se 418. Entrepreneurship SS —— << ( pEATION TOOLS i ir search for startup ideas We several id 1 rools that we may use to kick start ou We a ‘eal Fs aie thinking mindset but in addition to that, we can use these aye rainstorming : Ba isa group creativity exercise designed to come up witha panes fodiens tap | This method was devised by Alex Osborn, who proposed that groups can double their creative cue by using brainstorming effectively. Even though there are a number of variations to the basic ethy, a set of well-defined steps are followed in most brainstorming sessions. - Define the problem: ‘The problem must be clearly defined and captured in a question such as ‘yhy problems do you face while travelling by train?” Sometimes it might be a very big problem and may ned to be broken down into component questions like— ‘what are the problems you face whep ying to get on to a train?’ A well-defined question focuses the thinking of the group and increase; the quality of the ideas. For example, it might be easier to find a good answer to the business can I start with 10 lakhs? rather than with a vague question such as ‘what busi Isard? - Select participants: The participants selected should be from diver fresh perspectives to be presented during the session. Participants aggressive or very submissive, In case of a complex problem, it mi ipants of the topic well in advance, - Select a leader: One person i and act as a referee. Tt sh The object is to keep the gr - Set the stage: Enough comfortable level. The ambian seating should be provi pens, and pencils should’ or should be kept on silent, ‘The ‘rules’ of brainstorm Some of the important ‘rules * Focus on quantity, The finding good ideas. judgment on their quality Build on others ideas. to form one good idea. Encourage crazy ideas. Un can contribute to st Work with a deadline, chatter, It is desirable toideation 119 Even though brainstorming has its proponents, not improve the quality of ideas. All agree that brai activity and can be a valuable bonding exercise, Mind Maps A mind map is a diagram used to represent words, ideas, tasks, or other items. The components of a mind map are linked to each other and are usually arranged around one or few central or concepts. Many have likened mind maps to lists in a diagrammatic form. When: ae radially in a mind map, there is no implicit prioritization that comes from: sequential listing. Grouping and summarizing can be reserved for later stages. Mind maps can be good tools to sort our complicated ideas, Tony Buzan, who has extensively studied mind maps, suggests the following guidelines: © Scare with the central theme at the centre of the sheet * * Show associations and use emphasis where necessary * Use different coloured pens for coding the mind map + Use symbols, signs, and images where appropriate * Construct it clearly and neatly so it can be understood later * Develop a style of presentation you are comfortable with A good mind map to start with is to use a mind many researchers claim that brainstorming does nstorming can enhance the enjoyment of group* 120 Entrepreneurship SS ae eng bin toon ce» @q = e PRELIMINARY RES| Now that you have the out have to know lots more aba research you carry out You will have to go bac experience in the same and be careful to get as much if Cost Structure What are the main costs in sibility of alternatives, and: Market Structure Look at trends in the sell is there any cartelization chain which will have bet retailer, or even the coi ——_$_$_____. a Ideation 121 technology if there has been a recent change in technology, itis unlikely that there will be another technology change in the near furure but this may not be true of some high tech fields like software and robotics. It may be that come new technology has been implemented elsewhere but has not yet been imbibed by the local industry. HR Issues You have to be particularly careful if the work is hazardous. You have to provide adequate safety measures and also be prepared for a lot of trouble in case something goes wrong. If the industry is dependant on highly skilled labour, then you should have a well thought out strategy for attracting them and keeping chem with you. Government Regulations There may be government regulations which may act as entry barriers in the industry. Ie may take 2 Jong time to get a certain clearance from some government agency or it may be very costly to comply with some industry standard. The cost structure of the bottled water industry was totally changed after sricter controls were introduced following reports of contaminants in the bottled water. BUSINESS IDEA EVALUATION EXERCISE Now iti time to evaluate the business idea. For an idea ro become a business opportunity for you i should have the potential to be profitable and itshould be able to meet your personal goals. While most believe that selection of the business idea to purse can be intuitive, a methodically selected idea of success. There are some simple frameworks that can be used to both select and idea Bank So Usually, there are several business ideas that will be under consideration by All these ideas should be noted down in a digital or physical norebook. Just brief outline will suffice at this stage. called an be pursued further at the moment, : come back to the idea in case lateren br Ror 122. Entrepreneurship , how well you can plan for success, and what idea, how well i fits your temperament, how well : eSources d idea can become even better if you take the time to ey, ite: tn hen pee cele ning 10s fom ore i en fats relia dean ei your best idea, The steps ua three step process to evaluate idea - os Matrix Analysis 3. 5Qs Exercise a a Matrix Analysis will help you analyse all ideas and shortlist a couple The =. red seth a aga 2 iro des such as Idea Avs Ide B, whic pa a 5Q: Exerc is the Fin al check for you to prioritize ideas and arrive at the best one Decision Matrix Analysis ae ve Rane matrix helps bring all ideas to one place and lets cxample, one idea may be to start a business that sells smoothi jy pines idea would be making cardboard furnace both businesses ares investment required, ence, of operation: oe tl emplate to ge going with this analysis, Ot just sweet but sama, othe Some factors to take into x. s, marketability, co name sex Puton the top row and ideas are putin the lef most column. The five factors we . ment required * Fiewith your interests and ‘strengths 5 erations * Product differentiation ee is harder see * Ease of operations A busing yh 1c business also, So, even though case ‘of operations makes a et wil be xy 0 be a positive factor, “ cf How confident are der itto b * Marketability eno all factors fe equally important. So, “Sustomers’ minds. we will gin , ted average for each IDEA, hele ice investment isan important faeton, op lets give it 20% perations, slighty lesser, 60 159% lity is crucial and so, we will give ie 2596124 Entrepreneurship Now, just repeat these steps for the top 10 ideas in your will be the ones with max potential (refer to Figure 7.4). can revisit to change them’ So, from the top scoring five i reat potential Paired Comparison Analysis This cool helps compare one idea is called paired comparison, Note chat this comparison is b ideas. You may or may not have cores from the Decision Matrix vhich among your five shortIdeation 125 List all your ideas as row labels. Then list the same ideas as column headings as well (refer to Figure 7.5). | Cardboard Bluetooth Personalised |Travel <= ___|Smoothie_|Furniture | Sunglasses |Tea Website Total Cordboord furniture Bluetooth sunglasses yi ” Personalised tea [Trovel website le al Figure 7.5: List of top five ideas Lets start with the smoothie idea in the horizontal row. We will compare it one by one with che {ideas in vertical columns. Remember the score is for the idea on the horizontal row. We assign a value from -3 to 3. A score of 3 means that the idea in the horizontal row is much better than the idea on the vertical column. A score of 0 means that there is not much difference in the quality of ideas in the horizontal row and vertical column. A score of -3 means that the idea in the horizontal row is worse than the idea in the vertical column. The black boxes are where you input the scores. The grey boxes automatically show the corre- sponding score for the idea it is being compared t0. So let us say, we compare the smoothie idea to the cardboard furnicure idea and give it a score ‘of 2 in the black boxes as the smoothie idea is better but not dramatically better than the cardboard famicure idea. The formula in the template automatically gives a ~2 in the row belonging to the card- board furniture, Ic is exactly the opposite of the score I gave, implying that it is worse than the smoothie idea (refer to Figure 7.6). The smoothie idea is then compared to the other ideas listed in the vertical columns. So, when ‘compared to the Bluetooth idea, it is again given a score of 2, but when compared to the personalized tea idea, itis scored 3 as the smoothie idea is significantly better. When compared to the travel website,ll 926 Entrepreneurship $$ i i alised Travel Bluetooth [Person 1 nce Fase soc sel Website [Total Si Smoothie 3 Z — |Cordboard furniture 4 Ss : Bluetooth sunglasses = oo Personalied tea -3| | 3 3 ‘ [roel webs 2 Figure 7.7: Comparing scores for all pairs of business ideas Now, we have the score from the Paired Comparison Analysis (refer to Figure 7.8). Remember low, we have n / ready have some scores from the Decision Matrix Analysis. [Smoothie [cordboordrinre | [Bluetooth sunglasses Personalised fea Calculate the final score for each idea by adding the Decision Matrix and Paired Comparison anal- yses scores. The final scores will throw up the top two ideas in your list. From our examples, the scores of the smoothie and the cardboard furniture businesses are the highest at 13.05 and 5.35 respectively and so they are the '9P two ideas! You can now 80 ahead and begin your analysis to identify your top two ideas, The 5Qs Exercise The top two ideas can be put through this framework, which is i : there are more than juse five questions The main questio, based on five Questions, Bur actually ns help “US to (ons which addres a wide range of concerns, eh OUP together many more ques. QU. Which is the ‘arket segment that js being Identify the important customer problem, S to gain. Itis important to ‘need’ of butes of the product of, service being sold, In case a customer pro is the problem. The market need has to be carefully assessed by potential customers Is there a marker Segment we can target by offering clear Customer is willing to pays The answers to these questions help you to identify the marke. ment may be described in tems of, answer this question is to) describe your intended your intended customers are. businesses, One has modify the current behaviour of your potential customer,—_—_——— ldeation 127 Alo are you looking at targeting a different ou can effectively target different segments at th Q. What is the business model? Abusines mode is a description of various aspects oF busines, suchas operational process, masked rogrammes, and organizational structures. To answer this question, you have to clearly outline how you Sasa vo anlve the customer problem, This will include a detailed product description and an overview ot how is it gong to be produced and delivered tothe target customers. Can the business develop and mpley superior organizational processes, capabilities, resources compared to its competitors. f ERAT AS Gea ofan you should have an idea about the profitability of che busi- nes. Does the busin lly viable? Higher margins are obviously better but very high margins a usually nor sustainable or scalable; Margins can come down when we ry producing inlarge numbers or when there is intense competition in the market, Q. How big is your market? This can be broken down into several questions: profile of customers? In that case you have to judge if he same time, look to be econo: * How many total customers are there? This sives the size of the total market + How many will buy from you? This gives your shareim the marleer By now you should have had a mental picture of your first customer (besides you have to figure out how many such customers 4a be convinced to switch az You looking at targeting a different profile of customers? In that ease yc cfictively target different segments at the same time: ‘ By answering the above questions, you now have an idea of the kind o for che business. In case the money you can invest is not enough, are you by bringing in partners who are willing to invest. Do you » borrow funds ‘astitutions, maybe by putting up some asset as You should be c ment requirements of the business before you d QU. How can you protect your business? ‘ow can you protect your business from other ied to the answer to the question is why anyone else, There has to be sor128 Entrepreneurship You have to know lots more a before you can decide ona Most of the research you carry oy pan the same sources of your b have to take a closer look af ip technology trends, regulations‘a thought or conception existing in the mind jea e f mental understanding, awareness, or asa result of activity. Creativity The ability to develop new ideas and to Gecover new ways of looking at opportunities. innovation The ability to apply creative solutions to appropriate situations fist mover The firm that aims to get an advantage ty being the first to establish itself in a new market. Focus group A qualitative research tool based on getting together a group of people to discuss an issue. 4. Distinguish between creativity, innovation, and entrepreneurship 2 Is 2 ‘new’ business idea essential for entre- preneurial success? 3. What are the advantages and disadvantages of being the first in the market with a radical new product? 4, In ideation, what is involved in the pre-selec- tion process? 5. What are the good sources of business ideas? 1. Great ideas just happen. Discuss 2. What is the significance of having a pre- selection process while searching for business ideas? Celie ai UL Gm eles ideation 129 Brainstorming A group creativity exercise designed to come up with a number of solutions toa problem, Mind maps A mind map is a diagram used to rep- resent words, ideas, tasks, or other items. Critical success factor A factor which is necessary for a venture to achieve its goals. Market segment A distinct subset of consum- ers that behave in a similar way or have similar needs. 6. While researching the business opportunity, what kind of preliminary information is nec- essary? 7. What are the guidelines for having 2 great brainstorming session? 8 List the basic principles for making mind maps. 9. What are the five questions which help eval- uate a business idea? 3. Are there any other sources of business ideas, which this chapter has missed out on? 4. Why is it important to target a particular market segment? :