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FUTURE LEARN

a)starting a bussiness 1
-week 1
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0:05Before
embarking on this entrepreneurial journey, it's worth setting the context-kor in our words, the entrepreneurial learning cycle. Let's start with entrepreneurial
i
thinking, or the age-old debate, are entrepreneurs born or made? Of course, the
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answer is both. Entrepreneurs are born with certain attributes, have a family
background,
and all through their lives gain experiences and build networks, all of
t
owhich contribute to their values. We know that entrepreneurs share certain
characteristics, including the ability to recognise opportunities. They have a need to
0achieve, tend to be over-optimistic, and are prepared to take risks. They like
autonomy,
S and actually feel that they can control things. They're gregarious, and also
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creative.
Not all entrepreneurs have these characteristics or have them in equal
i S k S
measure.
n k i k

p i
u1:11iEntrepreneurial
thinking is how all these things come together to impact on the entrepreneurial
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t p
process, from
idea generation to opportunity recognition, and exploitation in enterprises. And like
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e
all
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o the
t more times you do it, the better you get. But how do we know an idea is really a
s things,
o opportunity?
o
business
This is a very difficult question to answer. And perhaps the only way to really
2
ado this is to start your own business. And this is inherently risky. One way to reduce
1
n 1
this
d riskmis to share your idea with other people until you can decide that this is the
i at
m the right time, or put it aside for another day.
rightmidea
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5 i
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1:56When
we ask successful entrepreneurs, how did you know this was the right
s u t u
e often
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say, I had a gut feel. There is nothing wrong with this approach. But
eidea,t they
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e
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what they are actually describing is their own internal judgement process, borne out

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of
years of experience, and also intuition. What would be extremely useful is to
n a a a
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develop
of sharing a business idea which was structured and a reliable
d n na way
d d d
spredictor
of success. Traditionally, this has been the role of the business plan. Indeed,

when
1 you're
5 5 raising finance, you will have to produce a very detailed business plan,
1 1 financial
6
including
forecasts. But the business plan has many disadvantages. Its very

structure reduces the opportunity for debate and creativity-- so important in


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entrepreneurial
recognition.
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2:51Over the last decade or so, business models have emerged as a way of describing
business ideas. In the first activity, we are going to consider the dimensions and
drivers of an opportunity business model as a way of facilitating a structured debate,
which will help to accelerate the entrepreneurial process from idea generation,
opportunity recognition, and exploitation in a new venture. Going through the
entrepreneurial learning cycle will improve your entrepreneurial thinking. Bear this in
mind throughout the activities on this course.

The entrepreneurial cycle


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Before embarking on this entrepreneurial journey, its worth setting the context
kS
or,ik in our words, the entrepreneurial learning cycle.
pi video, Professor Nigel Lockett considers entrepreneurial thinking, or the ageIn this
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S
old debate
are entrepreneurs born, or made? Watch the video and share your
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k
thoughts.
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i
0:05oHello,
I'm Nigel Lockett and today we're focusing on vision and opportunities.
p
0
And I'm going to introduce you to opportunity business models as a way of sharing
0
yourt ideas. I'm going to use The Cambridge Satchel Company, founded by Julie
m
o in 2008, as an example of how you can share your business idea.
Deane
im
0:31ni1Discovering or creating opportunities is a central notion of entrepreneurship.
un
There
tu is much debate about whether entrepreneurs discover opportunities like a gap
m
in the
et market or create them using their expertise and knowledge gained over time. In
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se the boundary between discovery, known as causation, and creation, known as
reality,
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s
u
effectuation,
can be blurred. Julie discovered the gap for high quality satchels after
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t
na
reading
Harry Potter to her children and not being able to find a satchel just like
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dn
Harry's.
But she also created with Vivienne Westwood, a famous British designer, a
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a for high quality designer satchels. Regardless of how opportunities come
market
3
n
15 it's important to share your vision with other people. One of the ways to do this
about,
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is using the opportunity business model.

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2
e
8
1:28So
c let's start by considering the dimensions of opportunity business models.
o
Dimensions
are a simple way of expressing the elements and components of a
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e
business
idea. This helps us to do analysis, support comparison, and identify the
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c
s
o
n
d
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uniqueness of a business idea. Proposition. What is the core value proposition as


perceived by your customers of the business opportunity? Can you express this in just
seven words? People. Who are the leaders, the management team, a network of
advisers, customers, suppliers, and other stakeholders? How does social capital,
social networking, support this business opportunity? Place. Where is the market?
Who are the customers and competitors? Analyse the market and industry to identify
the segments and gaps in the marketplace. Process. How is the enterprise structured?
2:43What are the key processes and relationships that make this business work? How

willSthese be enabled and supported over time? Profit. Why do it? What are the real

S
ki
profit,
ip net profit, and financial forecast. What are the key performance indicators, or
p and what capital is required? Is there any social value in this opportunity? How
KPIs,
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k of this opportunity? Are they financial? You might want to consider the gross
returns

willt ownership be structured? And have you thought about an exit? Let's now
to

consider
the satchel company as a case study. We all know that Julie's company is all
o
about
2 manufacturing very high quality, designer, leather satchels in the UK. But can
43

we express that as a proposition in just seven words?

m
m
i
in
3:46Produce
high quality, designer, British leather satchels. Can you do better than
n
this?u People. Julie and Freda, her mother, a growing management team, no doubt lots
ut
of advisers,
and a growing network of designers. Place. Three shops in the UK, two
te
es
in London.
Paperchase as national stockist and international stockist. But perhaps
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more interesting, a growing online business, including massive growth in markets

a
n
nd
manufacturing
leather satchels and marketing and protecting its brand. Profit. The
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likeaChina. Process. The satchel company has to be good at designing and

company started in 2008 with just 600 pounds. Interestingly, it raised 12 million
4
3
76

pounds
4 by selling equity to a leading venture capital company in Europe.
4:47sSo we can see how easy it is to describe a business opportunity and to see what is
se
distinctive
and discuss it with other people. But how do we know when an idea is
ec
co a business opportunity? We now need to focus on what's really driving the
really
on
opportunity.
The drivers are the underlying forces that impact on a business
nd
opportunity.
Typically, one or more of these will impact at any one time. But all of
ds
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them are beyond the control of the entrepreneur or business. Societal drivers, the
wider global, social, political, and environmental factors which impact on an
opportunity, such as climate change and ageing populations.
5:36Commercial drivers, the global and local commercial and economic factors, such

as local
S taxation and the price of oil. Legal drivers, legislation, rules, and regulatory
k
requirements
typically set by governments or consortiums, such as data protection
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laws or trade association membership rules. Technological drivers, the new and
emerging technologies, such as 4G mobile communications networks and
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nanotechnologies.
Let us consider the satchel company again. What are the factors

o
S
k
Let'si5 consider a societal driver. The world is changing. China will soon be the largest
p
economy
in the world, and with that has emerged a growing middle class who want
m
to demonstrate
their wealth by buying consumer goods.
it
no
u
6:45One
way to demonstrate this new wealth is by buying designer consumer goods.
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Julie76 knows this. She says, "Customers from China come when they visit London.
e
They
s know the brand and they seek out the stores." Secondly, let's think about a
m

S
outside
of Julie's control which are driving the extraordinary growth of this company?

i
commercial
driver. Britain really is cool. The Olympic games in 2012, the opening
a
nu
contributing
to a perceived value of British products. But what are these brand
td
n
ceremony
with The Queen and James Bond, even Mr. Bean-- all of these are

e
values?
Quality, trustworthiness, heritage, fashionable, and even fun. It's important to
s3
6

s
remember
that Julie has done very little to create cool Britannia and certainly nothing

to create
China as the emerging economic powerhouse in the world. But her company
a
has snbenefited from these drivers.

ed
c
7:52And
finally, let's not forget the role that the entrepreneur or the entrepreneurial
54o
team2n5 play in opportunity recognition. Above all, they develop the ability to spot
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opportunities, whether that is discovering gaps in a market or creating new ones, and
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in the
e case of Julie Deane, both. Julie has developed a clear vision and shared it with
c Let's not forget that she raised 12 million pounds in order to double her
others.
o
production
and expand into a huge export market. Can you think of a successful
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entrepreneur
and their company? Did they discover or create their opportunity?
d
s

Discovering or creating opportunities


In this video, Nigel focuses on the importance of vision and opportunity when
starting a business.
Referring to an industry case study, Nigel considers whether entrepreneurs discover
or create business opportunities; he looks at the importance of sharing your vision
with other people, and introduces the opportunity business model as one way of
sharing that vision.
Have your say:
At the end of the video, Nigel asks you to think of a successful
entrepreneur and question whether they discovered or created their business
opportunity. Please share your thoughts in the comments. Take some time
to look at the comments from other learners and respond to their
suggestions.
Great businesses in your locality
Weve now seen that to start a business you need both vision and opportunity.
In the last step, many of you will have identified businesses that have had global
success with entrepreneurs who are now household names. There are also many other
businesses from the service industries, charities and non-profit organisations, as well
as manufacturing, that have made a huge impact on all our lives.
Spend some time considering and researching successful businesses in your locality.
At this stage, focus solely on their vision and the opportunities they have had or made
when getting started. Your chosen business may be from the past or a business that is
still trading.
Use the comments to share your research. If you have an image of the business,
please share that along with a paragraph outlining the vision of this business on
the Vision & Opportunity Padlet pin-board. You can find details on using a Padlet
pin-board here.
Have your say:
Research a business in your locality. What is/was its vision? What
opportunities were available at the time the business started? Were these
opportunities there for the taking or did this business make the opportunity
happen? Please share your thoughts and findings.
Take the time to read the postings from other learners. Come back later to see how
the discussion and pin-board have progressed

Emma's business challenge


In this case study, the entrepreneur has a challenge Emma is considering the
opportunities available for her business.
Emma has identified a number of options for taking her business forward, and she is
asking you to consider these options and discuss your thoughts with your fellow
learners.
S
S
k Have your say:
k
i What do you think Emma should do? Share your thoughts in the comments
i
p explaining why you have come to your decision.
p
0:04Hi, I'm Emma. I got to a point where I just decided that I didn't like my part-time
t
t
job anymore,
and I really wanted more of a relaxed income so I was a lot more
o
o
flexible
with my studies. I decided that I needed to bring all of my skills together. But

first,0 I needed to work out what my skills were. So when I looked back, I realised that
0
I had quite a lot of experience and a big passion for English. I always loved writing,
and Sm
all of my teachers always said that I was good at creative writing. I remember my
m
i
ki
English
teacher actually said to me that she could imagine me having my own
ni
n
column
in a magazine.
up
u
0:34Itt didn't really want to be a journalist, but I thought maybe there's something in
that.ete So then I decided to have a look at more like creating magazines. And when I
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wassyounger, I used to create paper magazines and just distribute them to my friends

and 1aafamilies. Obviously, I didn't get any money for this or anything, but through this,

n
dm
d
media
i world. Then I realised that there were a lot of girls asking me for beauty advice
and n34fashion advice. So I kind of realised maybe I should do something to do with this
4u
n
I realised
that I really loved creating, designing, publishing, everything to do with the

crazy media, fashion, and beauty world.

ts
ese
e
1:07But
I felt like there were so many different skills together I didn't know how to
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ca them together. Then I decided that I'd push that to the side for a while and go
bring
o
on
and ndnget some worthwhile experience. I did some experience working with some
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d
independent
TV companies and radio companies. And then obviously I did quite a lot
s
s7

of writing for magazines. I used to just submit my creative stories in the hopes that

they'd
get published. I decided that I needed to get some practical work experience,
s
so I eentered a competition to be a blogger at the Olympic games. This is kind of
c my love for creativity really came out.
where
o
n
d
s

1:43I basically had to make an amateur video of me presenting at a local event, so I

wentS to the Leeds Half Marathon. Even though I had no presenting skills whatsoever
and kno filming skills, I set up a tripod, stood in the middle of everyone, and started
i
p
S
presentation,
and I ended up winning. This meant that I got to spend my whole
k
t
summer
at the Olympic games reporting live from the Olympics, and this was an
i
o
p
absolutely
incredible experience and really did make me realise that I needed and

recording. I actually got through to the final stage. I then had to do another

wanted
1 to do something in the media world. So then I realised that I had a problem.

t
o
m
2:16I was actually giving away my skills for free, and I wasn't making an income
i
from2n it. I realised that there must be a way to make an income from all of these skills.
But umthe problem was that actually I had quite a lot of skills. I didn't want to give up
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S
i
photography.
I didn't want to give up filming. I didn't want to give up fashion or
ke
n
beauty.
I wanted to bring all of these creative things together and make a business out
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u
of itpat and make my own income out of these things that I loved so much.
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e
td
2:41osThere were so many options available to me, and then I decided that I had to
4 the right one that was going to give me the best income. The first option
choose
a
3
would
n be to create a magazine. This would increase my brand's awareness, but it
d be very costly to produce and publish. The other option is that I could start a
would
s
m
ie This would create a community online. People could contact me and access it
blog.
41
nc
instantly,
but the blogging market is highly saturated. The next option could be to
16
uo
create
tn a YouTube channel. YouTube videos are seen worldwide. This means that a lot
s
ed
of income
could be made through advertising.
e
s
c
o
3:11However,
to start a YouTube channel, you do need quite good equipment, and this
a
n
doesnd cost quite a lot of money. Another option could be to open an online store. This
d
would
s give me a continual revenue stream, but there are a lot of costs to consider

when
1 opening an online store. These costs include firstly opening the store, secondly
1 the stock, and thirdly marketing the store and actually finding customers to
buying

buy my products. Now that you have listened to all of the options, I need your help.
s

Listen
e to what the advisers have to say, and discuss it in the forum below before
c
making
your decision
o
n
d
s

The advisers' views


Each adviser has provided their thoughts on how Emma should progress with
her business ideas.
S

The video above provides a consolidated response featuring key points from each
k
S
adviser.
i
k

p would like to watch the full response from one or more of the advisers, they
If you
i
are available
from the See also section below.
p

t
o16 comments
tV
oi
0
e
w
0:030So,
m having looked at Emma's case study and analysed what her various options
are, ithere's several thoughts that I've had in relation to them all. The first one in
m
n
relation
to the magazine is that everybody these days seems to be moving online.
iS
u
Anything
in print seems to be really old-fashioned, and for such a young market and
nk
t
young
ui target audience, I think that that would be the wrong move for her, especially
e
tp production costs are so high. If I was to rule one out, I'd rule out the magazine.
when
s
e
An online
magazine could be a good route, but it sounds like she's talking about a
st
printed
a magazine.
on
0:38aAnd
I think the startup costs, considering she may not have a readership, are
d
n1
probably
going to be quite high. The only way that I would push for a magazine, a
d
3
physical
magazine, is if you have advertising revenue covered before you start the
m
8
3i
magazine.
And also, you then have to wonder about how do you actually sell that
ns
magazine.
So it's quite complicated to set up unless you go through an existing
su
e
et
publisher.
I think the easiest, or maybe that's the wrong word, maybe lowest risk at
c
ce
the moment
would be to develop a blog. I think that would give her lots of different
o
o
n to do all of the things she loves.
ways
na
d
dn
s
1:23sdSo she could do a bit with photography, a bit about film. The blog, I was

interested in that. In terms of the market saturation, she'd have to be really, really
2

different
in order to get out there and get enough people actually checking in with the
3
blog regularly and reading. But then she could become a thought leader in relation to
s of the product testing things and review side that she was looking at. And that
some
e

business
idea is quite scalable. She might be able to get advertising in the future. And
c
o
n
d
s

although she does comment that the blogging world is quite a saturated market, it
does sound like she's got the ability to stand out in a crowd.
2:03The question is again, how do you actually monetise a blog? So I think the blog is
S idea, but I'll come back to that a bit more in a second. If I was to give Emma
a good
S
k
k advice, I would probably continue with the blog and make sure that you get a
some
i
i
p following. And you can always launch and link the blog to your YouTube
critical
p

channel. People love video. And you can partner with fashion magazines and borrow
t

t
content
o from them and link it to your YouTube channel. YouTube is my favourite
o

option, and I would principally go with that.


32
2
2:37I know the equipment is expensive, but I think that you can do a really good job
m
m
withSi some medium equipment rather than having to go out and buy 25 grands worth
ki
n immediately. I also think that she should approach the Prince's Trust and
of stuff
in
u
up
potentially
get a grant in order to set up her business, and she would be able to use
t
t
that eto buy her equipment. I think option C, which was the YouTube channel, she
et
s a good point about expensive equipment. I don't think that's necessarily the
makes
so

case,a but that could be a good sideline to developing the blog, an additional way of
a
n
d
marketplace.
d
m

kind3n of earning income and getting exposure she might need to stand out in a tough
i
13
3
3:18n8The
YouTube channel is rather like the magazine. It's a little bit about the cost for
7
u
setting
ts it up and then how you actually monetise it and make money from it. The
s
marketing
e
is probably more straightforward with a YouTube channel. But you've still
e
sc
got those
issues to think about. So the final option, D, was the one I really liked,
c
o
o was the online store. I think it's probably, of all the options, the easiest way to
which
na
n
startdndmonetising her skill set. In relation to that, I was really worried that, again, that
sd
would
s be quite a significant amount of hard work in terms of setting up a supply

chain,
5 making sure that you had distributors and supplier agreements in place.
7
3:57For example, if she didn't sell products that she'd already purchased, did she have
s
a sale
or return agreement? Because obviously she could be significantly out of
e
pocket
c if those didn't sell. Also things like postage, how would she go about doing
o
n
d
s

that and setting those up? So that seemed to be quite a complex option. Online store
doesn't have to be very expensive. There's a lot of open-source platforms that you can
use to create your own online store. In the beginning, I would probably recommend
that you open the store by using affiliate marketing so you don't have to physically
S
source
every single product.

k
i
4:37Ip think she should maintain a focus on the things that she's really good at, which

is the blogging and the journalism. So I'd probably not go for that option in this
t

particular
instance. So, Emma, I would suggest you develop a blog and maybe have a
o
YouTube channel on the side. There are some potential concerns really that if she
54 using an online store and the product's not good or the service isn't good, this
starts

willmactually go back and reflect on her blog. But it does give her the potential to
i
develop
her own brand of products alongside her blog. So the preferred option for me
n
would
be a mixture of B and D, a blog together with an online store.

u
t
5:14Ie would be going with number two, a blog, and starting to get some people
s
following
me and listening to my advice and the things I had to tell them, being very

different
and unique, and then pointing them onto YouTube and principally focusing
a
a
the majority
of my effort on YouTube. In summary, all four options are applicable.
n
d
13
What
47 would you recommend?

Ours entrepreneur needs your help.


e watched Emmas case study and the advisers views, its time for you
Having
c
to vote for the option(s) you think our entrepreneur should choose.
o
n
Have your say:
d
s Use the discussion section below to explain and discuss the reasons for

your recommendation with other learners.

Emma's decision
At the time of recording, Emma Sheldon was a second year Broadcast
Journalism student at the University of Leeds. Emma runs the EmTalks fashion
website.
Have your say:
In this video, Emma explains which options she chose and why. Are you
Ssurprised by her choices? Post your thoughts in the comments.
k
0:04iMy name is Emma Sheldon. I'm a second-year broadcast journalism student, and
p
my business is called EmTalks. So I actually did three options, so I'm going to talk

youtthrough those. The first option was to start to blog, and I decided that I'd bring all
of my
o passions together. So photography, writing, beauty, fashion, and general
lifestyle, I brought all of these together on an online blog. Online blogs are great.
S
0
They're
instantly accessible. You can make money through advertising. And my
k
profile online was really raised when I won the Cosmopolitan Blog Award for the
im
best newcomer in 2012. After winning the Cosmopolitan Blog Award, I realised that
pi
theren was a demand for what I was doing.
n
tu
0:41People kind of wanted more from me, and they wanted to get to know me more.
ot
So Iedecided to choose another option as well. I decided to create a YouTube channel.
This1s meant that I could talk with my readers, and I could just use another channel,

videos, to really get my online profile out there. Obviously, because it's a worldwide
m
a

audience,
too, revenue streams are much better through YouTube, and you can make
in
a lotnd more money through advertising. Next, I decided to launch my own online shop.

u
t4
coming
to it but nothing for them to buy.
e1
s
as
1:12eA lot of girls used to ask me where could they buy affordable accessories, and
nec
really
dco there was a complete gap in the market. So I decided to grasp the opportunity
withon both hands and launch my own online store, Lvndr. And it meant that young
1n
girlsd could shop for affordable accessories without a horrible price tag. This meant
2ds
that sI could have a continuous revenue stream as well as working on my YouTube and
blogs at the same time. And all three really well complement each other. In my plans
e
c
o
n
d
s

I realised that my blog was essentially an empty shop. It had loads of customers

for the future, I plan on working harder on my blog, doing more YouTube videos, and
bringing more stock to Lvndr.
1:44This will help me grow my online awareness, earn more revenue, and hopefully

reach
S a much wider audience.
k
i
p

Introducing the University of Leeds


t

We know that many people who take our courses are interested in taking their
o
learning further after the course has finished.
The1University of Leeds offers a wide range of undergraduate degrees. If you are
interested in pursuing further study with us, please visit our undergraduate course
m
finder
i where you can find out more about the subjects we offer.
n

Joinu our global community


If you
t choose the University of Leeds, youll be part of our global community of
e
students
from over 140 countries and will have the chance to take part in activities
introducing you to a world of new ideas and experiences.
a
Most Leeds undergraduate programmes give you the opportunity to study discovery
n
modules
as part of your degree. These modules reinforce the value and interest of
d
your degree by offering the opportunity to broaden your learning and pursue your
own4personal interests, while developing skills that will help prepare you for life after
4
University.
OursLanguage Centre offers discovery modules in more than 10 foreign languages,
and eruns year-round English language courses to help international students prepare
c
for study
in the UK and continue to develop their English language skills.
o

We nare one of only 24 UK universities that make up the prestigious researchintensive


Russell Group. This means that as an undergraduate student at Leeds you
d
willsbenefit from research-based learning throughout your degree. Your research
skills and experiences will help you become an independent, critical thinker and will
culminate in your final year project.
You will have an array of facilities at your fingertips; we are continually investing in
the university campus to ensure you benefit from the latest learning and teaching
resources, and have access to a first-class academic environment.

We are one of the top 10 universities in the UK for graduate recruitment (The
Graduate Market in 2015, High Fliers Research).
We have links with over 400 institutions worldwide and over 6,000 international
students study with us each year. This means that you will graduate with a truly
global perspective something highly valued by employers.
The University of Leeds is a creative community, with a vibrant and distinctive
cultural life. With over 60,000 students living within the city boundaries, theres a
real SSstudent focus, making it an exciting place to live and learn.

S
k
Theki University of Leeds offers undergraduate degree programmes in the following
ip
subjects,
which are relevant to this course:
p
BA Management
t
t
o BSc Biology with Enterprise
o
0 BSc Biotechnology with Enterprise
0
BA Music with Enterprise
m
m
i BA Social Policy with Enterprise
in
For numore information about undergraduate degrees at the University of Leeds,
visitut our website where you can also request a prospectus
te
es
0:03sLeeds is just remarkable. Leeds University itself provides so many different
a
opportunities.
an
0:15ndAnd I really enjoyed being in the city. It's a lovely place to be. It's just vibrant. It
d

just makes you feel as though it's your home. You've just got such a massive student
1

35
community
that everyone comes together.

1
s
0:31sA mix of international and British students, so it's just amazing the amount of
see
people
ecc you meet. Whatever it is that interests you, you will find people of the same
coo here. It's just mind blowing. For me, the real seller is the clubs and societies
interest
on
and nnthe sheer diversity of activities that you can be involved in. We're a Russell
dd
Group
dss university. Absolutely the right place to be. Very specialised lecturers that want
s
to teach
you and are really passionate. But we also have a really good social life.

Coming to Leeds was the best decision I ever made.

1:05I've visited lots of friends at different unis, and I love it here. It's everything I

thought
my university experience would be, and more. Do it. It's just the best
S
k
decision
that you'll make in your life. [INTERPOSING VOICES] Yeah. Definitely.
i
p

Leeds is good. Leeds is amazing


t
o

Preparing for next week


Next1 week, you will explore a framework for defining the vision and
opportunities for a business or business idea.
m
i
n
u
t
e
a
n
d
5
s
e
c
o
n
d
s

If you have time over the weekend, you might like to consider the following
questions for a business or business idea you may have, or think about a company
which you would like to research.
What is your business idea? Can you write your idea in less than 200 words?
What problem is your business idea trying to solve, or which gap in the market
is your idea trying to fit into?
How does it address the problem youve identified?
If you dont have a business idea at the moment, dont worry there will be plenty to

keep you busy next week.


13 comments
V
i
e
w

Discovering or creating opportunities


In this video, Nigel focuses on the importance of vision and opportunity when
starting a business.
S

Referring
to an industry case study, Nigel considers whether entrepreneurs discover
k
or create
business opportunities; he looks at the importance of sharing your vision
i
withp other people, and introduces the opportunity business model as one way of
sharing that vision.
t
o Have your say:

At the end of the video, Nigel asks you to think of a successful

0
entrepreneur and question whether they discovered or created their business

opportunity. Please share your thoughts in the comments. Take some time

mto look at the comments from other learners and respond to their
i suggestions.
n
u
0:05Hello,
I'm Nigel Lockett and today we're focusing on vision and opportunities.
t
Ande I'm going to introduce you to opportunity business models as a way of sharing
yours ideas. I'm going to use The Cambridge Satchel Company, founded by Julie

Deane in 2008, as an example of how you can share your business idea.

a
0:31nDiscovering or creating opportunities is a central notion of entrepreneurship.
d

There is much debate about whether entrepreneurs discover opportunities like a gap
in the
35 market or create them using their expertise and knowledge gained over time. In
1 the boundary between discovery, known as causation, and creation, known as
reality,
s
se
reading
Harry Potter to her children and not being able to find a satchel just like
ec
co
Harry's.
But she also created with Vivienne Westwood, a famous British designer, a
on
market for high quality designer satchels. Regardless of how opportunities come
nd
about,
ds it's important to share your vision with other people. One of the ways to do this
s
is using
the opportunity business model.

effectuation, can be blurred. Julie discovered the gap for high quality satchels after

1:28So let's start by considering the dimensions of opportunity business models.

Dimensions
are a simple way of expressing the elements and components of a
S
k
business
idea. This helps us to do analysis, support comparison, and identify the
i
p

uniqueness of a business idea. Proposition. What is the core value proposition as


perceived by your customers of the business opportunity? Can you express this in just
t words? People. Who are the leaders, the management team, a network of
seven
o

advisers, customers, suppliers, and other stakeholders? How does social capital,
social
1 networking, support this business opportunity? Place. Where is the market?
S
km
the segments
and gaps in the marketplace. Process. How is the enterprise structured?
ii
pn

WhoS are the customers and competitors? Analyse the market and industry to identify

2:43uWhat are the key processes and relationships that make this business work? How
tS
t
willothese be enabled and supported over time? Profit. Why do it? What are the real
ke
returns
i of this opportunity? Are they financial? You might want to consider the gross
32ap net profit, and financial forecast. What are the key performance indicators, or
profit,
n
KPIs,
and what capital is required? Is there any social value in this opportunity? How
m
td
willioownership be structured? And have you thought about an exit? Let's now
n2
consider
the satchel company as a case study. We all know that Julie's company is all
u48
about
t manufacturing very high quality, designer, leather satchels in the UK. But can
we express
that as a proposition in just seven words?
se
m
sie
nc
3:46Produce high quality, designer, British leather satchels. Can you do better than
auo
this?ntn People. Julie and Freda, her mother, a growing management team, no doubt lots
ded
of advisers,
and a growing network of designers. Place. Three shops in the UK, two
s
in London.
Paperchase as national stockist and international stockist. But perhaps
4
more
63a interesting, a growing online business, including massive growth in markets

likenChina. Process. The satchel company has to be good at designing and


sd

manufacturing
leather satchels and marketing and protecting its brand. Profit. The
e
c4
company
started in 2008 with just 600 pounds. Interestingly, it raised 12 million
o7 by selling equity to a leading venture capital company in Europe.
pounds

n
ds
4:47So
se we can see how easy it is to describe a business opportunity and to see what is
c
distinctive
and discuss it with other people. But how do we know when an idea is
o
n
d
s

really a business opportunity? We now need to focus on what's really driving the
opportunity. The drivers are the underlying forces that impact on a business
opportunity. Typically, one or more of these will impact at any one time. But all of
them are beyond the control of the entrepreneur or business. Societal drivers, the
wider global, social, political, and environmental factors which impact on an
opportunity, such as climate change and ageing populations.
5:36Commercial drivers, the global and local commercial and economic factors, such
S taxation and the price of oil. Legal drivers, legislation, rules, and regulatory
as local
k
requirements
typically set by governments or consortiums, such as data protection
i
lawsp or trade association membership rules. Technological drivers, the new and

emerging technologies, such as 4G mobile communications networks and

tS
ok
outside
of Julie's control which are driving the extraordinary growth of this company?
i
Let's65p consider a societal driver. The world is changing. China will soon be the largest

nanotechnologies.
Let us consider the satchel company again. What are the factors
o

economy
in the world, and with that has emerged a growing middle class who want
m
t

io
to demonstrate
their wealth by buying consumer goods.
n
u7
6:45One way to demonstrate this new wealth is by buying designer consumer goods.
t
Juliem
e knows this. She says, "Customers from China come when they visit London.
si know the brand and they seek out the stores." Secondly, let's think about a
They
n
commercial
driver. Britain really is cool. The Olympic games in 2012, the opening
au
ceremony
with The Queen and James Bond, even Mr. Bean-- all of these are
nt
de
contributing
to a perceived value of British products. But what are these brand
s
values?
Quality, trustworthiness, heritage, fashionable, and even fun. It's important to
43
remember
that Julie has done very little to create cool Britannia and certainly nothing
56a
n
to create
China as the emerging economic powerhouse in the world. But her company
sd
has ebenefited from these drivers.
c5
2o
7:52And
finally, let's not forget the role that the entrepreneur or the entrepreneurial
n
team play in opportunity recognition. Above all, they develop the ability to spot
ds
opportunities,
whether that is discovering gaps in a market or creating new ones, and
se
c case of Julie Deane, both. Julie has developed a clear vision and shared it with
in the
o
n
d
s

others. Let's not forget that she raised 12 million pounds in order to double her
production and expand into a huge export market. Can you think of a successful
entrepreneur and their company? Did they discover or create their opportunity?