Aspiring entrepreneurs can come up with ideas all day long, but not every idea is necessarily a good

idea. For an
idea to be worth pursuing, we must first determine whether the idea translates into an entrepreneurial
opportunity. Entrepreneurial opportunity is the point at which identifiable consumer demand meets the feasibility of
satisfying the requested product or service. In the field of entrepreneurship, specific criteria need to be met to move
from an idea into an opportunity. It begins with developing the right mindset—a mindset where the aspiring
entrepreneur sharpens their senses to consumer needs and wants, and conducts research to determine whether the
idea can become a successful new venture.

In some cases, opportunities are found through a deliberate search, especially when developing new technologies. In
other instances, opportunities emerge serendipitously, through chance. But in most cases, an entrepreneurial
opportunity comes about from recognizing a problem and making a deliberate attempt to solve that problem. The
problem may be difficult and complex, such as landing a person on Mars, or it may be a much less complicated
problem such as making a less expensive and more comfortable mattress, as companies like Casper and Purple did.

Identifying Opportunity
A good place to begin your entrepreneurial quest is to read as much as you can, especially with new technology
developments, even outside the field you work in. Remember that as technologies start to emerge, we often do not
yet understand their commercial potential. For example, microwave technology was first applied in radars to track
military submarines. But, thanks to a curious man named Percy Spencer and the accidental melting of a peanut bar in
his pocket one day while tinkering with the technology, the microwave was born. It would take a few decades for it to
be produced at a price the mass market could afford.5

Think of drones, too. When they were invented, the multiple uses for this technology were not yet identified. Now,
drone technology is being used by real estate firms, package delivery services, agriculture, underwater search and
scientific research, security, surveillance, and more. Being tuned in to new experiences and information can lead to
identifying opportunities. Entrepreneur Fred Smith found a system to solve the problem of overnight package delivery
in founding Federal Express.6 As a college student, he wrote a paper for an economics class where he discussed his
business idea. He earned only a C on his paper, by the way. He received his bachelor’s degree in 1966 and went on
to found Federal Express a few years later, which, in 2019, generated almost $70 billion in revenue. 7 Prior to starting
Federal Express, Smith was in the US Marine Corps serving in Vietnam where he observed the military’s logistics
systems.8 This is where he honed his interest in shipping products while in the military. Many entrepreneurs start their
business after working for someone else and seeing a better way to operate that business, and then start their own
competing business.

Note that entrepreneurs need to be careful about starting competing businesses. See Telling Your Entrepreneurial
Story and Pitching the Idea and Business Structure Options: Legal, Tax, and Risk Issues for information on
noncompete clauses and agreements. Indeed, some entrepreneurs, like Smith, conduct research as an idea
percolates, paying attention to new experiences and information to further advance their idea into an entrepreneurial
opportunity. However, they must ensure that the existing product, service, or business process is not covered by any
active and protected intellectual property (patent, trademark, copyright, or trade secret), as discussed in Creativity,
Innovation, and Invention and Fundamentals of Resource Planning.

Identifying consumer needs may be as simple as listening to customer comments such as “I wish my virtual orders
could be delivered more quickly.” or “I can never seem to find a comfortable pillow that helps me sleep better.” You
can also observe customer behavior to gather new ideas. If you are already in business, customer feedback can be a
simple form of market research.

When purchasing an existing business or franchise, the process is a bit different. The first step will usually be
searching for a business that suits your experience, personal preferences, and interests. You will still want to conduct
research to understand the industry, the local market, and the business itself. Then, you will begin to examine all
available company financial data. If purchasing a franchise, you may want to contact other franchise owners and
discuss their experience in working with the franchisor.

Drivers of Opportunity
Some recent drivers for change in the entrepreneurial space include new funding options, technological
advancements, globalization, and industry-specific economics.
  Increased access to capital through social media sources like crowdsourcing (see the chapter on Problem
Solving and Need Recognition Techniques for a more detailed discussion of crowdsourcing) is having a
significant impact on entrepreneurship in that it enables underserved people and communities—such as
women, veterans, African Americans, and Native Americans, who otherwise might not be able to start and
own a business—to become entrepreneurs.
 Technological advancements continue to provide new opportunities, ranging from drones to artificial
intelligence, advancements in medical care, and access to learning about new technology. For example,
drone technology is being used to map and photograph real estate, deliver products to customers, and
provide aerial security and many other services. Cell phones have spawned many new business
opportunities for a wide range of cell phone accessories and related products, ranging from cell phone cases
to apps that help make our cell phones faster for business and personal use.
 Increased globalization drives entrepreneurship by allowing importing and exporting to
flourish. Globalization also helps spread ideas for new products and services to a world market instead of a
local or regional market. Combined with the Internet and computer technology, even small businesses can
compete and sell their products around the globe.
 Economic factors could include a strong economy that fuels other businesses. For example, growth in the
housing market fuels growth for many housing-related products and services, ranging from interior
decorating to landscaping as well as furniture, appliances, and moving services.

David Pridham, CEO of the patent advisory board and transaction firm Dominion Harbor Group in Dallas, cites six
reasons that current conditions are excellent for startups:

1. Venture capital investment, which you will learn more about in Entrepreneurial Finance and Accounting, has
surged to the highest level ever, totaling $148 billion in 2018.
2. The concern over patent protection is improving with better trade protection of intellectual property rights.
3. Artificial intelligence could be a tremendous opportunity based on a McKinsey report projection, estimating
artificial intelligence to become a $13 trillion industry by 2025.
4. The explosive growth in freelance workers has been a boon to startups and small businesses.
5. Another hot sector is technology-driven advancements such as self-driving vehicles.
6. Intellectual property now accounts for 38.2 percent of our total Gross Domestic Product (GDP) in the United
States. That totals $6 trillion per year, more than any other nation’s GDP except for China. 11

In addition, Silicon Valley Bank (SVB) Financial Group surveyed new startup businesses in 2017 and found that 95
percent indicated they believe that business conditions will be the same or better. In addition, 83 percent plan to
increase their workforce, and 24 percent found fundraising not to be a challenge. 12 These numbers represent the
highest levels of optimism among entrepreneurs over the most recent five-year period.

Some other economic indicators favor entrepreneurship. According to the 2019 Goldman Sachs Economic Outlook,
consumer confidence is up, business confidence is up, interest rates remain reasonable and steady, more people are
working, and wages are higher.13 When the economy is strong, there are generally more opportunities available and
more potential customers with money to purchase your products and services; but of course, there are no
guarantees.