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. Each team will create and maintain a website on which you will present your opportunity analysis project as they evolve.  You should post your key deliverables to your website when they are due.

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 2
Team formation with a deadline of Session 2A. Your team should consist of five people and it will serve as both your study group and your term project team.

Session 4
List of potential ideas for your term project (submit via email after class is over). Please make sure to utilize the techniques learned during this session regarding creativity and innovative thinking.

Session 6
You should decide the idea your team will pursue as part of the OAP. Create a team website for the OAP. Post any information and deliverables related to your term project throughout the remainder of the course to this website. Notify (via email) the teaching team of the URL for your website today.

Session 8
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 PowerPoint 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.  Send (via email) the teaching team these slides with your team name in the title of the email by 1PM the day of this session.  Also post the slides to your team's website. 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 to your website. 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
PS3: Post an update of your PS2 to your website. What has the team learned since PS2?

Session 16
OAP Dress Rehearsal. Session 16 is dedicated to a dress rehearsal of the OAP. Each team will be paired up with another team at the start of this session and then will ideally present a rough draft of their final OAP presentation to the other team. This exercise is designed to both allow you to receive feedback on your presentation and let you practice giving feedback to others. Please make sure your team will have some materials to present and receive feedback by the start of this session unless you work out a different arrangement with the team you are paired with for another time that works for all. We highly encourage you to post any draft materials (i.e., the slide deck) to your OAP website beforehand.

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, all teams must post their slides to their website (in either PDF or .ppt format) and the homework list (in .ppt format) by 9:00AM before Session 17.
 
Session 20     
Written OAP reports. Post your OAP written report (up to 1500 words) to your team website and email it the instructors via the email list by 6 PM.  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, 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.

Professor Chien's tips for OAP


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