Not all ideas are Business
Ideas
IG N IT IN G YO U R B U S IN ES S ID EA S
What makes a good business idea?
 It starts with a good idea.
 Good ideas fill a void or solve a problem:
How?
 It makes somebody...
 Happier
 Healthier
 Richer
 More attractive
...at a price they are willing to pay
But...
 Great ideas alone don’t make great businesses!
How is a great business idea different?
 You have to consider more than just the idea
 Micro level market attractiveness
 Macro level market attractiveness
 Macro level industry attractiveness
 Sustainable advantage
 Team
Micro level market attractiveness
Vs.
Macro level market attractiveness
 Market size
 Short term market growth
 Long term market growth
Macro level industry attractiveness
Porter’s five forces:
1. Threat of entry
2. Supplier power
3. Buyer power
4. Threat of substitutes
5. Competitive rivalry
Macro level industry attractiveness
1.
Threat of entry
 Is it easy or difficult for
companies to enter this
industry?



Cost
Specialist knowledge
Route to market
Macro level industry attractiveness
2.
Supplier power
 Do suppliers to this
industry have the power to
set the terms and
conditions?


How many suppliers are
there?
How transparent are they?
Macro level industry attractiveness
3.
Buyer power
 Do Buyers have the power
to set terms and
conditions?


What are their alternatives?
How easy is it to find them?
Macro level industry attractiveness
4.
Threat of substitutes
 Is it easy or difficult for
substitute products to steal
my market?

Think about the customer
need
Macro level industry attractiveness
5.
Competitive rivalry
 Is the competitive rivalry
intense?


Assess your competitors
fairly.
If you know about them,
they may well be smarter
and better funded than you.
Sustainable comparative advantage
 Firstly, there must be an advantage (for your customers)
 Better
 Faster
 Cheaper
 Then, you have to sustain it.
Sustainable comparative advantage
 Proprietary elements
 Patents
 Trademarks
 Trade Secrets
 Superior organisational processes
(Vs.
 Business model is economically viable
 Commitment to innovation
)
“Best beats first”
Jim Collins
Team
 Ability
 Team as a whole
 Find the gaps and fill them
 Experience counts
 Alignment
 Commitment to the same goals
 Passion
 It will be hard
Team
 Network
 How connected are you?
Suppliers to your business (and your competitors)
 Distributors and customers (today and in the future)
 Competitors and substitutes

Names, titles, & contact information please.
It’s not what you know, it’s who you know, so get networking!
What makes a great business idea?
 A good idea – Somebody needs/wants it
 A good market – Large and growing
 A good industry – You can enter (with an advantage)
 A great team – Find the right people (they might not be
your friends)