Entrepreneurship

Creativity and the Business Idea

For use in the COBFSEN/COBFSDS classes of

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Mr. Reynaldo A. Mones, MBA, DBA (ABD)
McGraw-Hill/Irwin at the De La Salle University

 “Entrepreneurs have a knack for looking at the

usual and seeing the unusual, at the ordinary
and seeing the extraordinary.
Consequently, they can spot opportunities that
turn the commonplace into the unique and
unexpected.”
—D. G. Mitton, author

 “All human beings are entrepreneurs. When

we were in the caves we were all self-
employed . . . nding our food, feeding
ourselves.
That’s where human history began . . . .
As civilization came we suppressed it.
We became labor because they stamped us,
‘You are labor.’ We forgot that we are
Muhammad Yunus

entrepreneurs.”
Author and Social Entrepreneur
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 Opportunity is an apparent way of generating value through unique, novel, or

desirable products, services, and even processes that have not been previously
exploited.

For an opportunity to be viable, the idea must have the capacity to generate value.
The most common form of value is economic value: the capacity to generate
pro t.

All forms of value, however, are predicated on the assumption that there is a
market populated with enough people to buy your product or service.

® Neck, H. M., Neck, C. P., & Murray, E. L. (2018). Entrepreneurship : the prac ce and mindset. Los Angeles: SAGE.
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 The way to get good ideas is to get lots of ideas

and throw the bad ones away.
Different strategies can be employed and not all
will work for you.

Linus Pauling

Nobel Laureate in Chemistry

 Ideas can’t be stolen.

Seth Godin

Squidoo

Ideas get bigger when they are shared.

The role of the “stealer” is not to
implement the initial idea, but
instead to take responsibility for
improving on the idea.
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 Howard Schultz brought the concept
of Italian gourmet coffees to the
United States and then
disseminated the model around the
world.

® Neck, H. M., Neck, C. P., & Murray, E. L. (2018). Entrepreneurship : the prac ce and mindset. Los Angeles: SAGE.
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 A new idea that constitutes an opportunity, whether it is a product,
service, or technology, must be new or unique or at least a variation
on an existing theme that you are con dent people will accept and
adopt.

Part of recognizing an opportunity is the ability to evaluate ideas and

identify those with the highest likelihood of success.

® Neck, H. M., Neck, C. P., & Murray, E. L. (2018). Entrepreneurship : the prac ce and mindset. Los Angeles: SAGE.

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 Idea Classi cation Matrix

® Source: H. M. Neck, “Idea generation,” In B. Bygrave & A. Zacharakis eds. Portable MBA in Entrepreneurship (Hoboken, NJ: John Wiley & Sons, 2010, pp. 27–52).
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 Strategies for Idea Generation

• Analytical strategies
• Search strategies
• Imagination-based strategies
• Habit-breaking strategies
• Relationship-seeking strategies
• Development strategies
• Interpersonal strategies
® Neck, H. M., Neck, C. P., & Murray, E. L. (2018). Entrepreneurship : the prac ce and mindset. Los Angeles: SAGE. https://www.seekpng.com/ipng/u2w7y3t4q8i1a9u2_strategy-b2b-marketing-agency-strategies-for-growing-strategies/
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 Analytical Strategies
Analytical strategies involve taking time to think carefully
about a problem by breaking it up into parts, or looking at
it in a more general way in order to generate ideas about
how certain products or services can be improved or
made more innovative.

® Neck, H. M., Neck, C. P., & Murray, E. L. (2018). Entrepreneurship : the prac ce and mindset. Los Angeles: SAGE.
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 Search Strategies
Search strategies involve using memory to
retrieve information to make links or
connections based on past experience that
are relevant to the current problem using
stimuli.

® Neck, H. M., Neck, C. P., & Murray, E. L. (2018). Entrepreneurship : the prac ce and mindset. Los Angeles: SAGE.
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 Imagination-based Strategies
Imagination-based strategies involve suspending disbelief
and dropping constraints in order to create unrealistic
states, or fantasies.
For example, scientists at the National Aeronautics and Space Administration
(NASA) have needed to use a great deal of imagination to come up with tools,
protective clothing, personal care items, foodstuffs, and other inventions that
can be used in outer space.

® Neck, H. M., Neck, C. P., & Murray, E. L. (2018). Entrepreneurship : the prac ce and mindset. Los Angeles: SAGE.
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 Habit-breaking Strategies
Habit-breaking strategies are techniques that
help to break our minds out of mental xedness
in order to bring about creative insights.

A popular habit-breaking strategy is to take the role of a famous

or admired individual and think about how he or she would
perceive the situation.
This is sometimes called the Napoleon technique, as in “What
would Napoleon do?”

® Neck, H. M., Neck, C. P., & Murray, E. L. (2018). Entrepreneurship : the prac ce and mindset. Los Angeles: SAGE.
https://naominovik.fandom.com/wiki/Napoleon_Bonaparte

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 Relation-seeking Strategies
Relationship-seeking strategies involve consciously making links
between concepts or ideas that are not normally associated with
each other.
For example, you could make a list of words that are completely unrelated to the
problem you are trying to solve, such as doorknob, then list the characteristics of each
item on the list. Next, apply those characteristics to the problem with a view toward
coming up with ideas to solve the problem. The purpose of this exercise is to stimulate
toward the mind into making connections that would otherwise have gone unnoticed.

® Neck, H. M., Neck, C. P., & Murray, E. L. (2018). Entrepreneurship : the prac ce and mindset. Los Angeles: SAGE.

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 Development Strategies
Development strategies are employed to enhance and
modify existing ideas in order to create better alternatives
and new possibilities.
A common exercise in idea enhancement is to gather a group of four to six
people together. Each person writes down three ideas, which are then passed
around the group. Then every member spends ve minutes suggesting
improvements on the ideas to make them more feasible and effective.

® Neck, H. M., Neck, C. P., & Murray, E. L. (2018). Entrepreneurship : the prac ce and mindset. Los Angeles: SAGE.
ti

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 Interpersonal Strategies
Interpersonal strategies are actions that involve group
members stimulating each other to come up with new or
improved ideas.
Group brainstorming is a good example of an interpersonal strategy where
members exchange thoughts and build on ideas.

® Neck, H. M., Neck, C. P., & Murray, E. L. (2018). Entrepreneurship : the prac ce and mindset. Los Angeles: SAGE.
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 Sources of New Ideas

Trends

• The start of a trend that lasts for a considerable period of time provides one of
the greatest opportunities for starting a new venture.
• Trends that will provide opportunities include: green trend, clean-energy trend,
organic-orientation trend, economic trend, social trend, health trend, and Web
trend.

 Sources of New Ideas

• Consumers
• Informally monitor potential ideas and needs.
• Formally arrange for consumers to express their opinions.
• Existing Products and Services
• Analysis uncovers ways to improve offerings that may result in a new product or
service.
• Distribution Channels
• Channel members can help suggest and market new products.
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 Sources of New Ideas

• Government
• Files of the Patent Of ce can suggest new product possibilities.
• New product ideas can come in response to government regulations.
• Research and Development
• A formal endeavor connected with one’s current employment.
• An informal lab in a basement or garage.

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 Methods of Generating New Ideas

• Focus Groups
• A moderator leads a group of 8 to 14 participants through an open, in-depth
discussion in a directive or non-directive manner.
• An excellent method for generating and screening ideas and concepts.

 Methods of Generating New Ideas

• Brainstorming
• Allows people to be stimulated to greater creativity.
• Good ideas emerge when the brainstorming effort focuses on a speci c
product or market area.
• Rules of brainstorming:
• No criticism.
• Freewheeling is encouraged.
• Quantity of ideas is desired.
• Combinations and improvements of ideas are encouraged.
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 Methods of Generating New Ideas

• Brainwriting
• A form of written brainstorming.
• Participants write their ideas on special forms or cards that circulate within the group.
• Problem Inventory Analysis
• Consumers are provided with a list of problems and are asked to identify products
that have those problems.
• Results must be carefully evaluated as they may not actually re ect a new business
opportunity.

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 Creative Problem Solving

• Creativity tends to decline with age, education, lack of use, and bureaucracy.
• Latent creative potential can be sti ed by perceptual, cultural, emotional, and
organizational factors.
• Creativity can be unlocked by using any of the creative problem-solving
techniques.

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 Creative Problem Solving

• Brainstorming
• Session starts with a problem statement.
• No group member should be an expert in the eld of the problem.
• All ideas must be recorded.
• Reverse Brainstorming
• A group method that focuses on the negative aspects of a product, service, or
idea as well as ways to overcome these problems.
• Care must be taken to maintain group morale.
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 Creative Problem Solving

• Gordon Method
• Method for developing new ideas when the individuals are unaware of the
problem.
• Solutions are not clouded by preconceived ideas and behavioral patterns.
• Checklist Method
• Developing a new idea through a list of related issues.
• Free Association
• Developing a new idea through a chain of word associations.
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 Creative Problem Solving

• Forced Relationships
• Developing a new idea by looking at product combinations.
• A ve step process which focuses on generating ideas from relationship
patterns between elements of a problem.
• Collective Notebook Method
• Developing a new idea by group members regularly recording ideas.

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 Creative Problem Solving

• Attribute Listing
• Developing a new idea by looking at the positives and negatives.
• Big-Dream Approach
• Developing a new idea by thinking without constraints.
• Parameter Analysis
• Developing a new idea by focusing on parameter identi cation and creative
synthesis.

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 Illustration of Parameter Analysis

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 Innovation

• Types of Innovation
• Breakthrough
• Fewest number of innovations.
• Establishes the platform on which future innovations in an area are developed.
• Should be protected by patents, trademarks, and copyrights.
• Technological
• Occurs more frequently; not at the same level of breakthrough inventions.
• Offers advancements in the product/market area.
• Needs to be protected.

 Innovation

• Ordinary
• Occurs most frequently.
• Extends a technological innovation into a better product or service or one that has a different market appeal.
• Usually come from market analysis and pull, not technology push.

 Innovation

• De ning a New Innovation (Product or Service)

• Newness can be:
•In the consumer concept.
•A change in the package or container.
•Slight changes or modi cations in the appearance of the product. (Industrial market)
• Companies also add products to their product line that are already marketed
by other companies; products are new to the manufacturer but not the
consumer.
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 Innovation

• Classi cation of New Products

• Consumer’s Viewpoint
• The continuum proposed by Thomas Robertson is based on the disrupting in uence that use of the product has on
established consumption patterns.
• Continuous innovations.
• Dynamically continuous.
• Discontinuous innovations.
• This approach is consistent with the marketing philosophy that “satisfaction of consumer needs” is fundamental to
a venture’s existence.

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 Continuum for Classifying New Products

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 Innovation

• Firm’s Viewpoint
• Distinction can be made between new products and new markets.
• Situations with a new technology and a new market are the most complicated and pose the highest degree of risk.

 New Product Classification System

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 Industry Classification
Philippine Statistics Authority

https://psa.gov.ph/content/philippine-standard-industrial-classi cation-psic

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 A Model of the Opportunity Recognition Process

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 Product Planning and Development Process

• Establishing Evaluation Criteria

• Criteria should be established at each stage of the product planning and
development process.
• It should be all-inclusive and quantitative in nature.
• Criteria should evaluate the idea in terms of:
• Market opportunity.
• Competition.
• Marketing system.
• Financial factors.
• Production factors.
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 Product Planning and Development Process

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 Product Planning and Development Process

• Idea Stage
• Promising ideas should be identi ed and impractical ones eliminated.
• Evaluation method – Systematic market evaluation checklist.
• Determine the need for the new idea as well as its value to the company.
• Concept Stage
• Re ned idea is tested to determine consumer acceptance which can be
measured through the conversational interview method.

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 Product Planning and Development Process

• Product Development Stage

• Consumer reaction to the product/service is determined.
• A consumer panel is given a product sample and preference is determined
through methods such as multiple brand comparisons, risk analysis, etc.
• Test Marketing Stage
• Increases certainty of successful commercialization.
• Actual sales re ect consumer acceptance.

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 E-commerce and Business Start-up

• E-commerce offers entrepreneurs an opportunity to be creative and innovative.

• Factors that facilitate high-growth in electronic commerce:
• Widespread use of personal computers.
• Adoption of intranets in companies.
• Acceptance of the Internet as a business communications platform.
• Faster and more secure systems.

 E-commerce and Business Start-up

• Using E-Commerce Creatively

• Entrepreneurs have to decide whether to:
• Run Internet operations within the company.
• Outsource these operations to Internet specialists.
• Use e-commerce packages provided by software companies.
• The integration of front-end and back-end operations represents the greatest
challenge for doing Internet business.

 E-commerce and Business Start-up

• Web Sites
• Ease of use.
• Structure and organization of information.
• Search capability.
• E-mail response system.
• Speed.
• Compatibility with different browsers and platforms.

 E-commerce and Business Start-up

• Tracking Customer Information

• Electronic databases track the activity of the industry, segment, and company.
• It supports personal marketing targeted at individual clients.
• Care must be taken to follow the laws protecting the privacy of individuals.

 E-commerce and Business Start-up

• Doing E-Commerce as an Entrepreneurial Company

• Products should be delivered economically and conveniently.
• Products need to interest a wide market; company must be ready to ship the
product outside its own geographical location.
• Online operations should bring signi cant cost reductions.
• Company must be able to economically draw customers to its Web site.

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