Entrepreneurship

& Small Business

Chapter 4: Discovering a business idea

ESB
 Creativity & entrepreneurship

High STRUGGLER INNOVATOR

Creativity/
Innovation
Low STAGNATOR COPIER

Low High

Opportunity perception/
Entrepreneurship
 Blocks to innovative thinking
 Belief that there is only one solution

 Tendency to be practical & logical

 Tendency to think too narrowly & with too

much focus, to accept the ‘rules-of-the-game’
& the status quo & not to question the
premise on which a problem is based (can
you think ‘outside the box’?)
 Creativity

Can you think outside the box?

Example
 Blocks to innovative thinking
 Belief that there is only one solution
 Tendency to be practical & logical
 Tendency to think too narrowly & with too much
focus, to accept the ‘rules-of-the-game’ & the status
quo & not to question the premise on which a
problem is based (can you think ‘outside the box’?)
 Reluctance to accept uncertainty & ambiguity
 Unwillingness to appear foolish by suggesting
unconventional approaches or ideas
 Unwillingness to take risks in looking at different
approaches or ideas
 Lack of belief that you can be creative
 Swarfega

How difficult is it to be as
creative as Williamson?
 AULIVE creativity test
Typical: 62.48 You: 69.48

Persistence: Drive to find Abstraction: Ability to Connection: Ability to find

better solutions when abstract from ideas connections between
good ones already exist apparently unconnected things

Complexity:
Ability to Perspective:
manipulate Ability to shift
large perspective on
quantities of a situation
information
Paradox: Curiosity: Desire to
Ability to work change things others
Boldness: Confidence
with contradictory see as the norm
to push boundaries
statements
beyond accepted
conventions

www.testmycreativity.com

AULIVE link
 Connectivity
‘[Good ideas] come from crowds, from
networks… We have this clichéd idea of the
lone genius having the eureka moment ... in
fact … there is this quiet collaborative
process that goes on, either in people
building on other people’s ideas, but also in
borrowing ideas, or tools or approaches to
problems … The ultimate idea comes from
this remixing of various different components
… for the most part it’s a slower & more
networked process’

Johnson, 2010
RSA video
 OnMobile

What lessons do you learn from OnMobile?

 Discovery skills
1. Networking - finding
& testing ideas
2. Observing others -
particularly potential 5. Associating

INNOVATION
customers seemingly
3. Questioning unrelated =
common wisdom – things -
asking why? & why connectivity
not?
4. Experimenting -
trying things out

Dyer et al., 2009

Jeff Dyer
 Google

1. What are the barriers to

experimentation?
2. How do you apply the
principle to a start-up?
 Great Ormond Street
Hospital

What are the barriers to

developing discovery skills?
 Mamanpaz

Why is it important to adapt

ideas from other countries to
suit local circumstances?
 Discovery skills

Networking:
Exposure to diverse influences, ideas & people
Observing Questioning Experimenting

Curiosity Connectivity

Associating

Incubation

Creativity & innovation

 Start-up typologies

Radical New to the

product/service Disruptive
world
innovation innovation
industries

Incremental
product/service Incremental
innovation innovation

Market
Existing Market
product/service Copy-cat paradigm
expansion
shift

Existing Incrementally Radically

market new market new market
 Incremental innovation

 Developments in technology
 Improvements in design or functionality
– doing things better
 Improvements in efficiency – doing
things cheaper
 New combinations of marketing mix –
e.g. ways of getting things to markets
 Radical innovation
 New inventions & technologies
 New business models
 New markets
 Sea changes in market sentiment or
behaviour (e.g. CSR)
 Changes in laws or regulations (e.g. Health &
Safety)
 Unthinkable events arising from both the
known & unknown factors that are
difficult or impossible to plan for

Anthony HBR AULIVE ideas

 Summly App

What are the barriers to creating opportunity?

 Challenging conventions
 Generate new ideas: Do not always accept
the ‘dominant logic’ of how to do things –
market conventions

Osterwalder and Pigneur

Challenging market conventions

 Sectoral conventions

 Performance conventions

 Customer conventions

Chaston
 Challenging conventions
 Generate new ideas: Do not always accept the ‘dominant
logic’ of how to do things – market conventions
 Prototype development: Explore alternative business models
that might add value for customers
 Storytelling: Be able to articulate the concept behind the
product/service and how it creates value for customers
 Customer insights: Develop a deep understanding of
customer needs, even if they are not always derived directly
from the customers themselves
 Scenario development: Building on customer insights &
future development in the competitive environment
 Visual thinking: Draw or sketch out the business model & use
Post-it notes to explain it

Osterwalder and Pigneur

 Swatch

How difficult is it to change the way

you think about a product or market?
Opportunity - symptoms of change

 The unexpected
 Incongruity
 Inadequacy in underlying processes
 Changes in industry or market structure
 Demographic changes
 Changes in perception, mood & meaning
 New knowledge

Drucker, 1985
 Opportunity – the value chain

PRIMARY ACTIVITIES
Inbound Operations Outbound Marketing &
Service
logistics logistics sales

SUPPORT ACTIVITIES
Firm infrastructure
Human resource management
Technology development
Procurement
 Bloom & Wild

What do you need if you are to

reimagine a value chain?

Concept
 TutorVista

What are the barriers to spotting

this sort of opportunity?

Concept
Techniques for exploring change

Political
 Brainstorming Economic
Social
 PESTEL analysis Technological
Economic
Legal
 Futures thinking

 Mind maps
 The Million Dollar Homepage

Was this just good luck?

Homepage
Spotting an opportunity out of change

Brainstorm changes using PESTEL analysis

Develop a vision of the future after that change using

futures thinking

Brainstorm commercial opportunities coming out of

identified change

Develop & refine opportunity using mind maps

Business
idea
 Duplays

What are the barriers to spotting

this sort of opportunity?

Interview
 Exploring existing products
Subtraction Attribute dependency
Subtracting product features Correlating two or more
not valued by some market apparently unrelated
segments attributes

Division
Dividing out
the functions
of a product

Task
Multiplication unification
Duplicating some Bringing together
product feature or multiple tasks into
characteristic one product

Can you think inside the box?

Coyne
Exploring existing products

 Thinking inside the box

 Analogy

 Attribute analysis
Spotting an opportunity out of
inadequate existing products
List attributes of product/service

Brainstorm how these attributes can be improved

Develop & refine opportunity using mind maps

Business
idea
Exploring existing products

 Thinking inside the box

 Analogy
 Attribute analysis
 Gap analysis
 Perceptual mapping
 Non-metric mapping
 Repertory grid
Spotting an opportunity through gap
analysis
List attributes of product/service

Brainstorm the dimensions onto which these attributes

might be mapped

Identify the gaps in the mapping

Business
idea
 Nikwax

How easy is it to explore the

adequacy or inadequacy of
an existing product?
 Business ideas
Spot opportunity
 Change: Technology, law &
Create opportunity regulation, market &
industry structures,
demographics, culture,
Product/market innovation moods & fashions
Incremental Radical  Product deficiencies
 Unmet demand
 Product/market innovation

Market need

Practicality
Butter Stick Teleport
 Innovation
1. Analyse opportunities, internally &
externally. Innovate for NOW - timing is
everything
2. Innovation is conceptual & perceptual, so
look at financial implications & analyse
whether it meets the opportunity
3. Keep innovation simple - KISS!
4. Start small, take an incremental approach
5. Think long-term - aim at market leadership
& dominate the competition as soon as
possible
Peter Drucker
 Maggie’s Centres

1. Can the approaches outlined in

this chapter develop an idea for a
social enterprise?
2. How would you apply them to
Maggie’s Centre?

Concept
 Nuffnang

How important is local knowledge

in spotting opportunity?

Concept
15 characteristics of a good business idea
1. Identified market need/gap
2. No or few competitors
3. Growing market
4. Identified customers & a viable business model
5. Low funding requirements
6. Sustainable
7. High profit margins
8. Effective communications strategy
9. Not easily copied
10. Identifiable risks that can be monitored & mitigated
11. Low fixed costs
12. Controllable
13. Management skills that can be leveraged
14. Scalable
15. Financeable
 Streetcar

1. What benefits does Streetcar offer to its

customers? How are these different to
car ownership and traditional car hire?
2. How does Streetcar shift the paradigm
of car ownership & car hire?
3. Why did Zipcar buy Streetcar? Why did
Avis buy Zipcar?

Concept