IOE 422 W2010 Class 3

IOE 422 W2010 Class 3 - Winter 2010 Kurt Skifstad...

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Unformatted text preview: Winter 2010 Kurt Skifstad (skifstad@umich.edu) I O E 4 2 2 E n t r e p r e n e u r s h i p Class 3 1 Class #3 Evaluating the Opportunity, Short Written Things, Business Models Kurt Skifstad skifstad@umich.edu Winter 2010 Kurt Skifstad (skifstad@umich.edu) I O E 4 2 2 E n t r e p r e n e u r s h i p Class 3 2 Administrative No Class! Tuesday, January 19 Three speakers confirmed Winter 2010 Kurt Skifstad (skifstad@umich.edu) I O E 4 2 2 E n t r e p r e n e u r s h i p Class 3 3 Review Entrepreneurs The Venture Market Value Opportunity Types & Categories of Opportunities IC + EC Raw Materials Components / Modules Financial Capital Physical Assets Technologies Valuable Products & Services The Entrepreneurial Venture Attractive Opportunity Timely Solvable Important Profitable Favorable context Capabilities / Skills Good at the needed tasks Willing to learn Interests, Passions, Commitment Like the tasks Like the challenges Committed to do whats required The Sweet Spot Winter 2010 Kurt Skifstad (skifstad@umich.edu) I O E 4 2 2 E n t r e p r e n e u r s h i p Class 3 4 Finding the Right Opportunity The opportunity recognition process is messy, iterative, and replete with dead ends, and false starts Dorf and Byers Winter 2010 Kurt Skifstad (skifstad@umich.edu) I O E 4 2 2 E n t r e p r e n e u r s h i p Class 3 5 Some Guiding Principles One very good opportunity can be life-changing Dont count on sale or IPO to justify the venture Look for opportunities w/ large returns in a finite window (~ 4 yrs.?) Make sure you can exit with minor losses in case of unfavorable performance Few ideas are unique Learn to make decisions and close deals with incomplete information* *the trick is to find the balance btw. the cost of getting more info and the risk of making the wrong decision or missing the opportunity Winter 2010 Kurt Skifstad (skifstad@umich.edu) I O E 4 2 2 E n t r e p r e n e u r s h i p Class 3 6 5 Things to Consider When Evaluating an Opportunity Capabilities do teams capabilities, knowledge and experience match? Novelty does the product or service have differentiating qualities that customers are willing to pay for? Resources can the team attract the necessary financial, physical and human resources Return is the expected return positive? Is it consistent with the risk?...
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This note was uploaded on 04/05/2010 for the course IOE IOE 422 taught by Professor Skifstad during the Winter '10 term at University of Michigan.

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IOE 422 W2010 Class 3 - Winter 2010 Kurt Skifstad...

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