[MUSIC] Well, hello again. Welcome back to getting the right mindset, the first course in our specialization on how to start a business. At the end of our last lesson, we began our pursuit to try and get an understanding of the four sets of principles we had laid out that, on the foundation for what we've learned as the new business paradigm. In this lesson, we're going to look at the propositions are rules of conduct that are grouped into what we call the opportunity principles. Specifically at the end of this lesson, you will be able to approach starting or acquire your business, buy these opportunity principles. These principles guide or provide a foundation for searching for opportunities with a right perspective or expectations operating this search for the right focus and priorities and executing the series of startups or acquisition steps in the appropriate sequence. One of the most consistent characterizations of an entrepreneur across all definitions is the ability to recognize, evaluate, and exploit opportunities. Opportunity recognition is equally important for small business owners as they have to select the right franchise or identify the right business location. Opportunity recognition, evaluation and exploitation is at the core of all business success. So exactly what is an opportunity? An opportunity generally is a set of circumstances, situations or conditions that makes some particular action or achieving some goal favorable. Our first opportunity principle has to do with the do ways to view or identify an opportunity. In Roman mythology Janus was the God of new beginning. The two headed enemy was able to view the future as result of clearly viewing the past. Just as the image was often use for doorways, it's appropriate that this perspective be at the beginning point of your business startup process. Looking forward is analogous to a discovery approach in terms of identifying opportunities. This takes an objective perspective of an opportunity. It assumes it is external to the business and its owners. It exists within itself as a result of identifiable, competitive, or macro environmental conditions. Looking back on the other hand, is analogous to the creation approach in terms of identifying opportunity. This perceives an opportunity subjectively. It assumes that it lies within the actions and insights of the business owner his or herself. It exists only to the extent, the owners alertness and effective processing of information about competitive, and or macro environmental conditions, can guide that entrepreneur to allocate resources directly towards achieving their goal. Whether you're using a discovery approach or a creation approach. Recognition is equally important. One might have the right equipment, be in the right location. While successfully panning a river to discover gold presumes you know what a gold nugget looks like. Having the right material, having the skill to design and sew in order to create some garment for an event, presumes you have some vision of what's required for the event. So whether discovery or creation, opportunity recognition plays a critical role. In some cases, market or technology or social trends make opportunity recognition relatively easy. The readers of the website engineering.com gave their predictions for the dramatic growth of 3D technology. In light of such a trend, it's not surprising to see a company like fictiv recognize an opportunity. This company offers a service that rapidly produces 3D printing prototypes and then, delivers them the same day. In most instances, opportunities do not present themselves quite as clearly. They don't always knock. Thus this principle of searching for opportunities using a Janice perspective emphasizes the fact that behind any market industry, or technology disruption. Behind any change in the status quo, or some chaotic event, or associated with any unexpected outcome from some action taken. There exists an opportunity. One just has to be alert enough and persistent enough to look. Consider this example. In the midst of an unprecedented economic revival in Detroit, driven in fact mainly by entrepreneurs. Business owner Tommy Walker turned a city's frustration and a hoodie into a symbol of renewal and revival, and created a successful clothing line, having copyrighted the blank versus anybody logo. Being an alert and creative problem solver is one thing, but every great processor of information is dependent upon having good information. Thus, our third opportunity principle is prospective business owners must immerse themselves in the markets and industries that parallel and compliment their passions. Research has shown that the more entities and niche groups in a perspective owner's social and information network, beyond that individuals close, personal, and professional. Friends and family. The greater the number of opportunities identify, and the greater the likelihood of success. Assuming a perspective business owners discovers or creates multiple opportunities, they will need to be prioritized. Michael A business blogger provided a framework for this prioritization. Opportunities can be characterized based on the pain intensity of the customer's problem that is being addressed. This approach asks, does the business owner's proposed product or service address a problem that creates pain for a customer that needs morphine, aspirin, or a vitamin. The morphine category is the most desirable business scenario. The characteristics of this situation are, that people know they have the problem, the problem is severe. It disrupts their life and they are actively looking for solutions. Morphine opportunities have the potential for breakthrough market success like the iPod or iTunes. The aspirin category represents moderate pain this is characterized by people knowing that they have the problem, but the problem is variable, like a headache. It makes life uncomfortable, but it doesn't totally disrupt one's day. Individuals aren't aggressively looking for solutions. If one's available, they'll take it, but they don't shut down their daily activities just to find the aspirin or find the solution. Aspirin opportunity's had a potential for market success. Perhaps dramatic market success would typically face a lot of competition and moderate profits. An example might be the carrot. Finally, vitamin products unlike morphine or aspirin don't really relieve an existing problem or pain. They seek to it either to avoid pain in the future or to achieve some desired state of health in the future. These solutions require a lot of what we call, push marketing. It's characterized by the fact that potential customers have to be educated or even enlightened that they have the problem, and then they have to be convinced to acquire a solution to the problem. There may be some initial adopters. But the product has trouble penetrating the majority of the market. Consider a product like the Go Pro. That's our new business paradigm that we've found has had such a positive impact on the success of start ups. Should be executed on the foundation of these opportunity principles in addition to the process principles that we've discussed earlier. Specifically, opportunity should be both searched for and created by the efforts of the entrepreneur. Whether the approach be discovery or creation, opportunities will always accompany market industry or technology disruptions, chaotic events, or some change to some status quo. The ability to identify, evaluate and exploit opportunities is that the core of being an entrepreneur. Success is essentially a numbers game. The more opportunities evaluated, the greater the chances of success. And the more opportunities will result from broadening and diversifying one's social and information network. Hopefully, given a plethora of opportunities, they're going to need to be prioritized, and that prioritization needs to be based on the pain levels present for potential customers. [MUSIC]
