BET100 Lecture Notes - Lecture 3: Opportunity Cost
5 Jun 2018
School
Course
Professor
Module 3: Competition
Essentials(必要) of Entrepreneurial Behaviour
Module 4: Finding Important Problems
A: Definition of an important problem
It is mission critical, an excruciating pain point. Customers think this problem should be solved
urgently.
Define important problem:
• For an organization: problem can be high cost, a sharply rising cost, etc. Your employer
or customer might not notice there is a serious problem until you tell them
• For an individual consumer or user: problem seems urgent, essential, something they
must have once
What makes problem important, urgently?
1. The existing highly-desired product is too expensive
2. No product that provides the highly-desired benefit.
What makes a product highly desired?
• For consumers: must have it now
• For Business: a significant effect on their profit.
➢ Falling profits
➢ Threat of Falling profits
➢ Chance to raise profit
Why would profit fall?
➢ More competitors causing price declines
➢ More desirable products from existing competitors
➢ More desirable products from new competitors
➢ Customer fatigue because the product itself is becoming less appealing
The test of the killer problem: you don’t have to convince someone to accept it, just prove it
works
B: The power of alternatives
Opportunity Cost 机会成本:
It REQUIRES that you generate a significant number of viable alternatives for every major action
involved in the formation of an enterprise.
How to find a large number of important problems? 3 kinds of searches
➢ Search in the curated business media for important problems
➢ Search in your workplace experiences and those of others at the UW
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
It is mission critical, an excruciating pain point. Customers think this problem should be solved urgently. Define important problem: for an organization: problem can be high cost, a sharply rising cost, etc. Your employer or customer might not notice there is a serious problem until you tell them: for an individual consumer or user: problem seems urgent, essential, something they must have once. What makes problem important, urgently: the existing highly-desired product is too expensive, no product that provides the highly-desired benefit. What makes a product highly desired: for consumers: must have it now, for business: a significant effect on their profit. Customer fatigue because the product itself is becoming less appealing. The test of the killer problem: you don"t have to convince someone to accept it, just prove it works. It requires that you generate a significant number of viable alternatives for every major action involved in the formation of an enterprise.
