An idea is not an opportunity. Opportunities require recognition of a match between a need and a potential technology or solution. They also require development and elaboration of how this may flesh out. In other words, they take work. They are not “aha” moments.
Who are opportunity recognisers?
Lately, there’s talk about T-shaped people. These are people who know a little about a lot of things (broad) and a lot about at least one thing (deep). Opportunity recognisers have experience in a domain and across domains. They develop their T-shape that way.
Who are opportunity elaborators?
Imagination and curiosity and openness and lateral thinking are some of the skills and characteristics we see in people who elaborate opportunities. They may not even recognise the opportunity in the first place, but once it’s uttered in even the most innocuous way, these people can run with them.
Who are opportunity evaluators?
When you have uncertainty, how does one adequately evaluate an opportunity? We have found that good investors and good corporate sponsors evaluate opportunities not on the basis of probabilities, rather, they consider the robustness of the opportunity. They recognise that Pivots will likely occur, and ask, “If this direction doesn’t work, are there enough others such that we’re likely to find gold there somewhere?” The richness of the application possibilities is what drives opportunity evaluation in the world of uncertainty, rather than net present value (NPV) calculations. And that’s true for both environments: startup and corporate. Of course, this is easier said than done. We’ve heard from many venture teams in both contexts that finding the right investor or sponsor who can evaluate an opportunity in this manner is a rare thing indeed. That’s why we offer the tools: to help develop opportunity recognisers in this counter-intuitive manner.
The opportunity elaboration process is turbocharged when there is continuity of people doing it. For example, an opportunity recogniser has experience can be interpreted to mean that that person can connect an idea he or she encountered last month with one he or she sees now and another heard from a friend. This is the same person picking up and connecting disparate pieces of information.
On the corporate side, we don’t have to rely on the same single person. Some of the companies we’ve studied put opportunity screening panels together and try to keep the same people on the panel over time. That small team reviews ideas and can begin to detect patterns in ideas over time, or can connect one idea today with one that came through last month, much like we rely on one person in the startup world to do. Here, organisations have an advantage over the entrepreneur. But the entrepreneur’s VC team is a different matter. They operate much like the opportunity-screening team would in a company. The primary difference is that the VCs cannot force two independent startups to join forces if they see a symbiotic relationship between those opportunities. But a company can. The other difference is that VCs do not always see opportunities as early as the corporate opportunity-screening team might.
Many would-be entrepreneurs are scared to discuss their ideas openly and prefer to work in what they call “stealth” mode. This mode requires utmost secrecy and minimal interaction with the market. One can easily see the problems of operating in such a mode, as the aspiring entrepreneur runs the risk of launching a product or service that nobody wants. Though an idea can be shared with others, the outcome of going through an innovation process cannot. Also, the fear of stealing an idea cannot outweigh the benefits from testing an opportunity in the marketplace.
This is an edited extract from Pivot: How Top Entrepreneurs Adapt and Change Course to Find Ultimate Success by Remy Arteaga and Joanne Hyland, published by Wiley, RRP £32.99
About the authors
Remy Arteaga has more than twenty years’ experience in entrepreneurial, innovative, and strategic roles. Remy began his career with GM, where he was part of an internal consulting group, the sole mission of which was to change the way GM did business.
Joanne Hyland is President of the rInnovation Group (rInnovation) and former Vice President, New Venture Development, at Nortel Networks. As a Founding Partner in rInnovation, Joanne works with major corporations across diverse industries in the U.S., Canada, Denmark, Germany, and elsewhere to link innovation with strategy and to develop systems, leadership and culture capabilities that drive growth and corporate renewal.