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Valuation – The Worth of an Idea

November 13, 2010 Leave a comment

Entrepreneurs have a steady stream of thought and they keep generating ideas. There is a lot of work however with these idea machines as they need to develop the capability to sift through these ideas and freeze in over the opportunities. Opportunities are best described as the value generated for which there can be a given financial transaction made; with repeatability and room for enhancing the value. The opportunity should offer a good yield and capable of generating revenue that’s more than the unified expense for the opportunity.

Core Value: If the opportunity is long sustaining and if business can exploit the platform and evolve better profitability, the more comprehensive the solution is. The market need to see ‘value’ in the solution, the value need to be visible when viewed across varied perspectives. When the market scans for a value stack in a solution, the strength of the solution should excite the prospects. The solution stack should be a ‘Fit Gap’ over needs and when evaluated from an internal and an external perspective; internally the solution should address minimal investment, expanding existing capabilities over technology, operations, resources. Externally it needs to address needs of the market at large as a bundle.

Evaluation: The value of the idea and the impending solution can be evaluated by performing
1. Market centric Valuation – taking into consideration the Market Need + Solution Fit + Value Derivations.
2. Technical Feasibility Study of the solution – Performing a Technical feasibility study scrutinizes the need for the technology indulgence of the idea before its maturity and during market adoption, the ease + the scalability + the interops + simplifications, all counts.
3. Commercial Capability study – Evaluating the commercials will be done over two perspectives, the internal returns over expenses, ease of formulation, leveraging of existing business and the markets value for purchase scaling up performances or driving optimizations.
4. Competition Analysis – Positioning and Strategies – Complete landscape analysis over competition + Postioning + Market differentiator services offering be performed to ensure that the best strategy is drafted.

Jesu Valiant

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