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Opportunity Recognition & Business Concept:

Paying attention to both the external world and your internal


mind set.
Remember the
definition of
ENTREPRENEURSHIP

It is the process of recognizing,


seizing, pursuing and exploiting
opportunities without regard to the
resources you currently control.
OPPORTUNITY RECOGNITION

• What is an opportunity?
• How do you recognize opportunities?
• How do you screen opportunities
• How are concepts different from ideas?
• What is a business concept?
• Is the business concept worthwhile?
• How do you define a superior
opportunity and concept?
OPPORTUNITY RECOGNITION

An opportunity is not an
idea nor is it a business
concept.
An Opportunity is External

• It is in the environment
• It is a need to be fulfilled
• It is a want to be addressed
• It is a fear to be relieved
• It is time limited
• It is not a technology, service, or
product but an application to
situation
Ideas vs. Concepts
• Ideas are often seeing a need, want or fear
and saying, “Lets meet that”
• Ideas are sometimes a technology hunting
for an application or “opportunity”
• Concepts are when you put a technology
together with the customer and
understand the business and revenue
models that lead to sales.
Thinking About the
Concept

Distribution & Marketing

Products & Customer


Services s Groups

Resources Needed
& Earned
Entrepreneurs Bet

• Motto
• Be risk averse.
• Don’t stretch too much, too
fast
• Know your concept
Opportunity, Ideas & Concepts
• Good ideas are not always good
opportunities nor viable concepts.
• Concepts are built using ideas &
entrepreneurial creativity in real time, take
time & address real problems.
• Opportunities are attractive, durable, timely,
and anchored in a product or service which
creates real value for its buyer and end user.
• Concepts provide Need or Want Satisfaction,
Pain and/or Suffering Relief.
• Opportunities yield measurable net benefits
to the entrepreneur and to society.
Opportunity Recognition

• Opportunities are also situational


– The Window of Opportunity
• Opportunities take form in real
world conditions
– Changing conditions
– Leads and lags
– Knowledge gaps
– Chaos and/or confusion
– Inconsistencies
– Uncertainties
Some Global Trends

• Social
• Political
• Economic
• Technological
• Demographic
• Global
• Local
The External Environment
Macro-Environment

Industry
Demographics
Economic Environment
Competition

Customers FIRM Suppliers

Social Substitutes Global

Political/Legal
Technological
Some Important Environmental
Factors
Economic Demographic Socio-Cultural Political/Legal
Conditions Trends Trends Technological
GNP Trends Population Lifestyle Legislation
Growth Changes
Govt. Spending Age Distribution Family Welfare
Formations
Interest Rates Population Health Trends Housing
Shifts
Unemployment Immigration Environmental Agriculture
Levels Concerns
Income Levels Birth Rates Education
Heuristic Model for
Opportunity Identification
PREVISION

Market
Demands
Personal
Attributes
Social
Forces
VISION DEVELOPMENT DECISION
Technology
Personal Evaluate Go ahead or
Experiences
Cultural Quit
Forces Elaborate
Environmental
Forces
Modify
etc.
Alertness Model of
Opportunity Identification
COGNITIVE
PERSON SITUATION OUTCOME
BEHAVIOR
Person Situation No
does not No Ability Maximization Opportunity
have alertness No Gain Funding

Situation
Ability
No Gain

Situation
No Ability
Gain

Situation
Person Ability Optimization Opportunity
has alertness Gain Assessment Funding
Person-Place Framework
for
Opportunity
Right
Person
Identification
(has entre-
preneurial Assessment Break Create Perception
1) Perceptual
alertness) - attend to new info.
Means- New of Viable
- put self in position Ends Frame Opportunity
to get exposure to
Right new info, etc.
Frame
Situation
2) Reasoning
(person has - tolerance of
ability to ambiguity
- interpretation of
grasp and information
has potential -
for gain)
Ideas Versus Concepts
Avoid spending too much time
and money
You may turn out the best product in
the world, but the entire world
needs only have limited
requirements. These are great
ideas, but poor business
opportunities or concepts.
Questions to Answer

• Is this really an adequate business


opportunity and concept?
• Is this one I/we want to pursue?
• What resources are required to
exploit it?
• How do I/we acquire them?
• How do I/we manage the operation?
• How and when do I/we harvest?
Harvest Issues

• Profitability
• Positive Cash flow
• ROI on Required I
• Investor Demands/Expectations
• Value at exit
• Life style issues
–Personal wants
–Family issues
“Visionary leadership
rather than managerial
skill will be the most
valued standard for
tomorrow’s top officers.”
Lester Korn
Co-Founder -- Korn Ferry
Management Team Issues

• Team, Founder(s)
• Fit with Opportunity
• Track Record
• Gaps in Capabilities & Competencies
• Values and Ethics
• Personal Goals and Objectives
Differentiation Issues

• Technology
• Service
• Team, talent, fit
• Channels of distribution and marketing
• Pricing
• Opportunistic, adaptive
Principles of Opportunity
Seeking
• Systematically analyze all sources
• Go out:
– look,
– ask, & l
– isten
• Keep it simple, stay focused
• Start small (specific)
• Aim for leadership
• Be market focused, be market driven
More Principles of Innovative
Opportunity Seeking

• Don’t:
– Be clever
– Do do too much at once
– Innovate for the future
• Focus on opportunity, not risk
Concept Feasibility
• Compelling Interest
• Customer Opportunities
• Customers
• financial Resources
• Entrepreneurial Team
• Venture Evaluation
Compelling Interest

“Choose a job you love, and


you will never have to work a
day in your life.”

– Confucius
Customer Opportunities

“The secret of life is to be


ready for the opportunity
when it comes.”

– Benjamin Disraeli
Customers

“I cannot give you the formula for


success, but I can give you the
formula for failure...which is: try
to please everyone.”

– Herbert Bayard Swope


Financial Resources

"Happiness is a positive cash


flow.”

– Fred Adler
Entrepreneurial Assessment

"The true entrepreneur


acknowledges that he or she
cannot succeed alone."

– Dr. An Wang
Reality Check

"Never tell me the odds."

– Han Solo in "Star Wars"


Venture Evaluation

"Confidence is what you feel


before you comprehend the
situation."

– Old Proverb
Success

"Success, as I see it, is a


result, not a goal."

– Gustavae Flaubert
SUCCESS CRITERIA
IT IS NOT ONLY MONEY!!!

• Growth
• Profitability
• Technological Innovation
• Market Impact
• Institutionalization of Success
Conclusion

Be Realistic, but
Demand the Possible

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