Opportunity Assessment:
or How Do I Know I Have A Great Idea?
Is this a good idea?
Doggie Bags. Doggie Bags will be high quality plastic bags packaged in an
attractive box that looks like a dog house to offer a convenient and clean
way to pick up after your pet. Grocery bags often have holes and are
messy to store. Sandwich bags are too small for a larger dog’s output. We
will sell Doggie Bags in grocery store pet aisles for an average retail price
of $4.99 for 75 bags. Competing pick up bags sold only at specialty pet
stores are expensive, as high as twice our proposed price, unattractively
packaged and not specifically designed for the challenges of handling dog
waste. For example, our bags will have a gusseted bottom to easily grab
the materials and no seams to eliminate tiny holes that might bring
hands into contact with the waste.
Is this?
MediRev. MediRev helps the 300,000 small medical and dental practices,
clinics and hospitals in the U.S. collect the money they have earned. Because
of the complexity of the US healthcare system, doctors and hospitals are
collecting on average 45-55% of what they bill. Insurance companies use
different care codes, require certain doctors’ notes, push claims off to other
providers, deny claims and just generally make it difficult for doctors to get
paid. MediRev uses highly trained claims specialists in a call center based in
India to follow up on and collect those claims the doctor’s office manager
typically ends up writing off. If the claims are 60 days old or less we typically
collect 70-90% of all bills and we can even collect 50% or more of older
claims. We charge the customer 15% of what we collect – raising revenue
received from 45-55 cents on the dollar to 65-77 cents – after our fee.
How do I know I have
a good business idea?
ID’s Breakthrough Innovation Model
User Criteria
desirability
5
ID’s Breakthrough Innovation Model
Technical Criteria
feasibility
6
ID’s Breakthrough Innovation Model
Business Criteria
viability
7
ID’s Breakthrough Innovation Model
Entrepreneurial Criteria
motivation
8
ID’s Breakthrough Innovation Model
Entrepreneurial Criteria
User Criteria
Technical Criteria
Business Criteria
9
Need
Feasibility
Market
Competition
Economics
Execution
Personal
So, What Is the Right Score?
Who knows?
Entrepreneurs seek
confidence – not
certainty
Caveat Fundator
Top Six Industries for Startups
Businesses
Customer
Consumers
Professional/
technical
services
9.3%
Finance, insurance,
Construction
real estate
6.6%
Arts/
8.0%
entertainment
6.9%
Retail
Accommodations
trade
/food services
19.2%
14.1%
Source: Scott Shane, The Illusions of Entrepreneurship, 2008
Four Fertile Underserved Industries
Businesses
Manufacturing
4.1%
Wholesale
Transportation/
trade
warehousing
2.2%
1.7% Healthcare/
Customer
Consumers
Source: Scott Shane, The Illusions of Entrepreneurship, 2008
social assistance
4.3%
What We See in the NVC
Businesses
?
Customer
?
?
Consumers
?
Personal
Interests
Observed
Market Need
Inspiration
Increasing Your Chances
Businesses
?
Customer
?
?
Consumers
?
Personal
Interests
Observed
Market Need
Inspiration
So, how do I know I have
a good business idea?
You won’t with certainty
until you launch the
company and it succeeds.
Thank you.
Waverly Deutsch
Clinical Professor of Entrepreneurship
University of Chicago Booth School of Business
waverly.deutsch@ChicagoBooth.edu
773-612-1188