What is a Business Idea?

A business idea is a concept that can be used to make money. Usually, it

centers on a product or service that can be offered for money. An idea is
the first milestone in the process of founding a business. Every
successful business started as someone’s idea.
Although a business idea has the potential to make money, it has no
commercial value initially. In fact, most business ideas exist in abstract
form; usually in the mind of its creator or investor.
To find out about an idea’s chances in the market and check its
innovative content and feasibility, you need to conduct a plausibility
check.
 Conditions for a Viable Business Idea
A viable business idea must meet the following three conditions:
1. It must offer benefit to the customer by solving a problem or fulfilling a
need. Customers buy products and services for just one reason; to satisfy
a need. Every successful business idea must have a unique selling
proposition.
2. It must have a market that is willing to accept it. A viable business idea
must offer a product or service that would be accepted by a large market.
It must also have feasible arrangements for catering to that large market
as well as unique values that differentiates it from the competition.
3. It must have a mechanism for making revenue. A successful business
idea must show how much money can be earned from it and how the
money will be earned.
 What is an Opportunity?

An opportunity is a favorable set of circumstances that

creates a need for a new product or service.

Opportunity can be;

▪ Externally stimulated or
▪ Internally stimulated
"Opportunities from Possibilities" means
recognizing the potential in an idea or situation
and transforming it into something tangible,
useful, or profitable. It’s about identifying a
promising concept (a possibility) and converting
it into a viable opportunity that can be acted upon
in the market or in personal growth.

Look at trends or changes in technology, society,

or consumer behavior, and find a way to turn
those possibilities into a successful business or
innovation.
 Key Differences Between a Business
Idea and a Business Opportunity
1. A business idea is a concept for a new product or
service. A business opportunity is a situation or
market gap that can be exploited for potential profit.
2. A business idea originates from our imagination. A
business opportunity comes from observations of a
gap in the market.
3. A business idea is good if it is technically feasible,
commercially viable, and there is a market
opportunity. A business opportunity is good if
there’s growing demand, not too much competition,
and it has the potential to be exploited effectively by
the company.
4. The idea provides the direction and vision for the
business, while the opportunity provides the
context in which the idea is being implemented.
 What is Innovation?
▪ Innovation is the process by which entrepreneurs convert opportunities into
marketable ideas.
▪ Innovation happen when someone ‘improve on or make a significant
contribution’ to something that has already been invented .
▪ Innovation is the process of translating an idea or invention into a good or
service that creates value or for which customers will pay.
▪ To be called an innovation,
1. An idea must be replicable at an economical cost and;
2. Must satisfy a specific need.
 Peter Drucker’s Sources of Innovation
Most innovations, especially the successful ones, results from a conscious,
purposeful search for innovative opportunities. Also called as Peter
Drucker’s Sources of Innovation. These includes;
1. Unexpected occurrences
2. Incongruity
3. Process needs
4. Structural changes
5. Demographic changes
6. Perceptual changes
7. Knowledge-based concepts
 Peter Drucker’s Sources of Innovation
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1. Unexpected Occurrences
The ever-changing business world is full of surprises. Yet, not only the unexpected
failures but also the unexpected success, or even events that occur in the
organization can trigger innovative ideas and become the creative sources of
innovation. Unexpected situations can have a very powerful influence and can
inspire an organization to gain another, new, perspective on the situation.

❖The organization have some success/failure that needs to be further explored.

 Peter Drucker’s Sources of Innovation
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2. Incongruities
When our reality doesn’t meet our expectations, we can discover new insights and gain new
perspectives. Incongruity is a dissonance between what is and what it is supposed to be. It
can be a great source of innovative ideas as it compares what is and what everybody else
assumes it to be. Of all incongruities, the dissonance between perceived and actual
customers’ expectations is maybe the most common one.

❖Use customers’ feedback to determine incongruity and create the opportunity for
innovation.
 Peter Drucker’s Sources of Innovation
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3. Process Needs
The weak spots in your organization workflows, processes and systems provide
practical opportunities for innovation. Innovation based on process needs is a task-
focused rather than situation-focused. It improves the process that already exists,
redesigns existing, old processes and reinforces the weak links.

❖ Spot some inefficiencies in your processes.

 Peter Drucker’s Sources of Innovation
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4. Structural Changes
As the business landscape evolves, every organization has to adapt.
Changes in industry shake-up businesses, yet they can inspire people to
explore and create new ideas as well. Generally, industry or market
structure is ever-changing, and it can create great innovative
opportunities for organizations to adapt and adjust quickly.

❖ Track market changes and treat them as opportunities.

 Peter Drucker’s Sources of Innovation
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5. Demographics
Changes in demographics are defined as changes in population, size, age structure,
employment, educational status and income. They are the most reliable indicators of
future trends and offer diverse opportunities for innovation. Each new generation
demands new and unique products and services. These changes affect the market as
they determine the need for products, the target population who are buying those
products, as well as the number of products being distributed.

❖Explore what can Millennials bring to your innovation process.

 Peter Drucker’s Sources of Innovation
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6. Perceptual Changes
With the growth of technology, there are significant changes in the way people
perceive the world. People change their perception about a certain product, brand or
even industry. Changes in perception are based on the mood rather than on the facts.
Changing your perception from "half empty" to "half full" opens up incredible
innovation opportunities.

❖Follow changes in perception among today’s consumers to improve your

products and services.
 Peter Drucker’s Sources of Innovation
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7. Knowledge-Based Concepts
Every year new ideas are discovered, and a lot is added to the existing
knowledge base. Technological and scientific breakthrough are the source of
innovation that can’t be neglected. New knowledge can be applied in every
aspect of the organization, starting from learning more about emerging trends,
customer expectations, knowing how to use new technology, to improving
customer service and supply chain.

❖Look if you are applying new knowledge to generate new ideas.

 Organizational Innovation
▪ Organizational innovation can be defined as the introduction of
something new (an idea, product, service, technology, process, and
strategy) to an organization.

▪ Organizational innovation is also called administrative or management

innovation and can be conceptualized simply as “how managers do
what they do”. Such innovation includes new ideas for the recruitment
of people, the allocation of resources and the structuring of tasks,
authority and rewards. Furthermore, organizational innovation can
include changes in organizational structures, modification of people’s
behaviors and beliefs and new rules, roles and procedures.
 Types of
Innovation
The four basic types of
innovation are:
1. Incremental
2. Disruptive
3. Architectural
4. Radical
 Types of Innovation(contd.)
1. Incremental Innovation
Utilizing your existing technology and increasing value to the customer
(features, design changes, etc.) within your existing market. Almost all
companies engage in incremental innovation in one form or another.

For Example;
Coca-Cola: Coca-Cola has introduced line extensions such as Cherry Coke,
Coke with Lime, and Coca-Cola Life. These innovations have enabled the
130-year-old brand to remain relevant, tap into emerging trends, and offer
new options to its customers.
 Types of Innovation(contd.)
2. Disruptive Innovation
New technology is applied to an existing market, offering a new value
proposition and potentially overtaking established market leaders over time.

For Example;
Uber: Uber disrupted the traditional taxi service industry by introducing a
ride-sharing app that connects drivers with passengers directly, bypassing the
conventional taxi dispatch system. This innovation not only improved
convenience for users but also offered a flexible work option for drivers.
Uber's model has significantly impacted urban transportation globally,
prompting regulatory and business model adjustments in the taxi industry.
 Types of Innovation(contd.)
3. Architectural Innovation
Existing technologies applied to new markets involve
reconfiguring product or system components for new
applications or uses.
For Example;
Toyota’s Prius: Toyota's introduction of the Prius, the first mass-
produced hybrid vehicle, is an example of architectural
innovation. Toyota combined existing internal combustion
engine technology with electric motor technology to create a new
category of environmentally friendly vehicles. This innovation
did not require the invention of new technology but rather the
novel integration of existing technologies, creating a new market
for hybrid vehicles.
 Types of Innovation(contd.)

4. Radical Innovation
Breakthrough innovation that establishes new markets and involves novel
technologies, potentially disrupting or creating new industries.

For Example;
SpaceX’s reusable rockets: Space Exploration Technologies Corp. (SpaceX),
another venture by Elon Musk, has introduced the concept of reusable rockets
to the aerospace industry. Traditionally, rockets were single-use vehicles,
discarded in the ocean after launch, making space exploration exceedingly
expensive. SpaceX developed the Falcon series of rockets, capable of
returning to Earth after launch and being refurbished for subsequent missions.
This innovation drastically reduces the cost of accessing space, making it
more feasible for satellite deployments, scientific research, and even human
spaceflight. SpaceX’s reusable rockets are a cornerstone in the company's
ambition to make space more accessible and eventually enable human life on
Mars.
 Introduction to Technology Transfer
▪ Transfer of technology is a process which is very essential for the wide
application, utilization and upgradation of technology which has been
developed.
▪ Or
▪ Technology transfer is the process that permit the flow of technology
from source to a receiver.

▪ There are two ways of technology transfer;

1. Develop (R&D)
2. Acquire (Purchase)
Technology
Transfer
Process
 Fostering Innovation & Entrepreneurship
Fostering innovation involves creating an environment where creativity, experimentation.
and calculated risks are encouraged. Following are the principles that are directly aligned
with fostering both innovation and entrepreneurship:

▪ 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. The more an innovator has the end-user in mind, the greater the
chance the concept will be accepted and used.
▪ Start small: Innovators should not attempt a project or development on a grand scale.
They should begin small and then build and develop, allowing for planned growth and
proper expansion in the right manner and at the right time.
▪ Try/test/revise: Innovators always should follow the rule of try, test and revise. This
helps work out any flaws in the product, process, or service.
 Stages of Creative Thinking Process
Creativity follows a structured process that helps in generating new ideas and
innovative solutions. Understanding the stages of creative thinking allows
individuals to navigate through challenges and refine their ideas effectively.
Whether it’s solving a problem or creating something entirely new, this
process helps bring clarity and direction to creative endeavors.
A typical Creative Process involves following five stages:
Phase 1: Preparation(based on background and skills)
Phase 2: The incubation process(turn rough idea into workable idea)
Phase 3: Insights(the idea has been well defined)
Phase 4: Evaluation (market viability)
Phase 5: Implementation (design road map, development stage)
Individual Exercise

Case Study
POST-IT NOTES
One way new products are developed is to take a current product and modify it in some way. Another
way is to determine how a previously developed product can be marketed or used by a particular
group of customers. The 3M Company is famous for many products, among them adhesives and
abrasives. A few years ago one of the 3M managers, a member of a church choir, wanted to mark the
pages of his hymnal so he could quickly find them. A bookmark would not do because the piece of
paper could easily fall out. The manager needed something that would adhere to the page but not tear
it. Back at work, the manager asked one of the members of the research and development department
if an adhesive existed that would do this. One did, but it never had been marketed because the
company found that the adhesive was not strong enough for industrial use. At the manager’s request,
a batch of the glue was prepared and applied to small pieces of paper that could be used as
bookmarks. As the manager who had requested the product began to think about the new product, he
concluded it had uses other than as a bookmark. Secretaries could use it to attach messages to files
and managers could use it to send notes along with letters and memos. In an effort to spur interest in
the product, the manager had a large batch of these ‘attachable’ notes, now called Post-it Notes, made
and began distributing them to secretaries throughout the company. Before long more people began
to ask for them. The manager then ordered the supply cut off and told everyone who wanted them
that they would have to contact the marketing department. When that department became inundated
with calls for Post-it Notes, it concluded that a strong demand existed throughout industry for these
notes and full production began. Today Post-it Notes is one of the largest and most successful product
lines at the 3M Company.
 Questions
1. In the development of this product, how did the creative thinking
process work? Describe what took place in each of the five steps.

2. Why did the manager have the Post- It Notes sent to secretaries
throughout the company? What was his objective in doing this?

3. What type of innovation was this?

4. Which of the innovation sources help account for this product’s

success? Explain in detail.