Entrepreneurship Opportunity Identification

Identifying Opportunities and Idea Generation

• An opportunity is a favorable situation creating a need for a new product, service, or business. An idea is a thought that may or may not meet the criteria of an opportunity.
• To recognize an opportunity, an entrepreneur needs to understand whether the idea fills a need and meets the criteria for an opportunity.
• There are four essential qualities of an opportunity:
  • Desirable: The opportunity must be something that customers want.
  • Feasible: The opportunity must be something that can be realistically accomplished.
  • Viable: The opportunity must be something that can be profitable.
  • Valuable: The opportunity must be something that creates value for the customer.
• The term window of opportunity refers to the time period during which a firm can realistically enter a new market. This window is often limited by factors such as the product life cycle.
• Three approaches to identify opportunities:
  • Observing Trends: Following economic trends, social trends, technological advances, and political action and regulatory changes can reveal opportunities.
    • Social Forces include:
      • Growth in mobile device usage
      • Focus on health & wellness
      • Emphasis on clean energy
      • Migration to cities
      • Desire for personalization
    • Technological Advances create opportunities. The development of smartphones led to the rise of companies like Rokit that make smartphone accessories.
    • Political Action & Regulatory Changes can also spark business ideas.
  • Solving a Problem: Recognizing problems and devising solutions can lead to business opportunities.
    • For example, the need for alternatives to fossil fuels is a pressing problem, which entrepreneurs are addressing with solutions like wind-generated energy.
  • Finding Gaps in the Market: Identifying products or services that are absent or underserved in a location represents a potential business opportunity.
    • Daisy Rock guitars capitalized on the gap in the market for guitars specifically designed for women.

Personal Characteristics of Entrepreneurs

• Certain personal characteristics contribute to an entrepreneur's ability to recognize opportunities:
  • Prior Experience: Working in an industry can help entrepreneurs identify underserved market niches.
  • Cognitive Factors: Entrepreneurial alertness, which is the ability to notice things without engaging in deliberate search, can play a significant role.
  • Social Networks: Having a strong social and professional network exposes entrepreneurs to more opportunities and ideas.
  • Creativity: The process of generating novel and useful ideas can lead to new business opportunities.

Techniques for Generating Ideas

• Brainstorming is a group process used to generate multiple ideas about a specific topic. Criticism is not allowed during the brainstorming session.
• Focus Groups involve small groups of people familiar with a topic who are brought together to discuss and shed light on an issue. Focus groups are used after brainstorming to refine an idea.
• Library & Internet Research are valuable resources for entrepreneurs. Librarians can provide guidance on useful industry-specific publications and reports.
• Customer Advisory Boards are groups of customers who meet regularly to discuss their needs, wants, and problems. This can help entrepreneurs identify potential business opportunities.
• Day-In-The-Life Research involves company employees spending time with customers to observe how their products are used and to gather insights for new product ideas.