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WHAT
ARE IDEAS & OPPORTUNITIES?
Business Ideas and Opportunities
"Every problem is an opportunity, and the bigger
the problem, the bigger the opportunity," declared
Vinod Khosla, one of the world's leading venture capitalists,
in a talk at Stanford University. "No one will
pay you to solve a non-problem."
Is
this an opportunity? Is this a good business idea? -
questions commonly posed by future entrepreneurs. Sometimes
developing ideas for businesses seems like an insurmountable
challenge. Sorting through ideas to see which may be
good ideas can be even more difficult. Fortunately,
tools, frameworks and guidelines can help entrepreneurs
with both. A good starting point is to understand the
difference between an idea, and an opportunity.
An
idea is not an opportunity, necessarily
It's a common mistake: many people use the words 'idea'
and 'opportunity' interchangeably. Seems innocuous,
right? But it can lead to real problems.
What
is an idea?
Perhaps it's a flash of inspiration; perhaps you've
sat and brainstormed in a workshop - either way, ideas
spring forth from an inner source. No analysis has been
performed to determine the quality of the idea. In fact,
the basic rule to getting the creativity flowing in
a brainstorming session is 'there's no such thing as
a bad idea'. And during idea-generation, that's true;
but in fact, few are really good business ideas. So
the goal is to generate as many as possible to provide
the raw material for the next stage: opportunity evaluation.
What
is an opportunity?
Opportunities, on the other hand, are ideas that have
been through an analytical wringer. Take an idea, punch
it, pull it, ask the right questions, and if it holds
up - it's an opportunity: a chance to build a viable
venture.
What
is an idea? How do I generate ideas? "If you asked
me earlier to come up with a business idea, I would
have been clueless. Now, I just can't stop," laughed
Dr. Sunita Maheshwari. Sunita and her husband, both
physicians, are building one of the leading providers
of teleradiology services in India, with their young
company, Teleradiology Solutions.
Sunita's theory on her new-found ability to generate
infinite number of business ideas? "Practice,"
she says simply.
Ideas
are a prelude to finding a business opportunity, and
since all ideas are not good ideas, the goal should
be to generate as many as possible.
Where
to look for ideas?
There are many sources for ideas, including the following:
- a
problem that the entrepreneur faced him or herself,
for which he or she didn't find a solution;
- an
unmet need of customers discovered by an entrepreneur
at a previous place of employment;
-
changes in the environment.
Macro-level
changes are a great source of ideas and opportunities
- new players don't have to necessarily deal with large
entrenched companies. Three types of change that throw
up opportunities include:
- changes
in consumer taste or spending
- regulatory
changes
- changes
in technology, including inventions or improvements.
For
example, the business process outsourcing industry boom
was enabled both regulatory change and improvements
in technology. India's current boom in hospitality clearly
stems from increases in consumer wealth and changes
in spending.
Moving
from idea to opportunity
Having an idea is the first step towards starting a
company; the next step is to test that idea to determine
whether, in fact, it is an opportunity. There is no
one "correct" set of questions, or analysis
to be applied, however there are some useful frameworks
to guide your investigation.
What defines a good opportunity?
An opportunity is characterized by the following:
- There
are customers willing and able to purchase your product,
because your product solves a real problem, or satisfies
a need/want for them;
- A
large enough number of customers exist to make your
business viable;
- The
industry allows you to start and build - no regulations
or monopoly keeping you out, no suppliers that hold
all the power, and so on;
- An
ability to differentiate your offering from your competitors,
and to maintain your advantage;
- A
good match with your own and your team's interests,
abilities, and network.
Additional
Readings
What
defines a good opportunity?
How to know - Is this a good idea?
Tools to set you thinking: Start generating ideas now
Evaluate your opportunity: Check out some evaluation
tools
MBAUniverse.com
Entrepreneurship channel has been created with expert
inputs from National Entrepreneurship Network (NEN).
NEN is a not-for-profit initiative of the Wadhwani Foundation
working to inspire, educate and support the younger
generation of entrepreneurs. The organization was co-founded
in 2002 by leading Indian institutes, including IITBombay,
IIM-Ahmedabad, BITS Pilani, SP Jain and IBAB. Visit
NEN at www.NENOnline.org.
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