Opportunity Analysis Project

Assignment
Key Deliverables
Milestones
Tips

Assignment

Via the Opportunity Analysis Project (OAP), students will learn how to tell the difference between a good idea in a dorm or a lab and a great scalable business opportunity.  You will identify and define a market opportunity and pitch the opportunity to your classmates and the teaching team.

Key Deliverables


You and your team should pick an opportunity and perform an investigation to understand whether your opportunity can be turned into a scalable business. In your presentation and written analysis you should tell the "story" of your proposed venture by addressing as much of the following as possible:
  1. Concept and Vision. Where did your idea come from (e.g., a Stanford lab)? Explain what the market opportunity is and how your solution addresses this. What makes your solution particularly compelling? How does it make the world a better place? Do you have personal experiences with this market? Is there existing intellectual property that you must license or new intellectual property you must develop in order to pursue this opportunity? Has anyone tried something like this before? If so, why did they fail or succeed, and why is the opportunity still attractive?
  2. Market Analysis. What industry or sector of the economy are you addressing? Why is this market attractive? What segment of the overall market are you pursuing? What market research can be done to describe this market need? What are the total industry or category sales over the past three years? What is the anticipated growth for this industry? If this is a new market, what is the best analogous market data that illustrates the opportunity? Project the potential market size and growth for your opportunity.
  3. Customers and Customer Development.  This is extremely important. You need to have a clear idea of who your target customer is. The only way for you to be able to do this is to "get out of the building" and speak with your potential customers. You will need to answer questions such as: What does the customer need? Why does the customer need it? What is the customer using today?  What is the customer willing to pay for your solution? Why? How will you reach this customer? You should include both primary (or first-hand) research and secondary research, emphasizing primary over secondary.
  4. Competition and Positioning. Who else serves this customer need? Who might attempt to serve this market in the future? What advantages and weaknesses do these competitors and would-be competitors have? What share of the market do specific competitors serve? Are the major competitors' sales growing, declining, or steady? What are the barriers to entry for you? What are the barriers to entry for additional competitors? How could partners and allies best help you overcome competition from established enterprises or other startups?
  5. Business Model and Lean Startup Philosophy. Now that you have discovered an opportunity and talked to potential customers, how will you turn it into a business? How will you make money and when do you expect your venture to be profitable? What is the major risk to address right away (e.g., market or technical)? In other words, which hypothesis regarding product or market strategies need to be tested right away?
  6. Learning and Adaptation (extra credit). What did you learn and how between the time you chose the idea and wrote the first draft of the positioning statement and producing the final written report? Is this idea a true opportunity or not?
The list above has no implied order. Some entrepreneurs start with a well-defined concept and then try to identify a market for their idea; others start by studying a market and then stumble upon an idea. Also, please keep in mind that the specific data and information you provide will vary according to the type of opportunity you choose to analyze.

We recommend five basic steps in the process of analyzing an opportunity:
  1. Identify potential opportunities. Combine your own personal experiences and creativity with external forecasts and trend analysis. How is the world changing with respect to new technologies? What is the impact of globalization on current solutions? What new requirements will those changes produce? Recent media articles on trends are often a good place to start. Additionally, you may want to look through Stanford's Office of Technology and Licensing for new technologies that have been developed at the University.
  2. Define your purpose and objectives. Identify your most promising opportunity, being careful to discriminate between an interesting technological idea and a viable market opportunity. Prepare an outline which will help you to determine what types of data and information you need to demonstrate the attractiveness of your chosen opportunity.
  3. Gather data from primary sources. It is crucial for you to obtain data from primary sources. Potential investors will place more trust in well conducted primary research than in stacks of data from secondary sources. There is simply no substitute for talking to potential customers from the target market in order to validate the opportunity you have identified. Consequently, we prefer that you spend time gathering data from primary, not just secondary, sources. Past teams have found SurveyMonkey to be helpful in gathering primary data. The basic service is free and provides most of the features you’ll need. Visit SurveyMonkey at Survey Monkey
  4. Gather data from secondary sources. Countless secondary sources exist on the web and in Stanford's various library resources. The Jackson Library GSB Database Resources and the GSB librarians are especially helpful. Try not to get too bogged down in financial and accounting data.
  5. Analyze and interpret the results. Persuasively summarize your results.

A key success factor for a successful project is the depth of your analysis and what you learned from it. If after careful research you have determined that your business idea is not as promising as you originally thought, it is totally acceptable to present an OAP that describes why your idea will not make sense now rather than why it is the next big thing. An honest, rigorous analysis of an idea that did not survive further scrutiny is preferable to either (a) a half-baked presentation of an idea your team is unsure of, or (b) an enthusiastic job of over selling for your current idea, even though you know it is problematic.

Opportunity Analysis Project Milestones

Session 3
Our goal today is to form teams for the term project (OAP) and case study groups. Teams should consist of five students. These teams will then remain the same for the remainder of the quarter. As such, remember that the "best" teams (i.e.: the most creative, the most effective, and the most fun) have diverse members -- different majors, genders, or work experiences. Do not just pick your current friends. You will learn more from working with people who are not exactly like you and/or who don't agree with everything you say. We will devote as much time as possible in previous session and this session to let you meet other students to form teams. Let's  also leverage Slack to help you find other team members. The deadline for forming a full team is at the end of today.

Session 4
After this class session is over ... One person from each team should submit via canvas a short document containing a list of ideas for opportunities to evaluate as part of the OAP term project.

Session 5
You should decide the idea your team will pursue as part of the OAP.  Submit via canvas.

Session 6
First Positioning Statement (PS1). The Global Marketing and Sales class session will help you and your team get started in writing your positioning statement. Fill in Geoff Moore's two-sentence positioning template for your OAP product or service concept. The template is:


Sentence #1


For (target customer)

who (statement of the need or opportunity),
the (product/service name) is a (product/service category)

that (statement of benefit).



Sentence #2

Unlike (primary competitive alternative),

our product (statement of primary differentiation).



Create two slides. One slide should simply list the name of your project team with all the team members and their majors. The second slide should have a succinct draft of your positioning statement above.  Submit these slides as a pdf on canvas by noon the day of this session.  For extra credit, create an additional slide to share how your potential venture will make meaning and not just money.

Session 12
PS2: Post an update of your PS1 on canvas. This should result from feedback and research you have received from sharing it with others such as classmates, friends, customers, users, partners, and others. Succinctly explain why you have changed the statement.

Session 14

Please prepare your team's PS3 by today and post to canvas. Depending on what you've learned in the past week, your PS2 may have been validated or changed. To explain why your PS3 looks as it does, once again prepare a report of your direct research (both primary and secondary).

  • What additional research have you done?
  • Who else have you spoken to and why? (List)
  • What did you learn this time?

Session 16
OAP Dress Rehearsal. Each team will be paired up with another team this week and then will ideally present a rough draft of their final OAP presentation to the other team by the weekend. This exercise is designed to both allow you to receive feedback on your presentation and let you practice giving feedback to others. We highly encourage you to post any draft materials (i.e., the slide deck) to canvas.

Sessions 17 & 18
OAP Presentations. Group A teams present during Session 17 and Group B teams present during Session 18. Presentations are limited to 15 minutes per team including Q&A. Slides should be in standard PowerPoint format, with a recommended maximum of 8 slides per team. The best presentations are often the shortest and most succinct. A summary at the end of the presentation is often very powerful.
 
To be fair to all, teams must post their slides to canvas (in either PDF or .ppt format) and the homework list (in .ppt format) by 8:00AM before Session 17.
 
Session 20     
Written OAP reports. Post your OAP written report (up to 1500 words) to canvas by 6PM.  Your team is strongly encouraged to keep your written analysis to 1500 words, as this is a good opportunity to learn how to be succinct in business communications. 

Also by 6 PM, please fill out this form with your personal assessment of how to distribute a bonus among your E145 team members (including yourself). Assume a total of $100,000 is available for distribution. Bonus distribution should be based on completed work and effort to the good of the team and not distributed as if you were actually founding a company.

Chi-Hua's tips for a successful OAP


  1. Problem: "There is a problem in the market today..."
  2. Solution: "The ideal solution is..."
  3. Primary message: Elevator pitch (radio)
  4. Product description: What your product is and what it does
  5. Features: 3-5 problem-solving features

Tom's tips for a successful OAP



How to Present an Entrepreneurial Investment (to Me) by Trevor Loy, Flywheel Ventures and Lecturer in MS&E 276