IDENTIFYING VENTURE OPPORTUNITIES
I never perfected an invention that I did not think about in terms of the service it might give others... I find out what the world needs, then I proceed to invent. —Thomas Edison
One of the biggest questions on every hopeful entrepreneur’s mind is, ―how do I come up with a compelling idea for a new venture?‖ While there is no right or wrong answer to this question, there are several things to be aware of and thinking about as one heads down the entrepreneurial path. Even if a great idea has already come to mind, it is essential to cover the basics – the market, product/service offering, competitive, economic, and team dynamics to determine if the idea has the potential to become a viable venture opportunity. The objective of this note is to help guide students interested in becoming entrepreneurs. Specifically, this note will cover the common sources of inspiration for finding potential ideas and creating a vision, highlight the importance of capitalizing on trends, and review the basic components of what makes an idea an opportunity worthy of pursuing. THE DISCOVERY PHASE – LOOKING FOR INSPIRATION
Where to start looking for an idea? Successful entrepreneurs have found inspiration from many different sources, but often putting an initial stake in the ground is difficult. A good and logical starting point for an entrepreneur is to think about what s/he knows best, especially with regards to work experience; after all, there is great value in learning before doing. According to a recent Inc. 500 study, the ―dominant source of venture ideas is prior employment.‖1 Work experience is useful because of the relationships and networks one develops and the knowledge and skill-set that is built up around a particular industry/field. Further, the workplace is where the ―greatest opportunity for need observation occurs.‖2 Since a majority of ideas come out of a former career 1
Anne Marie Knott, Venture Design (Thousand Oaks: SAGE Publications, Inc.), p. 45. Ibid., p. 46
Jocelyn Hornblower prepared this case under the supervision of Lecturer Dr. Dennis Rohan as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. 2
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Identifying Venture Opportunities E-323
or consulting work, the entrepreneur should reflect on what s/he learned about industry, products/services, production, marketing, competition, etc. through job experience. There may be tangential opportunities to consider, for example to compete with a more innovative product/service offering or to introduce a novel business model. Prior work experience is not always required when exploring entrepreneurial ideas. Educational background can be extremely valuable and can provide the entrepreneur with skills and learnings that can be applied creatively, as well as provide the entrepreneur with an established network of students and faculty. Regardless of the area of study, having an educated appreciation for a particular subject matter can be very beneficial in identifying venture opportunities. Sometimes overlooked sources of inspiration for finding new ideas are travel and personal hobbies. Life experience is just as applicable as work and education in thinking about problems and...