MAIN TOPICS: - What makes a good idea? - How to assess it? - The role of the business plan - Opportunity validation framework - Introduction to the business plan --- This session is part of a 10-weeks course given to master students of the SOLVAY BRUSSELS SCHOOL OF ECONOMICS AND MANAGEMENT by professor Olivier WITMEUR.

1. www.solvayentrepreneurs.be
DO I HAVE A GOOD IDEA?
SESSION 6 (out of 10)
OPPORTUNITY
ASSESSMENT
This session is part of a 10-weeks course
given to master students of the SOLVAY
BRUSSELS SCHOOL OF ECONOMICS
AND MANAGEMENT by professor Olivier
WITMEUR.

2. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
• What makes a good
idea?
• How to assess it?
• The role of the business
plan
• Opportunity validation
framework
• Introduction to the
business plan
• Solvay Entrepreneurs
Checklist (in French)
2
Desired Outcomes of the Session

3. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
The main steps towards your final project.
3
VALUE
PROPOSITION
BUSINESS
MODEL
ROADMAP
Key activities,
resources & partners
Revenues model &
costs structure
Problem-Solution fit
Product-Market fit
Market sizing
Competition
Stages & milestones
Get-Keep-Grow
Risks & scenario
FINANCE
P&L, cash and
balance sheet
Financing
CREATE
TEST
=
BUILD
MEASURE
LEARN
YOU

4. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
How many squares do you see?
4

5. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
OPPORTUNITY ASSESSMENT
FRAMEWORK
#1
Beyond technical feasibility, financial return and additional developments…

6. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Opportunity Validation Framework
6
Market
attractiveness
Industry
attractiveness
Customer readiness
to buy
Understanding of
the industry KSF
MARKET
(Buyers)
INDUSTRY
(Sellers)
MACRO
LEVEL
MICRO
LEVEL
* Adapted from John Mullins, The New Business Road Test (2006)

7. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Opportunity Validation Framework
7
Market
attractiveness
Industry
attractiveness
Customer readiness
to buy
Understanding of
the industry KSF
MARKET
(Buyers)
INDUSTRY
(Sellers)
MACRO
LEVEL
MICRO
LEVEL
* Adapted from John Mullins, The New Business Road Test (2006)

8. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Total Available Market (TAM)
– How large is the market if
all customers buy your product?
– Example: total LED market
Served/Serviceable Available Market (SAM)
– Focus on your own technology/services
– Example: Living colors LED market
< segment of total LED market
Serviceable Obtainable Market (SOM)
– Which realistic market share can be obtained by myself, considering competition,
countries, my sales/distribution channels and other market influences?
What are the supporting trends (PESTEL)
How fast will the market grow?
8
Marking sizing
TAM
SAM
SOM

9. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Influencing trends
9
Political
Economical
Sociological / Demographical
Technological
Environmental
Legal / Regulation
P
E
S
T
E
L

10. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Time to market
10
Sales
Time
Early
adaptors
Early
majority
Late
majority LaggardsInnovators
Opportunity
Window

11. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
• Market (niche) size
• Market growth (Compound Annual Growth Rate)
• Market share
Market > 20M€
CAGR > 20%
Potential market share > 20%
11
Easy to keep in mind
3 x 20

12. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Opportunity Validation Framework
12
Market
attractiveness
Industry
attractiveness
Customer readiness
to buy
Understanding of
the industry KSF
MARKET
(Buyers)
INDUSTRY
(Sellers)
MACRO
LEVEL
MICRO
LEVEL
* Adapted from John Mullins, The New Business Road Test (2006)

13. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
• Back to Design Challenge and Empathy Map
• Segment definition using:
– Who the customers are (e.g. sociological, behavioral description)
– Where the customers are
• Customer’s benefits à Easiness to sell
– Where is the need / the pain
– Ideal = Customer ROI calculation
• Customer gain / Price = Pay-back (in months)
13
Market Micro Level: Will the customer buy it?

14. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Opportunity Validation Framework
14
Market
attractiveness
Industry
attractiveness
Customer readiness
to buy
Understanding of
the industry KSF
MARKET
(Buyers)
INDUSTRY
(Sellers)
MACRO
LEVEL
MICRO
LEVEL
* Adapted from John Mullins, The New Business Road Test (2006)

15. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Porter’s five forces
15

16. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Identify the key players of your business ecosystem
– Your customers … and their customers (often the end-user)
– Your suppliers … and their suppliers
– Direct and indirect competitors (substitutes)
– Possible new entrants
– Opinion or policy makers
– Other key players/factors if any
Analyse the logic of their evolution
Define your relationship with these players:
– Competition
– Co-evolution
– Alliance
16
Business Ecosystems

17. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Opportunity Validation Framework
17
Market
attractiveness
Industry
attractiveness
Customer readiness
to buy
Understanding of
the industry KSF
MARKET
(Buyers)
INDUSTRY
(Sellers)
MACRO
LEVEL
MICRO
LEVEL
* Adapted from John Mullins, The New Business Road Test (2006)

18. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Back to Key Activities, Key resources and Key partners in the Business Model Canvas
• What does it take to be successful in this industry
• Resource-based view of the firm: Resources, Capabilities & Processes
Valuable
Rare
Inimatable = Proprietary Elements
Non substituable
18
Understanding Key Success Factors (KSF)

19. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
About virtual companies
(Sometimes a good starting point and/or food for thoughts)
19
Virtual
company
Centres de
recherche
Research
centers
R&D Subcontracting
License agreement
Centres de
recherche
Industrial
partnersProduction/Sourcing
subcontracting
Confidentiality agreement
Investors
Investment
agreement
Accountant
Consultants
Management
agreementCentres de
rechercheDistributors
Distribution
agreement

20. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Why you are unique
including core/unique resources as a source oc Sustainable Competitive Advantage
(SCA)
20
Sustainable
Competitive
Advantage
Team, know-how…
Technology, secrets,
patents…
Partnerships,
exclusivity…
Business model
First Mover
Advantage
Brand, location…

21. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Competition
21
X Y YOU
General information
• Turnover/sales
• Headcount
• … (nationality, age…)
Offering
• Product range description
• Main features (Feat.1, Feat.2; Feat.3, …)
• Brands
Sales & Marketing
• Pricing
• Distribution channels / sales force
• Localization
Strengths
Weaknesses
Positioning
• Differentiation factor #1
• Differentiation factor #2
• …
WHY YOU
ARE
UNIQUE

22. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Blue Ocean – Value curves
22

23. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Useful techniques
23
Statistics and press
Industry Analysts
+
Specialized press
Interviews with
customers / Focus
Groups / Pools
+
Observation
Interviews with
experts
+
Observation
MARKET INDUSTRY
MACRO
LEVEL
MICRO
LEVEL

24. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
INTRODUCTION TO
BUSINESS PLANNING
#2
24

25. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
• Prove the quality of the opportunity
• Explain the business strategy
• Define realistic and measurable targets
• Convince potential partners
• Create a benchmark for the management team in charge of implementing the
plan
25
Main targets of a business plan

26. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
• Who is in the management team?
• What do you sell? Why is it unique? To what needs do you answer?
• Who are the customers?
• What are your goals (the strategy)?
• What are the main risks?
• What are the development stages of the venture? What need to be done (the
action plan)?
• How do you sell?
• How and when go you make profits (the financial plan)?
• What is missing before you start?
26
The big questions

27. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
The Great Equalizer
27
Orientation Content Time Horizon
Short
Long
Map
Itinerary
Strategy
Operations

28. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
The Great Equalizer
28
Use Output Format
PPT
Text
Milestones
Budget
External
Internal

29. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
The Business Plan Process
29
Forecasts
Financings
Production
Marketing & Sales
Research &
Development
Administration
Vision
Business model
Team
Product or service
Market & industry
CONTEXT
1
STRATEGY
2
ACTION PLAN
3
FINANCES
4

30. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Typical business plan construction
30
Management
Team
Vision
Business Model
Production &
Supply Chain
Sales &
Marketing
Research &
Development
Organization &
Administration
Financial Plan
Opportunity
Market
& Industry
Stages
Milestones
Risk analysis
Plan B
Financing
Sensitivity
analysis

31. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
A more realistic process view
31

32. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR 32
NEVER STOP
WONDERING
&
ASKING!

33. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
A real passion for entrepreneurship education and entrepreneurs.
• Student entrepreneurs: 2x
• Full time entrepreneur: once, in a team of 5
• Coach: 500+ projects over the last 20 years
• (Advisory) Board member in multiple new ventures
• Policy making: 2x
• Director of Solvay Entrepreneurs
• PhD in entrepreneurship in 2008
• … never as an investor
My wife (as Colombo), no kids, one dog (Vicky).
33
Olivier Witmeur (Belgian, 46)

34. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Solvay entrepreneurs is the entrepreneurship center of the Université Libre de
Bruxelles. We support entrepreneurs through the development of their venture, from
an idea to a successful and sustainable business.
34
Solvay Entrepreneurs

35. Entrepreneurship Course – Session 1 - 2014 © Olivier WITMEUR
Let’s keep in touch!
352014%©%Olivier%Witmeur
FOLLOW US ON
LinkedIn.com/company/
Solvay-Entrepreneurs
in
Facebook.com/
SolvayEntrepreneurs
f
Twitter.com/
SolvayStart
t
SolvayEntrepreneurs.be
www
YouTube.com/user/
SolvayEntrepreneurs
Foursquare.com/
SolvayStart