Transcript Ideas Generation

Ideas are
everywhere
Raj Bhat
Change as a Source of Opportunity

Status-quo is good for incumbent players (established
companies) – they have products or services, smooth
operations, established business models, loyal set of
customers, functional teams ……

Change brings in disruption – that in consumer tastes,
cost structures, business models, expectations, level of
expertise needed, distribution channels, payment
mechanisms, availability of finance

Change produces a level-playing field which is actually
loaded in favour of a new player because of his
flexibility, adaptiveness
Examples of Entrepreneurs
Exploiting Change

Japanese car manufacturers (1973)

Microsoft (1976-78)

Amazon and Dell (1990s)

Infosys (1989)
Broad Categories of Change

Demographic – whole population (age distribution)

Economic – Emerging markets

Socio-Cultural -- Value systems, role models

Technological -- Variety, performance, cost

Political – democratic, authoritarian/totalitarian regimes.
Free market vs socialistic policies (Britain in early
1980’s)

Legal and Regulatory -- liberalization (internal and
external), enforcement of IP protection laws
Demographic Changes

Median age

Working population as the % of total population

Life expectancy

Healthcare and Social Security Needs

Urban-Rural Ratio

Literacy

Male-Female ratio
Socio-Cultural Changes

Value systems -- globalization and local assertions

Accepted norms of behaviour

Role of religion and spirituality

Pursuit of expertise, knowledge, wealth,
possessions

Aspirations, fears, desires, anxieties

Measure of “time” – attention span, priorities,
conveniences
Technological Changes

Availability and wide-spread assimilation of
technology

Information Technology and it pervasiveness

Costs and disposable incomes

Performance, variety, ease of acquisition

Cross applications – interdisciplinary developments

Comfort level of technology usage

Examples: CD ROM drives and mobile phones
Economic Changes

Gross Domestic Product and Per Capita Income

Level of exports and imports

Inflation and interest rates

Availability of credit at all levels

Size of the middle class

Various growth rates – industrial growth, productivity
growth, exports growth

Level of unemployment
Political and Regulatory Changes

Transition from centrally planned to market
economy (India, 1991)

Transition from communism to “market socialism”
(China, 1978-1980)

Regulated, protected, closed economy

No IPRs (copyrights, patent laws)

Contract Enforcement and right to property

Labour and land reforms
India in the New Millennium

“Young” country with rising literacy and prosperity

GDP growth rate of 7-8 % per annum

Growing middle class

Liberal, business like values, pursuit of wealth

High unemployment, imbalance in the
development
India in the New Millennium

Passages of IP laws (new patent regime)

Respect in the global community (functional
democracy)

Atmosphere conducive to business -- no
xenophobia, no insularity, no misplaced importance
to “self-reliance”

Well developed “Institutions” – judiciary, capital
markets, stock exchanges, media (free and
independent), educational institutions, regulatory
bodies (SEBI, FDA, ISI)
Analysis of Existing Entrepreneurs

Truly new, novel and innovative ideas: 3-4%

Rest 96%

Enhancement -- improvement / refinement of
features – cheaper, better, faster, more user-friendly

Extension to features

Specialization -- niche’ creation
Enhancement, Extensions and
Specializations
Enhancements
Extensions
Specialization
Examples of Enhancement

DOS to Windows

Mechanical watch to quartz watch

Modem to ADSL modem

Ordinary TV to a flat screen TV

Desktop PC to a laptop PC to a tablet PC

Propeller engine to a jet engine
Most industrial innovations
Examples of Extensions

Toothbrush with a built in toothpaste

Pen with a torchlight

Mobile handset with camera, FM radio,MP3
player ….

Memory sticks with MP3 players

Wristwatch with a calculator

Cinema Multiplexes

Day care centers (crèche) with tuitions

Swiss army knife
Examples of Specialization

Low cost airlines (Ryanair, Easyjet, Air Deccan)

Boutique financial advisory services

Super-specialty hospitals

Finishing schools

Executive search firms (CxOs only, finance
professionals only)
Possible Service Opportunities

Schools

Restaurants

Travel agency and tour operators

Pet shops

Bookshops

Gyms / weight loss clinics

Oxygen bars
Screening Ideas: Are they
Opportunities?
5 Questions
1.
2.
3.
4.
5.
What important customer problem can you
solve?
How are you going to do it?
How many customers are there that are
willing to buy from you?
Why can only you provide the solution?
How can you defend against others?
Ask these questions BEFORE somebody else
does!
Screening an Opportunity:
5 Questions
1.
What important customer problem can you
solve?
How valuable?
How painful?
Remember, you need to change somebody’s
behavior to buy your product.
Screening an Opportunity:
5 Questions
2.
How are you going to do it?
Business model:
Product
Distribution
Location
Technology/Innovation
Service
Brand
Screening an Opportunity:
5 Questions
3.
How many customers are there that are
willing to buy from you?
How many customers are there? (Market size)
How many will buy from you? (Market share)
Who will be your first customer (besides your
Mom)?
Who will be your 100th?
Screening an Opportunity:
5 Questions
4.
Why can only you provide the solution?
How are you unique? What do you provide
that nobody else can?
Screening an Opportunity:
5 Questions
5.
How can you defend against others?
Location, brand, patent (or other IP), great
service, great taste, great fashion sense….