Understanding Opportunity and Ideas
Opportunities are about seizing the moment. Whether it be in personal relationships or business ventures, we all are given opportunities. If the entrepreneur does not pounce on the opportunity, then he or she will not get another chance. Opportunities are a result of real world interactions, and rely on the entrepreneur’s ability to conceive an idea that capitalizes on the opportunity.
In entrepreneurship, opportunities may be created when a new sector of technology opens an industry that had not previously existed. For example, when Apple opened their developer tools to the world and smartphones began to proliferate among us, a huge industry was created that had not formerly existed. Many of the dominant apps today were the first on the market. These early developers took advantage of the opportunity to create the first networks and games. Applications like Twitter and Instagram would exist under different names if their respective founders did not exist. It is a matter of who is first to market and able establish dominance. Opportunity in this example is being the first to capitalize on the emerging smartphone market.
An idea is only limited to by what the imagination can come up with. They are thought processes that exist independently from truth and reality. The thoughts and ideas we have about the world do not always correctly correlate with how the world actually works. And so this presents a problem for the entrepreneur. Often times an entrepreneur will only come realize their idea is unrealistic when actions are taken to manifest the idea. This is not necessarily a bad thing. Testing ideas to see what works and learning from the mistakes is the only way to strip away our naive understanding of the world.
All entrepreneurial ideas have some amount of opportunity in them. But not all ideas are created with equal amounts of opportunity. As formerly explained, timing is a large part in the value of an opportunity. But there is also the matter determining how valuable the problem being solved is. For example, an entrepreneur may have an idea for a technology that monitors the stress of infrastructure in real time. They may make a breakthrough in this field and create a unique technology that works great. But the profit value of this technology may not have been worth the energy required to make it a reality. Do engineers need to know the stress of a bridge in real time? How much will it cost to install this monitoring system? The entrepreneur must determine ahead of time that their idea has a good chance at generating healthy profits that justify their time investment.
I started the development of a social networking application because I feel like the risk reward ratio justifies the time and money investment on my end. Even though there are already huge players in the market, I think there is still opportunity for new social networks to succeed. Social networks compete with each other on user experience. The success of a social network depends on how much the users like the product. How sticky is it? This is what it really comes down to: developing a product that users fall in love with.