Chapter 4 Creativity and the Business Idea McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Entrepreneur’s Adage #12 “Don’t follow the trend. Create the trend.” - Jordan

Trends The start of a trend that lasts for a considerable period of time provides one of the greatest opportunities for starting a new venture. Trends that will provide opportunities include: Green Trend Clean-energy Trend Organic / Local / Sustainable Trend Economic Trend (focus on frugality) Social Media Trend Health & Wellness Trend Mobile / Web trend Others?

Sources of New Ideas Personal experiences, problems, challenges and yearnings Failed Projects or Businesses Consumers Formal and informal information channels Existing Products and Services Analysis uncovers ways to improve offerings that may result in a new product or service. Distribution Channels Channel members can help suggest and market new products.

Sources of New Ideas (cont.) Federal Government Patent Office files New product ideas generated in response to government regulations. Research and Development Formal R&D Informal R&D

Methods of Generating New Ideas Focus Groups A moderator leads a group of 8 to 14 participants through an open, in-depth discussion in a directive or nondirective manner. An excellent method for generating and screening ideas and concepts. Can be useful for creating ad campaigns and copy

Methods of Generating New Ideas (cont.) Brainstorming Allows people to express and amplify their creativity. Be somewhat specific Good ideas emerge when the brainstorming effort focuses on a specific product or market area. Rules of brainstorming: No criticism. Freewheeling is encouraged. Quantity of ideas is desired. Combinations and improvements of ideas are encouraged. Assign someone to take notes and write down everything

Methods of Generating New Ideas (cont.) Reverse Brainstorming A group method that focuses on the negative aspects of ideas and ways to overcome these problems. Care must be taken to maintain group morale and avoid offending participants.

Entrepreneur’s Adage #13 “Don’t follow the trend. Create the trend.” - Jordan

Methods of Generating New Ideas (cont.) Gordon Method Method for developing new ideas when the individuals are unaware of the problem. Solutions are not clouded by preconceived ideas and behavioral patterns. Layered presentation of the solution Free Association Developing a new idea through a chain of word associations.

Methods of Generating New Ideas (cont.) Collective Notebook Method Developing a new idea by group members regularly recording ideas. Big-Dream Approach Developing a new idea by thinking without constraints.

Creative Problem Solving Creativity tends to decline with age, education, lack of use, and bureaucracy. Latent creative potential can be stifled by perceptual, cultural, emotional, and organizational factors. HOW CAN SOMEONE’S CREATIVE SPIRIT BE NURTURED?

Entrepreneur’s Adage #14 “Creativity begets creativity… Write a poem, compose a song, take some awe-inspiring pictures or paint something in the middle of the day while you work!” - Jordan

Innovation Types of Innovation Breakthrough Technological Fewest number of innovations. Establishes the platform on which future innovations in an area are developed. Should be protected by patents, trademarks, and copyrights. Technological Occurs more frequently; not at the same level of breakthrough inventions. Offers advancements in the product/market area. Also needs to be protected.

Innovation (cont.) Ordinary Occurs most frequently. Extends a technological innovation into a better product or service or one that has a different market appeal. Usually come from market analysis and pull, not technology push.

Continuum for Classifying New Products

The Opportunity Recognition Process

Entrepreneur’s Adage #15 “Get excited (not discouraged) when people tell you your ideas are dumb or will never work. Most people mock what they cannot themselves understand, create or envision.” - Jordan