Entrepreneurship Chapter 05 Homework Many Studies Indicate That Entrepreneurs With Preexisting

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Instructor Resource

Neck, Entrepreneurship

SAGE Publishing, 2018

Lecture Notes

Chapter 5: Recognizing New Opportunities

Learning Objectives

• Explain how the entrepreneurial mindset relates to opportunity recognition.

• 2. Employ strategies for generating new ideas from which opportunities are born.

• 3. Apply the two primary pathways to opportunity identification.

• 4. Demonstrate how entrepreneurs find opportunities through active search and

alertness.

• 5. Connect idea generation to opportunity recognition

Notable Quote

• “Entrepreneurs have a knack for looking at the usual and seeing the unusual, at the

ordinary and seeing the extraordinary. Consequently, they can spot opportunities that

Recognizing an Opportunity

• Jack McCarthy

• Uglychristmassweater.com

• photo 5.1: example of an “Ugly Christmas Sweater” as in Ugly Christmas Sweater Party

Book

Notes:

For Jack McCarthy, success has never looked so…atrocious. The teenager started his business,

Uglychristmassweater.com, as a fluke, as Jack’s older sister prepared to participate in an Ugly

Instructor Resource

Neck, Entrepreneurship

SAGE Publishing, 2018

Encouraged by his sister’s success, the following Christmas seasons, Jack picked up more and

more sweaters, hawking them on eBay for similar margins. Each year demand grew, profits

Critical Thinking Questions

• Since the idea of ugly Christmas sweaters already existed, what key factors led to Jack

McCarthy’s turning it into a business opportunity?

Dimensions of Ideas

• Innovation

• Invention

• Improvement

• Irrelevant

Notes:

Of course, all ideas are not created equal. Part of recognizing an opportunity is the ability to

evaluate ideas and identify those with the highest likelihood of success. One framework for

Idea Classification Matrix

Notes:

Innovations and inventions are often paired together, but the difference between them lies in

demand. Inventions, by definition, score highly for novelty, but if an invention does not reach

Instructor Resource

Neck, Entrepreneurship

SAGE Publishing, 2018

the market or appeal to consumers, then it will be rendered useless. Inventions that succeed in

finding a market move to the innovation stage.

Making an Idea a Reality

• Time

Everyday Spinoffs from NASA

Notes:

One of the remarkable things about generating ideas, especially ideas that come from

imagination-based strategies, is that one idea can lead to another, yielding a pipeline of great

ideas – that may impact the world. For example, scientists at the National Aeronautics and

Space Administration (NASA) have needed to use a great deal of imagination to come up with

Strategies for Idea Generation

• Analytical strategies

• Search strategies

• Imagination-based strategies

• Habit-breaking strategies

• Relationship-seeking strategies

Instructor Resource

Neck, Entrepreneurship

SAGE Publishing, 2018

Primary Pathways to Opportunity Identification

Notes:

The finding approach suggests that any existing opportunity is there to be exploited as long as

we have the skills and awareness to do so. But if that was the case, why aren’t there floods of

people rushing in to seize every possible existing opportunity? Surely, it would be difficult to

Finding Opportunity

• Active search

• Alertness

• Insert photo of LIQUID PAPER/ Bette Nesmith Graham

Notes:

Researchers have identified two major factors in the building of opportunities: prior knowledge

and pattern recognition. As described in our earlier discussion of the finding approach, prior

knowledge is preexisting information gained from a combination of life and work experience.

Instructor Resource

Neck, Entrepreneurship

SAGE Publishing, 2018

Building Opportunity

• Prior knowledge

• Pattern Recognition

• See Photo 5.8: old-fashioned suitcases (i.e., bulky suitcases without wheels)

• Pattern Recognition

Notes:

Another key factor in building and recognizing opportunities is pattern recognition: the process

of identifying links or connections between apparently unrelated things or events. Pattern

recognition takes place when people “connect the dots” in order to identify and then build on

Idea Generation to Opportunity Recognition

• Idea generation: Production of ideas for something new

• Creativity: Production of ideas for something new that is also potentially useful

• Opportunity recognition: Recognition that ideas are not only new and potentially useful,

but also have the potential to generate economic value

Notes:

Instructor Resource

Neck, Entrepreneurship

SAGE Publishing, 2018

Idea Generation to Opportunity Recognition

Notes:

Researchers have identified four skills with which we can enhance our creativity through

training with the purpose of transforming our ideas into opportunities. These four skills yield

the acronym SEEC: securing, expanding, exposing, and challenging (see Table 5.2). Securing is

the capacity to not only focus on new ideas, but also sustain them. Expanding is the broadening

or the acquisition of new skills which enable people to generate ideas and share knowledge.

Skills to Enhance Creativity

• SEEC MODEL

• Securing

Notes:

Researchers applied the SEEC model to a group of students studying business-related subjects

in an effort to better understand the impact of training on the ability to generate innovative

ideas leading to opportunity identification. Students were asked to complete tests and

questionnaires before and after the SEEC training.

SEEC Model

• Securing

• Being consciously aware of possibilities

• Focus on capturing ideas

• Record ideas for later use

• Expanding

SEEC Model

• Challenging