As we study opportunity identification, we want to realize that opportunities become real when you have a solution that leverages your advantages to solve a problem that is important to others.
We want to translate approaches and tools into identifying and acting on real entrepreneurial opportunities.
In this context, we want to reflect on the methods and tools we've examined on how to identify opportunities and act upon them.
And we start putting that into practice, applying our ideas to identifying the problem, formulating a competitive solution, building our advantage, and building the right team.
Is the problem real?
How do you know if the problem of identifying opportunities in entrepreneurship is real.
Well, it starts with understanding:
- Who your customer is?
- Why do they need your product? What benefits will they gain, as well as can they make money or save money on your product?
Now the final component of making or saving money is more oriented towards whether you sell to businesses, but it may be oriented towards individual consumers as well.
We also want to think about how many people are experiencing the problem.
You might have a great solution, but if only ten people want it, you probably won't be able to build a business based on it.
We want to think of the people facing the problem, how many of them would be buyers? It's not one-to-one. Many of us may have a problem, but we don't want to spend money to solve it.
We also want to consider if there are enough people who care about the problem and we will pay for a solution with which we can achieve success as a company.
Now if we were a Ferrari or a Rolls-Royce, we would probably only need 2,000 customers a year. But if we were Wikipedia, we need 10 million.
That way, it really depends on which product category you're in to determine how much is enough.
If you generate a lot of money per customer, you may need less. If you generate less money for each client, you may need more.
Does your solution create value for stakeholders?
Another element to consider, is the solution creating value for stakeholders? What are the basics you offer? Do customers care? This requires a real understanding of their perception of value and what matters to them. for example:
They focus on value, not specifications, so features, functions, and technologies are simply the tool or enabler of the value the customer perceives.
So realize that and think about the value you provide. Think about what real benefit do customers get from your product or service.
2. Validate your ideas and solutions
We also want to talk to potential customers very early on before creating a product. This gives you insight into what features are important, what values are important, and what they would be willing to pay for it.
You don't want to build a $100 product with ten features if customers want to pay $10 and only care about three features. This way, we want to talk to customers early on, get their insights, and validate the solution you're considering before you build it.
3. Is your advantage superior and sustainable?
We also want to realize that our advantage is superior, in a better sense than there is, and sustainable, which means we can sustain the competition that may come along.
So superior advantage and sustainable advantage of advantage is really important to our success.
- Are we cheaper?
- Are we rare?
- Are we better in other ways?
B: Sustainable advantage
- Are we easily copied?
- Are there current competitors that can replicate what we're doing?
- Are there new competitors who might imitate what we're doing?
So we want to think about those two elements as well, and what entry barriers we might be able to create. Maybe it's a patent. Perhaps it is exclusivity. Maybe we can build a brand. Maybe we think we can beat competitors on features by getting a head start.
But we want to realize that our competitors will not sit idly by.
Competitors won't just sit back and say, OK, isn't that a good product. I'll let them get me out of business. They will compete. They will adapt. may imitate. They may jump.
There are a variety of things they might do that you want to be aware of and want to anticipate.
Team building when identifying opportunities
Team building, incredibly valuable to start a company. You don't necessarily have to team up with people you are friends with or are family members.
Now, your friend might be the perfect team member. Your family may be the perfect team member. But you have to ask questions further than that.
- What are their motives?
- Are they committed?
- How realistic is their view of the risks and rewards of your project?
- Do they have complementary skills?
- Do they know things you don't know?
- What did you hear?
- What is their experience?
- What is their education?
- Did they accomplish?
- Who should be on the team if you bring it up?
In this way, we want to think about the person, the skills, experience, and advantage they bring, as well as any relationships you might already have with them.
Summary
So in short, we want to know the clue to the problem. Don't be drawn to starting a company or launching a product based on some assumptions you have.
Think about the evidence. We also want to think about customer value, and make sure we're solving a solution that someone cares about.
We also want to think about how we can achieve sustainability. It's a shame to start something and be successful for one day, only to have someone copy it tomorrow and not be able to do anything about it.
This way, think about the future. Think about what will happen in the market once I get there, what the competitors are doing, whether they are existing or new, and what I can do next.
That way it's checkers for some, but if you play chess, you're thinking a few steps ahead. Then finally think about the team, think about who your organization is.
Who are the members of the management team perhaps? Can you develop a board of advisors, people who might have more or more experience or relationships, or even people who might be an advisor and an investor that you can connect with, and by doing that, we can better identify and work on our opportunities.
See: What is Entrepreneurship?