1. LAUNCHING NEW VENTURES – AN ENTREPRENEURIAL APPROACH, 7E Kathleen R. Allen – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

2. Recognizing and Shaping an Opportunity Chapter 3 – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

3. Chapter Objectives Using design thinking to understand opportunity. Discuss creativity, its challenges, and how to develop creative skills. Understand ideation and its role in problem solving. Understand the innovation process. – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

4. Creating Opportunity Ideas are a commodity Everyone has them, dozens every day But entrepreneurs know how to extract value from those ideas and turn them into opportunities that have commercial potential The difference between an idea and an opportunity is that an opportunity can turn into a business – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

5. Creating Opportunity Design thinking is a people-centered process A design thinker employs ◦ Empathy ◦ Integrative thinking ◦ Optimism ◦ Experimentation ◦ Collaboration – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

6. Figure 3.1- Entrepreneurship & the Elements of Design Thinking – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

7. 3.1 Creativity and Inspiration Creativity: ◦ Enables entrepreneurs to differentiate their businesses from competitors ◦ Is the basis for invention ◦ Is fundamental to problem solving ◦ Is a critical skill for recognizing or creating opportunity in a dynamic environment ◦ Is difficult to study because it deals with a person’s internal thoughts – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

8. 3.1 Creativity and Inspiration An early description of creativity by Wallas, held that the creative process has 4 stages: ◦ Preparation (see the problem from many views) ◦ Incubation (mulling it over in the subconscious) ◦ Illumination (discovery of a solution) ◦ Verification (bringing the idea to an outcome) A more recent view comes from Seeff, who identified seven stages – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

9. Figure 3.2- Entrepreneurship & the Elements of Design Thinking – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

10. 3.1a Challenges to Creativity Roadblocks may be: ◦ Personal ◦ Problem-solving ◦ Environmental No time for creativity ◦ Those who multitask are much less productive No confidence “Confidence is the expectation of success.” – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

11. Table 3.1- Developing Creative Skills – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

12. 3.1b Tools for Creativity & Inspiration Three Rules of Thumb: ◦ Initially, go for quantity over quality of ideas. ◦ Capture every idea, no matter how outlandish it may seem. ◦ Piggyback on ideas and create new combinations and modifications, but only after first generating ideas at the individual level. – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

13. 3.1b Tools for Creativity & Inspiration Brainwriting (a form of brainstorming used to make sure all on the team feel comfortable offering ideas. Visualization (make sense of things; paint a word picture; identify patterns) ◦ Mindmapping – a way to visually lay out ideas and organize them Journey mapping (depicts all touch points with customers.) – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

14. Figure 3.3- The Journey Map – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

15. 3.2 Opportunity/Ideation Opportunity is the intersection of an idea and a customer. Two theories to explain opportunities: ◦ Discovery theory  Opportunity arises from shifts in external factors; waiting for entrepreneurs to discover them; requires a systematic approach to scanning the environment. ◦ Creation theory  Entrepreneurs create opportunities by their actions around new products, services and business models. – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

16. 3.3 Find and Frame the Problem Avoid the natural tendency to want to kill the “crazy” ideas and adopt the best ones. Use Affirmative Judgment; articulate the positives first. State criticisms in a positive way. Restate the problem, and ask “why” often. – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

17. 3.3a Restating the Problem Make sure to restate the problem to define it correctly Ask “how” and “why” to break a logjam created by a problem statement that may be too narrow or too broad Table 3.2 demonstrates how a problem statement can be reworked to get to the root of the problem – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

18. Table 3.2- Restating the Problem – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

19. 3.3b Attribute Identification Ask: 1.What can we add or take away from this problem definition? 2.Can we combine this with something else? 3.What if we reverse the problem statement? – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

20. 3.3c Force Fitting Some of the best ideas come from connecting things that normally don’t go together Take a random object and create a relationship to the problem definition you’re dealing with ◦ Example: You have developed an alarm clock that people can talk to in order to turn it off. Someone brings in a lamp. How might the alarm clock turn on the lamp? – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

21. 3.4 Develop Solutions Use the same techniques used to generate and focus ideas. Criteria play a critical role in solution identification  Explicit: time limits, budgets, constraints  Implicit: considerations such as intuition, team culture, preferences, prejudices, etc. – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

22. 3.5 Innovation Joseph Schumpeter identified five categories of innovation: 1.A new product or substantial change in an existing product 2.A new process 3.A new market 4.New sources of supply 5.Changes in industrial organization – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

23. Figure 3.4- The Innovation and Commercialization Process – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

24. Table 3.3- Sources of Innovation – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

25. New Venture Action Plan Do the exercises suggested in Table 3.1, “Developing Creative Skills” Practice generating ideas and problems using the techniques provided in the chapter Take one of the sources in Table 3.3 and come up with an innovation – © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.