CHAPTER 2 SUMMARY ( Recognizing Opportunities and Generating Ideas )

In this chapter, we will discuss the importance of understanding the difference between ideas and opportunities, also approaches entrepreneurs use to spot opportunities, as well as factor or conditions in the external environment that may result in opportunities.

THE DIFFERENCES BETWEEN OPPORTUNITIES AND IDEAS

Entrepreneurs can recognize an opportunity and turn it into a successful business, also recognizes a problem or an opportunity gap and creates a business to address the problem or fill the identified gap. An opportunity is a favorable set of circumstances that creates a need for a new product, service, or business, but that opportunities are tough to spot. A common mistake entrepreneurs make in opportunity recognition process is picking a currently available product or service that they like or are passionate about and then trying to build a business around a slightly better version of it. The key of opportunity recognition is to identify a product or service that people need and are willing to buy, bot one that an entrepreneur wants to make and sell. An opportunity has four essential qualities, it is attractive, timely, durable, and anchored in a product, service, or business that creates or adds value for its buyer or end-user.

It is important to understand that there is a difference between an opportunity and an idea. An idea is a thought, an impression, or a notion. An idea may or may not meet the criteria of an opportunity. Many entrepreunial ventures fail not because the entrepreneurs launched them didn't work hard, but rather because there was no real opportunity to begin with.

THREE WAYS TO IDENTITY OPPORTUNITIES

1. Observing Trends

The most important trends to follow are economic trends, social trends, technological advances, and political action and regulatory changes.

a.       Economic Forces 

Understanding economic trends is helpful in determining areas that are ripe for new business ideas, as well as areas to avoid. When the economy is strong, people have more money to spend and are willing to buy discretionary products and services that enhance their lives. When the economy is weak, not only do people have less money to spend, they are typically more reluctant to spend the money they have, fearing the economy may become even worse, and that in turn, they might lose their jobs because of a weakening economy. When studying how economic forces affect business opportunities, it is important to evaluate who has money to spend and what they spend it on.

b.      Social Forces  

An understanding of the impact of social forces on trends and how they affect new product, service, and business ideas is a fundamental piece of the opportunity recognition puzzle. The reason that a product or service exists has more to do with satisfying a social need than the more transparent need the product fills. Changes in social trends alter how people and businesses behave and how they set their priorities. These changes affect how products and services are built and sold. 

c.       Technological Advances 

Advances in technology frequently dovetail with economic and social changes to create opportunities. Technological advances provide opportunities to help people perform everyday tasks in better or more convenient ways. Another aspect of technological advances is that once a technology is created, products often emerge to advance it.

d.      Political Action and Regulatory Changes 

Political and regulatory changes also provide the basis for business ideas. Political change also engenders new business and product opportunities. One thing entrepreneurs invariably do when a changing environmental trend prompts them to think about business opportunity is to learn more about the trend in an effort to shape and mold their idea.

2. Solving a Problem

To identifying opportunities, entrepreneurs have to recognize problems and find ways to solve them. Problems can be recognized by observing the challenges that people encounter in their daily lives and through more simple means, such as intuition, serendipity, or change. 

"Every problem is a brilliantly disguised opportunity"

      If you're having difficulty solving a particular problem, one technique that is useful is to find an instance where a similar problem was solved and then apply that solution to your problem.  Some business ideas are gleaned by recognizing problems that are associated with emerging trends.

3. Finding Gaps in the Marketplace

A related technique for generating new business opportunities is to take an existing product or service and create a new category by targeting a completely different target market. One thing that entrepreneurs must remain mindful of in pursuing business opportunities, regardless of whether the opportunity results from changing environmental trends, solving problem, or finding gaps in the marketplace, is that the opportunity must ultimately be fashioned into a successful business.

PERSONAL CHARACTERISTICS OF THE ENTREPRENEURS

         Researchers have identified several characteristics that tend to make some people better at recognizing opportunities than others. They've already defined an opportunity as a favorable set of circumstances that create the need for a new product, service, or business, but the term opportunity recognition refers to the process of perceiving the possibility of a profitable new business or a new product or service. 

Some specific characteristics shared by those who excel at recognizing an opportunity :

1. Prior Experience

By working in an industry, an individual may spot a market niche that is underserved. It is also possible that while working in a particular area, and individual builds a network of social contacts in that industry that may provide insights that lead to opportunities.

 2. Cognitive Factors

There are some who think that entrepreneurs have a "sixth sense" that allows them to see opportunities that the other miss. This sixth sense is called entrepreneurial alertness, which is formally defined as the ability to notice things without engaging in deliberate search. Some researchers conclude that alertness goes beyond noticing things and involves a more purposeful effort. In other words, entrepreneur may be better that others at sizing up the marketplace and inferring the likely implications.

3. Social Network

People who build a substantial network of social and professional contacts will be exposed to more opportunities and ideas than people with sparse networks. An important concept that sheds light on the importance of social networks to opportunity recognition is the differential impact of strong-tie relationships versus weak-tie relationships. It is more likely entrepreneur will get a new business idea through a weak-tie than a strong-tie relationship, because strong-tie relationships tend to reinforce insights and ideas the individuals already have.

4. Creativity

Creativity is the process of generating a novel or useful idea. For an individual, the creative process can be broken into five stage :

a.     Preparation 

Background, experience, and knowledge that an entrepreneur brings to  the opportunity recognition process.

b.      Incubation 

Stage during which a person considers an idea or thinks about a problem.

c.       Insight          

Flash of recognition when the solution to a problem is seen or an idea is born.

d.      Evaluation

Stage of the creative process during which an idea is subjected to scrutiny and analyzed for its viability.

e.       Elaboration 

Stage during which the creative idea is put into a final form.

TECHNIQUES FOR GENERATING IDEAS

        Entrepreneurs identify more ideas than opportunities because many ideas are typically generated to find the best way to capitalize on an opportunity. Several techniques can be used to stimulate and facilitate the generation of new ideas for products, services, and businesses.

1. Brainstorming

In a formal brainstorming session, the leader of the group asks the participants to share their ideas. One person shares an idea, another person reacts to it, another person reacts the reaction, and so on.Teknik kreativitas yang mengupayakan pencarian penyelesaian dari suatu masalah tertentu dengan mengumpulkan gagasan secara spontan dari anggota kelompok. 

 2. Focus Group

Wawancara dari setiap sekelompok kecil orang yang dipimpin oleh seorang narasumber atau moderator yang secara halus mendorong peserta untuk berani berbicara terbuka dan spontan tentang hal yang dianggap penting yang berhubungan dengan topik diskusi saat itu.

3. Library and Internet Research

Libraries are often an underutilized source of information for generating business ideas. The best approach to utilizing a library is to discuss your general area of interest with a reference librarian, who can point out useful resource.

4. Other techniques

Some companies set up customer advisory boards that meet regularly to discuss needs, wants, and problems that may lead to new ideas. Other companies conduct varying forms of anthropological research, such as day-in-the-life research. The company routinely sends teams of testers to the homes and businesses of its users to see how its products are working and to seek insights for new product ideas.

ENCOURAGING THE DEVELOPMENT OF NEW IDEA

             Entrepreneurial ventures can take certain concrete steps to build an organization that encourages and protects new ideas.

1. Establishing a Focal Point for Ideas

Some firms meet the challenge of encouraging, collecting, and evaluating ideas by designating a specific person to screen and track them. Another approach is to establish an idea bank, which is a physical or digital repository for storing ideas.

2. Encouraging Creativity at the Firm Level

A team employees may come up with a hundred legitimate creative ideas for a new product or service, but only one may eventually be implemented. Of course, it may take a hundred creative ideas to discover the one that ideally satisfies an opportunity.

by : Nadya Natasya Wijaya/2201761885