From 4:00 - 6:00 PM presenters will give thumbnail descriptions (of up to 10 minutes) of ventures that they are conceiving or developing - and there will be discussion of key elements by the group (the structured discussion after each presentation consists of clarification questions, brainstorming on a subject of the presenter's choice, summing up).
The presentations and discussions will center on:
1. the elements of a business model (as referred to by Clayton Christensen in The Innovator's Prescription):
- the value proposition;
- the resources necessary;
- the processes to make the venture function;
- the profit formula; and
2. the key elements that an investor should consider when reviewing a business plan according to Bill Sahlman:
- the people;
- the opportunity;
- the context;
- the risk and reward.
We hope to evoke useful questions and ideas from all present.
The Ventures being presented:
All three of the ventures being presented can be viewed in terms of innovative strategies.
DecisionIncite is a classical disruptive innovation. It makes use of the availability of massive computing power as a cheap commodity. The venture's software makes it possible to to analyze huge quantities of data either to improve the quality of work or to solve extremely complex problems. Its first application was not adopted by the company where it was developed because it was a low cost solution that would have disrupted the high priced cash cow on which the company was living (although the customers would have benefited greatly). Some healthcare problems that can be facilitated with DecisionIncite software: determinating interactions of myriad different drugs; designing proteins; detecting gene therapy patterns in terms of cellular mechanisms/body structure, chemistry processes.
20/20 Gene systems applies new technology to diagnostics, the field which Clayton Christensen described as an undervalued crucial link to healthcare progress in The Innovator's Prescription. Being able to make exact diagonoses that identify causes is the first step toward being able to develop dependable treaments and move areas of healthcare from intuitive to empirical to precision medicine. Using DNA technology to efficiently and effectively diagnose is itself a disruptive innovation that will be able to help disrupt the process of hypothesis and attempted treatment cycles that characterizes intuitive medicine.
The Greater Washington Healthcare Collaborative is a potential disruptive innovation that is in the feasibility study stage. It would serve marginal and non-customers by making it possible for entrepreneurs and small and medium-sized companies, who are increasingly priced out of the healthcare market, to provide healthcare benefits to their employees. The venture would provide a program of high deductible insurance and health savings accounts and other services such as health i.d. cards, guidance, and support network facilitation. It would exploit one of the two approaches that Professor Christensen sees as possible to improve healthcare and reduce its cost under existing conditions (the other being integregated healthcare providers).
Background:
Purpose of Workshop. The purpose of this Business Model Workshop is to help us learn how to apply in the real world the innovative strategy management disciplines for which we recently had a presentation series.
Three Disciplines. In the three disciplines covered, Disruptive Innovation, Blue Ocean Strategy, and The Momentum Effect, the emphasis is on new ways of doing things and new customers:
New Possibilities for Entrepreneurs. According to road maps presented in these research-based approaches, it is not necessary for entrepreneurs to do business as usual. The thought patterns developed by Professors Christensen, Kim and Larreche are reassuring to people who are interested in innovation. They make it possible to develop innovative new ventures in the context of recognizable concepts, stages of development and objectives.
Real World Challenge. However, principles and thought patterns that seem wonderfully intelligent and articulate in books and presentations turn out not to be easy to apply in the real world - because it is a considerable challenge to determine a viable value proposition and business model. Fresh thinking and logical approaches help to accomplish these tasks, but they can never make the process obvious or simple.
Even if a viable business model has been determined, it is necessary to put the right elements together to carry it out successfully - hence the business plan. The segments of a business plan, along with basic entrepreneurial advice from Steven Brandt's Entrepreneuring: The Ten Commandments, are set out in the posting entitled "Two By Brandt" on the entrepreneurship tab of the HBS Club website (www.hbsclubwdc.net).
Priority Elements that should appear in a Business Plan. How do experienced entrepreneurs and investors read a business plan? In a Classic Harvard Business Review article entitled How to Write a Great Business Plan Bill Sahlman describes "four interdependent factors critical to any business" that the entrepreneurs and investors sould bear in mind, namely:
" The People. The men and women starting and running the venture, as well as the outside parties providing key services or important resources for it, such as its lawyers, accountants, and suppliers.
The Opportunity. A profile of the business itself - what it will sell and to whom, whether the business can grow and how fast, whats its economics are, who and what stand in the way of success.
The Context. The big picture - the regulatory environment, interest rates, demographic trends, inflation, and the like - basically, factors that inevitably change but cannot be controlled by the entrepreneur.
Risk and Reward. An assessment of everything that can go wrong and right, and a discussion of how the entrepreneurial team can respond."
+++++++++++++++++++++++++++++++++++++++++++++++++
