Ideas and Innovation: Creating
ideas you can profit from
Tom Kalchik
Ideas and Innovation:
Creating ideas you can
profit from
Tom Kalchik, Assoc. Dir.
Michigan State University
Product Center
MSU Product Center
What it is
 Structure

– Strategic Marketing Institute
– Client Services
– Innovation Academy

Process
– Three phase model
MSU Product Center for Agriculture and Natural Resources
The Intuition about Process

First, can you tell a plausible “fairy tale”
about the idea of the venture?
– Market/customer driven
– Internally consistent and appealing
Then, can you reasonably make a profit
from the venture if everything goes
well?
 Finally, can you “prove” to yourself and
to others the venture’s potential to work
(feasibility)?

MSU Product Center for Agriculture and Natural Resources
What Is Needed to Launch a
New Venture?

What is a New Venture?
– A New Business or a New Product/Service

The Key Elements
– An Innovative Idea
– The Entrepreneurial Drive
– The Resources to Go to Market

The Prerequisite for Success: A
Business Plan that Puts the Key
Elements Together!
MSU Product Center for Agriculture and Natural Resources
Entrepreneurship

is a way of thinking, reasoning, and acting
that is opportunity obsessed, holistic in
approach, and leadership balanced.
 Habitual entrepreneurs – make a career out
of starting businesses, some working within
existing businesses and some in independent
startups. All have in common finely honed
skills in forging opportunity from uncertainty.
(“The Entrepreneurial Mindset : Strategies for Continuously Creating Opportunity
in an Age of Uncertainty,” Rita McGrath and Ian MacMillan, Harvard Business
School Press, 2000)
MSU Product Center for Agriculture and Natural Resources
Month of March
 6 workshops
throughout the State

MSU Product Center for Agriculture and Natural Resources
Agenda





What makes an idea unique, marketable and
profitable?
Does the idea match what consumers want
today?
What does it take to be an innovative
entrepreneur?
How do you take a new and unique idea to
market?
Are you ready to take the first step?
MSU Product Center for Agriculture and Natural Resources
What makes an idea unique,
marketable and profitable?
Differentiation
 Customer segmentation
 Supply chain issues
 Creating differentiated products
 Sources of differentiation
 Means of creating differentiation

MSU Product Center for Agriculture and Natural Resources
Creating Differentiation
Source
Means Physical
Change
Quality
Supply Chain
Change
X
Functionality
Form
Perceptual Service
Change
Change
X
X
Place
X
X
Time
X
Ease of
Posession
X
MSU Product Center for Agriculture and Natural Resources
X
X
Does the idea match what
consumers want today?

The Drivers – key functionalities
– Wellness
– Indulgence
– Convenience
– Value
– Ethnicity
– Demographics
MSU Product Center for Agriculture and Natural Resources
What does it take to be an
innovative entrepreneur?
Definition
 Inventory of ideas
 Paradoxes
 Myths and Realities
 Entrepreneurial test-self assessment

MSU Product Center for Agriculture and Natural Resources
Who can be an entrepreneur?

Anyone who wants to experience the
deep, dark canyons of uncertainty and
ambiguity; and who wants to walk the
breathtaking highlands of success. But
caution, do not plan to walk the latter
until you have experienced the former.
Quote from an entrepreneur
MSU Product Center for Agriculture and Natural Resources
Create your
own inventory
of ideas
NOW
MSU Product Center for Agriculture and Natural Resources
Paradoxes
An opportunity with no or very low
potential can be an enormously big
opportunity
 To make money you have to first lose
money
 To create and build wealth one must
relinquish wealth

MSU Product Center for Agriculture and Natural Resources
Technology
Year Developed
Household Electricity
1873
Telephone
1875
Automobile
1885
Airplane Travel
1903
Radio
1906
Television
1925
Videocassette
Recorder
1952
Personal Computer
1975
Cellular Phone
1981
World Wide Web
1990
Years to Reach 25%
of US Population
Source: Wall Street Journal
MSU Product Center for Agriculture and Natural Resources
Myths and Realities

Anyone can start a business
– Must recognize difference between an idea
and an opportunity
– Luck requires preparation
– Easy to start
– Hard to survive, sustain and build a
venture
MSU Product Center for Agriculture and Natural Resources
Myths and Realities

Entrepreneurs are gamblers
– Successful entrepreneurs take careful,
calculated risks
– Get other to share risks with them

Entrepreneurs want to run the whole
show
– High potential entrepreneurs build a team,
an organization, a company
MSU Product Center for Agriculture and Natural Resources
How do you take a new and
unique idea to market?
You’ve got the unique, marketable,
innovative idea!
 You’ve got the entrepreneurial drive!
 Now, how do you get the idea to market

– Gather the resources
– Put them into action
– The Prerequisite: A Business Plan
• A three-phase process!!!
MSU Product Center for Agriculture and Natural Resources
Are you ready to take the first
step?
The Challenge
 Will the idea work?
 How do I get started?
 Working time with counselor

MSU Product Center for Agriculture and Natural Resources
The Challenge You Face

To systematically turn a business or product
idea into a real start-up or launch.
 Desire often overwhelms reason.
– The glory of the idea
• “Build it and they will come.”
• “Everyone will want it.”
• “It’s the greatest thing since sliced bread.”
– Missing the logical flow of development
• Operational detail before concept/strategy development
• Production before marketing
• No consideration of the real return potential
MSU Product Center for Agriculture and Natural Resources
Results








336 participants
Average of 23 years of business experience
Average of 14 years in current business
Average of 62 miles traveled to attend
Usefulness of program – 4.15 out to 5
Met expectations – 4.28 out of 5
Improved understanding – 4.13 out of 5
70 new projects started
MSU Product Center for Agriculture and Natural Resources
Future Program
More details on idea generation
 More information on business planning

MSU Product Center for Agriculture and Natural Resources
MSU Product Center for Agriculture and Natural Resources