BTMW 4012

TECHNOLOGY ENTREPRENEURSHIP

Lecture 2:
Business Opportunities: Identification,
Evaluation and Selection
Prof Dr. Izaidin Abdul Majid
izaidin@utem.edu.my

FPTT - UTeM 1
 WHAT IS IDEA?

Idea is a thought
e cti o n o f th ou g h ts that
orcoll ea
in th e m in d . A n id
generate
with
is usually generated
be
intent, but can also
a ted u n in te n ti o n a lly.
cre
 BUSINESS IDEA
It is the first milestone in the
entrepreneurship process. Characteristics
of a promising business idea are:
Fulfils customer need or solve a
problem
Innovative
Unique
Clear focus
Profitable in long run
 SOURCES OF IDEAS
Personal Experience
Hobby
Serendipity (Accidental
Discovery)
Social Networking
Interviewing successful
entrepreneurs
Exhibition
Customers
 INNOVATIVE
TECHNIQUES TO
GENERATE BUSINESS
IDEA
Combining two businesses
Recognising hot trend and determine
customer needs
Improving products, their functions
and offer new benefits
Recognising need in the market that is
not currently being serve
 RECOGNISING
OPPORTUNITY

The Entrepreneur always searches for

change, responds to it & exploits it as
an opportunity

Peter Drucker
 Opportunities

A business opportunity is said to exist when there

is a room to offer a product or service in a
particular market which fulfils customer demand
and preferences.

Every business start with an opportunity that can

be identified or taken advantage of within the
current environment.

FPTT - UTeM 7
 IDEA VS OPPORTUNITY

Idea Opportunity

A thought, impression/ A favourable set of

notion which May or may circumstances
not meet the criteria of an That creates a need for
opportunity new product/service

Many businesses fail not because the entrepreneurs

that started them did not work hard, but because
there was no real opportunity to begin with.
WHEN IS AN IDEA AN
OPPORTUNITY?

Solve a Create/add
problem value

Robust
market/profit
margin
Attractive Timely
QUALITIES OF
OPPORTUNITY

Anchor to create
Durable
value
 HOW TO IDENTIFY
OPPORTUNITY???

What is the customer pain??

WHAT DOES IT TAKE
TO HAVE A
SUCCESSFUL NEW
BUSINESS?

People

People

People
QUANTIFYING PAIN
WHY PAIN IS CRITICAL
(ESPECIALLY FOR TECH START-UPS)

Helps prevent Joe P. -- Billboard

Management
Conserve resources
Makes raising money easier
Reach breakeven sooner
Allows company employees to focus
Know what expertise is needed in employees
 WHAT HAPPENS
WITHOUT PAIN

Without Hire Pursue Spend Behind

Clear & People Multiple More Schedul
Present With Markets & Money e&
Pain Wrong Opportunit Than Over
Skills ies Planne Budget
d
 WHY PEOPLE (NOT PAIN)
GET
SO MUCH CREDIT . . .
Venture focus changes, this is normal
Early-Stage Tech Start-ups
Flounder
New management identifies the pain
and addresses it
Conclusion: People was the key to success.

Really: Focusing on a customer pain was the key.

UNCOVERING MARKET PAIN
POINTS
Unconventional Marketing Research:

1. You are Solving Your Own Problem

2. You Observe the Customer
3. Sub-segment for Opportunities
THINK OF
PHOTOGRAPHERS
PROBLEMS
1. Finding a good model.
2. Getting right pose from a model
3. Getting models to pay attention
4. Finding the right backdrop
5. Eliminating hot spots on backdrops
6. Setting up correct lighting
7. Etc, etc., etc.
THINK OF
PROBLEMS
PHOTOGRAPHERS
HAVE WHEN . . .
Finding the right backdrop
ASSEMBLING THE BACKDROP
Push Here

Arrow
T50

Staple
Exit
PRODUCT DESIGN
OPPORTUNITY
Push Here
Push Here
Arrow T50
 TAKE AWAYS:
1) To properly execute a successful technology
business, the Ideal Customer should be explicitly
identified and named.
2) Quantifying monetarily customer pain is critical.
3) The more painful, the better.
4) Time is not money for Start-ups trying to justify
its business model.
 Process of Identifying, Evaluating and
Selecting.

FPTT - UTeM 23
1. Identifying the Need and Wants of Customers.

Every business opportunity begin with

customer needs and wants.

Need- basic in life (food, clothing and shelter)

Wants The craving for something that is far
better than basic
2.Scanning the Environment
and Evaluating of Self and
the Community
Environmental Scanning
Structure of population, income and taste
Import and export data
Local resource and technological
breakthrough
Industrial linkage
Development project by the public and
private sector
Local and foreign newspaper and magazine.
Social problem
Government policies and regulation
Self Evaluation
Experience
Knowledge and skill
Financial situation
Interest
Networking
Values/Norms and the community
3. Screening of Business
Opportunities
Legality
Monopolistic Power and Level of

Competition
Capital Requirement
Risk

Liquidity level
Loan
Credit
Foreign Exchange
4.Selecting a Business opportunity
and preparing a business plan
Entrepreneur will end up with only one
business opportunity.
Whether the opportunity can be implement

or not will depend on a comprehensive

study of the various business function on
Business Plan.
Techniques for Generating Ideas

Brainstorming Focus Groups

Library and
Internet Research

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Brainstorming
Brainstorming
Is a technique used to generate a large number of ideas and
solutions to problems quickly.
A brainstorming session typically involves a group of
people, and should be targeted to a specific topic.
Rules for a brainstorming session:
No criticism.
Freewheeling is encouraged.
The session should move quickly.
Leap-frogging is encouraged.

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Focus Groups
Focus Group
A focus group is a gathering of five to ten people, who have
been selected based on their common characteristics relative
to the issues being discussed.
These groups are led by a trained moderator, who uses the
internal dynamics of the group environment to gain insight
into why people feel the way they do about a particular
issue.
Although focus groups are used for a variety of purposes,
they can be used to help generate new business ideas.

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Library and Internet Research

Library Research
Libraries are an often underutilized source of information
for generating new business ideas.
The best approach is to talk to a reference librarian, who can
point out useful resources, such as industry-specific
magazines, trade journals, and industry reports e.g. Business
Times, Wall Street Journal etc.
Simply browsing through several issues of a trade journal or
an industry report on a topic can spark new ideas.

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 Library and Internet Research

Examples of Useful
Large public and Search Engines and
university libraries Industry Reports
Market Research
typically have access Malaysia
to search engines LexisNexis Malaysia
and industry reports BizMiner
that would cost ProQuest
Mintel
thousands of dollars
to access on your
own.
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Library and Internet Research

Internet Research
If you are starting from scratch, simply typing new
business ideas into a search engine will produce links to
newspapers and magazine articles about the hottest new
business ideas.
If you have a specific topic in mind, setting up Google or
Yahoo! e-mail alerts will provide you with links to a
constant stream of newspaper articles, blog posts, and news
releases about the topic.
Targeted searches are also useful.

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Other Techniques
Customer Advisory Boards
Some companies set up customer advisory boards that meet
regularly to discuss needs, wants, and problems that may
lead to new ideas.
Day-In-The-Life Research
A type of anthropological research, where the employees of
a company spend a day with a customer.

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Encouraging New Ideas
Establishing a Focal Point for Ideas
Some firms meet the challenge of encouraging, collecting,
and evaluating ideas by designating a specific person to
screen and track themfor if its everybodys job, it may be
no ones responsibility.
Another approach is to establish an idea bank (or vault),
which is a physical or digital repository for storing ideas.
Encouraging Creativity at the Firm Level
Creativity is the raw material that goes into innovation and
should be encouraged at the organizational and individual
supervisory level.

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What Is Feasibility Analysis?

Feasibility analysis is
the process of
determining whether a
business idea is viable.
Feasibility It is the preliminary
Analysis evaluation of a
business idea,
conducted for the
purpose of determining
whether the idea is
worth pursuing.

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When To Conduct a Feasibility Analysis
Timing of Feasibility Analysis
The proper time to conduct a feasibility analysis is early in
thinking through the prospects for a new business.
The thought is to screen ideas before a lot of resources are
spent on them.
Components of a Properly Conducted Feasibility
Analysis
A properly conducted feasibility analysis includes four
separate components, as discussed in the following slides.

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 Forms of Feasibility Analysis

Industry/Target Market
Product/Service Feasibility
Feasibility

Organizational Feasibility Financial Feasibility

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Feasibility Analysis

Role of feasibility analysis in developing

business ideas.

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Education, Inc. publishing as 3-
Prentice Hall 41