An idea becomes worth pursuing when it addresses a real need and can feasibly be turned into a viable offering. This lesson introduces entrepreneurial opportunity and explains why entrepreneurs investigate customer needs before investing resources.
An entrepreneurial opportunity exists when identifiable consumer demand meets the feasibility of satisfying that demand with a product or service. In other words, people must want or need the offering, and the venture must have a realistic way to provide it.
All flashcards
Entrepreneurial opportunity
A situation in which identifiable consumer demand meets the feasibility of satisfying it with a product or service.
Creative destruction
Innovation creates new economic activity while disrupting or displacing established products, businesses, or practices.
Schumpeter’s five routes to opportunity
New markets for existing products, new resource sources, new production methods, new products using existing technology, and new products using new technology.
Demand opportunity
An opportunity based on finding a new market for an existing product.
Supply opportunity
An opportunity based on changing resources, production methods, or products rather than finding a new market for an existing product.
Quiz questions
What does creative destruction describe?Answer: Innovation creates new economic activity while disrupting established businesses or practices.
An entrepreneur finds a new market for an existing product. How does Schumpeter’s framework classify this route?Answer: As a demand opportunity focused on reaching new customers.
What should an entrepreneur check about intellectual property while developing a business idea?Answer: Whether active patents, trademarks, copyrights, or trade secrets cover relevant work.
When evaluating a franchise purchase, which source can help a prospective buyer assess the franchisor’s relationship with franchisees?Answer: Conversations with other owners of the franchise.
How should entrepreneurs interpret favorable economic indicators such as employment or consumer confidence?Answer: As signals to investigate, not guarantees that a venture will succeed.
Based on Entrepreneurship by Michael Laverty, Chris Littel (OpenStax), licensed CC BY 4.0. Adapted into a summary, flashcards and quizzes.