Friday, March 3, 2017

Entrepreneur training 2: Opportunity identification

Opportunity identification

This week's topic is opportunity identification. 
We actually first discussed who should be in the Board of Advisory, there are 5 categories: 
  1. export in the domain
  2. someone who knows the technology
  3. channel
  4. personal coach
  5. celebrity
Usually the share should be around 0.25% 2-3 years, more useful 1 - 2 %, and less useful is 0.1%
In the lecture, we revisited the 'RightNow' example from the Bootcamp, and how to spot opportunities. 
Deep insights + expertise + shift (new law, new regulation, new tech) = spark!
Filters to identify good ideas
  1. unmet need
  2. market size
  3. differentiated position
  4. scalable business model
  5. why us & why now

Case study

For the case study, we discussed Veridicom (A): If You Build It, They Will Come. It is a very interesting case shows how the Veridicom went up and downs in its path to sell to Apple. The things I learned from this case are:
  1. the fingerprinting sensor system is a very interesting system. It includes scan the image of the ridges and valleys of the finger using thousands of built-in capacitive sensors, the matching algorithm to match the pattern, and data protection software then erased the actual fingerprint image, but did store a set of characteristics unique to the fingerprint (that even if stolen could not be used) for future identification. 
  2. The different views of the founder and the technical lead is very interesting, the technical lead saw the founder as a way to get money for their projects, not necessarily because they wanted to build a company. The same vision is very important for companies, especially for startups. Also, we can see that the start of the company, all the founders actually live in different places, and this also reflects the team dynamics. 
  3. VC invest in technology, people, and markets order. 
  4. Timing of starting a specific company with the technology is really important, if you don’t have outside support, even your technology is really advanced, you can not success. Think about you are a smartphone app developer before there is a smartphone.
  5. “The number one lesson that I learned when you are starting a company with just the technology, is that you need to hire a marketing guy before you hire a sales guy”
  6. The early fail of the company is due to they did not figure out “who exactly are the customers”, therefore, the transform from OEM manufacturer to a solution company that aiming for then banks is a very wise move, and leading to some big customers first to advance the business.
  7. It is a little crazy to see that the board fire the founder CEO, but I guess this is how the company evolve. 
  8. Identifying the existing competitors are important. 
  9. If the market size is really small, you can not grow, and you will not attract investors. Usually VCs like to invest market size $1B, and angel investors may have a lower threshold ~$100M. Less than $100M, is a niche market, and you can not attract investors, or only hobbits. Public good, and some foundations maybe interested in it.
  10. Crisis management is very important because you will have a lot of crisis on the way. 
key points
  • Opportunity identification is paramount – understand unmet need of the user
  • Velocity of execution is more important than over planning
  • Simple ideas, well executed, yield best results
  • Aligning like-minded people and executing with convictions, surrounding yourself with the right advisors works real well
  • Fast beats good!
  • The number 1 killer of the company - you never find customers
  • Too many opportunities will be distractions
  • Why do companies fail? They ran out of money

Acknowledgements:

All the materials are from the entrepreneurship class at UC Berkeley taught by Naeem Zafar

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