1. Market Opportunity Recognition1

2. Definitions Creativity
Characterized by originality and expressiveness; imaginative
Imagination
The formation of a mental image of something that is neither perceived as real nor present to the senses.
Idea
Something, such as a thought or conception, that potentially or actually exists in the mind as a product of mental activity.
Opportunity
A favourable or advantageous circumstance or combination of circumstances.
Imagination is more important than knowledge…
Albert Einstein ( ) 2

3. Creative v Logical Thinking
Seeks questions
Diverges
Explores different views
Restructures
Seeks ways an idea might help
Welcomes discontinuous leaps
Welcomes chance intrusions
Open ended
Seeks answers
Converges
Asserts best or right view
Using existing structure
Says when an idea will not work
Uses logical steps
Focuses on what is relevant
Closed 3

4. Innovation
Is the process by which entrepreneurs convert opportunities into marketable ideas. It is the means by which they become catalysts for change.
“The single biggest cause of failure is not lack of money but that you haven’t come up with something that the world wants.”
Larry C.Farrell
New Product
New method of doing the same product
New Source of Raw materials
New Market
New way of organising your business 4

5. Drucker’s Sources of Innovative Opportunity
The unexpected. Success IBM. Failure Jacket Potatoes
The incongruity. Possible v Actual. Overnight Delivery.
Process needs. Sugar free products. Caffeine free.
Changes in industry/market structure. Digital Cameras
PLUS
Demographic changes. Age profile
Changes in perception, mood or meaning. Fashion
New knowledge. Mobile phones. 5

6. Types of Innovation
INVENTION - totally new, product or service [Airplane, Light bulb, Telephone]
EXTENSION – New use or different application of existing product or service [McDonalds, Holiday Inn]
DUPLICATION – Creative replication of an existing concept [Pizza Hut, Virgin]
SYNTHESIS – Combining into a new formulation [Internet Cafes] 6

7. HBDI Herrmann Brain Dominance Instrument7

8. What is an Opportunity? Opportunity Defined
An opportunity is a favorable set of circumstances that creates the need for a new product, service, or business idea.
Most entrepreneurial firms are started in one of two ways:
Some firms are internally stimulated. An entrepreneur decides to start a firm, searches for and recognizes an opportunity, then starts a business.
Other firms are externally stimulated. An entrepreneur recognizes a problem or an opportunity gap and creates a business to fill it. 8

9. An opportunity has four essential qualities
What is an Opportunity?
An opportunity has four essential qualities 9

10. Window of Opportunity & Life Cycle
$100M
$50M
$25M
$3M
$1M
Time (years)
Start up
High
Growth
Maturity
Stability
Window of opportunity 10

11. Three Classic Life Cycles
500
100 25 5 1
High potential firm
Foundation firm
Lifestyle firm
In $Millions
Years 11

12. Three Ways to Identify An Opportunity12

13. Observing Trends First Approach: Observing Trends
Environmental Trends Suggesting Business or Product Opportunity Gaps 13

14. Environmental Scanning
Scanning: Detect Changes
Monitoring: Track Events Affecting Business
Forecasting: Making Plausible Projections
Assessing: ‘What does it all mean?’ 14

15. Trend Analysis SEEDTIP analysis Trends identify emerging needs..
Societal/sociological trends
Economic trends
Environmental/Ecological trends
Demographic trends
Technological trends
International trends
Political/Legal trends
When two or more trends come together…
[Café society]
[Life coaches]
[Ecotourism]
[In home care]
[VOIP]
[China/India emerging]
[Health & Safety] 15

16. Demographic change: age, urban living, growth patterns
Exploit trends
24 hour society
‘Money rich, time poor’
Demographic change: age, urban living, growth patterns
Environmental issues
Globalisation
Legislation
Desire for ‘gadgets’
Communication 16

17. Solving a Problem Second Approach: Solving a Problem
Sometimes identifying
opportunities simply
involves noticing a problem
and finding a way to
solve it.
These problems can be
pinpointed through observing
trends and through more simple
means, such as intuition,
serendipity, or chance.
Some business ideas are clearly
initiated to solve a problem.
For example, Symantec Corp.
created Norton antivirus
software to guard computers
against viruses. 17

18. Businesses Created to Solve a Problem
Solving a Problem
Businesses Created to Solve a Problem 18

19. How entrepreneurs found ideas
Left xmas shopping too late, couldn’t find last minute gadgets GADGET SHOP
Market opportunity to sell mobile phones direct
CAR PHONE WAREHOUSE
Wife crying because of seven days wait for new glasses
VISION EXPRESS
Passion for making scents and lotions turned into
JO MALONE
Create Curiosity – Open Mind & Observation of Circumstances 19

20. Finding Gaps in the Marketplace
Third Approach: Finding Gaps in the Marketplace
Gaps in the Marketplace
A 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.
This is the reason that small clothing boutiques and specialty shops exist.
The small boutiques, which often sell designer clothes or clothing for hard-to-fit people, are willing to carry merchandise that doesn’t sell in large enough quantities for Wal-Mart, GAP, or JC Penney to carry. 20

21. Personal Characteristics of the Entrepreneur
Characteristics that tend to make some people better at recognizing opportunities than others
Prior Experience
Social Networks
Cognitive Factors
Creativity 21

22. Social Capital - Per Lovgren
Network of
Professors of
Engineering
Management
Consultants
Foundry
Network of
Management
Consultants
Birley & Muzyka (2000:45) 22

23. Who Do You Know? Professional Contacts Tutors Family Advisors YOU
Friends
Other
Students
Work
Colleagues
Staff 23

24. Sources Of Ideas Insights - experience in profession or industry 43%
Challenge - could do better 15%
Unfilled/overlooked niche in marketplace 11%
Systematic search for business opportunities 7%
Brainstorm - cannot explain it 5%
Hobby or vocational interest %
Source: Entrepreneurship, John G Burch 24

25. Relationships & Contacts
Unlocking Value
Unlocking
Personal Value
Ideas
Opportunities
Ventures
Personality
Motivation & Drivers
Ability to Learn
Capabilities
Know How & Expertise
Relationships & Contacts
Rae (1999) 25

26. What Kind of Business Should I Start?
Start with what you know.
Do what you love.
Don’t reinvent the wheel, just make it better
Focus on a niche
Consider the franchising option
Know what sets you apart from the competition
Imitate an existing product
Buy an existing business
Become and agent or distributor
Sell your services as a consultant
More…?
Above all take your time
Start with what you know. If you've spent 20 years working as an accountant or you love to build wooden toy trains as a hobby, consider how you can take that experience and turn it into a successful business. You might also find a great business idea right under your nose. Look around your workplace. Do you see needs that are going unmet or can you think of a better way to do something? If so, you might have the seed for a profitable business.
Here are a few more guidelines to help you pick a business that's right for you:
· Do what you love. It's important to pick a business that you will enjoy running. I can't emphasize this point enough. Many people start a business for the wrong reason: to get rich. While it is true that many millionaires in this country made their fortunes from their own business ventures, that should not be your sole motivation for starting a business. If you don't enjoy what you do, you will not be successful, at least not from a mental point of view. Sure, the monetary rewards can be tremendous, but the mental anguish of working in a business you don't enjoy is a high price to pay. I talk to entrepreneurs all the time who are running successful businesses, but are so unhappy as a result that they literally make themselves sick. If you don't enjoy what you do, the business will become a chore, not a joy.
· Don't reinvent the wheel, just make it better. Many first-time entrepreneurs assume they have to come up with a new business idea to be successful. That simply is not true. Most successful businesses are born not of innovation, but of necessity. Instead of trying to come up with an idea that changes the world, take a look at the world around you and see where there might be a void that needs filling or a business concept that needs improvement.
Many successful businesses are the result of taking an already established business concept and making it better. Domino's Pizza was certainly not the first to offer home delivery of pizza, but it was the first to guarantee it would be delivered piping hot to your door in 30 minutes or less. Amazon.com was not the first company to sell books, but it was one of the first that would let you buy books from the comfort of your own home while sitting in your underwear.
· Focus on a niche. Many businesses have gone broke trying to be all things to all people. The ability to offer a billion products under one roof is all well and good for Wal-Mart, but not for most new businesses. Try to identify a niche that you would enjoy working in and think about starting a business therein. If you love to work outdoors, consider starting a landscaping business. If you enjoy working with numbers, think about becoming an accountant or CPA. When's the last time you had your gardener do your taxes? You get the idea. Focus on a niche and become an expert in your field.
· Consider the franchising option. Many new entrepreneurs consider buying a franchise operation instead of starting a business from scratch. Franchises are a good way to jumpstart the process because they have already done much of the hard work for you. They have proven the business model, established guidelines for running the business, spent millions of dollars on establishing the brand and so on. Buying a franchise is typically a very expensive and involved process that is beyond the scope of this article. The best thumbnail of advice I can give you is to thoroughly investigate the franchisor and the opportunity, use your own attorney to do the deal and read the fine print in the franchise agreement.
· Know what sets you apart from the competition. If your local business pool is already filled with other companies doing the same thing you want do, chances are you will fail in the face of established competition. To succeed in such a crowded pool, you will have to do something to stand out from the crowd. If you can't quickly and easily differentiate yourself from a large group of competitors, you're better off choosing another business.
· Above all, take your time. Think about starting part time while you still have your current job (and income) to fall back on. Talk to friends and associates who use the product or service you will provide to see if they would consider become paying customers.
Whatever business you choose to start, I encourage you to take the time required to make an informed, intelligent decision.
Source: entrepreneur.com 26