How to go from business idea to successful business

1. Where do new ideas come
from?

2. Todays objectives
• An understanding of the different places new ideas can come from
• How to develop customer friendly ideas using design thinking
• Knowledge of the ten steps in creating a new product or service
• How to test new ideas – choosing which ideas can work and which maybe won't

3. What did they create?

4. Invented the friction match. Didn’t
patent it and his idea got
copied. 500 billion are now sold
each year in the United States of
America alone
Invented the smiley face. Only
made $45

5. Invented the fidget spinner. Made
£0!!! She patented the idea but let
the patent lapse
Invented the biro pen. Sold the
patent to Marcel Bic for £2m. Since
then more than 1 trillion pens have
been sold. If he made just 1 cent
from each he would have made a
thousand million dollars

6. Don’t believe the experts!
“That’s an amazing invention,
but who would ever want to use
one of them?”
(US President Rutherford B.
Hayes, after participating in a
trial telephone conversation
between Washington and
Philadelphia in 1876).
“Television won’t be able to
hold onto any market it captures
after the first six months. People
will soon get tired of staring into
a box every night (Darryl F.
Zanuck, Head of 20th Century
Fox, 1946)

7. Don’t believe the experts!
“The horse is here to stay, but the
automobile is only a novelty, a fad”
(President of Michigan Savings
Bank, 1903, advising Henry Ford’s
lawyer not to invest in the Ford
Motor Company – disregarding the
advice, he invested $ 5,000 in stock,
which he sold several years later for
$ 12,5 million).
“I think there is a world market
for about five computers
(Thomas J. Watson Sr.,
Chairman of IBM, 1943)

8. The innovation in the dual-cyclone vacuum cleaner came from applying
industrial dust extract technology to domestic vacuum cleaners.
James Dyson had the idea when he installed an industrial dust extraction
system incorporating a large, 30 foot high cyclone dust extractor to
remove excess powder from the atmosphere in a powder coating plant.
As James Dyson himself describes it: “It occurred to me at that moment
that there really was no reason why it should not work in miniature – using
a cyclone about the size of say a Perrier bottle”.
James Dyson and the vacuum cleaner

9. Where do new ideas come from?
Where do
new ideas
come
from?
Customers
(Unmet
needs)
Gaps in the
Market
New
Technologies
Performance
Failures
New insights
and ideas
Cost and
Efficiency
Savings

10. The Candle Problem
You have a candle, a box of
drawing pins, and a book of
matches, and are tasked to affix
the lit candle to the wall so that it
will not drip wax onto the table
below.

11. The founder of Vision Express took the plunge after
his wife cried when her optician told her that she’d
have to wait seven days for new glasses

12. George de Mestral was a Swiss engineer. Returning
from a walk in the forest one day he noticed cockleburs
sticking to his dog’s coat. Intrigued, he put a cocklebur
under a microscope and noticed that the surface
consisted of thousands of tiny hooks that readily stuck to
tiny loops in his clothing. Having noticed that zip
fasteners often had a habit of sticking he wondered if the
principle of tiny hooks and loops could be used to
develop a new type of fastener for clothing. It took him
eight years and resulted in “Velcro” which is now used
throughout the world.
George de Mestral and Velcro

13. Ideas
That said ideas do not have to be:
• Imaginative
• Unique
• Different
There is nothing wrong with delivering something that already exists
The key is to have a Unique Selling Proposition and a Customer Value
Proposition

14. Types of innovation
Business Model Innovation involves changing the way business is done in terms of
capturing value
Process Innovation involves the implementation of a new or significantly improved
production or delivery method
Product Innovation involves the introduction of a new good or service that is new or
substantially improved. This might include improvements in functional characteristics,
technical abilities, ease of use, or any other dimension
Service Innovation is similar to product innovation except that the innovation relates to
services rather than to products

15. A competitors business model?
Value
Proposition
Revenue
model
Who?
Value
Chain
What do they
offer to their
customer?
How do they
create value?How do they
make money?
Who is their
target
customer?
What?
How?
Value?
Who?
What can you learn?
What can you
change to create an
idea?

16. Who – every business model serves a certain customer group. Who, therefore, is in
your target customer segment?
What – is being offered to the target customer. The important aspect here is not the
actual product or service but the elements which the customer values (CVP)
How – To build and distribute the value proposition the business has to master several
processes and activities. This, in addition to, your resources and capabilities creates
your value chain
Value – How are you going to generate revenue? How are you going to make
money?

17. Design thinking and idea development

18. New product / service development phases
Empathise
Define the
problem
Ideate Idea screening
Concept
development and
testing
Marketing strategy
development
Business case
Product
development
Test Marketing Commercialisation

19. Empathise and form a problem
Step 1 – design a few questions to ask people in the room
Step 2 – carry out some initial research – ask people in the room
Step 3 – define a problem

20. Defining the problem

21. Step into your customers shoes
Select
customer
segment
Identify
customer
activities
Identify
customer
pains
Identify
customer
gains

22. Customers (potential customers)
Customer Jobs –
(activities)
Jobs describe the
things your potential
customers are trying
to get done. These
could be tasks they
are trying to
perform, problems
they are trying to
solve or needs they
are trying to satisfy
It is important to
acknowledge that
not all jobs /
activities have the
same importance
Angle Tip
When carrying out potential customer
research its important to first identify
who your potential customers might
be. Don’t waste your time asking
people their views on products or
services that they will not buy.
•For example, mowing the lawn, playing a sport
Functional
Jobs
•When a customer wants to look good or gain power
status
•For example – brand aspiration – Ferrari, Hugo Boss
Social Jobs
•When customers seek a specific emotional state such
as peace of mind or feeling secure
•For example – private healthcare
Personal
jobs
Supporting
Jobs
• Buyer of value – physically choosing and purchasing
• Cocreator of value – those that leave feedback
• Transferrer of value – reselling a product, upcycling a
product

23. Empathise
Customer pains
• Anything that annoys
customers before,
during or after trying to
get a job (activity done).
• Pains also describe risks
– potential bad
outcomes related to
getting a job (activity)
done badly
• Function – this does not work
properly
• Social – I look bad in this
• Ancillary – its annoying
Undesired
outcomes,
problems and
characteristics
• These are things that prevent
customers from starting their
activity – I can’t afford it, I
don’t have the time
Obstacles

24. Customer gains
Customer gains
• Gains describe
the outcomes and
benefits your
customers
want. Some
gains are
required,
expected and
some are desired
and some would
even surprise
them.
• These are gains without which the solution would
not work
• For example, a smartphone making a phone call
Required
gains
• Relatively basic gains that we expect
• For example – an iphone being well designed and
looking good
Expected
gains
• These are gains that go beyond what we expect
• For example – our smartphone to sync with other
areas of our life – e.g. email
Desired
gains
Unexpected
gains
•These are gains that go beyond customer
expectation and desire

25. Ideate

26. Screening your idea with De Bono Thinking
Hats
• White hat
• Information and data. Neutral
and objective
• Black hat
• Difficulties, weaknesses,
dangers, spotting the risks
• Red hat
• Feelings, preferences, likes,
dislikes
• Yellow hat
• Positives, plus points
• Green hat
• Ideas, alternatives,
possibilities, solutions to black
hat issues
Evolve and redesign if required

27. Market research to help screening
Wider world
Industry
Competition
Customers

28. PESTLE
Bigger
picture
Political
Economic
Social
Tech
Legal
Environmental

29. Porter's five forces
Potential
Entrants
Substitutes
Competitive
rivalry
Potential
entrants
Buyers
Substitutes
Suppliers
What is the
threat?
What is the
threat?
How much
choice?
How much
choice?

30. Porters 5 forces
Micro environment
• Five Forces model helps identify the changes in another sources of competition
within an industry
• Each force is not independent of each other. Pressures from one can cause an
increased level of competition
• The greater the competition the more difficult it will be for you as a new business
to gain customers
• And the more important it is for you to be different in a way your customers will
value

31. Porter's 5 forces
Threat of entry
• Dependent upon the ability to overcome the barriers to entry
• These factors need to be overcome to compete successfully
• They can be viewed as providing only delays and not permanent barriers to
entry
• Economies of scale
• Capital requirement of entry
• Access to distribution channels
• Experience
• Expected retaliation
• Legislation or government action
• Differentiation

32. Porter's 5 forces
Threat of substitutes
• Substitution reduces demand for a particular class of products or services, e.g.
email reducing the demand for postal services
• This depends on whether the substitute provides a higher perceived benefit or
value
• Substitution may take different forms
• Product for product substitution – email vs postal service
• Substitution of need – more reliable appliances require less maintenance
• Generic substitution – indirect competition

33. Porter's 5 forces
Power of buyers and suppliers
• Buyer power high when
• Few buyers
• Alternative sources of supply
• Component or material cost is high percentage of total cost
• Switching cost is low

34. Porter's 5 forces
Power of buyers and suppliers
• Supplier power high when:
• Few suppliers
• Switching costs are high
• The brand of the supplier is powerful

35. Developing an MVP
• Make your idea real as quickly as
possible
• A MVP is a representation or prototype
of your product
• Not finished or polished
• Goal is to design and produce a MVP
to explore customer interest
How
• Storyboard
• Drawings
• Renders
• 3D prototypes
• Which MVP’s create value for you?
• Which ones should we progress with and
which ones should we ditch?
• What is missing?
• What would you like to see?
• What should be left out?
• What should be added?
• Could there be other options?
Minimum viable product Questions to ask of a MVP

36. Causes of new idea failures
Overestimation of market size
Product design problems
Idea incorrectly positioned, priced or advertised
Costs of product development
Competitive actions
To create successful new ideas, the company must:
• understand it’s customers, markets and competitors
• develop ideas that deliver superior value to customers.

37. Summary
New idea development can be a costly, timely and ultimately unsuccessful process
Plan each stage of the process and do not underestimate the time the whole process
will take
Listen to customer / potential feedback. Remember customers should be at the heart
of everything you do