Opportunity Recognition and
Idea Evaluation
Empowering Imagination Applying Knowledge Exploring Innovation
Tomorrow Seizing Opportunities Accelerating Business Inspiring T
Innovations Empowering Imagination Applying Knowledge
Explore Seizing Opportunities Accelerating Business Inspiring
TEomorrow
mpowering Imagination Applying Knowledge Exploring Innovations
Tomorrow Seizing Opportunities Accelerating Business Inspiring
Opportunity Recognition
 Discuss: What is the difference
between an opportunity and an idea?
Opportunity Recognition
Driving Forces of Value Creation:
 Opportunity driven
 Entrepreneur and team
 Fit and balance
 Integrated and holistic
Opportunity Recognition
Opportunity Driven:
What makes a good opportunity?
 Opportunity driven
 Entrepreneur and team
 Fit and balance
 Integrated and holistic
Opportunity Recognition
Opportunity Evaluations:
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Market size and growth potential
Technology
Personnel and team
Product value/characteristics
Internal challenges
Level of innovation and creativity
Opportunity Recognition
Maximize Potential with Limited
Resources
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Clear, concise description of the business
Unique features and proprietary rights
Overview of market potential
Strong team
Financial potential
Opportunity Recognition
The Product/Service Plan
 Bootstrapping (Barter, borrow, beg)
 Minimize and control resources
versus owning resources, such as
equipment, buildings, other…
Thinking money first can be a mistake.
Opportunity Recognition
Fit and Balance:
 Balancing Opportunity, and
Resources to create a successful
venture.
Opportunity Recognition
Resources
Opportunity
Business Plan
Opportunity Recognition
Opportunity
 Market Demand
 Market Structure & Size
 Margin Analysis
Opportunity Recognition
 Minimize & Control
Resources
vs. Maximize & Own
 Financial
 People
Opportunity Recognition
Evaluating Venture Opportunities Industry
and Market
Criteria:
 Customers
 Attainable Share
 Growth rate
 User benefits
 Product life
 Cost structure
 Capacity
 Value added
 Structure
 Size
Opportunity Recognition
Evaluating Venture Opportunities Economics and
Harvest Issues
Criteria:
 Time to BE
 Capital market
 ROI potential
 Capital requirements
 Exit strategy
 Value-added potential
 Cash flow
characteristics
BE = Break Even
ROI = Return on Investment
Opportunity Recognition
Evaluating Venture Opportunities
Competitive Advantages
Criteria:
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Fixed/variable costs  Response/lead time
Control over costs
 Legal advantage
Proprietary protection
Contracts/networks
Opportunity Recognition
Evaluating Venture Opportunities
Management Team
Criteria:
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Entrepreneurial Team
Industry and technical experience
Integrity
Intellectual honesty
Opportunity Recognitions
Evaluating Venture Opportunities
Personal Criteria
 Goals and fit
 Upside/downside issues
 Opportunity costs
 Desirability
 Risk/reward tolerance
 Stress tolerance
Opportunity Recognition
Venture Opportunities
1. They create or add significant value to
a customer or end user.
2. They do so by solving a significant
problem, or meeting a significant want
or need, for which someone is willing to
pay a premium.
Opportunity Recognition
3. They have a robust market, margin,
and moneymaking characteristics:
large with high growth; high margins;
early free cash flow; and attractive
returns to investors.
4. They are a good fit with the founders
and management team.