Entrepreneurship

6: Opportunity
and the creative
pursuit of
innovative ideas

Dr. Jaap van Baars

Spring 2022
1. To explore how ideas fit within the opportunity identification process
2. To define and illustrate the sources of opportunity for entrepreneurs
3. To identify the four models of market opportunity: competition, innovation, alertness and
social need
4. To examine the role of creativity and to review the major components of the creative process:
knowledge accumulation, incubation process, idea evaluation and implementation
5. To present ways of developing personal creativity: recognize relationships, use lateral
thinking, use your ‘brains’, think outside the box, identify arenas of creativity and work in
creative climates
6. To introduce how innovation can inspire opportunity through invention, extension,
duplication and synthesis
7. To review some of the major misconceptions associated with innovation and to define the 10
principles of innovation
8. To consider the challenges and changing dynamics of social and sustainability innovation

Objectives
1. Ideas and the search for opportunity
2. Four models of market-based opportunities
3. Entrepreneurial imagination and creativity
4. Arenas of creativity
5. Creating the right setting for creativity
6. Innovation and the entrepreneur
7. The innovation process
8. Innovation in the era of climate change

Outline
• Identifying and shaping opportunity is central to the domain
of entrepreneurship
• In other words – recognizing and creating of opportunities are
the core of value creation
• In this chapter we will examine the pursuit of innovative ideas;
and how they are endowed with economic and social potential

1. Ideas and the search for

opportunity
• Innovation in its purest sense refers to newness
• So if something is ‘new’ does it create value?...
• Value is always perceived after the fact based on performance
• Entrepreneurs have to predict future value of their innovations = both
an art and a science
• Where to start?
• An idea that might link to a good opportunity
• Recognize good ideas based on potential
• Where to look? Source of idea
• What opportunity? Apply model

1. Ideas and the search for

opportunity
 • Let us begin with sources of ideas –
1. Trends: Trends signal shifts in the
current paradigm
2. Unexpected occurrences: based
on unexpected
success/failure>typically based on
experimentation/trial and error
3. Incongruities: Expectations -/=
Reality: Innovation happens when
you create a solution to these
incongruities

1. Ideas and the search for

opportunity
 4. Process needs: process gaps or bottlenecks
5. Industry and market changes: changes in consumer
attitudes, tech advancements
6. Demographics: population changes, education,
income, occupations
7. Perceptual changes: customer interpretation of facts
and concepts
8. Knowledge-based concepts: basis for completely
new creations; products of new thinking, methods and
knowledge

1. Ideas and the search for

opportunity
1. Ideas and the search for
opportunity
 • Once an idea has been formulated they must
find a market.
• A market-based opportunity relies on a
static economy – balanced supply and
demand.
• Everything is established, and stabilized.
• What can entrepreneurs do here?
• Disrupt the market.

2. Four models of market-based

opportunities
1)The competition model of market opportunity:
• Arbitrage; purchasing low and selling high is the key
• These are demand/supply-driven opportunities – create
growth in an economy by increasing the number of companies
and expanding the market.

2. Four models of market-based

opportunities
 2)The innovation model of market opportunity
• This model of opportunity essentially introduces a
new supply and demand dynamic into the
marketplace and disrupts the equilibrium of the
static market system
• The entrepreneur creates a demand for the new
good or service and attracts the attention of
customers by educating them and enticing a move
away from the existing market to create a new
platform for economic growth

2. Four models of market-based

opportunities
 3) The alternatives model of market
opportunity
• relies on a combination of the previous two
opportunity models but places a higher
emphasis on the knowledge of the
entrepreneur
• Opportunities are ‘out there’ – they just need
to be discovered
• The entrepreneur with superior levels of
knowledge (market, industry, technology or
networks) will be able to unearth and
recognize them

2. Four models of market-based

opportunities
 4) The social need model of market opportunity
• Recall social innovation seeks to satisfy needs not
satisfied and unlikely to be satisfied by the market
• The social venture is not too dissimilar to the
commercial venture except that the customers,
suppliers or workforce have a special
characteristic –
• typically being a disadvantaged social group, or the
venture has a social mission; be it an environmental
purpose, animal welfare or other worthwhile
activity to support.

2. Four models of market-based

opportunities
 Stanford researchers list some recent social innovations
that have made it to the big time:
• Community-centered planning
• Emissions trading
• Fair trade
• Habitat conservation
• International labor standards
• Microfinance
• Socially responsible investing
• Supported employment

2. Four models of market-based

opportunities
• Next follows the most typical structural development for creativity to
transform experiences into entrepreneurial insight and know-how:
• Phase 1: Background or knowledge accumulation
• involves extensive reading, conversations with others working in the field
• Phase 2: The mind incubation process
• Engage in routine, ‘mindless’ activities, exercise, play sports/puzzles, relax
• Phase 3: The idea experience
• The eureka moment – the shower thought – sometimes sudden; usually incremental
• Phase 4: Evaluation and implementation
• Most difficult step; reworking of ideas to put them into final form

2. Four models of market-based

opportunities
 • To see opportunities, entrepreneurs
blend imaginative and creative thinking
with a systematic, logical process ability

2. Four models of market-based

opportunities
• Entrepreneurs develop an ability to see, recognize and create
opportunity where others only find problems
• Continually probing with questions like ‘What if…’ or ‘Why
not…’
• Every possible angle will be looked at since the first rule for
developing entrepreneurial vision is to recognize that
problems are to solutions what demand is to supply

3. Entrepreneurial imagination
and creativity
 • Creativity – a buzzword, something
individuals seemingly ‘possess from
birth’ is what makes the economy
work; competitive advantages are
gained
• One’s creative potential is something
that can be developed and improved.
Everyone is creative to some degree

3. Entrepreneurial imagination
and creativity
You can do several things to improve your own creative talents.

Becoming aware of some of the habits and mental blocks that stifle
creativity is one of the most helpful
Thinking outside the box
• Understand the problem
• recognize that you and everyone else have ingrained assumptions about every situation
• Play a child
• ask plenty of basic ‘why?’ and ‘why not?’ questions in order to discover and challenge those
assumptions
• Play an external observer
• pretend you are a complete outsider and ask questions such as: ‘Why do you do it this way at all?’
• Disassemble the problem
• reduce a situation to its simplest components in order to take it out of your environment
• Reframe
• consider an issue from many different angles; restate a problem in different terms
• Imagine the opposite
• consider what the experts and professionals advise and then consider doing the opposite

3. Entrepreneurial imagination
and creativity
 • Recognizing relationships-
Many inventions and innovations
are a result of the inventor seeing
new and different relationships
among objects, processes,
materials, technologies and
people

3. Entrepreneurial imagination
and creativity
Using your brains
• The right brain hemisphere helps an individual
understand analogies, imagine things and synthesize
information.
• The left brain hemisphere helps the person analyze,
verbalize and use rational approaches to problem solving
3. Entrepreneurial imagination
and creativity
 • The path to creativity begins by first recognizing all of the
ways in which we are or can be creative. > 7 ways/arenas
• Idea creativity
• Material creativity
• Organization creativity
• Relationship creativity
• Event creativity
• Inner creativity
• Spontaneous creativity

4. Arenas of creativity
 • No enterprise will have creative owners and
managers for long if the right context within the firm is
not established and nurtured.
• a trustful management that does not over-control
employees
• open channels of communication among all business
members
• considerable contact and communication with outsiders
• a large variety of personality types
• a willingness to accept change
• an enjoyment in experimenting with new ideas
• little fear of negative consequences for making a mistake

5. Creating the right setting for

creativity
 • Innovation is the process by which
entrepreneurs convert opportunities
(ideas) into marketable solutions
• The innovation process starts with a good
idea.
• The origin of an idea is important and the
role of creative thinking may be vital to that
development
• Perseverance to see it through
development stages and dedication to enter
the market

6. Innovation and the

entrepreneur
 • This process begins
with the analysis of the
sources of new
opportunities.
• Most successful
innovations are simple
and focused (ex
wireless internet)

7. The innovation process

 • Four basic types of
innovation

7. The innovation process

Major misconceptions of innovation:
• Innovation is planned and predictable.
• Innovation relies on dreams and blue-sky ideas
• Big projects will develop better innovations than
smaller ones.
• Technology is the driving force of innovation success

7. The innovation process

 • Principles of innovation:
• Be action oriented: Innovators always must
be active and searching for new ideas,
opportunities or sources of innovation.
• Make the product, process or service simple
and understandable: People must readily
understand how the innovation works
• Make the product, process or service
customer-based: Innovators always must
keep the customer in mind

7. The innovation process

• Top innovations that caused global warming:
• Electrification; automobile; aeroplane; water supply and distribution;
agricultural mechanisation; air conditioning and refrigeration; highways;
household appliances; petroleum and petrochemical technologies; nuclear
technologies.
• Candidates for sustainable innovations:
• Genetic engineering; artificial trees; species preservation; geo-engineering;
carbon sequestration; free non-fossil fuel power systems; gene sequencing;
hydrogen-powered cars; methane-fuelled rockets; smog-eating cement; waste
management; weather prediction

8. Innovation in the era of climate

change
Duct tape is a strong, fabric-based, multipurpose adhesive tape that can be used
for just about anything. It has been said that ‘duct tape holds the world together’.
Here are the top 10 things you can do with it.
Your task is to think of as many other uses as you can.
•patch pipes under the house
•cover the annoying ‘check engine’ light that won’t go out
•use as a band-aid
•tape all the holes in the computer case shut so the fan noise isn’t so annoying
•tape an annoying person’s mouth shut
•repair eyeglass frames
•patch a broken cigarette
•handcuff the kids as an emergency baby sitter
•be sure the toilet seat never stays up (duct tape it down)
•get dried cat puke out of carpeting.

Discussion