Entrepreneurial Opportunities

Entrepreneurial Opportunities

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A business opportunity is a viable business potential to create something new by engaging new technologies in the industry.

Another definition – a needed product or service selling in enough volume and produced cheaply enough to make a profit.

A business concept that if turned into a tangible product or service offered by a business enterprise will result in financial profit.

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Where do these opportunities come from?

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MANY SOURCES!

For start- ups Current or past work experiences Hobbies that grow into business or lead into inventions Suggestion by friends or families Changes in external environment

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Established firms

Needs of existing customers

Suggestions by suppliers

Technological developments that lead to new advances

Changes in external environment

Market research to discover new needs in the market

Consultations with business consultants…

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Characteristics of a viable business idea Characteristics of a viable business idea

Legality-the business opportunity should be capable of operating within the rules and regulations of its domicile

Growth potential- it should show dynamism by having growth potential to gurantee the business increase in custormer base operations, market shares and eventually profitability. A good business opportunity is one that occupies a growing sector of the economy and not a shrinking one .

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Uniqueness- It should stand out in the industry and market to capture the attention of all stakeholders

Marketability . A good business idea should appeal to the target market

Competitiveness –A good business idea should be able to stand the competition in its market

Protectability- a good business idea should provide the owners with the capability to own the intellectual property of the products or services in existence

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Social acceptability- It should be acceptable not only legally but also within the social norms and practices of the society

Operational feasibility- a good business opportunity should be compatible with its reinforcing infrastructure

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Creativity and innovation Creativity and innovation

Good business ideas are born through the process of creativity and innovation

Creativity and innovation are not synonymous terms . Creativity is the ability to bring something new into existence .

This definition emphasis the ability and not the activity of bringing something new into existence . A person may have a brilliant idea but not take the necessary action to make it a reality

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Creativity Creativity

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Knowledge

All the relevant information that an individual brings to bear on a problem. There are two types of knowledge that may be required for creativity.

On one hand, in - depth experience and long - term focus in one specific area allows people to build the technical expertise that can serve as a foundation, or playground for creativity within a domain.

At the same time, creativity rests on the ability to combine previously disparate elements in new ways, which implies a need for a broader focus and varied interests.

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Creative Thinking

While both Amabile and Gardner assert that thinking is a key aspect of the creative process, they address this topic at a high level. Creative thinking requires :

• Comfort in disagreeing with others and trying solutions that depart from the status quo.

• Combining knowledge from previously disparate fields. • Ability to persevere through difficult problems and dry spells. • Ability to step away from an effort and return later with a fresh

perspective ( “incubation”)

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Motivation

“Even more than particular cognitive abilities, a set of motivational attributes — childlike curiosity, intrinsic interest, perseverance bordering on obsession — seem to set individuals who change the culture apart from the rest of humankind,” (Nakamura & Csikzentmihaly, p. 258).

Theorists see motivation as the most important component of creativity people will be most creative when they feel motivated primarily by the interest, satisfaction, and challenge of the work itself — and not by external pressures [i.e., extrinsic motivation],” (Amabile , p. 78).

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I like this quote

“Students need to believe that creativity is determined by motivation and effort to a significant degree. They need to understand that creative products are seldom produced without intent and effort, that there is considerable evidence to support the belief that most people have potential they never realize and that persistent effort to develop that potential is likely to be successful.... Students need to know too that...truly outstanding creative works in science and art have often taken many years – sometimes the better part of a lifetime – to produce...They need to understand that if one really wants to be creative in a substantive way, one must be prepared to work at it,” (Nickerson, p. 416).

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Creative minds in Africa Creative minds in Africa

Charging shoes

Kenyan inventor Anthony Mutua has developed a rather ingenuous way of charging mobile phones – using the power of pedestrians. His invention comprises of ultra-thin chips of crystal which are fitted to the bottom of a shoe’s sole. As the user walks, it generates electricity through the pressure exerted when it is stepped on. The chips costs around $46, and charges the phone through an extension cable that runs from the shoe to the pocket. Recently the project has been granted $6,000 for further funding by Kenya’s National Council of Science and Technology, as well as the promise of mass production to reach out to a larger market.

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Please call me

Everyday users of mobile phone technology are sometimes blissfully unaware that the Please Call Me service was invented in Africa. The service allows users who have no airtime to send a Please Call Me text message to any number to alert the receiver that they wish to be called back. While there has been some dispute as to who exactly invented the service, the fact remains that it was either created by an employee of Vodacom or MTN in South Africa. Both former Vodacom employee Nkosana Makate and ex-MTN employee Ari Kahn have laid claims to the invention, each with their own proof, but the matter is still being investigated in a South African court.

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M-Pesa

M-Pesa is a mobile-phone based money transfer and microfinancing service which was created for mobile operators Safaricom and Vodacom, in Kenya and Tanzania, respectively. The ‘M’ stands for mobile, while ‘pesa’ is the Swahili word for money, and is currently the most developed mobile payment system in the world. According to online sources, the service was developed following a student software development project from Kenya in 2007, which was subsequently rolled out by Safaricom. The service is currently in use in Kenya, Tanzania, Afghanistan, South Africa, India and Egypt.

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CAT scan

Being widely used in the medical field across the world, few patients know that when they lie down for a computed axial tomography scan, or CAT scan, the technology was actually invented by South African. While it was developed at Tufts University in the UK, the person responsible for the imaging equipment was South African physicist Allan Cormack and Godfrey Hounsfield of EMI Laboratories.

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Recognizing their major efforts in the medical field, the pair was awarded the 1979 Nobel Prize in Physiology or Medicine. According to online sources, “Cormack’s interest in the problem of X-ray imaging of soft tissues was first aroused when he took up the part-time position of physicist for a hospital radiology department. In the 1960s, he provided the mathematical technique for the CAT scan, in which an X-ray source and electronic detectors are rotated around the body, producing a sharp map of the tissues within a cross-section of the body.”

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Idea generation Preparation

Incubation

Illumination Verification

THE CREATIVE PROCESS

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The creativity process

There are five stages in the creative process (HOLT, 2002)

Idea Germination

Preparation

Incubation

Illumination

Verification

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In each stage the individual behaves differently and the behavior varies greatly among individuals .

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Idea Generation

This is the seeding stage of a new idea. It is the stage where the entrepreneur recognises an opportunity exist. Most of the creative ideas can be traced to an individual’s interest in or curiosity about a specific problem or area of study.

Eg Alexander graham bell had been fascinated by the physics of sound since childhood. He was influenced to study human hearing systems by his mother, who had a serious hearing problem .

as a Young adult , bell taught at a school for the deaf and hearing impaired and he set up a lab for testing new hearing devices.his idea for a hearing aid was seeded years before he invented the telephone and it evolved through his interest of helping others .

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Preparation

At this stage, the entrepreneur consciously searches for information. He gathers, sort, and integrates information to provide for a breakthrough.

If it is a problem that they are trying to solve then they begin an intellectual journey , seeking information about the problem and how others have tried to resolve it. If its an idea for a new product then one would go for market research .

Inventors set up lab experiments , designers begin engineering new products or ideas and marketers will study consumer buying habits . Any individual with an idea will think about it and see how it can become a reality.

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Incubation

This is the subconscious assimilation of information. It is basically

fantasising. This a crucial stage of creativity because when we

consciously focus on a problem , we behave rationally to attempt

to find systematic solutions.

The subconscious is allowed to wander and pursue fantasies and

its hence open to unusual information and knowledge.

Subconscious is often called the world of syneltics (WJgordon) . It

means joining together of different and often unrelated ideas .

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Illumination stage –

Also called the eureka stage. This is when the idea pops up clearly and the individual recognizes the idea as feasible and realizable. The individual is able to connect all the necessary dots required to realize the opportunity. It is when the idea surfaces as a realistic creation. There will be a point when the individual will say “oh I see!” Most creative people go through many cycles of preparation and incubation searching for that catalyst that will give their idea a full meaning.

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Verification stage – Also called the validation or testing

stage. This is where the idea is verified to prove that it has

value. It is the development stage or refining knowledge

into application. This is the most difficult phase of creativity

as obstacles begin to appear. The idea may also start

evolving and taking a different direction. Sometimes the

individual is forced to go back to the previous phases.

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Innovation

Good business ideas are generated through the creative

process.

However, an idea no matter how good is useless unless it is

converted into a useful application. This is achieved through

the process of innovation.

Innovation is the process of doing new things . Ideas have little

value until they are converted into products , services or

processes.

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innovation involves finding a new and better way of doing

something. Much of our modern society is based on innovations

that have occurred in the past that provide us with the standard of

living we enjoy today. Entrepreneurship and innovation are

companion terms. Innovation always entails careful planning and

deployement of resources to realize the opportunity

Creativity is a prerequisite (desired condition) of innovation. You

cannot be innovative unless you are creative.

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Schumpters theory of innovationSchumpters theory of innovation

Schumpter was very explicit about the innovation role of the entrepreneur

Viewed the entrepreneur as the prime mover in economic development and his function is to innovate or to carry out new combinations

In his definition, an entrepneur is an individual who introduces something new in the economy . He used the term creative destruction to describe the way in which capitalist economic development arises out of the destructuion of some prior economic order.

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In his vision of capitalism innovative entry by entrepreneurs was the disruptive force that sustained economic growth.

According to Schumpeter a person is innovative when they do the following

1. Introduction of a new good

2. Introduction of a new method of production

3. Opening up of a new market in particular an export markt in a new territory

4. The conquest of a new source of supply

5. Creation of a new type of industrial organization

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Peter Drucker’s views of innovationPeter Drucker’s views of innovation

Drucker outlines seven sources for innovative opportunities that should be monitored by those interested

The first four are sources of innovation that lie within the industry. The last three arise in the societal environment.

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The unexpected - The unexpected success, failure, or outside event .It is not enough to depend on accidents. Entrepreneurs must ensure that the unexpected is being seen; indeed, that it clamors for attention. What does it mean? Where could it lead us? What could we do to convert it into an opportunity?

2. The incongruity -The incongruity between reality as it actually is and as it is assumed to be. It is usually clearly visible to the people within or close to the industry, yet it is often overlooked by them. “This is how it’s always been,” they say. There can be incongruities in economics (low or no profitability), between perceived and actual customer expectations, or processes within an industry.

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Innovation based on process need. Process need exists within the process of a business or industry. It starts out with the job to be done—it perfects a process that already exists, replaces a link that is weak, or redesigns an existing old process around newly available knowledge. The need must be understood—with the ability to define the specs for the solutions. Incongruities and demographics are the most common causes of a process need. This area lends itself to systematic search and analysis.

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Changes in industry structure or market structure. A change in industry structure offers exceptional opportunities, highly visible and quite predictable to outsiders. But the insiders usually perceive these same changes as threats. Changes include

(1) rapid growth;

(2) new segmentation of the market (old segmentation no longer reflects reality, and new niches must be created);

(3) the application or convergence of new technologies into the product/service.

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Demographics, or changes in population, its size, age structure, composition, employment, educational status, and income. This is the clearest of all external changes, because it can be seen coming in advance.

The basic assumption for our time should be that populations are inherently unstable and subject to sudden sharp changes, and that they are the first environmental factor that a decision maker should think about. Demographic shifts may be inherently unpredictable, yet they do have long lead times before impact. Statistics to watch include total population, age distribution, segmentation by educational attainment, labor force participation and occupational segmentation, and income distribution.

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Changes in perception, mood, and meaning. Innovative

opportunities can develop when a society’s general

assumptions, attitudes and beliefs change.

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New knowledge, both scientific and nonscientific. These are usually ranked high among the history-making innovations. But they are unpredictable, and hard to manage. They are almost never based on one factor but on the convergence of several different kinds of knowledge, not all of them scientific or technological.

Until all the factors are available, the innovation cannot be created. This is the first “check” for sourcing an innovation from new knowledge—make sure the technical, social, or perceptual factors are all in place and if not, whether they can be created. The second is strategic—the innovator has to be right the first time, as he is unlikely to get a second chance.

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