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BUSI 506 New Venture Analysis

BUSI 506 New Venture Analysis. Class 2 Value Proposition. Imagine: Medieval Europe. Weather Zillow. Occam’s Razor Example. Separate red circles from blue squares. Solution A – 70%. Solution B – 90%. Effective? Replicable? Scalable?. Solution C – 100%. Analogous to Business Planning.

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BUSI 506 New Venture Analysis

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  1. BUSI 506New Venture Analysis Class 2 Value Proposition

  2. Imagine: Medieval Europe WeatherZillow

  3. Occam’s Razor Example Separate red circles from blue squares. Solution A – 70% Solution B – 90% Effective? Replicable? Scalable? Solution C – 100%

  4. Analogous to Business Planning • Design prototype • Refine manufacturing process • Identify target market • Analyze competitive landscape • Create financial model • …

  5. Occam’s Razor for Business Plan or

  6. Vernon’s Razor Go or No-Go?

  7. Go or No-Go?

  8. Vernon’s Razor • Value Proposition • Market Potential • Return • Team • Competitive Advantage • Business Model • Customer Pain Defining Opportunity Minimizing Risk

  9. Value Proposition • Your new venture should make the world a better place = you are creating value • VP is brief description of the value that you will create with your new venture • Begin thinking of your idea in terms of the value they create

  10. Value Proposition Kawasaki – 3 Ways to Make Meaning • Increase quality of life • Right a wrong • Prevent end of something good • video

  11. Value Proposition • Riozen Video: get to VP quickly • Goal is to get to next step • “Elevator Pitch” • Effective communications • Kawasaki: make mantra Who is the mantra for? Customer? Employee? Investor? Partners? Suppliers? • Dilbert

  12. Components of Good VP • Problem solved (#1) • Size of problem • Target market • Competitive advantage • Team

  13. Bad VP University Biodiesel recognizes that reliance on petroleum to fuel our nation’s vehicles is problematic in that domestic production is decreasing, and the petroleum that remains globally is increasingly difficult to extract. Dependence on foreign sources is also inherently costly, insecure and politically undesirable… UniBio will address this opportunity through an integration of UNC-Chapel Hill (UNC) resources. • We will recycle waste vegetable oil (WVO) from UNC dining facilities • We will establish a collection system to likewise recycle WVO generated by the broader UNC community. • The biodiesel production facility and collection system will serve as educational resources, engaging and empowering faculty, students and staff in being part of the solution to an impending energy transition.

  14. Good VP • University Biodiesel offers an educational and operational package that allows universities to save cost on fuel and reduce greenhouse emissions by recycling waste vegetable oil into biodiesel fuel for use in university vehicles while teaching students the importance of environmental responsibility.

  15. Bad VP Customer service and efficiency best practices are defined by forward thinking corporations who drive differentiation by their speed, flexibility and quality of service. Providing high levels of service (and “touch”) while driving profitability requires communications-enabled technologies. Such technologies implemented privately/individually by an enterprise are costly and typically out of reach for small and medium businesses – yet customer expectations don’t change. The new venture by NewCo will establish a delivery model and hosted infrastructure based on “software-as-a-service” (hosted/operated/ managed services) for communications enabled business applications. Where appropriate, the chosen applications will be from the opensource community to provide for customer access to business solutions heretofore too expensive and complex to integrate by the Small and Medium sized businesses.

  16. Good VP • Using NewCo software-as-a-service, small- to mid-sized businesses can offer world-class customer services previously only available to the Fortune 500.

  17. VP for Google “Organize the world’s information making it universally accessible and useful.” Founder Larry Page Not necessarily a great “value proposition” statement, but an interestingly bold one.

  18. VP for eBay “Making inefficient markets efficient.” CEO Meg Whitman Also, not necessarily great, but certainly bold.

  19. Value Network • The economy is too complicated to think of customers only as end-user (B2C) (Estrin Video) • An overview of everyone who might be touched by your venture • Your challenge: identify who in the network gets the most value

  20. Cell Phone Company Cell Phone Company Home Phone Company Home Phone Company Office Phone Company Office Phone Company NewPhoneChipCo A technology company that has a chip that can divert phone calls to any of a customer’s telephones. End User New Gadget Caller Following the Path of One Phone Call Equipment Manufacturers Equipment Wholesalers Equipment Retailers

  21. Assignment Value Network for ReverbNation

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