Chapter 2 Creation of New Venture

Chapter
2
Creation of new venture
Outline:
• Creativity And Entrepreneurship
• Business Idea
• The creative process
• The importance and commercialization of technology-based
innovation
• Product Development Processes
• Technology Transfer
• Intellectual Property
From Creativity to Entrepreneurship
Creativity, Innovation and Entrepreneurs
Creativity is thinking new things, and innovation is doing

new things
Researchers believe that entrepreneurs succeed by

thinking and doing new things or old things in new ways .
Entrepreneurship = creativity + innovation

What does it take to be creative ?
A Initial Idea
A Willingness to engage in difficult work
Customers who are willing to buy your idea

Business Idea?
What is a Business Idea?
• A business idea is the response of a person or
persons, or an organization to solving an identified
problem or to meeting perceived needs in the
environment (markets, community, etc.).
• Finding a good idea is the first step in transforming

the entrepreneur’s desire and creativity into a
business opportunity.
Why Generate Business Ideas?
• You need an idea to start a new business
• Business ideas need to respond to market needs
• Business ideas need to respond to changing consumer wants and
needs
• Business ideas help entrepreneurs to stay ahead of the
competition
• Business ideas use technology to do things better
• Business ideas are needed because the life cycles of products are
limited
• Business ideas help to ensure that businesses operate effectively
and efficiently.
• Business ideas can help specific groups of people (elderly,
disadvantaged, those with disabilities)
• Business ideas help to solve natural resource scarcity, pollution
and depletion/reduction
Sources of Business Ideas
Good business ideas are a prerequisite for initiating a new

business venture. However, good business ideas do not usually
just occur to an entrepreneur.
Sources:
– Hobbies/Personal Interests
– Personal Skills and Experience
– Media (newspapers, magazines, TV, Internet)
– Business Exhibitions
– Surveys
– Customer Complaints
– Natural scarcities and pollution
– Changes in Society
– Brainstorming
– Being Creative
Evaluating a Business Idea
Each business idea should be evaluated in terms of:

• Present market: The size of the presently available market
must provide prospects of immediate sales volume to support
operations
• Market growth: There should be prospects for rapid growth
and high return on invested capital
• Costs: Some of the costs of production will include: a) start up
costs, b) costs of raw material inputs, c) labor costs, d) selling
costs, e) efficiency of production processes, f) service,
warranty, customer complaints and g) patents and licenses.
• Business risks: In assessing business risk consider the following
factors: Market stability in economic cycles, Technological risks
, Import competition Size and power of competitors,
Legislation and controls, Time required to generate profit
Creativity: Exercise
• See the figure below. Link all nine dots with only four straight lines,
which have to be drawn without any breaks and in one.
Nine dots
Cont…
Nine dots
Cross the line / think outside the „box“
Managing for Creativity
• Barriers to Creativity Enhance Ceativity
• Searching for the one “right”
• Expecting creativity
answer
• Expecting and tolerating failure
• Focusing on “being logical”
• Blindly following the rules • Encouraging curiosity
• Constantly being practical
• Problems=opportunities
• Viewing play as pointless
• Trainings to tap one’s creative
• Becoming overly specialized capacity
• Avoiding ambiguity
• Capture ideas and harness
• Fearing looking foolish
them
• Fearing mistakes and failure
• Believing that “I’m not • Providing support
creative”
• Rewarding creativity
• Invite lateral thinking
The creative process
• This is the seeding stage of a new idea.
• It is the stage where the entrepreneur recognises
that an opportunity exists.
• The idea germination takes place according to
interest, curiosity of the entrepreneur
• the first stage of the creative process is the preparation stage. In this
stage, you’ll research, gather knowledge, and gather resources.
Depending on your own particular area or industry, you might read
around your subject, study past masters and best in class examples or
attend events and trade shows. You might brainstorm initial ideas or
background concepts with colleague
• On the basis of the idea, interest and curiosity the need is judged by the
entrepreneur and he starts looking for the answer to implement the idea.
• If the idea is to launch a new product or service then market research is
conducted.
• That happens because the seed of curiosity has taken form of an idea, the
entrepreneurs foresee the future of the product
 After completing the preparation stage, the creative process moves into the
incubation stage. Incubation is the crucial second stage where you put all
that preparation to the back of your mind, allowing it subconsciously to
process ideas and hopefully turn these into a creative solution. It is a stage
where you can relax and take breaks from your daily work routine and let
your mind wander. Activities like exercising, engaging in hobbies or doing
nothing at all can help the mind relax and allow new ideas to form.
 Give the subconscious time to reflect on the information (daydream, relax,
etc)
 The entrepreneur starts thinking about the idea and implementation in his
sub-conscious mind
 Study the problem/opportunity in a wholly different environment
 E.g studying the pros and cons of manufacturing the product before he
had launched it.
• In this period of illumination the idea re-surfaces in
realistic way.
• The entrepreneur comes out with viable plan to give
practical shape by collecting raw-material, arranging
funds, policy–making for the implementation of
idea.
• Also called the validation or testing stage.
• Validate the idea is accurate and useful (conduct
experiments, prototypes, etc)
• This is the most difficult phase of creativity as
obstacles begin to appear.
• This is the developing stage in which knowledge is
developed into application
Innovation
The importance and commercialization of
technology-based innovation
Increasing momentum of innovation

Markets and technologies are changing more quickly than ever. Thus,
speed is one of the key competitive weapons.
What are the major advantages of speeding products to be launched on
the market?
 Speed yields advantage over competitors:
 Speed yields higher profits:
 Speed means fewer surprises:
Drivers of innovation
• Technology advances:
• Changing customer needs:
• Shortening product life cycles:
The relation between the factors
Quality
Cost Time
 Innovation happens when one is improved without

negatively affecting the other two.
 Maintain the same quality reducing either costs or time

Ideas vs Opportunities
• Ideas and opportunities are not
interchangeable terms, although they are
closely related. Here is a breakdown of the key
differences between the two:
• Ideas:
 Ideas refer to thoughts, concepts, or plans that are
generated by individuals or groups.
 They can be original or a combination of existing
knowledge and experiences.
 Ideas are typically abstract and have not yet been put
into action.
 They may require further development, refinement, or
validation before becoming an opportunity.
• Opportunities:
 Opportunities arise when an idea or set of
circumstances align with favorable market conditions,
customer needs, or emerging trends.
 Opportunities are more concrete and represent a
potential avenue for creating value or solving a problem.
 They often have market potential, profitability, and
growth prospects.
 To seize opportunities, ideas need to be cultivated into
actionable plans, backed by a viable business model.
• In summary,
 ideas are the initial sparks of imagination or inspiration,
 while opportunities are the tangible circumstances or
conditions where these ideas can be transformed into
successful ventures or initiatives.
 So, ideas can lead to opportunities if they are properly
developed, evaluated, and aligned with the right market
conditions.
Commercialization of technology-based
innovation:
• Commercialization refers to the process of bringing a
technology-based innovation to the market and turning
it into a commercially viable product or service.
• It involves identifying potential customers,
understanding market needs, conducting market
research, and developing a business model to bring the
innovation to market.
• Commercialization often requires additional
investment to fund product development, marketing,
and distribution channels.
Commercialization of technology-based innovation:
• Companies need to consider intellectual property protection,

such as patents, to prevent others from copying or imitating
their technology-based innovation.
• Marketing and branding efforts are essential to create
awareness and demand for the innovation among target
customers.
• Successful commercialization often involves partnerships or
collaborations with other companies, such as distributors or
manufacturers, to reach a wider market.
• Continuous innovation and product improvement are necessary
to stay competitive in the market and meet evolving customer
needs.
Formation, development, and growth of
technology-based new enterprises:
• Formation of technology-based new enterprises involves
identifying a business opportunity based on a
technological innovation and establishing a new company.
• Entrepreneurial mindset and skills are crucial for the
founders of these enterprises, as they need to take
calculated risks and navigate through uncertainties.
• Government support, such as grants or tax incentives,
might be available to encourage the formation of
technology-based new enterprises.

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Chapter

Creativity is thinking new things, and innovation is doing

Researchers believe that entrepreneurs succeed by

Entrepreneurship = creativity + innovation

A Willingness to engage in difficult work

Customers who are willing to buy your idea

• Finding a good idea is the first step in transforming

Good business ideas are a prerequisite for initiating a new

Each business idea should be evaluated in terms of:

Increasing momentum of innovation

 Innovation happens when one is improved without

 Maintain the same quality reducing either costs or time

• Companies need to consider intellectual property protection,

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