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Killer Opportunities
Where Do Great Ideas Come From and What Makes Them Great1
Marc MorinNov 25, 2003
Nov 25, 2003 Where do ideas come from? 2
Sorry, I couldn’t resist…
Nov 25, 2003 Where do ideas come from? 3
Disclaimer
This is my 2¢, take it for all it’s worth.
Nov 25, 2003 Where do ideas come from? 4
Short Background Education
BaSc, EE, University of Waterloo, 1987 MBA, Wilfrid Laurier, 1994
Work for others Hewlett-Packard, Focus Automation
Startup involvement… PixStream, sold to Cisco Kaparel, sold to Rittal VideoLocus, sold to LSI Sandvine SparkMatrix
Nov 25, 2003 Where do ideas come from? 5
The PixStream Legacy
Nov 25, 2003 Where do ideas come from? 6
Lifestyle Business vs. CorporationLifestyle Business Be your own boss
Lone wolf Self funded Organic growth Slower growth Can re-invent
themselves No planned exit
Corporation Founder, not boss
Team VC/Investors Fund the plan Rocket ship If a miss, typically
flame out Exit strategy
Nov 25, 2003 Where do ideas come from? 7
Focus of Presentation
Framework
Plan it
Do it
Build team Financing Execution Refinement/Adaptation
Identify major trends Synergies products
ideas Evaluate products
Expensive
Nov 25, 2003 Where do ideas come from? 8
Inspiration Eureka! NOT! A lot of hard work Spend appropriate time
Avoid costly mistakesin bad judgment
Nov 25, 2003 Where do ideas come from? 9
Identify Major Trends Identify major shift/discontinuities
Internet -> broadband -> distribution channel
Cell phones -> low cost wireless -> wireless everything
Analog->digital in entertainment Play “what if…”
Speculate on interaction within industries
Nov 25, 2003 Where do ideas come from? 10
Will trends intersect? The more turmoil in a market
The more opportunities… New entrants Threat of obsolescence
Single waves… Possible line extension…
favors incumbents, watch out!
Nov 25, 2003 Where do ideas come from? 11
Predict Interactions?
Individually•Easier to understand
Combined•More interesting results•Less obvious
Nov 25, 2003 Where do ideas come from? 12
Watch the sizeMust match your capability level
Start here• Smaller scope• Too small for the “big guys” … with killer potential!
• Need time to acquire capability
Nov 25, 2003 Where do ideas come from? 13
Watch the timescale Road to success
littered with startup roadkill
Need to still be around when trend peaks
Financing Tenacity Adaptability
Duration < 2 years, too late 2-5 years, ideal 5+ years, too early
Nov 25, 2003 Where do ideas come from? 14
Watch the direction Big trends
heading for rocks Abrupt ends Volatile Dangerous
How stable is the trend to disruptions? External factors
Nov 25, 2003 Where do ideas come from? 15
Evaluation Single major trend idea
Likely straight forward analysis of what will happen If tied to existing business/industry (most are), then this is line
extension for incumbent Stay away… there are sharks in the water!
Two major trends Interaction may provide insight… Not as straight forward to understand… Hope for new entrants
Three/More major trends Are they really independent trends? Difficulty in predicting with any degree of certainty the affects? What if trends don’t interact? How stable? Is it in the right timeline? It is too ‘wild’?
Nov 25, 2003 Where do ideas come from? 16
Positioning examples Sandvine
Broadband growth Decreasing average technical capability of
customer base Application use changing (by subscribers)
P2P from email/browsing VoIP Streaming video/audio
Internet threats changing (against subscribers)
Virus/Worm/DOS/DDOS Increasing in sophistication Decreasing in required skill level (toolkits)
Arguably same wave, viewed from different angles
Nov 25, 2003 Where do ideas come from? 17
More examples PixStream
Broadband DSL Digital Television
VideoLocus HDTV Video codec
RIM Cell phone -> low cost wireless Internet/Email strategic
Telco Triple play
HD DVD Player/Recorder
Blackberry
Nov 25, 2003 Where do ideas come from? 18
Have trends… now products Have a solid and insightful model of
major trends affecting industry Need to embody the most significant
implications of these into products How will existing products be affected? New services? New needs? What skills required?
Do you have them? Can you get them?
Nov 25, 2003 Where do ideas come from? 19
Searching for ideas What you know
Your experience Your company Your industry
Swim downstream Your customers
Swim upstream Suppliers
Nov 25, 2003 Where do ideas come from? 20
Customers suffer from myopia
•Unlikely to hear “if you made X, I’d buy it.”•If you do, likely line extension type of response•Very focused on the immediate
•MUST validate assumptions, logic arguments, etc…•Want to understand their problems
•Likely to expose opportunities
Nov 25, 2003 Where do ideas come from? 21
Evaluate Products/Plans 10x factors, Andy Grove Disruptive technology Overcome inertia gap
Customers will need a very good reason to buy from an new startup
Especially if there is a ‘natural’ provider What is required to dominate industry?
Technology, team, financing, execution, time Can you get there from here?
If you can’t, someone else can/will How would that affect your chance of success?
Nov 25, 2003 Where do ideas come from? 22
The Role of Luck Luck is good You will need some Right place at right
time Accident? NOT
Luck is not a cause, its an affect
Solid planning Keeping in touch Being nimble
“The harder I practise, the luckier I get”Gary Player
Nov 25, 2003 Where do ideas come from? 23
IrrationalExuberance
HolySh*t
Reality Maturity Obsolescence
Emotional Zenith
Reality HangoverReminiscing
Denial
Requiem
IrrationalExuberance
HolySh*t
Reality Maturity Obsolescence
Emotional Zenith
Reality HangoverReminiscing
Denial
Requiem
IrrationalExuberance
HolySh*t
Reality Maturity Obsolescence
Emotional Zenith
Reality HangoverReminiscing
Denial
Requiem
IrrationalExuberance
HolySh*t
Reality Maturity Obsolescence
Emotional Zenith
Reality HangoverReminiscing
Denial
Requiem
Time
Con
fid
en
ce
IrrationalExuberance
HolySh*t
Reality Maturity Obsolescence
Emotional Zenith
Reality HangoverReminiscing
Denial
Requiem
Business emotional lifecycle
Emotional Zenith
Reality HangoverReminiscing
Denial
Nov 25, 2003 Where do ideas come from? 24
Conclusion Build a model of major trends
How will they interact to change industry Want 2 major independent trends What opportunities are born
Develop idea/concept for first product Stay flexible, product line must evolve
Evaluate keys to success
Just Do ItTM