CHAPTER 2 Opportunity Mindset and Opportunity Recognition 2024

CHAPTER 2
Entrepreneurial Mindset and Opportunity

Recognition
Objectives
− Compare fixed and growth mindsets;
− Generalize characteristics and essentials of entrepreneurial
mindset;
− Assess entrepreneurship as a habit;
− Consider opportunity recognition using mindset;
− Integrate structured strategies of forming ideas;
− Propose pathways towards the identification of opportunity;
− Recommend ways on using information rightfully to create
impact; and,
− Adapt the IDEATE model in opportunity recognition.
What is Mindset?
Mindset and Its Characteristics and
Essentials
−Mindset is a belief that qualities like
intelligence and talent are fixed or changeable
traits.
−A mindset of abundance will consider that
there is plenty of resources for everyone and
that resources will not run out because they
are replaceable. However, a mindset of
scarcity shall think that there is inadequate
amount of things around, so some people can
either benefit or lose them.
Essentials
−People with a fixed mindset perceive that their
talents and abilities are set.
−People with a growth mindset trusts that traits
can be changed, developed, and strengthened by
working on them.
Essentials
Fixed Mindset Growth Mindset
I’m either good at it or I’m not. I can learn anything I want to.
When I’m frustrated, I give up. When I’m frustrated, I persevere.
I don’t like to be challenged. I want to challenge myself.
When I fail, I’m no good. When I fail, I learn.
Tell me I’m smart. Tell me I try hard.
If you succeed, I feel threatened. If you succeed, I’m inspired.
My abilities determine My effort and attitude determine
everything. everything.
What are the Characteristics of an
Entrepreneurial Mindset?
Characteristics of an Entrepreneurial
Mindset
1. Curiosity
- Leads to questions, and questions lead to
answers.
- Strengthens the ability to understand
things with a new standpoint.
Mindset
2. Commitment
- Continuing to keep going and
persist amidst problems.
- Rejection and disappointments are
essential elements of an
entrepreneur’s life which needs to be
endured.
- The focus should be on achievements.
Mindset
3. Optimism
- Tough attitude towards challenges
makes up successful entrepreneurs.
- Entrepreneur should be hopeful in
exploring its many learning
opportunities.
- For a successful entrepreneur, there
is always a solution to every problem.
Mindset
4. Flexibility
- Helps to be supple to deal with a
series of difficult situations, solve
problems easily and make progress
from obstacles.
- Make a journal and timeline to
overcome difficulties.
Mindset
5. Ownership
- Success comes from their own ability.
- The attitude to be responsible for the
things you do.
- Be confident that you can always fulfill
your dreams.
Mindset
6. Leadership
- Guides, motivates, and empowers
the team.
- Through convincing communication
and involving his team, an effective
entrepreneur is able to attain his
visions.
- Able to create visions by constantly
being the model of the team.
Mindset
7. Connection
- Entrepreneurs must choose those
people that would form his collective
links so that he could breed his idea.
- There should be both emotional and
financial bonds.
Mindset
8. Self-respect
- It’s vital to take care both of the body,
mind, and spirit.
- Taking care of oneself daily through
rest, exercise, and diet is essential.
Essentials of the Entrepreneurial
Mindset
1. Passion first
• The best ways to be involved and
continue doing business during difficult
times is to have a sense of meaning and
purpose.
• This is the intention for starting
businesses according to the
entrepreneur’s passion.
Mindset
2. Everything is possible
• Believing that entrepreneurs are
capable of accomplishing unexpected
results.
• They trust that an idea could be
possible to turn into reality.
• They examine first their goals and set
things bigger.
Mindset
3. 100% accountable
• The power to choose their responses to
any circumstance because they have this
100% Accountable mindset.
• They need to build a new start and form
a different conclusion.
Mindset
4. We are connected
• Entrepreneurs believe they can achieve
their dreams not by being alone though
they love to be independent.
• They take honor in competition because
they believe that working with, for, and
through others pushes their potentials.
Mindset
5. Live life to give
• As people in business profit more,
they tend to give more, or what is
known as corporate social
responsibility
• They believe that life is a cycle, hence
those people with so much need to give
to people with less.
Mindset
6. Attitude of gratefulness
• Seldom do people give their attention to
their accomplishments and their present
experiences except for entrepreneurs.
• Even during problematic situations
which entrepreneurs recognized as
opportunities to learn and grow, they are
still grateful about these situations.
Mindset
7. The time is now
• Recognizing that all their powers
exist in the moment.
• They believe that they cannot change
history and the future is uncertain.
• It is best to take action than simply
waiting on a perfect plan which does
not exist.
What is a Habit?
Entrepreneurship as a Habit
• Habit is an unconscious behavior done
often and regularly.
• Good habits can be acquired using “habit
loop”, a process wherein the brain makes
decision whether to store or repeat such
behavior.
• Rewarded behavior is most likely repeated.
Three Habits that Required Most to be
Nurtured and be Practiced for
Entrepreneurial Mindset
1. Self-Leadership Habit
• Practice of purposely influencing and
controlling one’s behavior, actions,
thinking, and feeling.
• Related to optimism, happiness,
consciousness, and emotional intelligence
among others.
• 3 important strategies:
1. Behavior-focused
- Concerns enhancing self-awareness to
manage behaviors especially when
dealing with essential but not-so-good
tasks.
- Ways to accomplish this include: Self-
observation, Self-goal setting, Self -
reward, Self-punishment.
2. Natural Reward
- About making every task enjoyable by
emphasizing the positive aspects of
each task and its importance.
3. Constructive Thought
- Creating positive and productive means
of thinking that are advantageous to the
performance of entrepreneurs.
2. Creativity Habit
• Creativity is the capacity of turning fresh
ideas, insights, inventions, products or
artistic objects that are considered to be
unique, useful, and of value to others into
reality.
• Creative people are open to experiments and
do not fear to commit mistakes.
• Example: The Aristocrat, the famous
restaurant for its world-renowned Chicken
BBQ & Java Rice combination.
3. Improvisation Habit
• Improvisation is the unstructured way of
creating something in the absence of
planning.
• Entrepreneurs though start with good
ideas oftentimes possess limited
resources, unpredicted market situations
or conflicts inside the company that
hinder them to realize their initial plans.
Opportunity Recognition Using
Mindset
• Opportunity is a means to generate profits by
creating unique, innovative, and desirable
products or services which are not being found
in the market yet.
• Opportunity recognition is a process by which
individuals and businesses make use their
entrepreneurial mindset to establish new
businesses or ideas.
Opportunity Recognition Using
Mindset
• Entrepreneurs are able to see problems as
opportunities. They consider each problem,
frustration , or unmet need they face as a
possible opportunity.
• However, if the right mindset is not utilized,
then a missed opportunity is expected.
How to Start with Ideas
1. Analytical
• Breaking a problem into details or
looking at a problem in a common way
to produce ideas on improving or
innovating products or services.
2. Search
• Linking personal experiences that are
significant to the existing problem.
• Illustrates the ability to be resourceful in
looking for connections between objects
that appears to have no obvious
relationship at first.
3. Imagination-Based
• Interrupting doubts and dropping
restrictions to produce fantasies or
make believe situations.
• Sometimes, entrepreneurs need to be
playful in their minds so they can
think of ways that are impossible.
4. Habit-Breaking
• To explore a new perspective, entrepreneurs
should think of the opposite of something.
• The ideas of a person not part of a situation
could also be taken particularly those
admirable personalities.
5. Relationship-seeking
• Establishing a link between concepts
that are not usually connected.
• Intention is to fuel the mind into making
connectivity that seems to be unnoticed.
6. Development
• Employs the modification of existing
concepts to make improved choices
and new potentials.
• One way to do this is to brainstorm.
7. Interpersonal
• Needs interaction with a group to
generate ideas.
• Brainstorming is also commonly used
to highlight creativity towards new
opportunities.
Four Pathways to Opportunity
Identification
• An opportunity could be in the form of a new
product and/or service, new found markets,
newly opened distribution channels, new ways
of production or supply or new methods of
organizing.
Identification
1. Find Pathway
• Assumes that opportunities exist independent
of entrepreneurs and are waiting to be found.
• Generally, an opportunity is found when the
entrepreneur sees a clear problem and
develops a solution.
• The problem is known to most, but the
entrepreneur is “the one who acts on the
potential solution”.
Identification
• This is the experience of Socorro Ramos, the
owner of National Bookstore. She opened
National Bookstore in Escolta with her
husband with a capital of P200, selling books
and school supplies to students. At that time,
Manila was under the control of the Japanese,
who imposed censorship on books and
periodicals. To augment their earning, she and
her husband resorted to selling other items
like candles and soaps.
Identification
FIND
SEARCH
I saw a EFFECTUATE
DESIGN
problem I knew what I
and I thought about I wanted to create
wanted to start
developed what I know, my something
a business, but
a solution. skills, experiences, innovative. I started
was unsure
and abilities and looking around,
what business to
developed an idea observed and talked
start. I
that matched ‘me’. to some people and
intentionally
I created identified new,
searched for
something and unmet needs. Then, I
different
just started testing created something to
opportunities.
it. meet these needs.
Identification
2. Search Pathway
• Used when entrepreneurs are not
quite definite what type of business
they want to jump in. Hence, they
engage in an active search to discover
new opportunities.
Identification
• The story of Ragnarok by the company
LevelUp! is a good example. During a business
trip in Korea, Nonoy Colayco smelled the
opportunity of online gaming in the
Philippines. He knew very well that Filipinos
are fond of gaming. Through the help of his
son Ben Colayco, a person passionate with
games, the father and son team brought
gaming to a whole new level called Massively
Multiplier On-line Games (MMOG).
Identification
The Internet and gaming was really
progressing that time with Counterstrike
as the popular online game. They got the
publishing rights with Oz World and 3D
Chat, but it was with Ragnarok from
Korea that served as the
accomplishment of LevelUp!
Identification
3. Effectuate Pathway
• Uses the entrepreneur’s skills, knowledge,
and abilities to unearth an opportunity
that suits him.
• Such opportunity comes from the
experiences, abilities, networks, and
entrepreneur’s confidence to make action
especially during times of uncertainty.
Identification
• With only 2 cake displays and 10
employees, Milagros, Clarita, and Doris
Leelin started Goldilocks at a 70-sq-m
building space in Makati. Sisters Milagros
and Clarita loved baking and decided to
pursue their passion into business. With
the help of their sister-in-law Doris, the
Leelin’s opened their first branch.
Identification
In 1991, Goldilocks launched its
franchising program. As of 2015, the
bakeshop chain had almost 400 stores
across the country, with other
branches in the USA, Canada, and
Southeast Asia. From the modest capital of
P66,000, Goldilocks is now a multi-
million food enterprise with more than
4,000 employees.
Identification
3. Design Pathway
• Most difficult yet the most-value creating pathway.
• By focusing on the unsatisfied need of the market
particularly the latent ones, the entrepreneur is
able to discover valuable opportunities
• Here the entrepreneur is really creating a new
market
Latent needs- needs that customers do have but do
not know they have
.
Identification
• The craze for potato fries is everywhere now.
Perhaps, this craze evolved from the
Westernization of the Philippines through
the entry of foreign companies in the
country introducing American-style meals
such as burgers and fries. Seeing an
opportunity for success, a local entrepreneur
developed an idea instead of competing
against these much larger companies with
the same product.
Identification
An entrepreneur of humble beginnings, Jose
Magsaysay Jr., is the current president of Potato
Corner. He worked at Wendy's as a dishwasher,
eventually climbing his way up to become a
district manager of Wendy's before opening his
first Potato Corner stall in 1992.
A unique selling proposition is what makes
a given product one of a kind like Potato
Corners. The factors inherent in Potato Corner's
USP are low costs and high efficiency.
Identification
What Potato Corner did in order to
increase sales and further expand the company
was by introducing franchising to the company.
By means of franchising, interested partners
could help expand the business by paying
royalties, and this in turn made Potato Corner
an even more publicly-recognized company. As
a result, Potato Corner became a 75% publicly-
owned company with franchisees from all over
the globe.
Alertness, Prior Knowledge and
Pattern Recognition
1. Alertness
• Ability to easily pinpoint opportunities in the
environment.
• Information is everywhere and are just waiting to
be discovered. However, only entrepreneurs that
possess alertness could possibly do this thing.
• With their usual activities everyday, entrepreneurs
turn to be alert to existing opportunities.
• Like many travelers Mr. Jonathan Jay
Aldeguer has a natural impulse to purchase
souvenirs. With his entrepreneurial eye, he
spotted the universality and huge potential
for a new business with souvenirs. The
souvenir industry from his entrepreneurial
lenses could become a multi-billion-dollar
industry given the twist.
In the Philippines, the industry lacked
creativity in design, visual merchandising,
quality and branding. Filipinos are used to the
ethnic-looking designs which were the norm.
He showcased his products as a unique
experience of a locality that highlighted his
jump-off concept and his dynamic personality,
hence Island Souvenirs was born. Today he
has more than 110 branches in the country.
2. Prior Knowledge
• Information gathered from the
combined life and work experiences.
• Studies show that entrepreneurs that have
knowledge about the industry and
market in combination with broad
network are able to recognize better the
opportunities around them.
Prior Knowledge
• Victoria Belo, more commonly known in
the Philippines as Dra. Vicki Belo, was a
victim of bullying in her childhood
years. She was usually pestered for
being ugly and fat. This experience
made her all the more fascinated in the
field of beauty. She imagined herself of
becoming somebody who could make
people feel gorgeous and adored.
Prior Knowledge
This led her to be in the medical profession,
particularly in the field of dermatology. Hence,
she obtained a Diploma in Dermatology in
Bangkok, Thailand in 1990. It was in 1990-
when Dra. Belo established her first clinic at
the Medical Towers in Makati. The clinic was
the first to make known liposuction and lasers
in the Philippines.
Prior Knowledge
The Dra. Belo's Belo Medical Group was also
the first recognized "ambulatory cosmetic
surgi-center in the Philippines" and certified
by the Department of Health (DOH). She is now
the noted dermatologist and "Doctor to the
Stars". In addition, Dr. Belo was hailed
"Ambassadress of Beauty" for the Philippines
and tasked to endorse the country as a world-
class cosmetic surgery destination.
3. Pattern Recognition
• Happens when people make connections of
dots to pinpoint and create
opportunities.
• Often, when “connecting dots” there are
constraints that block the way. Real
entrepreneurs ignore these things and try to
find ways to look beyond constraints.
• Filipina scientist Aisa Mijeno is an example
of an entrepreneur that knows pattern
recognition. After resigning from her job in
the IT industry and volunteering with
Greenpeace, Mijeno was exposed to "off-
grid" living conditions. Once she had seen
the restrictions no electricity had on day-to-
day living. Hence, she decided to find a way
to figure out how to produce a light source
that did not depend on electricity, batteries
or fuel to work.
In partnership with Philippine incubator,
Ideaspace Foundation, Mijeno was able to
design and create Sustainable Alternative
Lighting or simply SALt. The SALt Lamp is an
environment-friendly and viable alternative
light source that makes use of saltwater, making
it appropriate to those residing in coastline
areas. It can also function well in far-flung
barrios. Using only two table spoons of salt and
one glass of tap water, this ecologically designed
lamp lights for eight hours.
The concept of the SALt lamp is the chemical
conversion of energy. It uses the scientific
process behind the Galvanic cell. However, in
place of electrolytes, the SALt lamp utilizes
saline solution, thus it is harmless and non-
toxic.
From Idea Generation to Opportunity
Recognition
• In order for an idea to be feasible, it must be
fresh or inimitable or at least a twist from an
existing concept that will be acceptable and
adoptable in the market.
• The concept should be something of value to
consumers, because it is a need, a desire,
useful and has the capacity to earn profit. Not
all idea could be an opportunity.
• The best ideas are those that could be
transform into doable opportunity.
Recognition
• The IDEATE Method is an ideation process
empirically proven to help budding
entrepreneurs recognize problems, cultivate
innovative solutions, and choose the best
creative entrepreneurial idea. This model
follows the process of Identify, Discover,
Enhance, Anticipate, Target, and
Evaluate.
Recognition
1. Identify
• Identifying problems that customers are
trying to solve, are spending money to
solve, but still unsolved to the satisfaction
of customers.. This is also about identifying
solutions to this problem.
Recognition
• After quitting his job, Brian Chesky
drove to San Francisco to crash with a
college friend, Joe Gebbia, who also
recently quit his job. They were both
having trouble making the upcoming
rent payment. Then they realized that
the 2007 Industrial Design Society of
America conference was coming up and
that hotel rooms would be hard to get.
Recognition
2. Discover
• Actively searching for ideas in problem-
rich environment where there is social
and demographics change, technological
change, political and regulatory change
and/ or change in the industry structure.
Recognition
• Gebbia, who had three air mattresses
suggested they turn their apartment into
an "air bed and breakfast."
Recognition
3. Enhance
• Taking the ideas and expanding to new
applications or adding innovative twists.
Or simply enhancing existing ideas.
Recognition
• After setting up a simple website
(airbedandbreakfast.com), they managed
to book out their whole apartment in three
days, solving their rent problem.
4. Anticipate Recognition
• Studying change and analyzing future
scenarios as they relate to social,
technological, and other global changes
and trends.
Recognition
• The duo, who had met at college at the
Rhode Island School of Design, thought
acting as tour guides to designers would
be a fun way to make money.
Recognition
5. Target
• Defining and understanding a
particular target market, validating
new ideas with early adopters.
Recognition
• A customer for Airbnb is the one who adds
up to the company's revenue. He can be a
host who offers his space for rent and lists
it on the platform or he can be a traveler
who books a space.
Activity
How Entrepreneurs Find Opportunity
1. What was the observation of Poss about the
garbage problem? What was his solution to
this problem? Relate here.
2. What particular habit in the entrepreneurial
was used by Poss in this situation? Discuss
briefly.
3. Given the chance, with the same garbage
problem here in the Philippines, how will you
solve it the entrepreneurial way? Tell your
solution/s.

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CHAPTER 2

Entrepreneurial Mindset and Opportunity

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