Lecture 3

Opportunities

(Recognition, Shaping and

Re-shaping)
 Idea-to-opportunity transition

Viable
Seed of idea Idea
Opportunity

Professional Idea
Passion
Experience Multiplication
 How to Find the
Right Opportunity

Opportunity External Opportunity

Discovery Creation
Change

+
Passion Experience

Internal
 Where are Opportunities Born?
• Technology sea change
– Personal computing (software development,
Internet, electronic publishing, spreadsheets,
electronic communication, Facebook)
– iPods (waterproof cases – Solar battery chargers)
– Cable TV (infomercials – shopping networks – pay
per view)
 Where are Opportunities Born?
• Market sea change
– With the recent trend of service growth,100s of
small service organizations emerged, customer
service became a critical success factor.
– Consumer Obesity (Drain on healthcare system,
growth of diet industry, changes in food industry,
health clubs, home gyms)
– Change in Customers’ attitudes
– Change in Industry Structure
 Where are Opportunities Born?
•Societal Changes
–Demographic Changes

–Dual-Income households
(Child care, Home services – landscaping,
house cleaning, prepared foods)
–Role of religion and spirituality
–Pursuit of expertise and knowledge
 Where are Opportunities Born?

Regulatory and Political changes

• Transition from communism to Capitalism
• Deregulation of telecommunications and the
airlines led to thousands of new firms in the
1980s.
• Financial Services deregulation.
 Where are Opportunities Born?

• Pattern recognition
– Capacity to see what other do not (1+1=3) (e.g.
Staples, Crate and Barrel)
Every problem is an Opportunity
 Shaping Your Opportunity
• You will need to invest in thorough research to shape
your idea into an opportunity
– Published Information
• Libraries, internet, guides and company information,
Journal articles, statistics, projections and forecasts
– Other Intelligence
• Trade associations and shows, employees, consulting
firms, marketing research firms, key customer and
suppliers, reverse engineering, networks
 When Is an Idea an Opportunity?
• They create or add significant value to the customer or end
user
• They do so by solving a significant problem, removing a
serious pain point, or meeting a significant want or need- for
which some one is willing to pay a premium.
• They have robust market, margin and money making
characteristics that will allow the entrepreneur to estimate
and communicate sustainable value to potential stockholder.
• They are a good fit with the founder and the management
team at the time and market place- along with an attractive
risk reward balance.
 New Venture Realities

– Most new ventures are works in process and works

of art. Most business plans are obsolete at the
printer
– Speed, skillfulness of reflex, and adaptability are
crucial
– The key to succeeding is failing quickly and
recouping quickly
 Think Big
• “It is critical to think big enough. If you want
to start and build a company, you are going to
end up exhausted. So you might as well think
about creating a big company. At least you will
end up exhausted and rich,
not just exhausted”

Patricia Cloherty, venture capitalist