1. Idea to Business (Hint: it’s a journey not a task) Process Overview TL Faley, PhD Managing Director, ZLI April 3, 2008

2. Reality? Idea Business Plan Venture Financing Successful Company … And the steps you skip will destroy any chance of success WRONG

5. A Staged, Gated Process to Plan Innovation Source Business Hypothesis Business Hypothesis Business Feasibility Study Business Feasibility Study Business Plan Other entrants Other entrants Hypothesis strong enough to merit deeper investigation? Business merit planning/launching? Opportunity What is the product or service? Who are your users? Why do they buy? How does your business make money? Customers Market Industry Company Team Full Plan and Investor Pitch Assessment Integration

9. ZLI Activities for 2007-08 Frankel Commercialization Fund Wolverine Venture Fund Michigan Business Challenge & Intercollegiate Competitions Entrepreneurial MAP domestic & international opportunities Marcel Gani Internship Program (includes self-hosted internships) Williamson CoE/RSB E-education Initiative Entrepreneurial Studies Courses Action-based Learning New Business Development Seminars ZLI Office Hours, Coaching and Executive Consulting Counseling Michigan Growth Capital Symposium Private Equity Conference Entrepalooza: Exploration of entrepreneurship across multiple industries and business stages Symposia/Events Zell and Mondry Entrepreneurial Scholarships Mingle ‘n’ Match Academics

22. Business Positioning Evaluation Loop Business Hypothesis Influence Diagram Business Positioning Assessment Product Offering

23. Business Positioning Evaluation Loop Business Hypothesis Influence Diagram Business Positioning Assessment Product Offering

25. Value Chain: Material, Money, and information flow Design Manufacture Sales Consumer Distribution

26. Value Chains can be complicated…. The Commercialization of drugs

29. Teece’s Framework: Determining the optimal value-capture vehicle for your Intellectual Asset Niche Business Potential IAs have no capturable value Strong New Business Potential License to or Partner with CA holder Intellectual Asset Position is: Strong Complementary Assets are: Weak Generic Specialized If control the IA and the CAs, then you have the potential to create an extremely well-positioned business. Note: This assessment assumes that you are the IA holder, but do not currently have the complimentary assets necessary to fully commercialize your IA. Ref: David Teece, 1986

34. Business Positioning Evaluation Loop Business Hypothesis Influence Diagram Business Positioning Assessment Product Offering

36. Porter’s 5 Forces: Industry Analysis Industry Competitiveness Threat of New Entrants (Barriers to Entry) Bargaining Power Of Suppliers Threat of Substitute Products/Services Bargaining Power Of Buyers

38. Business Positioning Evaluation Loop Business Hypothesis Influence Diagram Business Positioning Assessment Product Offering

39. Innovative New Business Design Process Pyramid Business Environmental Influences Persona (target market segment) Product Idea (Starter Concept) Community Enabler (ex. technology) Solution (Positioning Statement) Bus Hypothesis Product Offering Innovation Source(s) What’s the difference?

41. Business Positioning Evaluation Loop Business Hypothesis Influence Diagram Business Positioning Assessment Product Offering

45. Developing a Feasibility Study More Detail – More Quantitative COPYRIGHT © 2006 THE REGENTS OF THE UNIVERSITY OF MICHIGAN ALL RIGHTS RESERVED

47. Business Assessment Framework TEAM DOMAIN Connectedness up, down, and across value chain Ability to execute CSFs Missions, aspirations, Propensity for risk Market Domain Industry Domain Macro-level Micro-level REF: The New Business Road Test , John Mullins © 2003. Market Attractiveness Industry Attractiveness Target segments benefits and attractiveness Sustainable advantage Large/growing? Move from Initial persona to other personas? Personas Porter’s 5 Forces Value-capture position (IA vs CA) (Teece, 1986) Product Differentiation (Intellectual Assets)

48. Opportunity  Assessment Building the foundation for the assessment phase The Business Hypothesis Market Domain Industry Domain Macro-level Micro-level Market Attractiveness Industry Attractiveness Target segments benefits and attractiveness Sustainable advantage Business Product Offering Intermediate Outcomes & Tools Opportunity Phase Assessment Phase Effort Community Map (user needs/desires & “Players”) Technology Map (benefits of existing, complimentary, future) Personas Solution (“starter”) Concepts Solution Positioning Statement Business Environmental Influences

54. Porter’s 5 Forces: Industry Analysis Industry Competitiveness Threat of New Entrants (Barriers to Entry) Bargaining Power Of Suppliers Threat of Substitute Products/Services Bargaining Power Of Buyers

65. Assembling The Full Business Plan Paul Kirsch Samuel Zell & Robert H. Lurie Institute For Entrepreneurial Studies January 25, 2008

83. Bus. Model: What do you do? Distribution Sales Marketing Mfg Product Design Technology Raw Materials

92. Risk Mitigation Type of Risk What happens Example of how to address Technology Science does not work repeatedly or in product Utilize prototypes extensively Market Customers aren’t paying OR adoption rates are lower Beta products provide early customer feed back opportunities Competition More competitors exist or they are stronger than anticipated Alter pricing strategy Management People in charge have skills that are misaligned to business Hire people with right skills for right phase; let others go Execution Missing milestones Emphasize right priorities Regulatory Product won’t pass current or pending regulations Move on regulations as early as possible; get “preliminaries” Financing Insufficient funds to continue or next round is in question Always stay in fundraising mode

99. The Document

113. Questions ?