Summary Chapter 2
The Diffrerences Between Oppotunities and Ideas
For an individual, the creative process can be broken down into five stages:
An Opportunity is a
favorable set of circumstances that creates a need for a new product, service,
or business. An essentially, entrepreneur recognize an opportunity and they can
turn it into a successful business. An Entrepreneur decides to launch a firm,
searches for and recognizes an opportunity and then starts a business. And an
entrepreneur also can recognize a problem or an opportunity gap and creates a
business to address the problem or fill the identified gap.
Regardless of which of
these two ways an entrepreneur starts a new business, opportunity are tough to
spot. Identifying a product, service, or business opportunity that isn’t merely
a different version of something already available is difficult. A common
mistakes an entrepreneur make in the opportunity recognition process is picking
a currently available product or services that they like or are passionate
about and then trying to build a business around slightly better version of it.
The key to opportunities
recognition is to identify a product or service that people need and are
willing to buy.
An opportunities has 4
essential qualities:
1. Attractive
2. Timely
3. Durable
4. Anchored in product, services, or business that creates or adds value for its buyer or end user
1. Attractive
2. Timely
3. Durable
4. Anchored in product, services, or business that creates or adds value for its buyer or end user
Window of opportunities
is a metaphor describing the time period in which a firm can realistically
enter a new market.
An idea is a thought, an
impression, or a notion. An idea may/may not meet the criteria of an
opportunity. And before getting excited about a business idea, it’s crucial to
understand whether the idea fills a need and meets the criteria for an
opportunity.
Three Ways to Identify Opportunities
1) Observing Trends
è The first approach is to observe trends and study how they create opportunities for entrepreneur to pursue.
The most important trends to follow are:
-Economic trends : Economic trends help determine areas that are ripe for new startups and areas that startups should avoid.
-Social trends : Social trends alter how people and businesses behave and set their priorities. These trends provide opportunities for new businesses to accommodate the changes.
-Technological advances : Advances in technology frequently create business opportunities. Once a technology is created, products often emerge to advance it.
-Political advances and regulatory changes : Political action and regulatory changes also provide the basis for opportunities. Company created to help other companies comply with a specific law.
1) Observing Trends
è The first approach is to observe trends and study how they create opportunities for entrepreneur to pursue.
The most important trends to follow are:
-Economic trends : Economic trends help determine areas that are ripe for new startups and areas that startups should avoid.
-Social trends : Social trends alter how people and businesses behave and set their priorities. These trends provide opportunities for new businesses to accommodate the changes.
-Technological advances : Advances in technology frequently create business opportunities. Once a technology is created, products often emerge to advance it.
-Political advances and regulatory changes : Political action and regulatory changes also provide the basis for opportunities. Company created to help other companies comply with a specific law.
An entrepreneur
it’s important to remain aware of changes in these areas.
2
caveats to keep in mind when looking at environmental trends to discern new business
ideas:
{ Distinguish between trends and fads
{ We should be considered simultaneously when
brainstorming new business ideas
2)
Solving a Problem
àThe second approach is to recognize problems and find the ways to solve them.
Problem can be recognized by observing the challenges that people encounter in their daily lives and through more simple means, such as intuition, serendipity, or chance.
àThe second approach is to recognize problems and find the ways to solve them.
Problem can be recognized by observing the challenges that people encounter in their daily lives and through more simple means, such as intuition, serendipity, or chance.
3)
Finding Gaps in the Marketplace
àA third approach to identifying opportunities is to find a gap in the marketplace.
àA third approach to identifying opportunities is to find a gap in the marketplace.
A
gap in the marketplace is often created when a product or service is needed by
a specific group of people but doesn’t represent a large enough market to be of
interest to mainstream retailers or manufacturers.
Product
gaps in the marketplace represent potentially viable business opportunities.
Personal Characteristics
of an Entrepreneur
Opportunity recognition
refers to the process of perceiving the possibility of a profitable new
business or a new product or service.
These are some characteristics
that tend to make some people better at recognizing opportunities than others:
1.
Prior Experience
àSeveral studies show that prior experience in an industry helps an entrepreneur recognize business opportunities.
àSeveral studies show that prior experience in an industry helps an entrepreneur recognize business opportunities.
By working in an industry, an individual
may spot a market niche that is underserved.
It is also possible that by working in an
industry, an individual builds a network of social contacts who provide
insights that lead to recognizing new opportunities.
2.
Cognitive Factors
àOpportunity recognition may be an innate skill or cognitive process.
àOpportunity recognition may be an innate skill or cognitive process.
Some people believe that entrepreneurs
have a “sixth sense” that allows them to see opportunities that others miss. This
“sixth sense” is called entrepreneurial alertness, which is formally defined as
the ability to notice things without engaging in deliberate search.
3.
Social Networksà The
extent and depth of an individual’s social network affects opportunity
recognition. People who build a
substantial network of social and professional contacts will be exposed to more
opportunities and ideas than people with sparse networks.
Research result that somewhere between 40%
and 50% of those who start businesses got their ideas through social contacts.
Solo entrepreneur = those who identified
their ideas through social contacts.
Network entrepreneur = those who
identified their ideas through social contacts.
Strong-tie relationships are characterized
by frequent interaction, such as ties between coworkers, friends, and spouses.
Weak-tie relationship are characterized by infrequent interaction, like ties between casual acquaintances.
Weak-tie relationship are characterized by infrequent interaction, like ties between casual acquaintances.
According to research that an entrepreneur
will get a new business idea through a weak-tie relationship than a strong-tie
relationship because the strong-tie relationship more typically form between
like-minded individuals, tend to reinforce insight and ideas the individuals
already have. But on the other hand, the weak-tie relationship form between
casual acquaintances, are not as apt to be between like-minded individuals, so
one person may say something to another that sparks a completely new idea.
4.
Creativity
àCreativity is the process of generating a novel or useful idea.
Opportunity recognition may be, at least in part, a creative process.
àCreativity is the process of generating a novel or useful idea.
Opportunity recognition may be, at least in part, a creative process.
For an individual, the creative process can be broken down into five stages:
1.
Preparation
à The background, experience, and knowledge that an entrepreneur brings to the opportunity recognition process.
à The background, experience, and knowledge that an entrepreneur brings to the opportunity recognition process.
2.
Incubation
à The stage during which a person considers an idea or thinks about a problem. Sometimes incubation is a conscious activity, and sometimes it’s unconscious and occurs while a person is engaged in another activity.
à The stage during which a person considers an idea or thinks about a problem. Sometimes incubation is a conscious activity, and sometimes it’s unconscious and occurs while a person is engaged in another activity.
3.
Insight
à The flash of recognition when the solution to a problem is seen or an idea id born. Sometimes it called the “eureka” experience. In business context, this is the moment when an entrepreneur recognizes an opportunity. But sometimes this experience may pushes the process forward and sometimes it prompts an individual to return to the preparation stage.
à The flash of recognition when the solution to a problem is seen or an idea id born. Sometimes it called the “eureka” experience. In business context, this is the moment when an entrepreneur recognizes an opportunity. But sometimes this experience may pushes the process forward and sometimes it prompts an individual to return to the preparation stage.
4.
Evaluation
è The stage of the creative process during which an idea
is subjected to scrutiny and analyzed for its viability. This stage is a
particularly challenging stage of the creative process because it requires an
entrepreneur to take a candid look at the viability of an idea.
5.
Elaboration
à The stage during which the creative ide is put into a final form. The details are worked out and the idea is transformed into something value, such as a new product, service, or business concept. In the case of a new business, this is the point at which a business plan is written.
à The stage during which the creative ide is put into a final form. The details are worked out and the idea is transformed into something value, such as a new product, service, or business concept. In the case of a new business, this is the point at which a business plan is written.
Techniques
for Generating Ideas
In
general, entrepreneur identify more ideas than opportunities because many ideas
are typically generated to find the best way to capitalize on an opportunity.
There are some techniques about it, here are some of it:
1. Brainstorming
à Is simply the process of generating several ideas about specific topic.
Is a technique used to generate a large number of ideas and solutions to problems quickly.
A brainstorming “session” typically involves a group of people, and should be targeted to a specific topic.
1. Brainstorming
à Is simply the process of generating several ideas about specific topic.
Is a technique used to generate a large number of ideas and solutions to problems quickly.
A brainstorming “session” typically involves a group of people, and should be targeted to a specific topic.
Rules
for a brainstorming session:
• No criticism.
• Freewhelling is encouraged.
• The session should move quickly.
• Leap-frogging is encouraged.
2.
Focus Group
à Gathering of 5 to 10 people who are selected because of their relationship to the issue being discussed.
Focus grup are used for a variety of purposes, including the generation of new business ideas.
These groups are led by a trained moderator, who uses the internal dynamics of the group environment to gain insight into why people feel they way they do about a particular issue.
à Gathering of 5 to 10 people who are selected because of their relationship to the issue being discussed.
Focus grup are used for a variety of purposes, including the generation of new business ideas.
These groups are led by a trained moderator, who uses the internal dynamics of the group environment to gain insight into why people feel they way they do about a particular issue.
3. Library and Internet Research
à Libraries are an often underutilized source of information for generating new business ideas.
The best approach is to talk to a reference librarian, who can point out useful resources, such as industry-specific magazines, trade journals, and industry reports.
Simply browsing through several issues of a trade journal or an industry report on a topic can spark new ideas.
à Libraries are an often underutilized source of information for generating new business ideas.
The best approach is to talk to a reference librarian, who can point out useful resources, such as industry-specific magazines, trade journals, and industry reports.
Simply browsing through several issues of a trade journal or an industry report on a topic can spark new ideas.
àInternet Reaserch is also important. If
you are starting from scratch, simply typing “new business ideas” into a search
engine will produce links to newspapers and magazine articles about the
“hottest” new business ideas.
If you have a specific topic in mind, setting up Google or Yahoo! e-mail alerts will provide you to links to a constant stream of newspaper articles, blog posts, and news releases about the topic.
Targeted searches are also useful.
If you have a specific topic in mind, setting up Google or Yahoo! e-mail alerts will provide you to links to a constant stream of newspaper articles, blog posts, and news releases about the topic.
Targeted searches are also useful.
4. Other Techniques
à Some companies set up other techniques to generate ideas:
1) Customer Advisory Boards = meet regularly to discuss needs, wants, and problems that may lead to new ideas.
2) Day-in-the-life research = a type of anthropological research, where the employees of a company spend a day with a customer.
à Some companies set up other techniques to generate ideas:
1) Customer Advisory Boards = meet regularly to discuss needs, wants, and problems that may lead to new ideas.
2) Day-in-the-life research = a type of anthropological research, where the employees of a company spend a day with a customer.
Encouraging the Development of New Ideas
1.
Establishing a Focal Point for Ideas
àSome firms meet the challenge of encouraging, collecting, and evaluating ideas by designating a specific person to screen and track them—for if its everybody’s job, it may be no one’s responsibility.
àSome firms meet the challenge of encouraging, collecting, and evaluating ideas by designating a specific person to screen and track them—for if its everybody’s job, it may be no one’s responsibility.
Another approach
is to establish an idea bank (or vault), which is a physical or digital
repository for storing ideas.
2.
Encouraging Creativity at the Firm Level
àCreativity is the raw material that goes into innovation and should be encouraged at the organizational and individual supervisory level.
àCreativity is the raw material that goes into innovation and should be encouraged at the organizational and individual supervisory level.
Protecting Ideas From Being Lost or Stolen
• Step 1
The idea should be put in a tangible form such as entered into a physical idea logbook or saved on a computer disk, and the date the idea was first thought of should be entered.
The idea should be put in a tangible form such as entered into a physical idea logbook or saved on a computer disk, and the date the idea was first thought of should be entered.
• Step 2
The idea should be secured. This may seem like an obvious step, but is often overlooked.
The idea should be secured. This may seem like an obvious step, but is often overlooked.
• Step 3
Avoid making an inadvertent or voluntary disclosure of an idea, in a manner that forfeits the right to claim exclusive rights to it.
Avoid making an inadvertent or voluntary disclosure of an idea, in a manner that forfeits the right to claim exclusive rights to it.
Comments
Post a Comment