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Employ entrepreneurial discovery strategies to generate feasible ideas for business ventures/products.

Employ entrepreneurial discovery strategies to generate feasible ideas for business ventures/products.

2.01 Part 2

Discuss differences between entrepreneurs and non-entrepreneurs that can aid entrepreneurs in perceiving opportunities.

commitment and determination

leadership

opportunity obsession

tolerance of risk, ambiguity and uncertainty

creativity, self-reliance and ability to adapt

motivation to excel (Timmons 1994)

social nature

Being social is important because Building a company entails hiring, organizing, and inspiring a collection of people who typically need to get start-up funds from others, to buy things from other people, and, ultimately, flourish or fail together as a result of the ability to sell things to yet another group of people.

Some characteristics commonly associated with entrepreneurs:

Byers, T., Kist, H. & Sutton, R.I. (1997, October 27). Characteristics of the Entrepreneur: Social Creatures, Not Solo Heroes. Retrieved April 19, 2011, from http://www.skillcast.co.uk/documents/49.html

Life experiences

Persons position in a social network

Nature of the search process a person uses

Ability to focus on the opportunities

Intelligence

Perhaps most importantly, entrepreneurs also tend to be entrepreneurially alert. Are you always looking for new opportunities? If so, then you are more apt to see them when they arise.

An entrepreneur also capitalizes on:

Scientific discovery: Occurs when a physical or technological observation is made

Circumstantial discovery: Occurs when an observation is made based on specific knowledge of time, place, or circumstance

Distinguish between scientific discovery and circumstantial discovery.

The introduction of a new good or a new quality of a good

The introduction of a new method of production

The opening of a new market

The conquest of a new source of supply of raw materials or components

The reorganization of any industry

Areas of Entrepreneurial Discovery

The introduction of a new product or an improved product:

MP3 playerMost common area of innovation

Note the difference in the new invention of the MP3 player from improved MP3 player with a screen

Examples:

Henry Fords invention of the assembly line

The introduction of a new method of production:

The opening of a new market:

McDonalds moving into China for the first time

Note that in addition to discovering the new market, this also requires an understanding of culture, laws, local buyer preferences and business practices, and a host of contact, communication, and transportation details referred to as "setting up a distribution channel."

The conquest of a new source of supply of raw materials or components:

Moving a shoe manufacturer from the U.S. to Mexico to access cheaper labor

Finding a new source of oil previously not discovered

The reorganization of any industry:

Several years ago, the U.S. government believed that one telephone company, Bell, had formed a monopoly. The company was broken up, making the way for new, smaller telephone companies to form.

Explain techniques that entrepreneurs can use to recognize opportunities.

Examples:

Analogies

Pattern RecognitionExperiments

Simulation of Prototypes

Reverse Engineering

Comparing an unfamiliar abstract idea with an already known mental image. It's like painting a picture in the listener's mind. What the utilization of analogies and comparisons does is to change the frame of reference and to force thinking in new and interesting ways. If a person is only thinking of the problem in its own terms, the number of possible solutions is very limited. By making analogies, and forced comparisons, the opportunities for new and creative solutions are multiplied many times over.

Analogies

Hurlbert, W. (2006, March 2). Blog Business World: Analogies: Making the Connection. Retrieved April 12, 2011, from http://blogbusinessworld.blogspot.com/2006/03/analogies-making-connection.html

Many problems can be diagnosed and remedied in a pattern-recognition mode. Like a doctor looking to diagnose an ailment, look for patterns occurring. For example, if you're always thirsty, you urinate frequently, you're losing weight, and your eyesight is blurry, you have diabetes.

Pattern Recognition

Definition: a 3-dimensional version of your vision

Prototype

http://www.realclearscience.com/cgi-bin/mt/mt-search.cgi?blog_id=2&tag=Rapid%20prototype&limit=20

It enables you to test and refine the functionality of your design.

Sure, your idea works perfectly in theory. It's not until you start physically creating it that you'll encounter flaws in your thinking.

That's why another great reason to develop a prototype is to test the functionality of your idea.

You'll never know the design issues and challenges until you begin actually taking your idea from theory to reality.

Prototypes are Helpful to Discovery

Monosoff, T. (2011). Entrepreneur.com. Creating a product prototype. Retrieved April 19, 2011, from http://www.entrepreneur.com/startingabusiness/inventing/inventionscolumnisttamaramonosoff/article80678.html

It makes it possible to test the performance of various materials.

For example, your heart may be set on using metaluntil you test it and realize that, say, plastic performs better at a lower cost for your particular application. The prototype stage will help you determine the best materials.

Prototypes Continued

Monosoff, T. (2011). Entrepreneur.com. Creating a product prototype. Retrieved April 19, 2011, from http://www.entrepreneur.com/startingabusiness/inventing/inventionscolumnisttamaramonosoff/article80678.html

It'll help you describe your product more effectively with your team, including your attorney, packaging or marketing expert, engineers and potential business partners.

It will encourage others to take you more seriously.

Prototypes Continued

Monosoff, T. (2011). Entrepreneur.com. Creating a product prototype. Retrieved April 19, 2011, from http://www.entrepreneur.com/startingabusiness/inventing/inventionscolumnisttamaramonosoff/article80678.html

Definition: examining a completed product with the intent of understanding the technology and process used in its design, manufacture, or operation

Reverse Engineering

Online Ethics Center. (2006, February 16). Benchmarking and reverse engineering. Retrieved April 19, 2011, from http://www.onlineethics.org/CMS/workplace/workcases/ti-ethics/benchmarking.aspx#revers

Determine your product/ideas major selling advantage:

What will make a customer buy you and not a competitor?

What makes your product different from the competition?

This may be a product feature, type of service provided, etc.

Discuss ways that entrepreneurs try to distinguish themselves from their competitors.

Discuss stages of entrepreneurial processes.

The term discovery has the connotation of literally removing the cover from something that already exists. I do not intend that meaning here. Here, discovery is synonymous with invention, but I dont use that term because it is too much associated with technological invention, while I want to denote the emergence of new technology, organization and knowledge generally. Bart Nooteboom, Tilburg University

Discovery

Nooteboom, B. (2005, April 25). Entrepreneurial roles along a cycle of discovery [CentER Discussion Paper No. 2005-43]. April 11, 2011, from http://ssrn.com/abstract=706902

Entrepreneurial discovery is the oil that enables the market mechanism to operate and adapt so smoothly.

Entrepreneurial discovery occurs when a market participant notices what others have overlooked.

Discovery Continued

Leithner, C. (2004, December 15). Entrepreneurship and intelligent investing. Retrieved April 11, 2011, from http://www.quebecoislibre.org/04/041215-5.htm

Warren Buffett discovered a lucrative opportunity (one of the first of many in his long and successful career) when he worked at Graham-Newman Corp. Mr. Buffett recalls that Rockwood & Co., a Brooklyn based chocolate products company of limited profitability, had adopted [Last In First Out] inventory valuation in 1941 when cocoa was selling for $0.50 per pound. In 1954, a temporary shortage of cocoa caused the price to soar to over $0.60. Consequently Rockwood wished to unload its valuable inventory quickly. But if the cocoa had simply been sold off, the company would have owed close to a 50% tax on the proceeds. The 1954 Tax Code came to the rescue. It contained an arcane provision that eliminated the tax otherwise due on LIFO profits if inventory was distributed to shareholders as part of a plan reducing the scope of a corporations business. Rockwood decided to terminate one of its businesses, the sale of cocoa butter, and said 13 million pounds of its cocoa bean inventory was attributable to that activity. Accordingly, the company offered to repurchase its stock in exchange for the cocoa beans it no longer needed, paying 80 pounds of beans for each share. For several weeks I busily bought shares, sold beans, and made periodic stops at Schroeder Trust to exchange stock certificates for warehouse receipts. The profits were good and my only expense was subway tokens.

Example

Leithner, C. (2004, December 15). Entrepreneurship and intellig