In the first part of Opportunity and Idea Generation, we provide an overview of the academic literature available in the area of entrepreneurial opportunity recognition. In the second part, we will present the practical part of this post – interview with an entrepreneur.
Interview With an Entrepreneur
The entrepreneur I had the chance to interview has extensive experience in the hotel and restaurant sector, which is a part of the larger hospitality industry. In the short time, I had been available to make a live interview. I acquired a better insight into the reality faced by today’s entrepreneurs. I also believe that I developed a better understanding of the psychological development process of entrepreneurs and the trigger factors that ultimately push them into pursuing opportunities and being proactive.
Motivational Factors to Start a Business
For the person who agreed to the interview, one of the main motivations to start her own business was the notion of working long years for other people and not having much to show for at the end of the day. She acquired enough experience, and becomes more and more qualified, but felt underappreciated. In addition to that, with her experience, she was in a better position to recognize certain changes in terms of customer satisfaction, tastes, and preferences.
Another factor contributing to her proactiveness was her two young children. What she wanted to provide for them is an environment where proactiveness, forward thinking and risk tolerance was not unknown terms. She believes that with her actions, an example will be set for her children to follow in their future and perhaps learn some lessons in life sooner than their parents.
Opportunity Recognition and Creation
Some of the environmental settings that contributed to the creation of this opportunity are part of the current global economic crisis. Namely, what the entrepreneur noted and was realistic enough to recognize was the emerging trends of a large number of customers preferring lower pricing of products and services.
Another factor that helped this opportunity become more easily identifiable and accessible was the fact that the current participants in the local restaurant sector did not pay any attention to the complaints of these people, managers were not proactive enough to come down on the customer service level and engage a direct a contact. So, one of the things that were in favor of the entrepreneur was the narrow – mindless of the managers and their lack of appreciation for the customer and general market feedback.
As stated in the interview, to keep to the low-cost business model running, only family members were involved in the restaurant management. The other reason why initially only family members were involved was the expected flow of communication, as that was recognized as an important aspect of organizational management. In terms of the idea generation, the entire process and to place in academic terms, the “connecting of dots” was done by the entrepreneur, through information gathering from the environment.
Real-Life Case VS Scholar Research Related to Opportunity Recognition
In relation to academia and scholar research, there is only one aspect of the opportunity recognition model that can be identified in the real-life case analyzed through the interview. The factor of previous knowledge and experience related to the industry is the obvious one with the entrepreneur having more than 25 years of practical knowledge in the specific sector.
What makes this case perhaps a unique one is the absence of some of the more established opportunity recognition model variables as recognized by scholars. In the particular case, the entrepreneur did not touch on the topic of entrepreneurial alertness, and the discovery was obviously not achieved after a purposeful market research.
The restaurant was managed internally, where the children helped in the operation facilitation, and the company was opened on the initiative of an individual, where she does not mention any specific networks of business partners. In this aspect, a business network can be the customers she communicated with that led to them revealing how they felt about the prices. More specifically, these people would fit the description of the so-called “loose ties”, which as discussed by researchers, are much more than the closer ties, with family and friends.
Conclusions Related to Opportunity Recognition Research
As a rapidly developing field of economics, entrepreneurship is considered one of the biggest economic drivers for improvements and expansion. With academia and industry experts increasingly recognizing the role and importance of future developments in this field, efforts are being made towards establishing entrepreneurial activity and perception models. Such models would help provide better insights and facilitate the entrepreneurial processes in the future. So far, academia has somewhat agreed and established upon several aspects or factors of the entrepreneurial opportunity identification and discovery process. However, due to the lack of uniformity and standardization in this process, a universally acceptable and applicable model has not been developed so far.
The interview conducted with the entrepreneur provided valuable insights into the findings of this post, which somewhat contradicted the general findings of the academia. Although the findings from the interview cannot be generalized, they did not match the majority of already established academic criteria related to the opportunity recognition process. As a small scale research, this only further implies the diversity of circumstances and variety of factors that can influence this entrepreneurial process.
This is a guest post by Aleksandar Delev, Ba in Marketing, Sheffield, UK.