MPU32092 ASAS PEMBUDAYAAN KEUSAHAWANAN CHAPTER 2

CHAPTER 2

CREATIVITY, INNOVATION AND ENTREPRENEURSHIP

2.0 INTRODUCTION

An idea can be regarded as the outcome of a thinking process (i.e. impression, opinion,
view, belief, formulation and concept). In entrepreneurship, ideation is the creative
process of generating, developing, and communicating new ideas. A business start-up
ideation must be centered on solving customers' problems.

2.1 IDEA GENERATION

Generating an idea may involve the whole

process of observing, thinking (analyzing),
communicating (discussing) and developing,
which can be abstract, concrete and visual.
Ideas may come to entrepreneurs from daily
exposures. A frustrating experience or a
source of irritation could be a great business
idea for an entrepreneur.

Customers' complaints and feedback can

provide an opportunity to develop something
better, quicker or cheaper than existing products.

Extra: How to Find Business Ideas - The Ultimate Guide

Link: https://www.youtube.com/watch?v=cIsA1s9SwEU

2.2 SOURCES OF IDEAS: WORK EXPERIENCE, HOBBIES, INTERESTS AND

THE ENVIRONMENT

Work experience is one of the primary sources of a business idea. An entrepreneur can
use his work experience and technical skills obtained from earlier work to resolve
problems and shortcomings in his present work or operation system.

Sometimes a new business idea may grow from a

hobby or personal interest. For example, someone
who loves to bake cakes may start selling their
makes online as a way to generate income. This
business may grow as demand increases. The home
baker will need to decide at one point whether to
become an entrepreneur managing a grooving
business, or he may return to baking just as a hobby.

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New ideas, information, opportunities or insight into new technological trends may reach
entrepreneurs through trade exhibitions, or links with universities and research
institutes, or network king with sales representatives, wholesalers, distributors,
manufacturers, franchisers, professors and research scientists.

lt is also important to observe and pay attention to

latest trends and technological development in
technical magazines, scholarly journals, newspapers
and the Internet. A clever entrepreneur will likely
systematically scan his environment to identify
business ideas or to get an idea on the problems faced
by the people and explore possibilities of offering
products or services that may solve such problems.

Table 2.1 Examples of How Changes in Environmental Trends Provide Openings for New Business
and Product opportunities

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2.3 FOUR TYPES OF INNOVATION IN BUSINESS

Whether a business is in the initial stage of exploring innovation or has already gained some
experience from it, new opportunities exist across the entire growth cycle. By classifying
innovation into four distinct categories, companies can assess the opportunities that exist and
how different approaches can enable them to create and capture value.

https://techblog.constantcontact.com/software-development/types-of-innovation

2.3.1 Incremental Innovation

The continuous improvement of existing products

or services to provide more value to an existing
market. It focuses on reducing defects and
incrementally improving performance with
features like product line expansions, cost
reductions, and next-generation products. This type
of innovation occurs in the short-term and has low
technological advancement and low market impact.
Examples: Next-generation 3 series for BMW,
Gillette

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2.3.2 Architectural Innovation

The modification of existing solutions for an entirely new

market. Architectural innovation refers to changing the overall
design of a product by putting existing components together in
new ways. This innovation occurs in the short to medium term.
Examples: Sony Walkman, desktop photocopiers.

2.3.3 Disruptive Innovation

When new technologies and products are created to serve an existing market. This type
of innovation is enabled by new technology that provides a more efficient and accessible
alternative to what already exists in the market. Businesses apply disruptive innovation
to serve the evolving needs of their consumer base, creating entirely new value streams
and service offerings that did not exist before.

Disruptive innovation mostly originates at

the lower end of the market segment,
however, as the maturity of the technology
increases, it eventually displaces
established market leaders. This innovation occurs in the
medium to long term.
Examples: Tesla, Open source software, Netflix, Peer-to-peer platforms (Airbnb), video
streaming

Extra: Three Things: What is Disruptive Innovation?

Link: https://www.youtube.com/watch?v=tefu0dmt9l0

2.3.4 Radical Innovation

When an organization applies new technology to a new

market. This type of innovation is when a new product,
process, or service with high technological advancement
has a high market impact and completely replaces an
existing offering. This innovation occurs in the long-term.
Examples: Salesforce, Metromile

Named by Forbes as one

of the World’s Most Innovative
Companies 4 years in a row.
https://www.youtube.com/watch?v=di6iwHhrH6s

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2.4 TECHNIQUES FOR GENERATING NEW BUSINESS IDEAS

Apart from the sources of business ideas described in Section 2.2, there are many ways
to help entrepreneurs generate a new business idea.

2.4.1 Brainstorming

Brainstorming is one of the most commonly used techniques in generating a new business
idea. The aim is to come up with as many ideas
as possible in a short period of time. Usually
questioning or criticism is not allowed. People
do not need to fear making mistakes or looking
foolish in front of other team members.

In fact, it is highly encouraged to put forward

ideas which might not seem to work. There are
no “bad” ideas, as all ideas could be the start
for another idea. It is also good to have a
multidisciplinary team so that a problem can be
approached from different perspectives.

Extra: Brainstorming Techniques - Rick Enrico

Link: https://www.youtube.com/watch?v=2bNvs_qElIw

2.4.2 Focus Group

A focus group is typically composed of eight to 14 individuals participating in a discussion

to generate a new business idea in a structured way. The focus group members are usually
selected because of their relationship with the
issue being discussed.
A trained moderator leads the group through an
open and in-depth discussion, in either a
directive or nondirective manner. The success
of the session is highly dependent on the
moderator's ability to ask questions that keep
the discussion on track.
Extra: How do focus groups work? - Hector Lanz
Link: https://www.youtube.com/watch?v=3TwgVQIZPsw

2.4.3 Surveys

A survey is a technique of collecting valuable information from a sample of people; usually

just a fraction of the population being studied. Demand, supply and change in customer
behavior can be analyzed and ascertained through a survey. The survey can be carried out
formally or informally via various methods: interviews, questionnaires or observations.
The survey usually asks specific questions and gets specific answers, which helps
entrepreneurs to generate new business ideas.

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2.5 TRANSFORMATION OF IDEAS INTO BUSINESS OPPORTUNITIES

The transformation of an idea into a marketing opportunity is a process which requires
resources, time and hard work. Successful entrepreneurs are good at transforming ideas
into opportunities. In order to get an idea on the business potential of the new ideas,
entrepreneurs may ask the following:

i. Has it solved the customers’ problem or pain?

ii. Does it offer higher value-added products or services?
iii. Does it have a unique selling proposition?
iv. Can it be produced at an acceptable cost, and marketed and sold at a profit?
v. Does it have competitive advantage compared to competitors' products?

The business model canvas technique discussed in the following chapter can be used to
discuss issues so that suitable business strategies can be developed.

2.6 IDENTIFY AND FIX CUSTOMER PAIN POINTS

One of the best ways to build brand credibility is to create long term customer relationships
by understanding their journey. Knowing how they perceive your brand and how to remove
customer pain points, can go a long way towards implementing the right customer experience
strategies.

According to the Forbes study, “75% of companies identified improving customer experience
as their top objective”.

Source: https://www.revechat.com/blog/customer-pain-points/

Excellent brand experience is the key to make your customer happy. In order to keep them
happy, you need to know customer pain points. Businesses, no matter big or small, need to put
effort to identify the customer pain points to acquire and retain customers by delivering a
frictionless experience.

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2.6.1 What are customer pain points?

Customer pain point can be defined as a specific problem your customer or prospect
experiences during all the interactions across different touchpoints. The very first step for
businesses is to understand what customers want should be part of your customer service
strategy. By identifying pain points, businesses and entrepreneurs can craft an appropriate
value proposition that attracts the customer to resolve their problems.

8 COMMON CUSTOMER PAIN POINTS EVERY BUSINESS FACES

1 Delayed support response
2 Inconsistent customer experience
3 Non-availability of the support team
4 Poor quality of products & services
5 Lack of adequate knowledge & experience
6 Complicated buying process
7 Tailor your solutions to your customer needs
8 Rude behavior of support representatives
Source: https://www.revechat.com/blog/customer-pain-points/

A faster response is a key attribute of customer experience!

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2.6.2 Types of customer pain points

If you don’t understand your customers’ pain points, how are you going to solve their
problems?
Every business builds products or services to resolve specific customer problems. By having
an in-depth customer pain point analysis, you can group them into four broad categories

Sources:https://www.wordstream.com/blog

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2.6.3 Identify customer pain points

a) Conduct qualitative market research

It is very important to discover exactly what your customers want. Conducting a
qualitative market study includes mapping customer journeys and evaluating data
regarding customer pain points.

Observing how your customers interact with your brand, whether offline or online
would give you an idea. Some vital steps for conducting research are:
 Map out your customer journeys give businesses gain valuable insights and
understanding regarding common customer pain points.
 Create customer personas to focus your time on qualified prospects, guide
product development as per customer needs, and align all work across your
business.

b) Listen to your customers to identify pain points

One of the best ways to identify customers’ problems is by listening to them. Solving
the problem by knowing it first through the perspective of a customer is the best way
to handle it. Listening involves paying close attention to their needs and
understanding how you can help them achieve their goals. Here are the key reasons

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why listening to customers is beneficial.

 Bad customer service is one main reason for customer churn. On the other
hand, customers are happy to pay more, if they receive a better customer
experience.
 When support reps listen to customers, service interactions tend to be
smoother. The frictionless experience has a great impact on your customer
retention strategies.

c) Use live chat to identify customer pain points

In order to effectively manage customer pain points, businesses first need to develop
trust and confidence before offering solutions to customers. Adding live chat is a
great way to know customer demands and the issues they are facing. Here is how
live chat helps to discover customer pain points and offer effective solutions.
 By enabling instant connectivity with clients via live chat, you can
immediately determine their needs and provide products/services that best
meet their interests.
 The benefit of using live chat to identify client pain points is that your agents
can understand every issue to the best of their abilities and offer timely
solutions.

d) Talk to your sales and customer support teams

Regular conversations with your customer-facing teams, be it sales, customer, or
marketing team is one great way to identify customer pain points. 62% of
customers want marketing content that speaks to pain points. Having
discussions with the teams provides valuable insights on your customer perception
& experience. Here are the key benefits of having regular conversations with your
teams.
 It helps you to identify the customer pain points as well as the core strengths
of your brand as a whole.
 Keeping in regular touch with the respective teams can help you to
understand and categorize the pain points.

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