Advice to business school students presenting business cases
week I sat on a panel of judges for a business plan competition at the Schulich School of Business
at York University in Toronto Canada. My experience on the campus, interaction with the students and a number of faculty members, and my lengthy dialogue with the Dean of the Business School in which he described the history, ambitions, and strategy of the school helped me appreciate why Schulich is rated one of the very best business schools in the world.
I sat and listened as 8 teams
of 7 or so each presented an idea for a new product or service, the
business plan, the marketing strategy, the profit model etc... This
was a class of bright eyed 1st year 17 &18 year old
under graduate students cutting their teeth on building a business
plan for the first time. They had 50 page business cases in hand.
Some had figured out where they were going to build their products
and what the labor conditions were and others had done deep analysis
on distribution networks. The focus (and the judging criteria) was
on the process and completeness of the business plan. The hard part
of course is coming up with a block buster idea and some of these
were humorous and toungue in cheek. Some of the ideas were creative
but impractical ( an automated indoor doggy litter-box with artificial
grass); Some recognized a need (comply with regulations on lawn mower
emissions) but whose solution had some difficult to manage
"by-products" (deploying a herd of goats to trim residential lawns);
Some involved physics of the impossible, or at least wildly
optimistic (a AA rechargeable battery with approx. 40,000 mA of energy storage capacity); Some
were, lets say, a little over ambitious, or at least required some
highly ambitious capitalization (overhauling the global ethanol
market with genetically modified Arrowroot and an experimental
enzyme); Some hadn't quite tied off their dependencies (a social
location based coupon marketing service that had a critical
dependency on facebook for authentication and analytics... but who
identified as a “threat' that they had not talked to facebook). At
the end of the day the panel awarded the “judges choice” to a
Bluetooth base proximity alarm that used your smartphone and some
'tags” to help you keep track of you essentials. It was a lot of
fun for the students and a lot of fun for me to see the genesis of
the next generation of creative, passionate business people. There is
tremendous potential in this next generation.
point out that this class at Schulich uses LotusLive. They do so to allow the virtual coordination and integration of distributed work. I should also point out
that the chief weakness, in my opinion, of all the presentations, or perhaps I should say the greatest opportunity to improve the quality of the presentations, was a lack of cross
discipline engagement. Of course this was a friendly "in class" "process of building a business plan" competition that didn't reasonably have a lot of scope for cross discipline interaction, and that wasn't the point of the exercise per se. I am convinced however that cross discipline interaction is one of the essential skills these students will have to learn over the next few years. My discussions with faculty members
at Schulich make it clear to me that they understand this is tremendous opportunity, and requirement for
business school education and that curriculum has to impress upon business students that success as business people will increasingly
require cross-discipline collaboration and social skills. I am hopeful they will begin to use LotusLive to explore ways of engaging
other disciplines in the University to help them come up with even better ideas, refine the good ideas they already have and put together even more compelling business plans. (I should mention that I also spent a
lot of time with the Engineering School who also recognize this
essential need from the engineering side of the equation. They want to
train the next generation of what they call “renaissance” engineers. I
hope they too will begin using LotusLive to help them with this)
the competition was over, I spend another hour or so answering
questions and “consulting” with these students to help them refine their
ideas and business plans. Professor Jean Adams, who invited me to judge this
competition, asked me to forward on any recommendations I may have thought
of that I did not get a chance to communicate in person. I thought
would share them here. This is off the top of my head and most certainly
not a definitive list, but it is based on my observations of the
competition and I think would have helped these students deliver even better
your product/service early and concisely and make sure you have a
very well defined value proposition. Why is this invention/product
valuable and to who is it valuable? Why would someone want to
spend money on it? You need to be very explicit about this. "This
is why it is valuable to these people..." Ultimately any
product or service will be successful or fail because of the value
it provides and you ability to articulate that value to prospective
buyers. Once again, you need to be very explicit right up front
about value to the customer.
the disruption. Most good ideas stem from either finding a new and
novel or more cost effective way of addressing some well understood
problem or from leveraging a specific "disruption" . In
either case as you present your idea to someone make it clear what
category your idea fits into. That helps a reviewer to slot the
discussion into a evaluation framework quickly. If it is a
disruption then describe its nature (technical, regulatory, social,
business structure, business cycle etc..) and its magnitude. It
may be also useful to describe how some mega disruptions that people
are familiar with (mobile, social networking, cloud computing, green
regulation, analytics etc.) will impact the space into which you are
trying to insert the product/service. Once again, this is
important so that a reviewer can slot the discussion and evaluate
value and viability quickly.
needs to be feasible/ implementable. Nothing can shoot down a good
idea faster than impossibility of implementation. Whether it is a
problem of the energy requirements involving densities that are
orders of magnitude greater than anything available or requiring
some manufacturing process never before seen, or regulations prohibit
it... make sure that it is feasible and even better, implementable
in an economically realistic way. This means reaching out to
experts to validate and help refine the idea and sensitize you to
physical, chemical, manufacturing, and regulatory limitations. Talk
to an electrical engineer. Talk to an environmental lawyer. Talk to
manufacturing specialist. If the product/service does involve a
disruption that does go beyond conventional feasibility (which
happens all the time) then be sure to describe that disruption in
some detail and provide evidence (a study, reference an expert
opinion by name and reputation etc.) A proof of concept can help.
This may be a prototype or may be a case study or an existing example
of success with this type of product/service.
the business model out in a very simple manner. This is how we are
going to make it... This is how we are going to distribute it... This
is how we are going to sell/ ,market/ support it... This is how we
are going to make money... and how much. Is this a less expensive
or better alternative to an existing product? Is this a standalone?
Is this an accessory to something that has already succeeded? Is
this a razor and razor blades model? Does it leverage the network
effect or is viral? Does it benefit from ecosystem acceleration? Is
it a loss leader and if so what follows it? Is it a freemium model?
Think about adjacencies.
If you succeed with this product, are there any interesting
adjacencies that allow you to leverage your insertion power? Are there
follow-on or accessory products that can benefit form lower cost of
sales and by extension higher revenue profits? Your base product may
be closer to a loss leader if you can make profit on follow-on.
the market dynamics in a concise manner. What is the target market
and opportunity size? Are you proposing to commoditize an existing
market and how are you going to/can you protect yourself against
commoditization? What is the intellectual property landscape? Do
you have patentable novelty. Who are your competitors? What
strengths and weakness do you have relative to your competitors?
your dependencies. What will it take to be successful? What
partnerships/agreements do you need? What capital do you need and
where are you going to get it from? What approvals are required?
How much skill or manufacturing capacity do you need? What are the
concise, respectful, and professional. When you are pitching an
idea, respect the value and finite nature of the time that the
reviewers are investing. This means being net, concise, well
organized and well prepared. Get to the point. Edit out
superfluous information. Be warm, engaging, enthusiastic,
passionate.... but don't do a comedy routine.
cross discipline expertise, collaborate and iterate. Invention
rarely happens in isolation and never becomes a real value
proposition in the real world without engaging collaborators and
critics form across disciplines. Concept development is a
fundamentally collaborative and iterative process. Don't forget it.
Engage and refine through many iterations before you pitch it to an
investor. First impressions make a big difference. You may only
get one shot so make the best of it.
through and describe the product life cycle. Your costs aren't only
manufacturing, marketing and sales. They are also ongoing support
and distribution. Once a customer buys your product they don't
automatically transform from being a revenue source to a cost
center. They become evangelists/ influencers and repeat customers.
The post sale life cycle may also be a revenue source such as
licensing fees, upgrades, service for fee, supplies...etc. and as
such may be an important part of the business model. The value
proposition you are selling isn't only about the point of purchase,
it often involves a long term and ongoing relationship.
forget about brand equity. When you are selling a product you
aren't only capturing revenue and making profit, you are generating
brand equity. Your potential value to a potential investor isn't
only how much free cash you can generate it is the real,
intellectual and brand equity of the company. You should package
and articulate this value and the plan to maximize it as part of