Business Opportunity vs. Business Idea – What is the difference?

Business Opportunity vs. Business Idea – What is the difference?

  • April 30, 2020
  • Posted by: Fabian
  • Category: Uncategorized

What is the difference between an idea and an opportunity?

You’re a brand-new entrepreneur who has a big idea and a boatload of passion.

You wanted to start your first million-dollar business yesterday because you know your idea is so big that it will thrill your customers and fulfill your dreams in the process.

The first question you have: how much is this idea worth?

Nothing.

Business ideas are numerous, and they exist without inherent value. An idea—no matter how big or small—is a series of electrochemical reactions inside your brain.

No one purchases business ideas, and business ideas cannot be assigned a dollar value.

This does not mean that ideas are without potential—ideas are critical first steps toward developing your business opportunity. Unlike ideas, business opportunities are the stock and trade of successful entrepreneurs.

A business opportunity is actionable and has the potential to provide value both to customers and to you.

The distinction might seem subtle, but the difference between an idea and a business opportunity is a critical one.

Attempting to follow through with ideas that have not become a business opportunity will spell disaster for your venture. It will be doomed before it even begins.

what do you do with an idea

Ideas and business opportunities do not exist independently of one another, and they do not exist independently of people.

Everything that has been created by people started out as an idea, but not everything that has been an idea has been created.

This is the root of the value assigned to business opportunities: execution.

Business opportunities are valuable in their execution.

Just as an idea that is trapped in your head has no value on its own, a business opportunity that cannot be executed has no value either.

Ideas and business opportunities do not exist independently of one another, and they do not exist independently of people.

Everything that has been created by people started out as an idea, but not everything that has been an idea has been created. This is the root of the value assigned to business opportunities: execution.

Business opportunities are valuable in their execution. Just as an idea that is trapped in your head has no value on its own, a business opportunity that cannot be executed has no value either. 

There is no such thing as a new idea. It is impossible. We simply take a lot of old ideas and put them into a sort of mental kaleidoscope. We give them a turn and they make new and curious combinations. We keep on turning and making new combinations indefinitely; but they are the same old pieces of colored glass that have been in use through all the ages.

Mark Twain

Mr. Twain was correct.

There are no new ideas. Every business idea is a permutation of existing ideas and conditions.

Whether or not an idea can be evolved into a business opportunity determines whether it will become reality, or whether it will just be another series of electrochemical reactions.

What do you do with an idea – 4 Steps to cultivate a business opportunity

business-opportunity-what-do-you-do-with-an-idea

A common misconception is that business opportunities simply “occur” to entrepreneurs in a flash of insight.

That may be how ideas come to us, but the process of uncovering business opportunities is a little more complex.

Business opportunities aren’t just waiting around for an enterprising entrepreneur to come and find them.

They are an extension of the entrepreneur.

Each person is a unique blend of his or her

  • background,
  • talent,
  • insight,
  • and perspective.

Together these facets form a kind of “thumbprint” that is just as unique to each of us as our actual fingerprint.

The concept of an entrepreneurial thumbprint is essential to understanding how business opportunities interact with the entrepreneurs who cultivate them.

First, where do business opportunities come from?

Business opportunities are cultivated through a variety of methods, and each of these methods is dependent entirely on the entrepreneur and his or her entrepreneurial thumbprint.

01. A Business Opportunity Comes From Active Search

good idea bad idea

An engaged, structured, and disciplined process of searching for ways to evolve ideas into a business opportunity will yield better results than a passive process.

Instead of searching for new business ideas or new knowledge, focus on solutions to existing problems.

The simpler the better.

A compliment that an entrepreneur should love to hear after pitching a business idea is “That’s obvious!” Simple solutions to common problems have a higher potential for success.

Example

Jazzercise, a legacy name inactive fitness programs, was founded in 1969 by Judi Sheppard Missett.

Judi was a teacher at a dance studio in Chicago when she noticed abysmal dropout rates among her students.

Young women would attend dance classes to get a workout, but as the lessons progressed, students who had little interest in becoming professional dancers would abandon the class.

To keep fees flowing in, Judi began holding warm-up classes with a focus on fun and fitness rather than honing dancing skills. These classes were later rebranded “Jazzercize” and developed into a fitness phenomenon.

02. A Business Opportunity Comes From Information

Entrepreneurial business opportunities exist because different people have access to different information.

What is an idea for one entrepreneur may be a business opportunity for another who has the resources and the means to execute it.

A business opportunity that exists without the means to execute it does not have value.

It is simply an idea.

Example

Qualcomm is a name that for many doesn’t immediately ring a bell, despite the fact that the company is responsible for the functionality of devices that we rely on every day.

Qualcomm is the telecommunications and semiconductor company responsible for—among other things—3G cellular technology.

Qualcomm also holds patents for the technology that powers 4G connectivity and is a leader in the 5G space.

When the company was founded in July of 1985 by former University of California, San Diego professor Irwin Jacobs, he didn’t have a business plan or a particular product in mind.

What the founding team did have, however, was an abundance of engineering talent in their small team and the vision that wireless connectivity would change the world in even more dramatic ways.

Former Qualcomm CEO Paul Jacobs (son of founder Irwin Jacobs) said of the company’s foundation, “Having visions which are out there allows people to have creativity. The main force of a company is shaped by a vision.”

The takeaway from Qualcomm’s story is that Jacobs and the rest of the founding team started a company knowing what they wanted to do and how they wanted to change the world.

They did this knowing that they had a well of technical knowledge and a firm belief in their vision.

03. A Business Opportunity Comes From Change

great-business-opportunities

External changes can create business opportunities in two ways:

  • Change that makes it possible to do things that haven’t been done before
  • Change that makes it possible to do something in a more valuable way

An external change that makes it possible to do something in a more valuable way could be the catalyst that makes an idea that otherwise would not have been actionable into a business opportunity that has the potential to provide value.

04. A Business Opportunity Comes From The Process Of Effectuation

bright-idea

Effectuation is essentially the opposite of causation.

It is a process used to identify entrepreneurial opportunities when the future is unknown or unpredictable.

We often think of new ventures as starting with a goal, then gathering the resources needed to achieve that goal.

Effectuation, on the other hand, starts with the resources at hand and then assembles them to build the goal.

The difference between causation and effectuation may seem subtle, but it is important.

great example of the difference in your approach to making dinner. If you were to take a casual approach, you would carefully plan out a menu in advance, then check your kitchen to see what you have, then go to the store to buy any missing items.

In an effectual approach, you would look in your refrigerator and pantry, see what you have, and plan your menu accordingly.

Causation vs. Effectuation -Which is the right method?

which is the “right” method to use when developing an idea into an opportunity?

The answer is both.

When it comes to making dinner on an average weekday night, you probably use the latter.

If you’re planning a dinner party, the former is probably the best.

The moral of the story is that sometimes the best opportunities are found by just looking around and seeing what skills and resources are available to you.