Utilium

When you have finished studying this module, you will be able to fulfill the following learning objectives:

• Explain how new ventures are based on creative problem solving and innovation.
• Recognize entrepreneurial opportunities.
• Evaluate entrepreneurial opportunities as new ventures.
• Analyze opportunity factors in case studies of new ventures.

The module opens with Charles Leadbeater discussing the origins of the mountain bike. How does the development of the mountain bike illustrate the convergence of creativity, opportunity, and feasibility in bringing a new product to the public and fundamental change to the bike industry?

Creativity is an important element of entrepreneurship because success as an entrepreneur often rests on generating novel and useful ideas (Ward, 2003). In the context of entrepreneurship, creativity involves the development of something new that has value to some segment of society. It could be a new product or service, an innovative component of a technology, or a novel production or distribution method.

Use the following reading and podcast to answer these questions: How do entrepreneurs discover or invent business concepts to develop as possible new ventures?

What is involved in innovation and creative processes, and how do those processes lead to the recognition of venture opportunities?

What is the SCAMPER process? To stimulate your creative thinking, consider an existing product or service and then apply the SCAMPER tool. What new products or services can you imagine from this process?

Recognizing an opportunity is one of the first steps in becoming a successful entrepreneur (Ardichvili, Cardozo, and Ray, 2003). An opportunity potentially exists when a number of people have a frustration, problem, or unmet desire that is not being addressed adequately by existing products or services.

Identifying a frustration, problem, or desire is the first step in recognizing an opportunity. What other factors are important in determining if you have recognized an entrepreneurial opportunity?

How do environmental factors affect the probability of identifying opportunities?

Why are demographics and industry structures important in recognizing opportunities?

What is the role of experience in recognizing opportunities for new ventures? Is it possible to have too much experience?

What concrete steps can you take in the near future to increase your chances of recognizing an entrepreneurial opportunity? Try the technique of creating and maintaining an idea journal for new ventures.

Developing a pool of potential opportunities is the first step in generating an idea for your new venture. The second critical step in the process is evaluating the opportunities and selecting the best one or two opportunities to explore further (Timmons, Muzyka, Stevenson, and Bygrave, 1987). Evaluation requires that you consider issues such as the market opportunity, the skills of the founding team, industry structure, and the intensity of competition.

According to the venture capitalists in the first article, what central issues should you consider when evaluating opportunities? What additional issues might you add that you think are important?

What types of information and data can you gather to aid your evaluation of venture opportunities?

Compare and contrast the two ventures presented in this section. How did opportunity recognition and evaluation come together for the founders of Tazo Tea and Dry Soda?

This section offers resources for recognizing venture opportunities in four different industries. Choose an industry that interests you and analyze the potential opportunities the panel identifies.

What situations, facts, events, technologies, needs, frustrations, problems, and trends give rise to those opportunities?

Are there any opportunities identified by the panel that seem particularly compelling to you? What factors make these opportunities so interesting?

What ideas might you contribute if you were on the panel?