What to Run Before Your Business Plan
Course
John W. Mullins
London Business School
© John Mullins 2006
1
What’s Terrific About Your Business Plan
Course?
• Pulls things together
• Applies theory learned in the core
• Gets students engaged: work on their
own ideas
• Learning by doing
© John Mullins 2006
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What’s Not So Good About Your Business Plan
Course?
• A “sales” mindset: no critical thinking
• Puts them in a difficult position vs.
judges
• Some students disengage if the idea is
not theirs
• Most plans are pretty bad! Why?
© John Mullins 2006
3
One Solution:
Opportunity Assessment Course
• Course project: a feasibility study for an
opportunity they choose
• No confirmation bias: “go” or “no-go” are
both OK
• No embarrassment with judges
• Brings together strategy, marketing, OB
• Jump-starts the business planning
© John Mullins 2006
4
How Do You Build It?
• The seven domains of attractive
opportunities
© John Mullins 2006
5
Motivated by Warren Buffett…
“When a business with a
reputation for poor
fundamentals meets a
management team with a
reputation for brilliance…
it’s the reputation of the
former that remains intact.”
© John Mullins 2006
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ProCom
• Bootstrapped the business with money
from 3Fs to prove the model
• Raised $4 million from GE Capital when
e-learning was all the rage
• Have treaded water since, no exit, but
still around: the “living dead”
© John Mullins 2006
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Oxiden
• Raised £5 million from 3i
• Took two years to get product to market
• Then, a very lengthy sales cycle
followed
• There was another solution…
• Died after 4 years
© John Mullins 2006
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Darian Holdings
• Raised small amount of angel money
• An opportunity arose to buy a
competitor at a very attractive price
• Having considerable success
© John Mullins 2006
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Glencoren
• Turned down by several investors, but
did eventually raise a small amount for
proof of concept
• Now trying to raise the next round
• A very long lead time play – changing
surgeons’ behavior takes a long time
© John Mullins 2006
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Research Question
How can entrepreneurs (and
investors, too?) best assess
market opportunities?
© John Mullins 2006
11
Point of Confusion #1:
The Market / Industry Distinction
• What’s a market?
• What’s an industry?
• These are frequently confused!
© John Mullins 2006
12
The Seven Domains of
Attractive Opportunities
Market Domains
Market Attractiveness
© John Mullins 2006
Industry Domains
Industry Attractiveness
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Point of Confusion #2:
The Macro / Micro Distinction
• Large and growing markets are
important, but…
• Structurally attractive industries (in a
five forces sense) are also important,
but…
© John Mullins 2006
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The Seven Domains of
Attractive Opportunities
Market Domains
Macro
Level
Market Attractiveness
Industry Domains
Industry Attractiveness
Micro
Level
Target Segment Benefits
and Attractiveness
© John Mullins 2006
Sustainable Advantage
15
Point of Confusion #3:
What’s Crucial about Entrepreneurs and Their
Teams…
• It’s not found on their CVs
• Not simply about “chemistry” or
“character” or “entrepreneurial drive”
© John Mullins 2006
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The Seven Domains of
Attractive Opportunities
Market Domains
Macro
Level
Industry Domains
Market Attractiveness
Industry Attractiveness
Mission,
Aspirations,
Propensity
for Risk
Ability to
Execute
on CSFs
Team
Domains
Micro
Level
Connectedness up
and down Value Chain
Target Segment Benefits
and Attractiveness
© John Mullins 2006
Sustainable Advantage
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In Summary, for the Seven Domains…
• Scores are not additive: summing the
scores across the seven domains is
meaningless
• Strong scores at the micro level can
mitigate poor macro-level scores
© John Mullins 2006
18
What to Do Before (Or in?) Your Business Plan
Course?
• The seven domains
– Identify key weaknesses
• Questions to be answered
– Suggest avenues for reshaping the
opportunity if not mitigated by other
domains
– Identify key strengths
• Crucial in telling your story to resource
providers
© John Mullins 2006
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Remember
Warren Buffett’s Words
“When a business with a reputation
for poor fundamentals meets a
management team with a
reputation for brilliance, it’s the
reputation of the former that
remains intact.”
© John Mullins 2006
20
For the Rest of the Story…
The New Business Road Test
© John Mullins 2006
21
To Download an Examination Copy of Chapter
1…
www.faculty.london.edu/jmullins
Instructor website at
www.pearson-books.com/roadtest
See Amazon for Reader Reviews
© John Mullins 2006
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