Launch - Summer 2008 - (Page 26)

A good exercise for any entrepreneur is to take a marginal business model and consider how to make it better. The probability of success for any opportunity and the size of the final payoff must be estimated early on by the entrepreneur and considered carefully in making the final decision. Copying Another’s Business Model: Copying another’s ideas and even their business model may in fact be the best and smartest way to launch a business. Many entrepreneurs have achieved success by simply taking another’s basic business model and making minor improvements in content or execution. A good exercise for any entrepreneur is to take a marginal business model and consider how to make it better — provide a better service, higher quality, more customization, longer life, or make it easier to purchase. By doing so, new opportunities will surface. Apply Technology: Consider what happens to the business model when technology is applied, or newer more advanced processes and workflows are employed. Often such improvements significantly enhance the business to a degree that a higher price can be charged, costs can be reduced, or more customers served — all resulting in a more viable business model. Deciding Which Opportunity to Pursue Resources Required: Each opportunity requires critical resources in order to be developed. These resources certainly include money, but also time and specific skill sets. The amount of required resources is often a factor of the complexity of the business opportunity. The entrepreneur must carefully consider the amount of resources that are at readily at hand and let this reality check force a focus on those opportunities that more closely match available resources. It is better to pursue an opportunity that you have the resources for than to spend precious time and energy trying to raise additional resources to pursue what you might feel is a grander opportunity. Timing Is Everything: There is a time frame associated with each opportunity — a ticking clock that meters out the life cycle of the opportunity. It is possible for the entrepreneur to pursue an opportunity too soon before market needs have been defined or before customer segments arise. It is just as possible to pursue an opportunity too late, long after competition has arisen, or customer needs have changed. Pursuing even an opportunity of great value out of sync with this timing will result in failure regardless of its overall merits. After considering all of these opportunities, the entrepreneur must decide which one to pursue. This is a time to be strictly objective. Entrepreneurs need to take on the mindset of a financial investor. Investors consider hundreds of businesses before making an investment decision and they learn to do so objectively and with discipline. Entrepreneurs must do the same, as they too are about to make a sizeable investment of time, energy and resources. The factors to consider most at this point are highly personal to each entrepreneur but should definitely include the following: Evident Fatal Flaw: One final consideration is making sure the opportunity is not marred by a “fatal flaw” — some element that predicts failure such as overly entrenched competitors, current vendors or suppliers who are better positioned to meet customer needs, or an entity in the supply chain that is better able to offer the solution. If such is discovered, the wise entrepreneur will walk away from the opportunity instead of blindly moving forward feeling that their drive and passion alone will be enough to succeed. Conclusion Probability of Success and Size of Payoff: It will generally take the same energy and time to pursue a good opportunity as one with little likelihood of success and a low payoff. Choose those opportunities that have the highest probability for success and will yield the greatest personal payoff. 26 launch summer There are countless opportunities entrepreneurs can pursue — many with tremendous potential. Entrepreneurs who can set their emotions aside and carefully work through their evaluation are more likely to select the very best and achieve the ultimate success they are seeking. $ Click here for the HTML version of this article on launchutah.com. http://www.launchutah.com/article-feature2-q22008.php

Table of Contents Feed for the Digital Edition of Launch - Summer 2008

Launch - Summer 2008 Contents Editor's Note Dashboard Marketing Column Funding Column Sales Column Risks vs. Rewards Myths of Entrepreneurship Opportunities vs. Ideas Funding Options for Startups Making Sense of Term Sheets

Launch - Summer 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.