Idea, Opportunity and

Retrospective Determinism
 Idea……..
Is a thought, impression, or notion.
 Screening Ideas: Are they
Opportunities?
5 Questions
1. What important customer problem can you
solve?
2. How are you going to do it?
3. How many customers are there that are
willing to buy from you?
4. Why can only you provide the solution?
5. How can you defend against others?
 Screening an Opportunity:
5 Questions
1. What important customer problem can you
solve?

How valuable?
How painful?
Remember, you need to change somebody’s
behavior to buy your product.
 Screening an Opportunity:
5 Questions
2. How are you going to do it?

Business model:
Product
Distribution
Location
Technology/Innovation
Service
Brand
 Screening an Opportunity:
5 Questions
3. How many customers are there that are
willing to buy from you?

How many customers are there? (Market size)

How many will buy from you? (Market share)
Who will be your first customer (besides your
Mom)?
Who will be your 100th?
 Screening an Opportunity:
5 Questions
4. Why can only you provide the solution?

How are you unique? What do you provide

that nobody else can?
 Screening an Opportunity:
5 Questions
5. How can you defend against others?

Location, brand, patent (or other IP), great

service, great taste, great fashion sense….
Opportunity………

-Is a favorable set of circumstances that creates

a need for a new product, service or business.
-Has four essential qualities:
• Attractive
• Durable
• Timely
• Anchored in a product, service, or business that creates or
adds value for its buyer or end user.
-Its “window of opportunity” must be open: the
time period in which a firm can realistically enter a
new market
 Opportunity Recognition Process

Environmental
Trends
Economic Factors
Social factors
Technological
advances
Political & regulatory New
changes Business, Product Business
or Service Product &
Personal
opportunity gap service ideas
characteristics
of entrepreneurs
Prior experience
Cognitive factors
Social networks
Creativity
 Environmental trends suggesting business or product
opportunity gaps
Economic Forces
State of the economy
Level of disposable income
Consumer spending patterns

Social Forces
Social & cultural trends
New
Demographic changes Business,
Business,
What people think is “in” Product or
Product &
Service
Service
Technological advances Opportunity
Ideas
New technologies Gap
Emerging technologies
New uses of old technologies

Political & regulatory

changes
New changes in political arena
New laws & regulations
 Personal Characteristics of the
entrepreneur
• Prior Experience
- Studies show that prior experience in an industry
helps entrepreneurs recognize business opportunities
“Opportunity recognition refers to the process of
perceiving the possibility of a profitable new business
or a new product or service”
- Once an entrepreneur starts a firm, new venture
opportunities become apparent. This is called the
“corridor principle”, which states that once an
entrepreneur starts a firm, he or she begins a journey
down a path where “corridors” leading to new venture
opportunities become apparent.
Contd……….

• Cognitive factors
- entrepreneurial alertness: the ability to notice
things without engaging in deliberate search.
Social Networks
- the extent and depth of an individual’s social
network affects opportunity recognition.
solo entrepreneurs (those who identified
their business idea on their own.)
network entrepreneurs (those who identified
their ideas through social contacts.)
strong tie relationships
weak tie relationships
 Contd…………

• Creativity
- is the process of generating a novel or
useful idea.
- steps to generating creative ideas are

Preparation Incubation Insight Evaluation Elaboration

Eureka!
Business Idea
conceived
Problem solved
Contd…….
• Preparation: is the background, experience, and
knowledge that an entrepreneur brings to the opportunity
recognition process.
• Incubation: is the stage during which a person considers
an idea or thinks about a problem; it is the “mulling over”
phase.
• Insight: is the flash of recognition- when the solution to a
problem is seen an idea is born.
• Evaluation: is the stage of the creative process during
which an idea is subjected to scrutiny and analyzed for
its viability.
• Elaboration: is the stage during which the creative idea is
put into a final form: the details are worked out, and the
idea is transformed into something of value.
Analysis of Existing Entrepreneurs
• Truly new, novel and innovative ideas: 3-4%

• Rest 96%
– Enhancement -- improvement / refinement of
features – cheaper, better, faster, more user-friendly
– Extension to features
– Specialization -- niche’ creation
Enhancement, Extensions and
Specializations

Enhancements Extensions

Specialization
 Examples of Enhancement
• DOS to Windows
• Mechanical watch to quartz watch
• Modem to ADSL modem
• Ordinary TV to a flat screen TV
• Desktop PC to a laptop PC to a tablet PC
• Propeller engine to a jet engine
Most industrial innovations
 Examples of Extensions
• Toothbrush with a built in toothpaste
• Pen with a torchlight
• Mobile handset with camera, FM radio,MP3
player ….
• Memory sticks with MP3 players
• Wristwatch with a calculator
• Cinema Multiplexes
• Day care centers (crèche) with tuitions
• Swiss army knife
 Examples of Specialization
• Low cost airlines (Ryanair, Easyjet, Air Deccan)
• Super-specialty hospitals
• Finishing schools
 Retrospective Determinism
• It is the informal fallacy that because
something happened under some
circumstances, it was therefore bound to
happen due to those circumstances.
Thank You