Module 3 Opp ID - Idea Generation and Opportunity Identification PDF

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Idea Generation and Opportunity Identification
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Module 3 Idea Generation and Opportunity Identification Introduction and Learning Objectives In Module 1 we identified the entrepreneurial process as consisting of:    

Identifying opportunities. Checking out the opportunity’s feasibility. Assembling strategic resources (see module 6). Building the business to stability.

In this module we will examine the first step in this process; opportunity identification. Note that identifying a business opportunity is not the same as coming up with a business idea. Essentially, a business opportunity is an idea that has been subjected to an evaluation process (see Module 7). However, as Nobel Prize winning physicist Linus Pauling once put it, “The best way to have a good idea is to have a lot of ideas.” Idea generation then is fundamental to the entrepreneurial process. On completion of this module students should: 1. 2. 3. 4. 5.

Understand the importance of idea generation in the entrepreneurial process Be aware of the main sources of business ideas Understand the role that creativity plays in idea generation Be aware of the characteristics of creative people. Be able to complete the course individual assignment. Note that this assignment requires the student to generate a number of business ideas and screen them using their Personal Business Interest Profiles in order to select the one that best fits their personal interests, strengths and weaknesses.

Suggested Readings 1. 2. 3. 4. 5. 6. 7. 8.

Williams, Geoff “ Innovative Model”. http://www.entrepreneur.com/magazine/entrepreneur/2002/september/54604.html Parallel Thinking – Edward de Bono http://www.debonogroup.com/parallel_thinking.htm TED talk: Zach Kaplan and Keith Schacht demo toys from the future http://www.ted.com/talks/lang/eng/toys_from_the_future.html Opportunity ID. Y-Enterprise Centre, St. John's, NL. http://www.busi.mun.ca/b1600/CourseMaterials/opportunity id.pdf

Sources of Business Ideas Business ideas come from a number of sources. Often, they are the result of applying creative thinking to everyday experiences, such as: 

Knowledge gained from work or education experience

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A hobby of yours An invention Socio-demographic changes in the business environment Dissatisfaction with present levels of service on the part of you or your family or friends Ideas suggested by friends or business acquaintances Import substitution Transferring ideas seen in other jurisdictions

There are two basic approaches to idea generation. The first can be termed the “Eureka Approach”. Individuals using this approach often have no preconceived intent to be an entrepreneur. An example of this type of idea generation was experienced by Ray Kroc, who built Macdonald’s Restaurants into a supremely successful international franchising business. Kroc, a salesman in his mid-50’s at the time, happened into the first Macdonald’s Restaurant and was struck by the potential of applying the counter service model of food purchase in a much larger setting. The second approach to identifying ideas can be termed the “Systematic Approach”. Entrepreneurs using this approach have usually already made a decision to be entrepreneurs. They then seek ideas that will satisfy that ambition. As a precursor they generally undertake an intensive self-assessment exercise such as that discussed in Module 2 that will help them to decide which industry they would be most comfortable operating in, and whether they have all of the requisite skills and knowledge to operate as an individual entrepreneur or whether they should seek out partners with complementing skills. It must be pointed out that creativity plays a critical role under either of these approaches. Unfortunately the fact that many of us do not see ourselves as being particularly creative can act as an inhibitor in the idea generation process. Keep in mind though that we all have a creative side. This is often suppressed by factors such as: 

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Searching for the one “right” answer. Most business situations can be addressed in a variety of ways. Although some of these might be more effective than others there is rarely one approach that is exactly correct. Focusing on being logical. Logic is certainly important in developing or managing a business. An over reliance on logic, however, can often inhibit the kind of “outside-the-box thinking that can add substantial value to the original idea. Blindly following the rules. The advent of the personal computer was the result of several groups of entrepreneurs who ignored the implicit rules that computers were of no use to individuals, that profits were to be made on hardware and that software was of little profit potential. Constantly being practical and not exploring “what-if” alternatives.

Enhancing Our Creativity Research indicates that our brains are designed to differentiate between logical and creative functions. The left side of the brain:

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Controls rational, logical thought Controls speech Is responsible for linear thought Controls the right side of the body.

The right side of the brain:   

Is responsible for lateral thought Is creative and imaginative Controls the left side of the body.

In many of us the right side of the brain has been suppressed by our education and experience. The good news is that there are exercises and activities that can help redevelop our creative sides. Characteristics of Creative People While it is true that high profile individuals such as well-known visual artists, musicians, and authors exhibit high levels of creativity it would be a mistake to view all creative people in that light. Many creative people are not that different from those that are more logical. They tend to:     

Be bright but not brilliant Have positive self-images Be motivated by challenging problems Not jump to conclusions Look for meanings and implications of problems

Summary Idea generation is the key first step in the entrepreneurial process. In fact, it is not an exaggeration to say that an individual might exhibit many entrepreneurial attributes but without the ability to identify a sound business opportunity s/he will never be an entrepreneur. Ideas for businesses come from a variety of sources; it is important, however, that the entrepreneur put his/her personal spin on the idea in order to differentiate it from the competition. Lateral thinking, the ability to think outside the box using the entrepreneur’s inherent creativity is a critical part of the opportunity identification and idea generation process....