does Traditional Roadmap Work?
• Only 6 of 1.000 business plans get venture funding
• Of those 60% go bankrupt
• Fewer than 2% of ventures reach an IPO
• Yet what do we teach? And how?
Search and Select Strategy
• Market already exists in some form
• Undertake detailed analysis to identify
opportunities
• Assess market potential on basis of
segmentation and past demand
• Assemble resources to exploit the opportunity
How Could You Predict?
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Budget airlines (Southwest 1971)
Microlending (Grameen Bank 1976)
Online book sales (Amazon 1995)
Internet search (Google 1998)
Social networking (Facebook 2004)
Intuitive Thinkers Ask Profound Questions
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What Does Your Gut Tell You?
And here?
Or Here?
IDEA = ANYTHING
+ YOU
What is your
motivation or
passion?
• I want to start a business
• I want to be CEO
• This is a “hot” sector
• Investors like this space
• I want to be rich
• I am unemployed
• My boss says I should
I want to invest
my time doing
this because ...
OPPORTUNITY =
IDEA + ACTION
Opportunities Can Be Made
• Incomplete information
• Market that defies definition
• Consumers are not aware of their needs or
wants
• Confusing and conflicting signals abound
What Can We Do With Our Means?
What Are My Means?
• Who I am?
• Traits, abilities and attributes of entrepreneur/team
• What I know?
• Education, experience and expertise
• Who I know?
• Social networks
Risk Little, Fail Cheap
Affordable Loss
• Risking little implies thinking creatively about
how to bring cost of discovery down while …
• Determining your walkaway cost in terms of
time and money
• Time seems to be more expendable than money
• Depends on which type of money (earned income
versus found money)
• Returns are not solely monetary in nature
VIABLE VENTURE
= OPPORTUNITY +
COMMITMENT
Co-Create Solutions With Partners
Co-Created Solution
Co-Creation: Securing Partners
• Stakeholders bring new means to table
• Stakeholders invest what they can afford to
lose
• Open minded approach to the opportunity
• Buy-in as opposed to selling
• Look for partners with a “win-win” (reciprocation)
• Who deliver on their promises
• Who you like dealing with
The Element of Surprise
Who Could Have Guessed?
Could Be Transformed Into
Which Opens Up New Possibilities
Effectual Entrepreneurship
Holds Great Promise
• Why do we spend our time (means)
• What do we spend our time doing (affordable
loss)
• Who do we work with (co-creation)
• Open to and seeking out new perspectives
(surprise)
Some Insightful Reads
peter.kelly@aalto.fi
+358 41 503 4508