CHAPTER 5

GENERATING
NEW IDEAS
 t e r
a p
C tline 5.1 The Entrepreneurial Mindset
h
Ou
and Opportunity Recognition
5.2 Opportunities Start with
Thousands of Ideas
5.3 Two Pathways to Opportunity
Identification
5.4 Opportunities Through Active
Search and Alertness
5.5 From Idea Generation to
Opportunity Recognition
5.1 The Entrepreneurial Mindset and Opportunity Recognition

What is Opportunity?
We define opportunity as an apparent way of generating value through
unique, novel, or desirable products, services, and even processes that
have not been previously exploited.

Forms of Values in Terms of Opportunity

1. Economic Value – it is a form of value that relates to the capacity to
generate profit.
2. Social Value – it is the value defined as helping to address a social
need.
3. Environmental Value – it is the value that exists if opportunity
protects or preserves the environment.
FO U R D I F F E R E N T
DIMENSIONS
Part of recognizing an opportunity is the ability to evaluate ideas and
identify those with the highest likelihood of success. One framework
for doing this is to rate an idea on four different dimensions: the idea
may be an innovation, an invention, an improvement, or
irrelevant. Of these, innovations and inventions are high in novelty,
while improvements and irrelevant ideas are low in novelty.
FOU R D I F F E R E N T
D I M E N S I O N S
 5.2 Opportunities Start with Thousands of Ideas

The first step in creating and identifying opportunities is idea

generation; the more ideas we generate, the greater the likelihood we
will find a strong opportunity.

7 Strategies for Idea Generation

Analytical Strategies
Search Strategies
Imagination-based Strategies
Habit-breaking Strategies
Relationship-seeking strategies
Development Strategies
Interpersonal Strategie
 ANALYTICAL
STRATEGIES
Definition:

actions that 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.
 SEARCH
STRATEGIES
Definition:

actions that involve using memory to retrieve information to make links

or connections based on past experience that are relevant to the
current problem using stimuli.
IMAGIN A T I O N - B A S E D
STRATEGIES
Definition:

actions that involve suspending disbelief and dropping constraints in

order to create unrealistic states, or fantasies.
HAB I T - B R E A K I N G
STRATEGIES
Definition:

actions that involve techniques that help to break our minds out of
mental fixedness in order to bring about creative insights.
 REL A T I O N S H I P -
SEEKING S T R A T E G I E S

Definition:

plans of action that involve consciously making links between

concepts or ideas that are not normally associated with each other.
DEV E L O P M E N T
STRATEGIES
Definition:

actions that involve enhancing and modifying existing ideas in order to

create better alternatives and new possibilities.
INTE R P E R S O N A L
STRATEGIES
Definition:

actions that involve group members stimulating each other to come up

with new or improved ideas.
 5.3 Two Pathways to Opportunity Identification

Applying the two primary pathways to opportunity identification.

Finding approach: a concept that assumes that opportunities exist

independent of entrepreneurs and are waiting to be found.

Building approach: a concept that assumes that opportunities do not

exist independent of entrepreneurs, but are instead a product of the
mind.
FINDI N G A P P R O A C H

Definition:
a concept that assumes that opportunities exist independent of
entrepreneurs and are waiting to be found.

In the finding approach, the role of savvy entrepreneurs is to

deliberately search for these opportunities by scanning the
environment, staying alert, making use of available information, and
ensuring they are the first to exploit opportunities as soon as they
discover them.
BUILD I N G A P P R O A C H

Definition:
a concept that assumes that opportunities do not exist independent of
entrepreneurs, but are instead a product of the mind.

In the building approach, opportunities are created, not found. They

originate from the entrepreneur’s prior knowledge and experience,
which equip the entrepreneur to create them. To identify opportunities,
this approach advocates using what you know, whom you know, and
who you are. Your role as an entrepreneur is to take action and see
how the market responds, recognize patterns, and learn from iteration
to define the opportunity as it evolves.
FINDING A N D B U I L D I N G
OPPO R T U N I T I E S
 5.4 Opportunities Through Active Search and Alertness

Identifying opportunities is not just about having information but using it

effectively.

Entrepreneurs actively search for existing opportunities through

personal contacts and relevant publications, not relying on traditional
sources. They follow two main approaches: finding, where
opportunities already exist and need discovery, and building, where
personal connections and knowledge are key. Understanding and
balancing these strategies are vital for entrepreneurs navigating the
dynamic landscape of opportunity identification.
ACT I V E S E A R C H

Definition:

The method used by entrepreneurs in attempting to discover existing

opportunities.
ACT I V E S E A R C H
In the pursuit of opportunities, our existing knowledge forms a
foundation.

Actively searching for this knowledge, like tapping into our inner circle
of friends, family, and business contacts, can yield valuable
information. However, relying solely on rational and conscious
searches has limitations, especially in situations where discoveries
happen randomly.

Focusing too narrowly on our known knowledge base may cause us to

miss unexpected opportunities beyond our usual scope.
ACT I V E S E A R C H

A study on "lucky" and "unlucky" people underscores this, revealing

that being overly focused on predetermined goals can lead to missed
chances.

The finding approach suggests that opportunities exist to be seized,

but it's not as simple as it sounds.

If everyone rushed to exploit every opportunity, competition would be

fierce, making it challenging to create unique and profitable products
or services.
ACT I V E S E A R C H

Therefore, entrepreneurs must go beyond their existing knowledge

sets. While active search is crucial for identifying opportunities, being
alert to nonobvious opportunities is equally vital.
 ALERTNESS

Definition:

the ability some people have to identify opportunities.

 ALERTNESS

To address the question of why some people spot opportunities and

some don’t, researchers have suggested that opportunities are
everywhere waiting to be discovered.

Such discovery is made by those entrepreneurs who have alertness,

and the ability to identify opportunities in their environment.

This means that entrepreneurs do not necessarily rationally and

systematically search their environment or their particular information
sets for opportunities.
 ALERTNESS

Some researchers believe that entrepreneurs may be more adept at

spotting opportunities than non-entrepreneurs for several reasons:

▶ they have access to more information,

▶ they may be more prone to pursuing risks rather than avoiding
them, and;

▶ they may possess different cognitive styles from those of

nonentrepreneurs.
 Building Opportunities: Prior Knowledge and Pattern
Recognition

Prior knowledge - the preexisting information gained from a

combination of life and work experience.

Many studies indicate that entrepreneurs with preexisting knowledge of

an industry or market, together with a broad network, are more likely to
recognize opportunities than those who have less experience or fewer
contacts.
Building Opportunities: Prior Knowledge and Pattern
Recognition
 Building Opportunities: Prior Knowledge and Pattern
Recognition

Pattern recognition - the process of identifying links or connections

between apparently unrelated things or events.

Pattern recognition takes place when people “connect the dots” in order
to identify and then build on opportunities.
 5.5 From Idea Generation to Opportunity Recognition

From Idea Generation to Opportunity Recognition

APPROACHES TO ENHANCE CREATIVITY FOR TRANSFORMING IDEAS
INTO OPPORTUNITIES

Researchers have identified four approaches that we can practice to

enhance our creativity with the purpose of transforming our ideas into
opportunities.

These approaches yield the acronym SEEC:

securing, expanding, exposing, and challenging
 SECURING

Definition: the capacity to focus on and sustain new ideas.

Similar to alertness, securing involves being consciously aware of

possibilities, but also focuses on the deliberate capture of those ideas
that sometimes have a habit of drifting in and out of our minds before
we have a chance to focus on them.

A useful way of securing those ideas is to keep a written log of

opportunities that you observe during your daily activities, which is a
simple but effective way to record ideas for later use.
 EXPANDING

Definition: broadening or acquiring new skills

Expanding skills enables people to generate ideas and share

knowledge.

A useful exercise carried out in a group setting is to list recent

problems you have encountered in your daily life and design some
possible solutions, which are then shared with the class for further
discussion and feedback.
 EXPOSING

Definition: opening ourselves to circumstances and events

Entrepreneurs tread a fine line between structure and turbulence, so it

is useful to build resilience by exposing ourselves to diverse and
fluctuating circumstances and events.

This exposure builds our ability to function in an unstructured and

uncertain environment. Brainstorming and becoming a consumer of
information about creativity are productive ways of building exposure.
 CHALLENGING

Definition: overcoming past failures by braving new encounters.

We all fail at times, and the important thing is not how often we fail but
how well we recover.

Further, we must not let past failures stop us from challenging

ourselves to make new efforts and try new things.

Learning from failure can lead to enhanced creativity and further idea
identification.
THANK
YOU!