entrepreneuship and innovation

1. Intro to Entrepreneurship &
Innovation
ENE 303
UNIT 4
IDEATION: Idea To Opportunity

2. Unit Objective
The learner should be able to:
● Explain how ideas are generated
● Define Ideation
● Define an “Opportunity”
● Evaluate if an idea is an opportunity (business idea).
● Explain approaches to discover “opportunities”.
● Demonstrate the design thinking process

3. Idea Generation/Ideation
Thus, Ideation is “the conceiving, imagining and
forming of ideas….serves to generate as many
concepts as possible, screen these concepts
and determine the most valid concept for
further development.” (Kanh, 2015)
So, what is an Opportunity?

4. Opportunity
Opportunity is ‘a situation in which a person can exploit a new
business idea that has the potential to generate profit’ (Baron
and Shane, 2008)
Idea Generation/
Ideation Opportunity Recognition
Production of ideas
for something new
Recognising that ideas are not only
new and potentially useful, but
also have the potential to Generate
economic value (profit)

5. The Difference Between Opportunities and Ideas
A. An opportunity is a favourable set of circumstances that creates a need for a new
product, service, or business.
B. An opportunity has four essential qualities: it is
(1) attractive,
(2) durable,
(3) timely, (Window of opportunity) e.g Masks and Sanitizers, Soap Manufacturing.
(4) Prompts the desire for new product, service, or business that creates value or solves
a problem 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, impression, or notion. It may or may not meet the criteria of an
opportunity. This is a critical point because, many businesses fail not because the
entrepreneurs that started them didn’t work hard, but because there was no real
opportunity to begin with.

6. Where do Ideas Come From
1. The information you learn and already know can help you
recognise an opportunity
- Observed information
- Experience
- Market knowledge
- Industry knowledge (existing products/services, needs within a
distribution channel
2. Networking: Exposure to diverse influences, ideas and people
3. Changes that are happening in your community, country or
globally can generate ideas for entrepreneurs:
- Technology
- Political and regulatory policies
- Social and demographic trends

7. Sometimes you just think…surely there must
be a better way

8. Methods of Generating Ideas
• Focus groups
• Brainstorming
• Brainwriting
• Problem Inventory
Analysis
• Design thinking
• Value chain analysis
• Fit quadrant
• Library and Internet
Research
• Customer advisory boards
An entrepreneur can explore several methods to help generate
and test new ideas:

9. Ways to Identify Opportunities
A. Observing Trends—The first approach to identifying opportunities is to
observe trends and study how they create opportunities for entrepreneurs to
pursue.
1. Economic Forces
a. Economic forces affect consumers’ level of disposable income. Individual sectors
of the economy have a direct impact on consumer buying patterns. For example,
when the economy is strong, people have more money to spend and are willing to
buy discretionary products and services that enhance their lives. In contrast, when the
economy is weak, not only do people have less money to spend, but 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.

10. Ways to Identify Opportunities
2.Social Forces
a.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.
b. The increased popularity of fast-food restaurants, for
example, isn’t due primarily to people’s love for fast food but
rather to the fact that people are busy—the number of
households with both parents working remains high.

11. Ways to Identify Opportunities
C. Some of the social trends that allow for new opportunities are as follows:
❑ Aging of the population
❑ The increasing diversity of the workforce
❑ Increased participation in social networks
❑ Growth in the use of mobile devices
❑ The increasing focus on health and wellness
❑ Emphasis on clean forms of energy including wind, solar, biofuels, and others
❑ Continual migration of people from small towns and rural areas to cities
❑ Desire for personalization (which creates a need for products and services that
people can tailor to their own tastes and needs)

12. Ways to Identify Opportunities
3.Technological Advances
a. Given the rapid pace of technological change, it is vital for
entrepreneurs to remain on top of how new technologies
affect current and future opportunities. Once a technology is
created, products emerge to advance it. For example, the
creation of the Apple iPhone, iPad, and similar devices has in
turn spawned entire industries that produce compatible
devices. E.g. Samsung smartphone, Tablets, Watches etc

13. Ways to Identify Opportunities
4.Political Action and Regulatory Changes
a.Political action and regulatory changes also provide the basis for
opportunities.e.g Import bans - Open up opportunities for home grown
enterprises to flourish. Tax incentives/ Tax breaks - below a certain
profit margin, no to little tax is charged/
b.Political and social unrest also leads to the establishment of new
businesses and product opportunities. For example, political instability
and the threat of terrorism have resulted in many firms becoming more
security conscious. These companies need new products and services
to protect their physical assets and intellectual property, as well as to
protect their customers and employees.
In Botswana - heists and atm bombings, opportunity for intesification of
security services.

14. Ways to Identify Opportunities
B. Solving a Problem
1 Sometimes identifying opportunities simply involves noticing a problem and finding a
way to solve it.
These problems can be pinpointed through observing trends and through more simple
means, such as intuition, serendipity, or chance.
Some business ideas are clearly gleaned from the recognition of problems in emerging
trends. For example, some older people find traditional cell phones hard to use—the
buttons are small, the text is hard to read, and it’s often difficult to hear someone on a
cell phone in a noisy room. To solve these problems, GreatCall, a recent start-up, is
producing a cell phone called the Jitterbug, which is designed specifically for older
users.
serendipitous discovery is a chance discovery made by someone with a prepared mind

15. Ways to Identify Opportunities
C. Finding Gaps in the Marketplace
1.The third approach to identifying opportunities is to recognize a need that consumers have
that is not being satisfied—by either large, established firms or entrepreneurial ventures.
Large retailers compete primarily on price by serving large groups of customers with similar
needs. They do this by offering the most popular items targeted toward mainstream
consumers. Although this approach allows the large retailers to achieve economies of scale, it
leaves gaps in the marketplace.
This is the reason that small clothing boutiques and specialty shops exist. The small
boutiques, which often sell designer clothes or clothes for hard-to-fit people, are willing to
carry merchandise that doesn’t sell in large enough quantities for Wal-Mart or Costco to carry.
A common way that gaps in the marketplace are recognized is when people become
frustrated because they can’t find a product or service that they need and recognize that other
people feel the same way.

16. Opportunity Development
Process
• Opportunity Recognition/Identification
• Opportunity Evaluation- Feasibility analysis
❖ Is there anyone currently satisfying that needs ot
what? If not, Are people interested in that type or
product or service? What other ways would it add
value? What would be the best way to distribute the
product? How much are they willing to pay for it?
• Opportunity Exploitation - Implement your idea. I.e.
source for funds to test the idea, register a business,
hire a team and begin processing.

17. “THE Business Idea”
Not all ideas are opportunities.
First you have to determine:
1. What problem or challenge is your idea
solving?
2. What needs are you addressing?
3. What gap is your idea filling in the market?

18. The Idea Equation
Subject
+
Problem / Benefit
+
Business model
A full business idea has all the three components
• Some ideas are incomplete, they don't offer a solution
to the problem they point out

19. Are business Opportunities discovered
or created? - Student facilitate

20. Opportunities are found
⮚ Kirzner (1997) and Shane (2003) explain that these opportunities can
be found by discovering unsatisfied needs and wants in the economy.
⮚ Therefore opportunity discovery occurs when an existing market which
is currently unknown and unsatisfied is realized by an entrepreneur.
Opportunities are made
⮚ A result of the interaction between the entrepreneur, other people and
their ecosystems in daily life.
⮚ Opportunities and markets are created:
1. From information available that is incomplete and overwhelming
2. Consumers are not aware of their future preferences
3. New technologies as they emerge
The 2 Approaches to
Opportunity

21. Skills to Identify Opportunities
⮚Networking, finding and testing ideas
⮚Observing others –customers, the market/industry
⮚Associating seemingly unrelated things – connectivity
⮚Questioning why and why not?
⮚Experimenting and trying things out (including work
experience)

22. Hunting for Opportunities
⮚ Tip1 - Recognize patterns as they are forming
⮚ Tip2 - Don't overlook the obvious
⮚ Tip4 - Watch for good ideas that are poorly executed
⮚ Tip5 - Combine two or more things/thoughts together
⮚ Tip6 - Look for new, generally unknown information
⮚ Tip7 - Talk to people
⮚ Tip8 - Read
⮚ Tip9 - Look for what has worked elsewhere
⮚ Tip10 - Look for new ways to meet old needs and wants

23. Hunting for Opportunities
⮚ Tip10 - Look for new ways to meet old needs and wants
⮚ Tip11 - Look for ways to overcome barriers that blocked a good
idea in the past
⮚ Tip12 - Look for "left-behind" markets
⮚ Tip13 - Look for good ideas that can be improved
⮚ Tip14 - Look at why people buy something rather than what
they buy
⮚ Tip15 - Look for new uses for old products
⮚ Tip16 - Look for what's not working
⮚ Tip19 – Stay alert!

24. What entrepreneurs need to know before they
start:
DESIRABILITY
What do people want or need or desire
FEASIBILITY
Is it possible/practical? Do you have the knowledge, resources, skills
etc. to implement it
VIABILITY
Is it worth it – financially?

25. Recommended Reading
• Hisrich, R.D, Peters, A.P. Sheperd D.A. . (2017).
Entrepreneurship. 10th Edition. McGraw-Hill Education
• Kirby D, (2003). Entrepreneurship. McGraw-Hill
Education
Available at IDM main campus library
• Other e-books on the same subjects in the e-libraries &
Google Scholar