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What is opportunity recognition

When it comes to recognising opportunities, knowledge is crucial. With this in mind, let's look closely at different types of opportunity recognition.
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You probably want to become an entrepreneur. How will you recognise an opportunity? And what exactly is an opportunity? The entrepreneurial process begins with an idea that can turn into an opportunity. It’s any idea and opportunity? No. To become an opportunity, an idea needs to be evaluated and acted upon. To become a business opportunity, your idea needs to have a potential economic value, meaning that it needs to be able to create profit. There have to be customers willing to pay for the product. It should also be new and innovative– for example, introducing a new or different product or technology to the market. It also needs to be attractive and desirable by people who want to buy it.
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There are two ways to recognise opportunities. You can discover them or create them yourself. Entrepreneurs discover opportunities when they search for them in the existing markets. This means that they observe technological, economic, or social trends. They observe the changing environment and events in their professional or daily life. They talk to people in their network. They search for gaps in the market. For example, you might design a method or a process that allows saving production costs, and therefore delivering a product in a cheaper way. It is delivering incremental innovation. Think about booking.com, started by alumni of the University of Twente.
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They saw a gap that nobody has filled in before and created a service to make booking a hotel room much easier. Other entrepreneurs create opportunities. They break the ways things are done by combining existing resources. Their ideas are not based on existing market products or consumer preferences. Those entrepreneurs bring radical innovations to market by making new combinations of technology and newly gained information. They create a demand for their products or services. Think about Airbnb that made renting of private apartments easier. What they did– they changed the way people travel. Recognising opportunities is a cognitive process. It relies on the ability of people to recognise patterns and connect the dots.
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People can make the links between the dots using their prior knowledge and experience. In doing so, they are able to link them into problems or to needs they or people around them have. But some people take the dots and connect them in not so obvious way by applying their knowledge and information gained from social interactions to create radical innovation. Therefore, if you want to create an opportunity, use your creativity, imagination. Use your knowledge and new information, and combine all of them. The main takeaway message is that there are two ways to recognise opportunities, discovering or creating. It is up to you, as an entrepreneur, which way is most suitable for you and which actions to take to enable opportunity recognition.
To become an opportunity, an idea needs to be evaluated and acted upon.
To become a business opportunity, your idea needs to have a potential economic value:
  • It needs to be able to create profit. There have to be customers willing to pay for the product.
  • It should also be new and innovative.
  • It also needs to be attractive and desirable for people who want to buy it.
There are two ways to recognise opportunities:
  • You can discover them or
  • You can create them yourself and with others.
Entrepreneurs discover opportunities when they search for them in existing markets. This means they observe technological, economic or social trends. Recognising opportunities is a cognitive process. It relies on the ability of people to recognise patterns and connect the dots.
Entrepreneurs create opportunities when they engage with others in bouncing ideas back and forth, and each time it becomes more specific what the user needs are and how they are going to be solved. Creating opportunities is a social process. It relies on the ability of entrepreneurs to interact.
Main take away message
There are two ways to recognise opportunities: discovering or creating. It is up to you as an entrepreneur which way is most suitable for you and which actions to take to enable opportunity recognition.
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