UNIT 2: OPPORTUNITY IDENTIFICATION

TITLE OF THE LESSON: ENTREPRENEURIAL MINDSET AND OPPORTUNITY

DURATION: 3 hours

Learning Objectives:
The learners shall be able to:

Compare fixed and growth mindsets;

• Generalize characteristics and essentials of entrepreneurial mindset:

• Assess entrepreneurship as a habit; Consider opportunity recognition using mindset:
• Integrate structured strategies of forming ideas:
• Propose pathways towards the identification of opportunity, Recommend ways on using
information rightfully to create impact; and,
• Adapt the IDEATE model in opportunity recognition

I stand upon my desk to remind myself that we must constantly look at things in a different way."
- John Keating, Lead Character in the 1989 Film "Dead
Poets Society

For several decades now there has been a constant debate whether entrepreneurs are self-made
or they possess unique gifts. Sometimes, people have mistaken entrepreneurs as those born with
exceptional genes. Today, entrepreneurial mindset makes entrepreneurs move forward even
during difficult situations. Entrepreneurial mindset makes possible innovations and taking risks
and the ability to accept failures. Thus, entrepreneurial mindset is important for business

Mindset its Characteristics and Essentials

A mindset is a belief that qualities like intelligence and talent are fixed or changeable traits. The
word mindset was coined by Carol Dweck in her book "Mindset" It was based from her research
about personalities of successful people. She found out that successful people have different
mindsets which are a fixed versus growth mindset.
In reality, there are numerous mindsets, but fixed and growth mindsets are her important
discoveries for people living in today's fast changing and very complex
Take the example of abundance versus scarcity as an example of mindset. A mindset of abundance
will consider that there is plenty of resources for everyone and that resources will not run out
because they are replaceable. However, a mindset of scarcity shall think that there is inadequate
amount of things around, so some people can either benefit or lose them.
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People with a fixed mindset perceive that their talents and abilities are set. They consider their
brains and talents are sufficient to become successful and endure life by becoming smart. They
personally take positive criticisms of their capabilities. A fixed mindset sees the world in an
"either/or perspective. For people with fixed mindset success is based on luck or possibly from
some sort of prejudicial advantage. They always want to avoid challenge, failure and tell
themselves they do not have expertise. People with a fixed mindset believe that these qualities
are inborn, fixed. and unchangeable.
On the other hand, people with a growth mindset trusts that traits can be changed. developed and
strengthened by working on them. These people are certain that their abilities could be developed
by commitment, determination and obviously hard work. For them, brains and talent are simply
the starting point of the lifelong success of everyone. People with growth mindset see failure as an
opportunity to enhance their performance and take mistakes as lessons. Instead of giving up, they
proceed to what they wanted to do despite failures.

Table 2. Fixed vs. Growth Mindset

Source: https://www.brainpickings.org/2014/01/29card-deck-mindse

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Characteristics of an Entrepreneurial Mindset
Entrepreneurship is a challenging and rewarding path. Based on research there is no distinct set of
traits signifying success. Although, there are several characteristics often common to successful
entrepreneurs
1. Curiosity- Being curious is really shared among successful entrepreneurs Curiosity leads to
questions, and questions lead to answers. This trait strengthens the ability to understand things
with a new standpoint. Nobody really knows everything, and curious people are conscious of this.
Being humble and open-minded lead to greater knowledge, and greater knowledge allows more
detailed reflection.
2 Commitment - This is continuing to keep going and persist amidst problems. Rejection and
disappointments are essential elements of an entrepreneur's life which needs to be endured.
Lessons must be taken from rejection and should not affect the confidence of an entrepreneur.
The focus should be on achievements, because it would motivate the entrepreneur to persevere
as he moves forward and continues to harvest good outcomes.
3. Optimism-Tough attitude towards challenges makes up successful entrepreneurs. Every time a
situation happens, the entrepreneur should be hopeful in exploring its many learning
opportunities. For a successful entrepreneur, there is always a solution to every problem.
4. Flexibility-Entrepreneurship is a challenging field with its unpredicted demands and continuous
problems. It helps to be supple to deal with a series of difficult situations, solve problems easily
and make progress from obstacles. A successful entrepreneur usually makes a journal and timeline
to overcome this difficulty
5. Ownership-Successful entrepreneurs always trust that their success comes from their own
ability. Simply they have high internal locus of control. Whatever life throws at them, they will be
able to make or break them through their. own actions, decisions and responses. It has always
been their attitude to be responsible for the things that they do. They are very confident that they
can always fulfill their dreams
6. Leadership A successful entrepreneur always guides, motivates and empowers his team. It is
usual for him to share his vision with his team to inspire these people. Through convincing
communication and involving his team, an effective entrepreneur is able to attain his visions. He is
able to create his own vision by constantly being the model of his team.
7. Connection -In entrepreneurship creating a network is very important. Entrepreneurs must
choose those people that would form his collective links so that he could breed his idea. There
should be both emotional and financial bonds. Investment is terms of relationship so that later this
bond could be used for support when needed.
8. Self-respect-In business, it is also vital to take care of both the body, mind and spirit. Taking care
of oneself daily through rest, exercise and diet is essential. Always have ample rest and sleep for
renewing ones' energy. Take time to exercise and do whatever one enjoys. Eating healthy choices
and a few treats to nourish the body is basic too

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The world is very different on how entrepreneurs see it. These traits must be developed in order
to be successful in going forward.
Essentials of the Entrepreneurial Mindset
Although living with entrepreneurial mindsets is really transformative, knowing them is amazing.
Entrepreneurial mindsets appear to be like common sense, yet they are not common practice.
There are essential things in order to really employ and initiate successful mindsets.
1. Passion first - Real entrepreneurs look for what really are important to them. what they truly
wanted to, and then bring together their business around those things. Most of the times a
company has so many problems. The best way to be involved and continue doing business during
difficult times is to have a sense of meaning and purpose. This is the intention for starting
businesses according to the entrepreneur's passion.
2. Everything is possible - This mindset is about believing that entrepreneurs are capable of
accomplishing unexpected results. They trust that an idea could be possible to turn into reality.
Usually entrepreneurs examine first their goals and set things bigger. Nothing could serve as
hindrance for an entrepreneur to realize his potentials.
3. 100% accountable In life it is easier to blame others especially when things became out of hand.
Entrepreneurs always believe that they have the power to choose their responses to any
circumstance because they have this 100% Accountable mindset. For entrepreneurs though they
cannot turn back the hands of time, they need to build a new start and form a different
conclusion.
4. We are connected - Entrepreneurs believe they can achieve their dreams not by being alone
though they love to be independent. They wanted to lead by helping other people to do their
tasks and fulfill their dreams without seeking anything in return. This mindset is activated by
synergies in every relationship Entrepreneurs take honor in competition because they believe that
working with, for and through others pushes their potentials
5. Live life to give Most people now especially business people wanted to offer their time and
resources for a valuable cause. As people in business profit more, they tend to give more. This is
known today as corporate social responsibility. Embracing this mindset means incorporating the
daily works with the philosophy they believe in. Entrepreneurs believe that life is a cycle. hence
those people with so much need to give to people with less. Giving back assures entrepreneurs of
giving forward
6 Attitude of gratefulness -Most people also focus much of their thoughts on what they do not
possess. Seldom do people give their attention to their accomplishments and their present
experiences except for entrepreneurs. This mindset provides the recognition of all positives in
every experience and be thankful for these. Even during problematic situations which
entrepreneurs recognized as opportunities to learn and grow, they are still gratefulness about
these situations.)
7. The time is now - This mindset for entrepreneurs refers to recognizing that all their powers exist
in the moment. Entrepreneurs believe that they cannot change history and the future is uncertain.
Hence, the important thing is to take action now. There should be purposeful action not just being
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busy. It is best to take action than simply waiting on a perfect plan which does not exist.
Entrepreneurs give their best effort and make their adjustments of their action as necessary.
Entrepreneurship as a Habit
A habit is an unconscious behavior done often and regularly. Good habits can be acquired using
"habit loop". This habit loop is a process wherein the brain makes decision whether to store or
repeat such behavior. Rewarded behavior is most likely repeated. There are three habits that
required most to be nurtured and be practiced for entrepreneurial mindset
The Self-Leadership Habit
The book of authors Bryant and Kazan entitled "Self Leadership- How to Become a More Effective,
and Efficient Leader from the Inside Out" contains the definition of self-leadership. Self-leadership
from this book is the practice of purposely influencing and controlling ones' behavior, actions,
thinking and feeling. Self-leadership is related to optimism, happiness, consciousness and
emotional intelligence among others.
Self-leadership needs the implementation of three important strategies, namely:
1. Behavior-focused This strategy concerns enhancing self-awareness to manage behaviors
especially when dealing with essential but not-so-good tasks. Here are the ways to
accomplish this strategy
➢ Self-Observation- This increases the consciousness of how, when and why
entrepreneurs behave the way they do in some situations. Most of the times
entrepreneurs evaluate themselves on their accomplishments, on what they have not
accomplished, the situations at hand and their feelings about these situations.
➢ Self-goal Setting This concerns the process of planning goals of entrepreneurs.
➢ Self-Reward This is about paying oneself after accomplishing the set goals with either
tangible or intangible rewards.
➢ Self-Punishment This is allowing entrepreneurs to evaluate their behaviors in order to
reform them. Entrepreneurs though make mistakes must make effort not t repeat
these things again.
➢ Self-Cuing This is making lists and notes or writing motivational posters as reminders of
the planned goals.

2. Natural Reward-This is about making every tasks enjoyable by emphasizing the positive aspects
of each task and its importance.
2. Constructive-Thought- This means creating positive and productive means of thinking that
are advantageous to the performance of entrepreneurs. Identifying negative beliefs and
assumptions and reforming these are still part of constructive thought.

The Creativity Habit

Creativity is the capacity of turning fresh ideas, insights, inventions, products or artistic objects
that are considered to be unique, useful and of value to others into reality. It is the ability to
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observe the world in different and novel ways, to discover unseen patterns, to make associations
between apparently unconnected phenomena and to produce solutions.
A good example of creativity habit is the story of The Aristocrat, the famous restaurant for its
world-renowned Chicken BBQ & Java Rice combination. In the 1930s, Asiang Reyes started The
Aristocrat as a mobile canteen in Luneta, serving sandwiches filled with adobo and other Filipino
viands. Hotdog trucks were in vogue at that time. Reyes created her own version of merienda for
park-goers. Reyes was supposed to name the canteen "Andy" after her eldest son, but changed it
to Aristocrat instead. The canteen prospered, and Reyes and her husband decided to turn it into a
full-time restaurant.
Creative people are open to experiments and do not fear to commit mistakes Entrepreneurs are
said to be creative people because they are constantly in practice of creativeness. An in-depth
observation of the entrepreneurial process indicates that creative thinking is the essential "skill" of
an entrepreneur for the formation of fresh ideas
Simply, creativity is the ability of imagination Imagination makes somebody to reach unexplored
areas. In business, imagination is known as "thinking outside the box". Using imagination, an
entrepreneur can set aside the everyday norms and entertain in his mind something creative and
innovative.
However, there are certain problems in the practice of creativity which are:
1. Fear
2. No craving for disorder
3. Fondness for judging over making ideas
4. Distaste for nurturing ideas
5. Perceived shortage of challenge
6. Failure to differentiate reality from fantasy

The Improvisation Habit

Improvisation in the unstructured way of creating something in the absence of planning. It is the
rational ability to promptly sense, and change direction quickly. It requires improvisation to
function in the uncertain world of business. Entrepreneurs. though start with good ideas often
times possess limited resources, unpredicted market situations or conflicts inside the company
that hinder them to realize initial plans. Hence, quickly entrepreneurs must adjust to any situation
they are in to realize these plans. Improvisation helps entrepreneurs outperform their competitors
who do not possess this habit. People with improvisation habit are always prepared to face
failures. Self-doubt is the common barrier to improvisation. Fear is part of self-doubt which comes
from being unprepared.
Hailing from Iloilo City, Edgar Sia dropped out of college to pursue his own laundry and photo-
developing business at the age of 19. In 2003, 26-year old Sta decided to open the barbecue fast
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food restaurant Mang Inasal. Mang Inasal is an Ilonggo version for "Mr. Barbecue." The first
branch was built at a mall parking lot in his home city due to limited resources. The restaurant
took off When Tony Caktiong heard about Sia's burgeoning business, he decided to buy Mang
Inasal for a total of P5 billion. Sia eventually put the sales of Mang Inasal to other investments like
banking and healthcare. At 42, he's considered the country's youngest billionaire.
Before any action is mindset. Self-leadership, creativity and improvisation are the habits essential
towards entrepreneurial actions. The best idea would be useless unless not leading to actions.
There will be no new business, no new product, no formed organization or anything else.
However, self-efficacy plays a significant role in the development of the intentions and of the
entrepreneurial actions. Entrepreneurial self efficacy is the belief that entrepreneurs has the
capability to start new businesses. Self efficacy is a vital element of the entrepreneurial mindset. It
is also a sign of business intention in moving towards an action, leading to realizable opportunities.
Opportunity Recognition Using Mindset
An opportunity is a means to generate profits by creating unique, innovative and desirable
products or services which are not being found in the market yet. In order for an opportunity to be
feasible, the idea should be able to create value. The most common form of value is economic or
the ability to make profit. However, nowadays it is also vital to consider social value and
environmental value. Social value addresses a social need or provides benefits to the society.
Environmental value is the opportunity to preserve the natural surroundings:
Opportunity recognition is process by which individuals and businesses makes use their
entrepreneurial mindset in order to establish new business or ideas. This is done using continuous
brainstorming to find new and innovative ways of solving problems. Such opportunity could be a
new business concept or possibly new products or services to satisfy customers' needs and
expectations.
In addition, a fresh and new idea that is open for opportunity should be different from the existing
products or services that the market is willing to accept and adopt. These products or services
should be able to solve vital problems the society. Discovering solutions to problems and meeting
customer needs are the core of opportunity recognition.
Entrepreneurs are able to see problems as opportunities. They consider each problem, frustration,
or unmet need they face as a possible opportunity. They are able to understand the world using an
empathic viewpoint, rather than concentrating on their own needs. They change and focus their
consideration to the broader world around them to know the needs of others. They turn to be
attentive, enquiring about the process being done, the missing details and the improvement that
needs to be done. However, the right mindset is not utilized, then a missed opportunity is
expected.

How to Start with Ideas

There are several approaches in forming ideas from the not-so-formal to a more formal way of
creating ideas. Here are some structured strategies of forming ideas:

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1. Analytical-This is about breaking a problem into details or looking at a problem in a common
way to produce ideas on improving or innovating products or services. Only when thought
analytically that correlation of problems is seen.
2. Search This involves linking personal experiences that are significant to the existing problem.
This also illustrates the ability to be resourceful in looking for connections between objects that
appears to have no obvious relationship at first.
3. Imagination-Based This is interrupting doubts and dropping restrictions to produce fantasies or
make believe situations. Sometimes, entrepreneurs need to be playful in their minds so that they
can think of ways that are impossible.
4. Habit-Breaking Sometimes, the human mind needs to depart from usual patterns to stimulate
creative insights. In order to explore a new perspective, entrepreneurs should think of the
opposite of something. The ideas of a person not part of a situation could also be taken
particularly those admirable personalities
5. Relationship-Seeking This is establishing a link between concepts that are not usually
connected. The intention here is to fuel the mind into making connectivity that seems to be
unnoticed.
6. Development - This employs the modification of existing concepts to make improved choices
and new potentials. One way to do this is to brainstorm.
7. Interpersonal. This needs interaction with a group to generate ideas. Brainstorming is also
commonly used to highlight creativity towards new opportunities.

Four Pathways to Opportunity Identification

An opportunity could be in the form of a new product and/or service, new found markets, newly
opened distribution channels, new ways of production or supply or new methods of organizing.
Those that fit the capabilities of an entrepreneur, valuable, rare, expensive to copy are promising
opportunities. Fit means the skills and knowledge of the entrepreneur match the current
opportunities Valuable considers the need of the market. Rare considers the offer to be unique
that it does not exist in the market. Expensive to copy is an entry barrier for most entrepreneurs
who wanted to start a business
Here are the pathways towards the identification of opportunity:

Find Pathway
This pathway assumes that opportunities exist independent of entrepreneurs and are waiting to
be found. Generally, an opportunity is found when the entrepreneur sees a clear problem and
develops a solution. The problem is known to most, but the entrepreneur is "the one who acts on
the potential solution".

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This is the experience of Socorro Ramos, the owner of National Bookstore. She opened National
Book Store in Escolta with her husband with a capital of P200, selling books and school supplies to
students. At that time, Manila was under the control of the Japanese, who imposed censorship on
books and periodicals. To augment their earnings, she and her husband resorted to selling other
items like candles and soaps

Figure 1 Four Pathways Towards Opportunity Identification

Source Neck HM, Neck, C. P. & Murray, EL (2019) Entrepreneurship: The Practice and Mindent

Search Pathway
This is used when entrepreneurs are not quite definite what type of business they want to jump in.
Hence, they engage in an active search to discover new opportunities Everyone has certain
information sets or knowledge bases. Through actively searching these sets, entrepreneurs are
able to access a wealth of information and discover new opportunities. Usually, entrepreneurs find
an area that they are interested in and then start searching for business opportunities.
The story of Ragnarok by the company LevelUp! is a good example of this pathway. During a
business trip in Korea, Nonoy Colayco smelled the opportunity of online gaming in the Philippines.
He knew very well that Filipinos are fond of gaming. Through the help of his son Ben Colayco, a
person passionate with games, the father and son team brought gaming to a whole new level
called Massively Multiplier On-line Games (MMOC). The Internet and gaming was really
progressing that time with Counterstrike as the popular online game. They got the publishing
rights with Oz World and 3D Chat, but it was with Ragnarok from Korea that served as the
accomplishment of Level Up

Effectuate Pathway

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This is a pathway that uses the entrepreneur's skills, knowledge and abilities to unearth an
opportunity that suits him. Such opportunity comes from the experiences, abilities, networks and
entrepreneur's confidence to make action especially during times of uncertainty. Effectuate
pathway is not simply discovering opportunity but really creating it using "what you know",
"whom you know" and "who you are" as an entrepreneur. With only two cake displays and ten
employees, Milagros, Clarita, and Doris Leelin started Goldilocks at a 70-sq-m building space in
Makati. Sisters Milagros and Clarita loved baking and decided to pursue their passion into
business. With the help of their sister-in-law Doris, the Leelin's opened their first branch.
In 1991, Goldilocks launched its franchising program. As of 2015, the bakeshop chain had almost
400 stores across the country, with other branches in the USA Canada, and Southeast Asia. From a
modest capital of P66,000, Goldilocks is now a multi-million food enterprise with more than 4,000
employees.

Design Pathway
This is the most difficult yet the most-value creating pathway. By focusing on the unsatisfied need
of the market particulary the latent ones, the entrepreneur is able to discover valuable
opportunities. Latent needs are those needs that customers do have but do not know they have.
This pathway is considered most difficult because this needs practice and creative thinking before
discovering real unsatisfied needs. Here the entrepreneur is really creating a new market.
The craze for potato fries is everywhere now. Perhaps, this craze evolved from the Western isation
of the Philippines through the entry of foreign companies in the country introducing American-
style meals such as burgers and fries Seeing an opportunity for success, a local entrepreneur
developed an idea instead of competing against these much larger companies with the same
product. An entrepreneur of humble beginnings, Jose Magsaysay Jr., is the current president of
Potato Corner. He worked at Wendy's as a dishwasher, eventually climbing his way up to become
a district manager of Wendy's before opening his first Potato Corner stall in 1992.
A unique selling proposition is what makes a given product one of a kind like Potato Corners. The
factors inherent in Potato Corner's USP are low costs and high efficiency What Potato Corner did
in order to increase sales and further the company was by introducing franchising to the company.
By means of franchising interested partners could help expand the business by paying royalties,
and this in turn made Potato Corner an even more publicly-recognized company. As a result,
Potato Corner became a 75% publicly-owned company with franchisees from all over the globe.
Alertness, Prior Knowledge and Pattern Recognition
Right information is essential in opportunity identification. However, this information should be
rightfully used to create impact
Alertness
In reality information is everywhere. Information are just waiting to be discovered. However, only
entrepreneurs that possess alertness could possibly do this thing. Alertness refers to the ability to
easily pinpoint opportunities in the environment. In fact, these entrepreneurs need not really
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search for information around their environment methodically. With their usual activities every
day. entrepreneurs turn to be alert to existing opportunities. Sometimes, even themselves are
surprise to what they notice around. Some researches reveal that entrepreneurs perseverance and
positivity make them more alert and prepared to identify and act on possible opportunities that
others do not even see.
Like many travelers Mr. Jonathan Jay Aldeguer has a natural impulse to purchase souvenirs. With
hus entrepreneurial eye, he spotted the universality and huge potential for a new business with
souvenirs. The souvenir industry from his entrepreneurial lenses could become a multi-billion-
dollar industry given the twist. In the Philippines, the industry lacked creativity in design, visual
merchandising quality and branding. Filipinos are used to the ethnic-looking designs which were
the norm. He showcased his products as a unique experience of a locality that highlighted his
jump-off concept and his dynamic personality, hence Island Souvenirs was born. Today he has
more than 110 branches in the country.

Prior Knowledge
Prior knowledge is the information gathered from the combined life and work experiences.
Studies shown that entrepreneurs that have knowledge about the industry and market in
combination with broad network are able to recognize better the opportunities around them.
Most entrepreneurs that had knowledge and experiences in a market, industry or customers can
be able to apply these to their respective businesses.
Victoria Belo, more commonly known in the Philippines as Dra. Vicki Belo, was a victim of bullying
in her childhood years. She was usually pestered for being ugly and fat. This experience made her
all the more fascinated in the field of beauty. She imagined herself of becoming somebody who
could make people feel gorgeous and adored. This led her to be in the medical profession,
particularly in the field of dermatology Hence, she obtained a Diploma in Dermatology in Bangkok,
Thailand in 1990. It was in 1990 when Dra. Belo established her first clinic at the Medical Towers in
Makati. The clinic was the first to make known liposuction and lasers in the Philippines. The Dra.
Belo's Belo Medical Group was also the first recognized "ambulatory cosmetic surgi-center in the
Philippines" and certified by the Department of Health (DOH). She is now the noted dermatologist
and "Doctor to the Stars". In addition, Dr. Belo was hailed "Ambassadress of Beauty" for the
Philippines and tasked to endorse the country as a world-class cosmetic surgery destination
Pattern Recognition
Pattern recognition refers to identifying relationships between seemingly isolated things or
occasions. This recognition happens when people make connections of dots to pinpoint and create
opportunities. Often, when "connecting dots" there are constraints that block the way. Real
entrepreneurs ignore these things and try to find ways to look beyond constraints.
Filipina scientist Aisa Mijeno is an example of an entrepreneur that knows pattern recognition.
After resigning from her job in the IT industry and volunteering with Greenpeace, Mijeno was
exposed to "off-grid" living conditions. Once she had seen the restrictions no electricity had on

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day-to-day living. Hence, she decided to find a way to figure out how to produce a light source that
did not depend on electricity, batteries or fuel to work.
In partnership with Philippine incubator, Ideaspace Foundation, Mijeno was able to design and
create Sustainable Alternative Lighting or simply SALL The SALI Lamp is an environment-friendly
and viable alternative light source that makes use of saltwater, making it appropriate to those
residing in coastline areas. It can also function well in far-flung barrios. Using only two table
spoons of salt and one glass of tap water, this ecologically designed lamp lights for eight hours.
The concept of the SAL! lamp is the chemical conversion of energy. It uses the scientific process
behind the Galvanic cell. However, in place of electrolytes, the SALt lamp utilizes saline solution,
thus it is harmless and non-toxic.
From Idea Generation to Opportunity Recognition
In order for an idea to be feasible, it must be fresh or inimitable or at least a twist from an existing
concept that will be acceptable and adoptable in the market. The concept should be something of
value to consumers, because it is a need, a desire, useful and has the capacity to earn profit. Not
all idea could be an opportunity. The best ideas are those that could be transform into doable
opportunity.
The IDEATE Method is an ideation process empirically proven to help budding entrepreneurs
recognize problems, cultivate innovative solutions, and choose the best creative entrepreneurial
idea. This model follows the process of Identify, Discover, Enhance, Anticipate, Target, and
Evaluate:

Identify Identifying problems that customers are After quitting his job, Brian
trying to solve, are spending money to solve, Chesky drove to San Francisco to
but still unsolved to the satisfaction of crash with a college friend, Joe
customers This is also about identifying Gebbia, who also recently quit
solutions to this problem. his job. They were both having
trouble making the upcoming
rent payment. Then they
realized that the 2007 Industrial
Design Society of America
conference was coming up and
that hotel rooms would be hard
to get.
Discover Actively searching for ideas in problem-rich Gebbia, who had three air
environment where there is social and mattresses suggested they turn
demographics change, technological change, their apartment into an "air bed
political and regulatory change and/ or and breakfast.
change in the industry structure.
Enhance Taking the ideas and expanding to new After setting up a simple
applications or adding innovative twists. Or website:
simply enhancing existing ideas. (airbedandbreakfast.com), they
managed to book out their
whole apartment in three days,
solving their rent problem.
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 Anticipate Studying change and analyzing future The duo, who had met at college
scenarios as they relate to social, at the Rhode Island School of
technological, and other global changes and Design, thought acting as tour
trends guides to designers would be a
fun way to make money.
Target Defining and understanding a particular A customer for Airbnb is the one
target market, validating new ideas with who adds up to the company's
early adopters. revenue. He can be a host who
offers his space for rent and lists
it on the platform or he can be a
traveler who books a space.
Table 3 The IDEATE Model for Opportunity Recognition with AIrBnB as Example
Source: Adapted from Neck, H. M., Neck, C P. & Murray, EL (2019) Entrepreneurship: The Practice
and Mindset https://www.businessinsider.com/how-airbnb-was-founded-a-visual-history-2016-2

How Entrepreneurs Find Opportunity

By H. James Wilson, Danna Greenberg, and Kate McKone-Sweat

Source: https://hbr.org/2011/09/entrepreneurs-find-opportunity

In 2003, Jim Poss was walking down a Boston street when he noticed a trash vehicle in action. The
truck was idling at a pickup point, blocking traffic, with smoke pouring out of its exhaust. Litter was
still all over the street.

There has to be a better way, he thought to himself.

Looking into the problem, Poss learned that garbage trucks consume more than 1 billion gallons of
fuel in the US. alone. They average only 2.8 miles per gallon and are among the most expensive
vehicles to operate. In the early 2000s, municipalities and waste collection services were
considering more fuel-efficient vehicles and better collection routes to reduce their overall costs
and environmental footprint. Poss was not convinced that this was the right approach.
Through discussions with diverse stakeholders, he turned the problem upside down: the answer
might not be about developing a more efficient collection process, but about reducing the need
for frequent trash collection. As he considered this solution, he discovered multiple benefits: if
trash receptacles held more trash, they would not need to be emptied so often; if trash did not
need to be collected so often, collection costs and associated pollution would be reduced; and if
receptacles did not overflow, there would be less litter on the streets. There were many
advantages to this approach.

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By applying the solar technology he used at work, Poss envisioned how a new machine might
better manage trash. His initial concept of a solar-powered trash compactor was dismissed in
favor of other ideas for environmentally friendly inventions, including a machine that would
generate electricity from the movement of the ocean. Nonetheless the problem and the potential
solutions continued to occupy his mind. "I took pictures of trashcans on my honeymoon," Poss
confessed.
He began to involve others, choosing a team based on who he knew might be interested within his
social network. "We are motivated in part because we care about the environment and in part
because we know this can be financially successful." Poss and his assembled team experimented
with a variety of options and finally returned to the Big Belly an innovation that provides clear
solutions to the problems he noted on the city street that day. The current version can hold up to
five times more trash than traditional receptacles. As a result, it dramatically decreases the
frequency of trash pickup and cuts fuel use and trash-truck emissions by up to 80 percent.
Entrepreneurial leaders like Jim Poss create opportunities using three practices that we have
observed again and again in our research of over 1,500 organizations in the past two years. While
each practice is separately rooted in existing theory, entrepreneurial leaders distinguish
themselves by adroitly circulating between all three, as Poss's story illustrates
Relying on self and social awareness Entrepreneurial leaders shape opportunities within the
context of who they are, what they know, and who they know. Notice how Poss began with a
problem he experienced directly in his life. linked that concern to his expertise in solar technology,
and then connected his ideas with others in his community and his broader networks.
Employing cognitive ambidexterity. This practice is characterized by switching flexibly back and
forth between prediction" and "creation" approaches to thought and action. The prediction
approach which is based on analysis using existing information works best under conditions of
certainty and low levels of perceived uncertainty. The creation approach, on the other hand,
involves taking action to generate data that did not exist previously or that are inaccessible. Note
how Poss used the prediction approach as he analyzed available operational and financial data on
trash truck fuel consumption. In situations where data wasn't available. Poss generated data
himself by creating conversations and prototypes to guide his next steps.
In some instances prediction and creation logics are portrayed as incompatible methods of
thought and action. However, in our research into entrepreneurial leadership we found this
distinction to be artificial. Through conscious effort, one way of thinking can be used to inform and
progress the other way of thinking making the approaches complementary. Moreover, by
engaging prediction and creation approaches, entrepreneurial leaders are able to create greater
value than if they had tried only one of these approaches.
Considering social, environmental, and economic value simultaneously. We use the acronym
SEERS which refers to social, environmental and economic responsibility, and sustainability to
capture the full scope of impacts that entrepreneurial leaders consider at once. Consider how Poss
was able to simultaneously consider customer benefits (reduced costs for municipalities) and
environmental impact (lower fuels emissions) without instinctively privileging one dimension over
another.
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