1. Finding ideas

2. ? Why are ideas important?

3. =
1000 point
Finding the right business ideas is a 1000 point activity

4. 1
Great entrepreneurs are
great at generating ideas

5. Source: Dyer, Gregersen & Christensen (2011)
A study on 25 super innovators & 3000 executives

6. Super
innovators 80 percentile
Non
innovators 45 percentile
Source: Dyer, Gregersen & Christensen (2011)
Idea generation skills

7. 2
Ideas are the best way to
improve the sales of new
products

8. Idea management 7.9%
Technology & resource
management 6.7%
Strategic planning 5.5%
Product development
4.8%
process
Market intelligence 2.4%
Source: Arthur D. Little Innovation excellence study (2005)
Impact on sales of new products

9. 3
Ideas are one of the best
predictors of start up
success

10. Industry Number of Inc 500 Firm starts Percent of Starts
firms
Pulp mills 6 33 18.182
Computer and office equipment 99 2359 4.197
Guided missiles, space vehicles, parts 2 60 3.333
Nonferrous rolling and drawing 14 581 2.410
Railroad car rental 3 136 2.206
Measuring and controlling devices 49 2482 1.974
Paper mills 3 125 2.400
Search and navigation devices 6 310 1.935
General industrial machinery 26 2173 1.197
Photographic equipment and supplies 7 646 1.084
Manifold business forms 3 281 1.068
Household appliances 4 390 1.026
Electrical industrial apparatus 11 1080 1.019
Legal services 10 129207 0.008
Eating and drinking places 34 494731 0.007
Carpentry and floor work contractors 4 66383 0.006
Real estate operators 5 90042 0.006
Hotels and motels 2 39177 0.005
Painting and paper contractors 2 43987 0.005
Retail bakeries 1 22165 0.005
Grocery stores 5 112473 0.004
Used merchandise stores 1 24442 0.004
Automotive repair shops 5 124725 0.004
Beauty shops 3 79081 0.004
Residential care 1 27710 0.004
Videotape rental 1 27793 0.004
Source: Shane (2009)
Inc 500 vs. total starts by industry

11. Inc 500 Total start ups
99 2,359
Computer and office equipment

12. Inc 500 Total start ups
34 494,731
Eating and drinking places

13. Computer and Office Equipment Eating and Drinking Places
(1/25) (1/14,550)
Source: Shane (2009)
Industry and Inc 500

14. High Probability Business Models
It is all about the business idea!!!
paulshawsmith
scientific business strategy

15. Where do great
business ideas
come from?
paulshawsmith
scientific business strategy

16. 1 Deep industry knowledge

17. Systematic search
Other
5% 4%
Discovered
serendipitously
20%
71%
Previous work
experience
Source: Bhide (2000)
Inc 500 source of start up ideas

18. 5-year failure rate?
No Industry
Experience
54.5 %
Industry
Experience
25.5 %
paulshawsmith
scientific business strategy
Source: Bruderl, et al. (1992)

19. Industry Experience?
75% 48%
paulshawsmith
scientific business strategy
Source: Barreria (2004)

20. Suppliers
Potential
Regulatory
Customers
Bodies
Industry
Employees Indirect
Competitors
Industry
Experts Direct
Competitors
Lead Competitors
Users Industry
Bodies
Talk to at least 100 people (ideally 200 to 300)

21. 2 Lead users

22. 1 Lead the market
2 Develop own prototypes
What is a lead user?

23. What is a lead user?

24. Mountain bike lead users (Klunkerz video)

25. Irrigation system developed by lead user farmer

26. Summary of studies on users in product development

27. Source: Von Hippel (2011)
How common are lead users?

28. Do they use the What features did
product or service? they add?
How would they How would they
like the product like the product
improved? changed?
Did they adapt Did they improve
the product? the product?
You must find and interview lead users

29. 3 Solving problems

30. Problem Solution
Find what I want on the
internet fast?
Cheap way of
advertising to my
customers?

31. Problem Solution
Find what I want on the
internet fast?
Cheap way of
advertising to my
customers?

32. Problem Solution
I want to sell
my house?

33. Problem Solution
I am overweight?

34. Suppliers
Potential
Regulatory
Customers
Bodies
Industry
Employees Indirect
Competitors
Industry
Experts Direct
Competitors
Lead Competitors
Users Industry
Bodies
You seek out problems people will pay to have solved

35. 4 Networking

36. Source: Dyer, Gregersen & Christensen (2011)
Networking skills

37. Blackberry

38. The Macintosh

39. Suppliers
Potential
Regulatory
Customers
Bodies
Industry
Employees Indirect
Competitors
Industry
Experts Direct
Competitors
Lead Competitors
Users Industry
Bodies
Talk to at least 100 people (ideally 200 to 300)

40. 5 Observing

41. Inadequate understanding
of the customer 24%
Product defects 16%
Poor marketing 14%
Higher costs than
10%
planned
Competitors 9%
Source: Cooper (2009)
The main reason new products fail

42. Ethnography and innovation

43. Source: Dyer, Gregersen & Christensen (2011)
Observing skills

44. Scott Cook and QuickBooks Source: Dyer, Gregersen & Christensen (2011)

45. Ratan Tata and the Nano Source: Dyer, Gregersen & Christensen (2011)

46. Suppliers
Potential
Regulatory
Customers
Bodies
Industry
Employees Indirect
Competitors
Industry
Experts Direct
Competitors
Lead Competitors
Users Industry
Bodies
While interviewing you must observe

47. 1.Deep industry knowledge
2.Lead users
3.Solve problems
4.Networking
5.Observing
How entrepreneurs/companies find business ideas

48. e 5 good & bad ideas
paulshawsmith
scientific business strategy

49.  Get into groups of 3 – 4 members
 Brainstorm 5 “worst”/ “best” ideas
 Worst ideas: “Ice to Eskimos”, “cars to beggars”
 Best ideas: Use techniques just learn t
 Choose the best & worst idea
 Choose 1 person to present the 2 ideas to the class
 Present for 1 minute only
 Time: 20 minutes
5 best and worst ideas

50. 1. Deep industry knowledge
• What business ideas come from your work experience?
2. Lead users
• When have you wanted a company to add a feature to a
product you have used?
3. Solve problems
• What problem do you want solved or can solve?
4. Networking
• How do the other people in your group think they could
improve your business idea?
5. Observing
• When have you observed a problem that you could solve?
How entrepreneurs/companies find business ideas