Essentially, entrepreneurs recognize an opportunity and turn it into a successful

business.1 An opportunity is a favorable set of circumstances that creates a

need for a new product, service, or business. Most entrepreneurial ventures are
started in one of two ways. Some ventures are externally stimulated. In this
instance, an entrepreneur decides to launch a firm, searches for and recognizes
an opportunity, and then starts a business, as Jeff Bezos did when he created
Amazon.com. In 1994, Bezos quit his lucrative job at a New York City investment
firm and headed for Seattle with a plan to find an attractive opportunity
and launch an e-commerce company.2 Other firms are internally stimulated,
like BenchPrep. An entrepreneur recognizes a problem or an opportunity gap
and creates a business to fill it.
Regardless of which of these two ways an entrepreneur starts a new business,
opportunities are tough to spot. Identifying a product, service, or business
opportunity that isn’t merely a different version of something already available
is difficult. A common mistake entrepreneurs make in the 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. Although this approach seems sensible, such is usually not
the case. The key to opportunity recognition is to identify a product or service
that people need and are willing to buy, not one that an entrepreneur wants to
make and sell.3
As shown in Figure 2.1, an opportunity has four essential qualities: It is
(1) attractive, (2) durable, (3) timely, and (4) anchored in a product, service, or
business that creates or adds value for its buyer or end user.4 For an entrepreneur
to capitalize on an opportunity, its window of opportunity must
be open.5 The term window of opportunity is a metaphor describing the time
period in which a firm can realistically enter a new market. Once the market
for a new product is established, its window of opportunity opens. As the
market grows, firms enter and try to establish a profitable position. At some
point, the market matures, and the window of opportunity closes. This is
the case with Internet search engines. Yahoo!, the first search engine, appeared