New entrepreneurs often believe they have to invent something in order to create an opportunity. In fact, inventors and entrepreneurs are quite distinct from each other—invention and entrepreneurship are different, but often overlapping, processes that involve different and precise skills. Entrepreneurs tend to be innovators. They take the inventions of others and either put them to work in the marketplace or find new ways of applying them to problems, needs, wants, or challenges.

Here is an example of the innovative application and combination of new technologies from the consumer electronics industry.

Home video cameras are common today, but there were significant technological challenges to overcome before they became a reality. For example, in their earlier "analogue" format (non-digital), in order to record the amount of information onto videotape that moving pictures require (30 images per second) the tape would have to pass very quickly over the recording heads, thereby requiring an enormous amount of tape. Inventors solved this problem by mounting the recording heads on a spinning drum and having the tape pass by relatively slowly while the drum spins very quickly. The same process made videotape players possible, which started the new electronics revolution. Entrepreneurs quickly spun off innovative businesses such as video rentals. If you peek into the slot in your VCR, you can see this silver drum quite easily. This invention led to a series of yet more innovative spin-offs. Although it was invented for video, this same process allowed audio engineers to solve a similar problem—how to produce high-fidelity recordings without using vast amounts of tape. By mounting audio heads on the spinning drum, they were able to produce very high quality audio, which you get with hi-fi VHS videocassette decks, for example. When digital imaging was developed, the pictures it produced were high quality, but required vastly more storage space—as much as a megabyte per image. At thirty images per second, this created a daunting problem. However, digital audiotape had already been invented, which allowed audio signals to be recorded, using a static audio head, in digital format. Designers combined the rotating video recording drum concept with digital audiotape and applied it to digital video recording. As a result, a single small digital audiotape is able to hold a full hour of digital video, the equivalent of 108,000 megabytes (108 gigabytes) of information! With high quality full-motion digital video now possible, more innovative applications followed. The same tape that can hold an hour of video could also hold more than 600 high quality still images, which meant that digital video cameras could also work as still cameras. However, innovators were also at work creating ever smaller hard drives for computers, which eventually allowed them to use this technology for image storage in digital cameras. At the same time, memory chips are becoming more powerful as well, making possible....

...well, you get the idea. One invention leads to a myriad of innovative applications. Try the brainstorming techniques described below to see if you can create opportunities by applying new technologies to new and old problems or applications.

Just as your first idea isn't likely to be your best idea, the first opportunity may not be the best either. For example, you may discover that the aging population will mean a growth in the health care field. But which part of this vast area holds the most and best opportunities? Home care? New drugs? Better nutrition? Health care centres? Education? Before you commit yourself to the hard work it will take to research an opportunity, make sure you've brainstormed as many variations of it as you can. Try the brainstorming activity below with your friends to see how many opportunities you can come up with. Keep the tips below in mind as you go.

Tips for Maximizing Creative Activities

• Choose an unusual setting or rearrange the setting you're in. Humans tend to get into ruts, which restrict creative thinking. Try these activities outside, perhaps on your deck or in your backyard. Wear unusual clothing and arrange yourselves randomly, rather than sitting in ordered rows or circles.
• In creative exercises, there are no wrong responses or answers. Anything goes. Go for volume and don't worry about quality at this point. Make sure everyone gets involved.
• Leapfrog off each other's ideas. If someone says "frog," another might say "pond," for example.
• Record your ideas as you go. Have a volunteer write down ideas, perhaps linking them in the order in which they're generated.
• Have fun. We tend to be more creative when we're having a good time.

Brainstorming Activity

Materials: Flip-chart paper, different coloured felt pens

1. Form a group of three or more people. They can be friends, classmates, or business associates. It doesn't matter.
   
   
2. Generate a list of problems or challenges that individuals in the group feel represent broad unsatisfied needs. We'll assume "aging population" is on the list.
   
   
3. Write one item from the list (for example, "aging population") in a circle in the centre of a sheet of flip-chart paper.
   
   
4. In a three-minute, timed exercise, have everyone blurt out whatever comes into their heads when they see the words "aging population." Before starting, encourage people to leapfrog off each other's ideas and, remember, there are no wrong ideas. Get as many as possible.
   
   
5. Record all these ideas on the sheet as you go.
   
   
6. If you have enough people to form two groups (of even three each, for example), exchange sheets and run another three-minute session where each group adds to the other group's ideas. Record these in a different colour to see which group contributed which ideas.
   
   
7. When you're finished, tape the sheets up on a wall or chalkboard and discuss the ideas that you've come up with. Underline the ones that seem the most interesting or promising and then choose one, for example, "health care."
   
   
8. Run another brainstorming session, this time with "health care" as the central idea.
   
   
9. Run one more session based on the outcome of the previous one, and you should end up with one specific need that you might be able to address as an opportunity.

The only way to be sure that you have identified a solid opportunity is to research and evaluate it thoroughly. Use the questions, below, to guide you through the process of researching and evaluating an opportunity you've identified.

1. What need, want, problem, or challenge does your opportunity address? Describe it in detail.

   For example, let's say that you perceive a need for home care for the elderly.

   Whose need is this? Is it the need of the elderly or the need of traditional health care services to create space for younger patients? Do the children of elderly people need this service for their parents or grandparents? Is it a larger need for society to keep the elderly in their homes longer for a better life as they age?

   What needs are you including in home care? Is this a health care need or a lifestyle need? If it is a health care need, is there a need for prescription drug counselling? Post-hospital care for those recently treated for illness? Nutrition counselling? Physical rehabilitation after injury? If this is a lifestyle need, is there a need for companionship? House and yard maintenance? Grocery shopping?

   You need to be absolutely clear about what need you're addressing and whose need it is. For example, if you are selling pet food, are you satisfying the pet's needs or the pet owner's need to feed his or her pet?
   
   

2. Is this opportunity reflective of a "niche," or relatively small, market or of a large market? How large is the market? How many elderly people are in need of the service you've decided to offer? You need to know as closely as possible how many possible clients you would have.
   
   
3. Where is your market located? Are there large numbers of your potential clients near you? Do you need to be physically located near your market or can the service be operated over a distance?
   
   
4. Who is your competition? How many competitors are out there? What will you offer that they do not? Is there room for one more competitor or will you have to take market share from another competitor? If so, how will you do that?
   
   
5. What price will the market bear? What do competitors charge? Can you make a profit if you charge the same as your competitors?
   
   
6. What conditions exist that allow this opportunity to exist? Describe the "Window of Opportunity."

   Window of Opportunity

   Opportunities do not exist equally for everyone, nor are they constant through time and space. That is, what is an opportunity for you where you are may not be one for someone else where they are. And an opportunity today may not be one next year. Consider these points one at a time:

   For whom does this opportunity exist? In our home care example, if you have experience in health care with the elderly, the window of opportunity is wider for you than for someone who knows nothing of either aspects. If you enjoy working with the elderly, the window opens wider for you than for someone who is doing this only for the money. If you live near your target market, the window is wider still (assuming you need to be near the market). If you have, or can get, the necessary resources to generate a business to meet this opportunity, the window is open for you. If not, the window is closed to you, but possibly open to someone else.

   How long will the opportunity exist? Often opportunities evaporate over time. For example, by selling directly to consumers, the Internet is closing the window of opportunity to serve the needs of consumers through retailers. In the home care example, is there a possibility that the government may step in and run this service itself? Is there a trend toward families of the elderly taking care of their own? Might a large facility open up in your community that would compete with your business? Could a large competitor simply undercut your prices and put you out of business after a short while?
   
   

7. Does this opportunity require resources that are beyond your reach? For example, there may well be a need for a 100-seat jetliner, but few entrepreneurs would be able to muster the resources to address that need.
   
   
8. Does this opportunity hold great interest for you? Can you see yourself passionately involved in pursuing it? If you're only in it for the money, you may well lose interest before you make any money.
   
   
9. What is the "opportunity cost"? If you take this opportunity, you'll have to give up any other opportunity that might also interest you. Are you prepared to do that?
   
   
10. Have you conducted a full-scale search of the Internet, libraries, and other related sources of information to find out everything you can about this potential opportunity? You must be familiar with the history of this problem/need/want/ challenge as well as with current developments.
    
    
11. Are there any legal ramifications related to this opportunity? Is any necessary legislation in place, or do new laws have to be passed? Could pursuing the opportunity put you at risk of breaking the law in any way? For example, unless you are qualified to do so, it may not be legal for you to administer drugs to the elderly.
    
    
12. After you've answered all of the above questions and issues, what is your gut feeling about this opportunity? Does it feel right to you, or does it leave you feeling vaguely uneasy? If you can't decide any other way, go with your gut feeling, as it may well be the right one.

Here are some links that can help you learn more about identifying opportunities: