Venture Concept No. 2 (1 for me) - Week 15

Opportunity. An opportunity may be defined as a group of customers with unmet or under-met needs.

Who has the need?

Many people interested in cars and modifying them would be interested in the product.  It is really needed by the goal market for the product, 16-30-year-old males who have a lower end sports car like a Hyundai Genesis or For Mustang. 

The nature of the need?

The goal demographic need this product because of a lack of affordable options.  The exhaust system is already present in higher end cars, however these systems often cost close to the price of a lower end sports car.  This variable exhaust system solves the problem most prospective buyers have when purchasing an exhaust of loudness vs. droning. 

What are the forces or changes in the environment creating this opportunity?

The technology utilized already exists, however it is not implemented on an affordable scale.  Current exhaust manufacturers continue to make systems that do not utilize the technology, which means it is not in the market on large scale. 

How is this market defined geographically and demographically?

Geographically this market cannot be pinned.  Car modifiers live throughout the world in a huge variation of environments.  Rural areas can be excluded but other than that there really is no better way to pinpoint a geographic description.  Demographically, the market is defined mainly by 16-30-year-old males, who are not able to afford the 7-20,000 dollar systems that are currently on the market. 

How are customers currently satisfying this need? And how loyal are they to whatever they use now?

Customers currently satisfy their need through the large aftermarket exhaust manufacturers such as MagnaFlow and HKS.  They do place a great value on brand names, however this just means supplying a quality product, which can be done with smart engineering.  I would say that loyalty does not really matter in this market, it solely depends on the performance of the product.

How big is this opportunity?

This is an international level opportunity, as big names like HKS started in Japan and has become popular throughout the world.  Depending on the growth and success, there is opportunity to build large scale manufacturing plants and working with car companies as well as car garages. 

How long is the window of opportunity?

This product will be viable for as long as cars will be around, which is definitely atleast for the next 100 years.

Innovation

My innovation is to create a variable aftermarket exhaust system for a few different cars at first like the Hyundai Genesis, Ford Mustang, Honda Civic, and Subaru BRZ/Scion FRS.  I chose these cars because they are the most common choices of cars for people who are modifying their cars (16-30-year-old males).  With this age range, customers are often not able to afford higher end sports cars, but they still want to be able to have a car that sounds fast and looks good. It is not all about the high performance, rather the aesthetic.  They are willing to spend maybe a thousand dollars on a new exhaust system, but anything more than that would be better spent on other car parts.

This system is already present in high end sports cars like Ferraris and Lamborghinis, but when it comes to the middle of the line sports cars, there are very few options.  It is one of the biggest decisions for anyone who is looking to modify their car, whether they should get a loud exhaust or keep it soft.  Many people want to be able to really hear their engine sometimes, but when they are driving it on the highway, the sound becomes extremely irritating. This product would essentially have a remote so that when you want a sportier exhaust sound, all you have to do is press a button, and when you want a subtler sound, just press a different button. This happens through opening valves in the muffler so that it changes the restriction of exhaust flow, which in turn changes the pitch and resonance of the exhaust noise. 

Venture Concept. A venture concept may be defined as the application of a specific innovation to address a specific opportunity.

My company would be appealing to these customers because there is virtually no other affordable, quality, variable exhaust system in the world.  With this exhaust system, they would be able to cruise with a high performance sounding exhaust, but when they are on longer road trips, they won’t have to worry about the annoying drone commonly found in high performance exhaust.  This would allow for a steady base to start the company off and eventually allow for the development of systems for other cars as well.  It would take a few years to develop a product with high quality standards, but because I would only be working with a few models, it would allow for much more thorough analysis of the design and materials.

What are the reasons to think customers would switch to this new product? How hard will it be to get them to switch?

I think customers would switch to this product because it solves a common issue for existing exhaust systems.  When they realize how affordable it is as well as the possible performance increases, they will see the value in switching.  The hardest part of convincing customers to switch is getting the brand name out there.  This would involve going to local car meets with a company car to display how the system works, so that customers have something tangible before they drop $1000 on the exhaust. 

Who are the competitors? What are their possible weaknesses or vulnerabilities?

There are quite a few competitors in this market, namely being Magnaflow, HKS, Borla, and ArkPerformance.  I think their biggest vulnerabilities are in their marketing techniques.  None of these companies have something that really sets them apart, which is where I believe my business will shine. 

What role does packaging, your price points, distribution, customer support, the customer experience or the business loacation play in defining your business concept?

All of these aspects are what would set my business concept apart from the already existing companies.  Packaging the product correctly will make sure that the system is delivered with the same performance and quality that it had out of the factory.  Price points are very important, and as the company becomes larger, instead of increasing prices, I would try to lower prices through more efficient manufacturing and distribution.  Location would not be of paramount importance, but I think having places to showcase the exhaust would be important, such as in performance garages. 

How would you organize a “business” to support the ongoing production of your new product? How many employees? What roles are in the venture?

The business would be located in a garage space in an industrial park, which would make rent cheap as well as allow for the manufacturing/instillation of the exhaust systems.  There would be a small garage to start off, but the majority of the space would be dedicated towards manufacturing the exhaust systems.  The initial plan would require around 5-10 employees at first, a majority of them being involved in manufacturing, while two others and I work on the actual design of the systems in CAD systems.

Three Minor Elements

What will set your business apart?

I think my technical background in mechanical engineering really sets apart as well as the fact that I am a part of my customer demographic.  I have a personal interest in my product because it is something that I would definitely want on my car and it is something that I have looked for but never found. 

What’s next for the venture?

The product I would plan on bringing to my business after I have established the exhaust systems would be a cold air intake system.  Customers want this because when it is combined with their new exhaust system, it will actually increase the overall performance of the car, not just make it sound better.  These air intake systems are much more affordable than the exhaust systems, around 200 dollars, which means that my customers will realize that since they already spent 1000 on the exhaust, they might as well spend the extra 200 to make it perform at a higher level.

What’s next for you? 

Within the first five years, I hope to have established the brand name for my business, and have enough profit to be able to expand into many different models of cars, while continuing to ensure quality.  In the next decade I hope that I am able to start another venture, because although I am passionate about cars, there are so many other things I am interested in and I want to be a part of as many startups as I can.  This would mean the ability to invest and help coach up and coming entrepreneurs to be successful like I am.

This is the first venture concept I have made, so I don’t have any feedback from the last time we were supposed to have done it.  I did get feedback on my What’s Next exercise however, and I tried to integrate that into my plans for the venture.  I really tried to push the idea that there would be a significant discount for customers that already have purchased an exhaust system through me.

Going for Google Gold - Week 14

1.     Although I am obviously not well versed in how to truly strategize for search engine optimaztion, one of the main things I though to consider was making sure to include a description of my product in every post.  This way, people could immediately determine what it was I was talking about, rather than have to search through older posts just to get a background to be able to understand later ones.  Other than that, there were not many activities I really considered, just because my concept wasn’t really something I felt confident enough in, as it was really just a class activity. 

2.     I think my main key words were: Blog, Jon Dasher, Entrepreneur, exhaust system, car performance, modification, variable-exhaust, and air intake.  I wouldn’t say I necessarily chose these words, but they were the words that ended up appearing most often because they were the subject matter of each and every blog post.  My keywords did change about a third of the way through the semester, just because I changed my business concept, which I think was a very smart decision.  Otherwise I would have never been able to complete many of the activities that came later. 

3.     I did not really promote my blog on social media for the same reason mentioned in one.  Although I think I learned a lot from this experience, I was not very confident in my business concept and did not really see it in a realistic sense.  I think if I had utilized social media, it would have been a great way to connect with people, as I know many people that would be interested in my entrepreneurial endeavors, mostly being family.

4.     My most viral post was the Free Money exercise we did in week 7.  It got the most page views by far, almost 35.  I think it got the most just because there weren’t many people who actually did the exercise, and I also believe it is something that attracts views just by its title.  Almost anyone can connect with this activity and it is cool to see how people respond to situations such as these. 

5.     When I included my name in the keywords, I came up on the first page out of the 102,000 results, but when I did not include that, my blog didn’t come up untile page 7 of 332,000.

Very Short Interview Part 2 - Week 14

Looking back at the interview I had with Mr. Ladson, I found that the questions and answers were very powerful idealistically, however there was much to still be said about entrepreneurship.  From everything I have learned in this class, I realize there are so many details associated with entrepreneurship that it could be easy to lose sight of the big picture and what it is that drives someone to be successful.  I think the part Mr. Ladson touched on about fear of failure is extremely important.  I think this fear is what drives us to not be complacent and to continually evolve so that we may grow our business ventures or run them more efficiently. 

Because Mr. Ladson is in Jacksonville, I was forced to correspond with him over email.  Here are the questions I asked and his answers.

How often do you think about your competition?

In the market I’m in, competition is not as big of a deal as most other markets.  With industrial development, the focus is really about catering to the client, not proving your businesses worth over the next guy.

Did you have a concrete plan for your business when you started out? Did you follow it?

There wasn’t really a concrete plan for the business, but I did have a general idea of what I wanted to do.  I think it’s difficult to set up an exact plan because of how quickly things can change.

Have there ever been any times you questioned being an entrepreneur?

All the time but if you believe in what you are doing and your skill set, you can overcome fear. When you stop being fearful, you are probably destined to fail. 

I feel that I have definitely developed my entrepreneurial ability greatly through this class.  I think that I really learned how many different facets there are in business development and it helped me be a little bit more pragmatic in my approach.  I think I feel very comfortable in talking about the ideas of entrepreneurship in general, however I still feel uneasy about talking with an already successful entrepreneur.  I realize all of the details that are needed, but I don’t think I have enough information on the actual details themselves to be confident when talking with an entrepreneur.  Mr. Ladson did not really mention anything about my personal progress, but I think he was impressed with how our class was structured.