Overview
Every successful entrepreneur—from world-renowned entrepreneurs like Jeff Bezos and Elon Musk to small business founders in your town—goes through opportunity recognition on the way to establishing their business. What separates a great idea for a new product, service, or venture from mediocre ideas? What actions can you take to excel at coming up with promising ideas for a new venture? And how can you de-risk the launch of a new product, service, or venture? Answers to these questions are certainly context dependent, but the goal of this Skill is to provide guidance and tools, so you can move from an idea to a viable product/service with a solid customer and user base.
Figure 1 summarizes the topic coverage for this Skill. We divide opportunity recognition into two efforts: identification and vetting. The items listed in opportunity identification are the elements needed for a new product idea to germinate. The interplay between a person’s characteristics and what triggers them to start opportunity identification is the beginning magic of entrepreneurship. The items listed in opportunity vetting are specific tools and actions to confirm (or refute) that your new product, service, or venture idea is worth pursuing.
The figure has three levels. The first level has two boxes, one is Triggers/Catalysts (left side) and the other is Personal Factors (right side). In the former, the following points are listed: Get an idea, See Problem/Need/Pain, and Market Change or Disruption. The Personal factors include the following: Experience, Skills, Knowledge, Mindset, and Desire to be an entrepreneur. The two boxes have a loop arrow between them. The way to get out of this cycle is shown in the next level. In the second level, there are two bubbles: Problem definition and Solution concept. These bubbles also have a loop arrow between them. These two levels have been labeled as Opportunity Identification. The third level has a bubble with the following points: Assumption Testing, Customer Discovery, Personas, Customer Journey Maps, Value Proposition, and Smokescreens & MVPs (minimal viable products). This level is labeled Opportunity Vetting. The bubble in this level has an arrow leading to the second level labeled “Pivot,” and there is another arrow leading to the first level which is labeled Restart.
Source: Author.
Notice all of the looping feedback arrows. Finding, understanding, and vetting a business opportunity is messy, non-linear, and confusing at times. For example, you might find a problem that you want to solve, develop the skills and knowledge to define a solution, fully understand the competition, and have a solid concept for a solution. Victory, right? Hopefully, but unlikely. If you start testing key assumptions you have about the market, customer, user, regulations, and costs, you may find out your solution has few or no buyers, meaning there is no product–market fit. This where you stop and pause and where persistence kicks in. You can follow the dotted arrow back up to either Level 1 to restart or go to Level 2 to modify your problem definition and solution concept (termed a “pivot”). Having to restart or pivot may seem like a failure, but it is not. You have increased your experience, skills, and knowledge as a new entrepreneur, which will serve you well in iterations #2 and #3, etc.—until you have found solid product–market fit.
In summary, in this Skill you will find real-world scenarios, videos, templates, and more that will help you:
- Select feasible new business ideas
- Appreciate the role of change in creating new ventures
- Fully understand your customer’s problems/needs/pains
- De-risk your new product or service
- Test customer interest with minimal cost and time
Further Reading
Not sure where to start?Assess your skills level for opportunity recognition
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