Spotting good thing secret to finding success

Many ventures are not thought out before starting

B y their nature, entrepreneurial thinkers and idea generators consider themselves great opportunity spotters. Everyone, from the selfmade captain of industry to the Dragons’ Den viewer who emulates venture capitalists from the safety of his or her couch, believes they know a good thing when they see it.

But the truth is most ventures or projects based solely on ideas have very little chance of succeeding. It’s calculated that about one in 1,000 business ideas has a chance of being successfully funded by outsiders.

Further, last year 61% of non-business owners said they wanted to start businesses, but only half of them will survive five years and one-third won’t make it past two.

The reason is simple: There is a large gap between an idea, which begins the journey to creating an opportunity, and the conversion of that idea into a business, to the final product or business.

Yet countless incipient entrepreneurs and idea hamsters pursue an idea without ever analyzing whether that idea constitutes an opportunity.

Sean Evan Wise says this is the secret to spotting a good thing — that a business will take advantage of a market opportunity and, not only exist, but thrive and thus succeed.

Wise, a professor at Ryerson University’s Ted Rogers School of Management, venture capitalist and initial adviser to the popular CBC reality show Dragons’ Den and ABC’S Shark Tank in which hopeful entrepreneurs pitch their business ideas to a panel of venture capitalists, has put these concepts in a book.

Hot or Not: How to know if your business ideas will fly or fail? (Ryerson Entrepreneurship Institute) is a “field manual” for Canada’s growing army of entrepreneurs. Wise wrote it because he sees and hears countless pitches in which hopeful entrepre-

neurs solicit investment for ideas or concepts that haven’t been validated with proper research and thinking.

Wise points out that, if 3,200 business concepts were funded in a year, then at least 300,000-plus were not, largely because of poor “opportunity evaluation.” By providing a methodology to assess a business opportunity, he hopes to close that gap and save many entrepreneurs (and investors) a great amount of grief.

An idea can be seen as an opportunity, he says, when:

It is durable It will last long enough to generate money;

It is timely The market is ready to buy the solution the idea encompasses;

It is attractive The potential rewards and returns on investment exceed the costs and resources.

It adds value It must lead to a product or service that creates or adds value for its buyer or end user.

The next step is to evaluate that opportunity at a much deeper level, usually by examining the following eight factors:

People Who is behind the project?

Pain What problem are you addressing?

Product What solution to the problem do you offer?

Province To what market or industry are you selling?

Pitch How will you deliver a clear, two-minute overview?

Plan What is your go-to-market strategy?

Proposal What are you seeking to gain, what are you willing to give?

Pitfalls What things should you avoid? Wise says he wrote the book to guide entrepreneurs trying to decide which idea to take to market; for business managers deciding which internal project to back; for investors looking for a systematic and objective review of funding opportunities.

Howe ver, with a few tweaks, the methodology could just as easily be turned to any idea-generating situation that requires further examination. Tony Wanless, of Knowpreneur Consultants (knowpreneur.net), is a certified management consultant who helps knowledgebased businesses with strategy,

innovation and planning.