Entrepreneurs are brilliant at spotting opportunities that previously went unnoticed. They show alertness to potential opportunities that their peers would decline and walk away from.
A serial entrepreneur once commented that 70% of all business opportunities have not yet been discovered. There is an ocean of opportunities all around us, yet we often battle to find new business opportunities; this is the conundrum that we’ll address in this post.
A recipe or blueprint for finding new opportunities does not exist.
“While out walking, a man found a penny lying on the ground. From that day on, he walked looking down to see if he could not find another penny. Eventually he got a hump on his back and had missed a lot of beautiful things. Yet, he never found another penny.”
There is no one proven recipe for spotting a new business opportunity. The way that you (or someone else, for that matter) found your last worthwhile opportunity most likely would not work again. The world we live in is just too volatile.
Principles, skills and attitudes that make you more ready to spot new opportunities
1. "Never say die" attitude
An “attitude of stubbornness” that will not let you surrender to obstacles and challenges.
The steadfast belief that there are lucrative opportunities, and if I cannot see them now then I will change my approach, change the questions I ask, change the way I do things. Whatever it takes, I will change, but I will not believe that there is not any hope.
This is a theme you will often find in the stories of successful entrepreneurs: a time when all seemed to be against them, and despite the prevailing circumstances they kept pushing forward.
Lucrative opportunities are rarely presented on a plate. More often they are “dragged” into existence by sheer willpower and determination.
2. "Stepping stone" goals
Stepping stone goals come into play when you know what the end goal is (e.g. to start a successful business) but you have no idea of how to get there. You then choose intermediate (stepping stone) goals that look like they will take you in the direction of the end goal. Once you have achieved a stepping stone goal, you get insight into the next stepping stone that will take you even closer, and eventually you get insight into how to achieve the end goal.
In finding new business opportunities, people often make the mistake of walking away if they cannot see exactly how things will “play out”. Many entrepreneurs didn’t know exactly what their road would be when they started, and on the way they took numerous turns, but as they pressed forward the target gradually became more clear.
From a manager’s point of view this does not make sense. Within the context of a manager’s function, she knows exactly what the end goal looks like and her task is to utilize and direct all resources to best achieve the goal [1]. Thus the goal dictates or shapes how the resources are used.
An entrepreneur creatively combines resources resulting in various new opportunities [1].
The entrepreneur however starts only with the resources at his disposal, namely: his own skills, traits and talents, his own knowledge and experiences, and who he knows - his social and professional network.
He starts to play with different combinations of the resources and starts to imagine the possibilities that could flow from them. Thus possibilities (goals) are being shaped by the creative combination of resources. The goals (note plural) are also pliable because as he progresses, he discovers more resources, and this shapes them further. Often, the entrepreneur starts small, with what they have closest at hand – but what is important is that they take action and so start a process that will lead them on a road of discovery.
Formulating “stepping stone” goals is a tool to help discover new business opportunities.
3. Being open to turning the unforeseen into an opportunity
In light of the preceding argument, it makes perfect sense that the business idea you started with might not be what you pursue in the end.
It is worth mentioning, because if you do not know this, you could become discouraged if it seems that you are losing “direction”, especially as this is often the criticism that “other” people will raise in the seemingly aimless and prolonged initial phase of an entrepreneur’s journey.
In hindsight, it seems that the successful entrepreneur’s path was a direct climb to great heights. But on closer evaluation, you would more often than not find a disorderly path that eventually ended in success.
One must show perseverance (without determination and perseverance an entrepreneur is lost) when looking for opportunities, BUT you also need to be flexible. When you are venturing into the unknown to identify new opportunities, you cannot only be fixed on one goal. You also need to recognize other worthwhile opportunities if they come along, and make the needed changes. What you set out to find might not be what you eventually pursue. Be open to turning the unforeseen into the opportunity.
4. Being "outside" your own skin
Self-absorption is death to an entrepreneur. In order to spot an opportunity, you have to be “outside” your own skin. You have to know what is going on around you and in the world.
Entrepreneurs are actively networking with people. They talk to people, find out what is important to people, what they are excited about and also share what they (the entrepreneur) are excited about. They are constantly connecting with people, gathering and spreading information and enthusiasm. Part of an entrepreneur’s resources is their ability to build, maintain and enjoy their network.
Research has shown that the main source of information regarding new opportunities comes from the personal network of an entrepreneur [3]. The network provides bits and pieces of information from completely different sources. Not all of them present an opportunity in itself, but once some of them have been put together, a clear image of a possible opportunity may be revealed.
Additionally, an entrepreneur’s network also provides information on raw material, supplies, equipment, space, employees, and resources - information on everything that is needed to successfully pursue an opportunity.
Sarasvathy [1] notes that an important strategy of entrepreneurs is to build strategic partnerships early on in their business.
To understand the importance of this strategy, we need to refer back to our manager scenario, where all resources are focused on achieving a well-defined goal. In this landscape the basic premise is that:
“To the extent that we can predict the future, we can control it.” [1]
The entrepreneur however works within a different landscape and therefore needs a different premise to work with. The entrepreneur believes that:
“To the extent that we can create the future we do not need to predict it.” [1]
Entrepreneurs are in the business of creating the future. They imagine different combinations of the resources, and the possibilities that could flow from them, while building a future that they value. When they enter an unpredictable market, they believe that it could be shaped through their own actions, and also by working in conjunction with committed stakeholders and strategic partners. This approach means that they have to work with a variety of people over an extended period of time.
5. Making creative links
The value of an entrepreneurial opportunity lies in the creative links you can make between bits of information. We live in the information age where everyone has access to volumes of information – but the distinguishing factor is in the creative links you make.
Entrepreneurs need to be open to different ideas and different experiences. An important aspect of entrepreneurship is to recognize the basic ideas or principles from one situation, and to apply them to another. Their brilliance lies in the original way that they adapt ideas from other fields to solve the problems they are currently working on.
6. Ill-structured real life problems
Ill-structured problems are problems that seldom have single right or wrong answers available. You are confronted with opposing and contradictory evidence and opinions to be considered.
Generally ill-structured problems lead to feelings of uncertainty, fear and irritation. However, ill-structured problems are the “feeding” grounds for entrepreneurs.
When an ill-structured problem is identified, all the green lights go on for the entrepreneurial mind, indicating that new opportunities are lying dormant just waiting to be discovered.
An example of an ill-structured problem is The Fourth Industrial Revolution. Klaus Schwab said of this revolution: “In its scale, scope, and complexity and the transformation it will bring, it is unlike anything humankind has experienced before. We do not yet know just how it will unfold… and it is disrupting almost every industry in every country.”
- The First Industrial Revolution used water and steam power to mechanize production.
- The Second used electric power to create mass production.
- The Third used electronics and information technology to automate production.
- The Fourth Industrial Revolution (building on the Third) is characterized by the blending of technologies, that is blurring the lines between the physical, digital, and biological spheres.
The Fourth Industrial Revolution will open up totally new ways of doing business - we are already starting to witness this. Think of Uber. They don’t own a single car, yet they are the biggest taxi company on the globe. Uber is in essence a software company. The same is true for Airbnb, the biggest hotel company in the world, while they do not own any properties.
“We believe that every industrial company will become a software company.” General Electric, CEO Jeffrey R. Immelt [2]
Herewith a list of some of the anticipated consequences (positive or negative) of this revolution:
- Entirely new ways of serving existing needs and consequently disrupting existing industries. (Uber, Airbnb)
- Lowering barriers for both businesses and individuals to create wealth.
- New cost effective products and services that can increase efficiency and the enjoyment of our lives.
- Will render many of the jobs we have today obsolete and may therefore contribute to increased unemployment.
- Create new jobs that will require higher levels of education and specialization, while those jobs that are being destroyed involve more physical or routine tasks (such as being associated with call centres, retail and administrative roles).
What the end result of this ill-structured problem will be, only time will tell, but what is a certainty is that within this situation a multitude of entrepreneurial opportunities are locked up. Ill-structured life problems are a telltale sign of lurking opportunities.
What if this ill-structured problem is circular? What if this problem also contains the solution?
More and more cloud-based solutions allow non-technical people to create software solutions. This phenomenon is part of what Silicon Valley calls the “democratization of technology”: an increase in access to sophisticated technological products, tools and services. This means that without education in computer programming or software development (which requires higher levels of education and specialization) you could start a business offering software solutions to real life problems in niche markets. You would still need the basic building blocks any successful entrepreneur needs, namely, determination (a “never-say-die” attitude), discipline, energy, common sense and the ability to identify a business opportunity. Part of the consequences of the fourth revolution is that the technology industry is opening up with possibilities for non-technical people. A further benefit is that your business” customers do not have to be geographically confined to the struggling consumer market of your hometown. The globe becomes your market.
And lastly, the barriers for entering this industry are also lowered: you do not need large upfront capital or even a big workforce to start with, thus ultimately lowering the barriers for individuals to create wealth.
The downside to spotting opportunities
Seeing possible opportunities that previously went unnoticed has its downside. It can leave you in a lonely and uncertain place.
A lonely place because only a small number of people spot new entrepreneurial opportunities - research suggests as little of 10-15% of the total population [Bolton and Thompson]. This can be debated, but it seems fair to say that when you see a possible opportunity, a lot of the people around you might not share your optimism.
An uncertain place because usually new undiscovered opportunities have low odds. It stands to reason that if it were a 70% certainty, then everyone would have known about it and would have pursued it.
Another factor that contributes to the uncertainty is that opportunities usually take a lot longer to actualize than one had planned for. This is the time that people around you might start to voice their doubts about the viability of the venture. Years ago, Marc Benioff from Salesforce said “People overestimate what you can do in a year and they underestimate what you can do in a decade”.
You’re welcome to share this infographic on your website:
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</a>Sources
1. Sarasvathy, SD 2005. What makes entrepreneurs entrepreneurial? University of Virginia.
2. Strålin, T; Gnanasambandam, C; Andén, P; Comella-Dorda, D & Burkacky, O. 2016. Software Development Handbook Transforming for the digital age.
3. Chell, 2001; Katz, 1997; McGrath, MacMillam & Scheinberg, 1992
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