Recognizing Opportunities

The Oregon State Advantage Accelerator is not just an accelerator. We are not an incubator. We are a hybrid—a combination of both at the same time. Both accelerators and incubators provide important services, education and community to entrepreneurs. The major differences between the two is that incubators tend to provide office space and companies can stay there much longer than the typical three month accelerator stay. University research takes a significant investment of time, money and grit. Everyone dreams of the overnight success, but in fact original research takes years of hard work and persistence.

Working with our aspiring entrepreneurs—particularly those in the very early stages—requires patience. We must introduce key business components and enlighten scientists to the commercialization process. This is critical because almost all grants (federal, state or private) now require a commercialization plan that is focused on market-based application. Grant acceptance is determined by the marketability of the research.

We also accept later stage companies. These businesses are taken back to the beginning, to their roots. All clients must make certain that each opportunity is examined thoroughly. An opportunity has the qualities of being attractive, durable, and timely and is anchored in a product or service, which creates or adds value for its buyer or end user.

Opportunity is the basis for the company’s existence. At the OSU Advantage Accelerator, we have our entrepreneurs scrutinize as many possible opportunities as possible. With each potential opportunity we consider a number of variables, and for each variable we examine one set of opportunities for the business aspect and another for the technology itself.

For the business aspects, each opportunity is compared to:

Total market, addressable and reachable

The major benefits for each opportunity

Ease of entry

Cost of entry

Adoption rate and ease of customer reach

Key drivers of change

Channels, both physical and digital

Intellectual property or other market protection

Competitive response

Price/margins (price re-frames customers)

Potential early adopters

Strategic partners

Application platform, early features leading to a minimal viable product

Unique Value Proposition (What really does make you so special?)

List the unknowns, questions to explore, and the decision making process for the targeted customer in each opportunity.

On the technology side, the focus remains on commercialization but seeks the answer to other important questions:

Is the inventor or good substitute readily available to join the team?

What is the amount of the pain for our solution?

How far along is the technology? Is it prototype ready?

What are customers doing now? Are there other substitutes?

What is the industry’s infrastructure?

What is the regulatory environment?

Going back to the beginning helps to cut down on pivots during and after working through a business model canvas exercise. A pivot is a substantive change to one or more of the nine business model canvas components. Pivots may cost money.

Not pivoting when appropriate may also cost the business. Going through an opportunity recognition exercise before working on a business model canvas saves time and money. Is it possible to choose the better option earlier on? I know it is and our clients at the Advantage Accelerator know it as well.

We teach our clients to follow the three D rule: Be Daring, be Different and be Delightful (More on the three D’s in a future post). Test the opportunities as well as the nine elements of the canvas and the answers to each hypothesis will be found. These answers will eliminate and/or reduce the pivots when starting the new great entrepreneurial venture.

Grace is in the Resolution – Customer Service

I know that all of you at some time have experienced poor customer service. Remember how frustrating that can be? Some of you might remember receiving outstanding customer service that is gracious and fulfilling.

Think about the cost of customer acquisition (CAC) and customer retention costs (CRC). However unfathomable it may seem, one poor customer service issue may lose a customer forever. There are a number of vendors that I will never use and there are vendors that keep my business despite having ordinary or even redundant products or services.

I am interested in hearing stories from those creative souls that either saved a lost customer or discovered an outstanding way to recapture a seemingly lost client. I am not asking about ways to throw money at a customer. I will admit that money and refunds can be excellent incentives for customers. Instead, I am looking for interesting stories in the art of the creative save.

One of my stories occurred at a high-end chain restaurant at a hotel in San Diego overlooking a harbor. It was near the fourth of July, and the restaurant was particularly busy. Our children were with us and, and we were looking for a pleasant family dinner. Suddenly, an unexpected firework show began over the harbor. We ordered, our drinks came, we were all laughing and talking, and clearly enjoying the evening. We were having such a pleasant time that we were completely unaware of how much time had passed since we ordered.

Soon the maître d’ came to us and apologized for our meals being so late. It had been an hour since we had placed our order, and we didn’t even know it. They offered us more drinks, and immediately served our meals and desserts, all on the house. Now I know some readers will see this as a monetary incentive. However, we had not realized how long we were waiting and did not complain – but the wait staff knew as well as the manager that this was not the good service they were trained to give. This was a case of the restaurant unilaterally deciding to take action, and doing what they perceived was the right thing before the customer could register any complaint. As a result, we have since favored that particular chain, when given a choice of other similar restaurants.

Poor service is only one way to lose a customer. Other common failures in the cost of customer retention (CRC) results from failing to maintain a relationship with your customer, failure to understand their evolving needs and requirements, or finding yourself edged out by another vendor who worked harder than you for their business. A heavy focus on product or service price may contribute to losing a customer. You work hard to bring in customers, why lose them?

Do the math. What is your cost of customer acquisition (CAC), cost of retention and cost of recapture? My guess is that employee training and empowerment can easily solve customer service issues, and come at a lower cost than losing good clients.

Consider this: How good are all your employees at managing customer interactions?