Entrepreneurship Management and Finance - Module 2 - PPT

Opportunities and Pathways to Entrepreneurship. It explains how entrepreneurs identify opportunities, sources of innovative ideas, and the role of imagination and creativity in venture creation. The presentation details principles, components, and barriers of creativity, along with the phases of the creative process. It also introduces the critical thinking process for better decision-making. Finally, it highlights key pathways to start a new venture or a business, acquiring an existing one, or franchising; all supported with live examples and case studies.

1. Module 2 Opportunities and pathways to Entrepreneurship - Dr. Adithya Hegde, Dept. of R&AI, MITE

2. Chapter Roadmap Opportunity identification: Sources of Innovative ideas, Entrepreneurial imagination, and creativity: Concept of Creativity, Rules, Components, Process or phases of creativity, the critical thinking process. Pathways to new ventures: Creating New ventures, Acquiring an established venture, Franchising.

3. Opportunity Identification Opportunity identification is the ability to spot gaps in the market and turn them into ventures. It is the first step in the entrepreneurial journey. Meaning and Importance An opportunity is not just any idea. It must be feasible, desirable, and viable.

4. Opportunity Identification

5. Opportunity Identification Opportunity vs. Idea : Not every idea qualifies as an opportunity; only those ideas that can realistically be turned into successful ventures should be considered opportunities. Feasibility : The opportunity must be achievable with available resources, skills, and technology. Desirability : It should fulfill real needs or wants in the market or audience, making people genuinely interested.

6. Opportunity Identification Viability : The opportunity needs to have financial potential, meaning it must be profitable and sustainable over time. Identifying opportunities helps entrepreneurs align their skills with unmet needs.

7. Opportunity Identification Bridging Skills and Needs : Entrepreneurs succeed by matching what they are good at (skills) to gaps or problems that exist and have not been adequately addressed (unmet needs). Market Relevance : Recognizing opportunities enables entrepreneurs to offer products or services that are truly needed, increasing chances of success.

8. Opportunity Identification Personal Fulfillment : Aligning opportunities with personal skills leads to greater satisfaction and motivation for entrepreneurs.

9. Opportunity Identification

10. Opportunity Identification

11. Opportunity Identification Without Correct Identification, Even Brilliant Execution Fails Correct identification means understanding the real problem, market need, or opportunity before acting. Brilliant execution alone cannot save a venture if it addresses the wrong problem or misjudges the market.

12. Opportunity Identification Examples Blockbuster vs. Netflix Blockbuster was a giant in video rentals but failed to identify the shift customers wanted toward online streaming and DVD deliveries. Despite having a strong physical store presence and good execution in that domain, ignoring the unmet shift led to its bankruptcy. Netflix , by correctly identifying the move to online rentals, succeeded spectacularly

13. Opportunity Identification Examples Ford Edsel Ford invested heavily in a car model (Edsel), but poor market research meant they misidentified customer desires. The product was rushed and over-engineered without meeting real customer wants, resulting in one of the biggest automotive flops despite the company's resources.

14. Approaches to Identify Opportunities Problem-driven approach: Observe problems people face in daily life. Look for pain points or inefficiencies that need solutions. Example:  Difficulty in booking taxis → led to Uber-like platforms making booking easy and quick.

15. Approaches to Identify Opportunities Trend-driven approach: Watch for emerging social, technological, environmental, or economic trends. Opportunities arise by aligning with rising trends before they become mainstream. Example:  Growing interest in plant-based diets → startups like GoodDot in India offering plant-based meat alternatives.

16. Approaches to Identify Opportunities Resource-driven approach: Start with the resources you already have. Think of how these resources can be applied in new or innovative ways. Example:  A farmer using crop waste to make biodegradable plates, tapping agricultural waste into a new product.

17. Tools for Scanning the Environment

18. Tools for Scanning the Environment SWOT Analysis Strengths → Internal factors that give you an advantage (skills, resources, networks). Weaknesses → Internal limitations that hold you back (lack of funds, inexperience). Opportunities → External factors that can be leveraged (new trends, policy support, technology). Threats → External risks that can harm the venture (competition, regulations, market shifts).

19. Tools for Scanning the Environment

20. Tools for Scanning the Environment

21. Sources of Innovative Ideas - Internal Internal Sources (come from within the entrepreneur or team) a. Skills Unique technical or managerial capabilities can trigger ventures. Example: A student skilled in drone programming develops drone-based crop monitoring services.

22. Sources of Innovative Ideas - Internal b. Knowledge Academic background, domain expertise, or specialized training generates insights others may miss. Example: A mechanical engineer applies thermodynamics knowledge to design energy-efficient stoves for rural households.

23. Sources of Innovative Ideas - Internal c. Experiences Personal or professional experiences highlight problems worth solving. Example: A student who struggled with renting books creates a peer-to-peer book rental app.

24. Sources of Innovative Ideas - External a. Customers Customers are the richest source of unmet needs. Methods: Surveys, interviews, user observation, complaints analysis. Example: Café Coffee Day noticed urban youth wanted “hangout spaces” rather than just coffee → they designed CCD as a lifestyle space, not just a café.

25. Sources of Innovative Ideas - External b. Competitors Competitors show what works and what fails. Innovators can improve upon it. Example: Ola emerged by adapting Uber’s model to Indian conditions (cash payments, auto-rickshaw integration).

26. Sources of Innovative Ideas - External c. Technology Trends New tech opens avenues even before customers know they need it. Example: Rise of AI → tools like ChatGPT, AI-based personalized learning apps. Case: Ather Energy (India) leveraged battery advancements to build smart electric scooters.

27. Sources of Innovative Ideas - External d. Research Institutions Labs and universities generate innovations waiting for commercialization. Example: ISRO’s cryogenic technology transferred to private firms for applications. Case: IIT-Madras incubated Ather Energy , showing how campus research can seed startups.

28. Sources of Innovative Ideas

29. Entrepreneurial Imagination and Creativity

30. Examples of Breakthrough Innovations Airbnb (2008, USA) Imagination : What if strangers could rent spare rooms to travelers? Creativity : Built a peer-to-peer platform with secure payments and reviews. Outcome : Disrupted the global hotel industry.

31. Examples of Breakthrough Innovations

32. Examples of Breakthrough Innovations Amul (India) Imagination : What if small farmers could pool milk collectively to compete? Creativity : Created cooperative model and iconic marketing campaigns. Outcome : Became India’s largest dairy brand, empowering millions.

33. Examples of Breakthrough Innovations

34. Examples of Breakthrough Innovations Paytm (India) Imagination : What if mobile could replace wallets everywhere? Creativity : Designed QR-code payments even for roadside vendors. Outcome : Largest digital wallet in India, transforming fintech.

35. Examples of Breakthrough Innovations Jaipur Foot (India) Imagination : What if artificial limbs could be affordable for the poor? Creativity : Designed low-cost, durable prosthetics using local materials. Outcome : Restored mobility to millions globally.

36. Examples of Breakthrough Innovations SpaceX (USA) Imagination : What if rockets were reusable like airplanes? Creativity : Engineered reusable Falcon rockets. Outcome : Revolutionized space launch economics.

37. Creativity Creativity is the ability to generate novel and valuable ideas, solutions, or products by thinking in new and imaginative ways. 

38. Creativity in Entrepreneurship

39. Creativity in Entrepreneurship – Case studies Idea Generation Dell’s IdeaStorm : A crowdsourcing platform where customers submit ideas fueling new product innovations that address real needs. LEGO Ideas : Community-driven innovation platform allowing fans to propose and vote on new sets.

40. Creativity in Entrepreneurship – Case studies Problem Solving Walmart’s Blockchain for Food Safety : Implemented blockchain technology to improve traceability and reduce contamination, solving supply chain issues. IBM Watson in Healthcare : Used AI to assist doctors in diagnosing and customizing treatment plans, creatively addressing complex medical challenges.

41. Creativity in Entrepreneurship – Case studies Innovation Driver Dyson : Leveraged creative engineering to invent bagless vacuum cleaners, differentiating themselves in a crowded market. Tesla : Transformed electric car design and technology, moving beyond traditional limitations with creative vision.

42. Creativity in Entrepreneurship – Case studies Adaptability Netflix : Pivoted from DVD rentals to streaming services as market and technology evolved. Slack : Evolved from a gaming company to a workplace communication platform, adapting to new market opportunities.

43. Creativity in Entrepreneurship – Case studies Competitive Edge Apple : Fuses creativity in product design and user experience, creating loyal customers and premium pricing power. Zara : Uses creative supply chain management and fast fashion cycles to outperform competitors in responsiveness and trends.

44. Creativity v/s Innovation

45. Creativity v/s Innovation Basis Creativity Innovation Definition Generating original, novel, and imaginative ideas Implementing creative ideas into practical, valuable solutions Nature Imaginative and exploratory process Productive and execution-focused process Focus Idea generation and thinking outside the box Application and commercialization of ideas Outcome Intangible (concepts, designs, possibilities) Tangible results (products, services, processes) Measurement Difficult or impossible to measure Can be measured by impact, profit, adoption

46. Creativity v/s Innovation Basis Creativity Innovation Risk Usually low risk, involves thinking and brainstorming Often involves financial, market, and operational risks Goal To inspire, explore possibilities, and challenge norms To solve problems, improve systems, and create value Financial Cost Generally low, involves mental effort Requires investment for development, marketing, and scaling Relationship Creativity is the raw source of new ideas Innovation transforms those ideas into reality Dependency Can exist without innovation Cannot exist without creativity as a foundation

47. Principles Guiding Idea Generation

48. Principles Guiding Idea Generation 1. Quantity Breeds Quality The more ideas you generate, the higher the chance of finding a great one. Don’t stop at the first idea. Aim for 20, 50 or even 100. Example: Thomas Edison filed over 1,000 patents. Only a few became life-changing, like the light bulb.

49. Principles Guiding Idea Generation 2. Defer Judgment During brainstorming, never say “That won’t work.” Judging too early kills creativity. Even the wildest ideas may spark something practical later. Example: Many “impossible” ideas became world-changing innovations.

50. Principles Guiding Idea Generation 3. Encourage Wild Ideas Big breakthroughs often start as crazy-sounding thoughts. Radical ideas open doors that safe ideas never will. Example: 3D-printed food was once a joke. Today, startups actually print pizzas and chocolates.

51. Principles Guiding Idea Generation 4. Build on Others’ Ideas Innovation often comes from mixing existing ideas. Look at what others have done, then add your twist. Example: The iPhone wasn’t new tech. It combined phone + internet + camera into one powerful device.

52. Principles Guiding Idea Generation 5. Focus on the User Creativity means nothing if it doesn’t solve real problems. Study how people behave, what they struggle with, and what they really want. Example: Ola noticed Indians preferred cash, so they added cash payments. Something Uber missed at first.

53. Principles Guiding Idea Generation 6. Visualize and Prototype Early Don’t just talk. Instead draw, sketch or build quick models. A rough prototype makes the idea real and easy to improve. Example: Startups release beta apps early, then refine them based on user feedback.

54. Barriers to Creativity

55. Overcoming Barriers to Creativity 1. Personal Barriers – Fear of Failure Many people avoid new ideas because they fear being wrong. This blocks risk-taking and experimentation. Solution: Treat failures like experiments. Each failure teaches you something. Example: Most startups pivot several times before finding success.

56. Overcoming Barriers to Creativity 2. Personal Barriers – Fixed Mindset Believing creativity is “only for geniuses” limits growth. A fixed mindset stops you from trying new approaches. Solution: Practice divergent thinking—generate many different answers to one problem daily.

57. Overcoming Barriers to Creativity 3. Personal Barriers – Overthinking Filtering or rejecting ideas too early kills creativity. People keep asking, “Will this really work?” before even trying. Solution: Use time-boxed brainstorming. Example: Write 20 ideas in 10 minutes without judgment.

58. Overcoming Barriers to Creativity 4. Organizational Barriers – Rigid Hierarchy In many workplaces, good ideas get stuck at the top. Bosses filter or block them before they reach action. Solution: Use flat structures, suggestion boxes, and open innovation contests.

59. Overcoming Barriers to Creativity 5. Organizational Barriers – Resource Constraints Lack of time, money, or staff discourages experiments. Big ideas die at the proposal stage. Solution: Start small—use low-cost prototypes or pilot projects to test ideas.

60. Overcoming Barriers to Creativity 6. Organizational Barriers – Resistance to Change Employees often stick to old methods. “We’ve always done it this way” kills innovation. Solution: Celebrate small wins, reward creativity, and make change exciting.

61. Overcoming Barriers to Creativity 7. Environmental Barriers – Cultural Norms In some cultures, questioning or taking risks is discouraged. People fear judgment or punishment for new ideas. Solution: Create safe spaces in classrooms and organizations where all ideas are welcome.

62. Overcoming Barriers to Creativity 8. Environmental Barriers – Lack of Exposure Without awareness of trends, tech, or global ideas, creativity is limited. Solution: Encourage learning from hackathons, research institutions, industry news, and travel.

63. Components of Creativity 1. Fluency Fluency is the capacity to generate a large number of ideas for a given problem. It reflects quantity of ideas, not necessarily their quality. For example, when asked how to reuse a plastic bottle, a fluent thinker might propose dozens of uses: storage container, plant holder, funnel, toy, lamp, and more. High fluency ensures that at least some ideas will be practical or innovative.

64. Components of Creativity 2. Flexibility Flexibility is the ability to produce ideas across different categories or approaches. It reflects variety of thought. Using the same example, one person might suggest only storage-related uses for a bottle, while another suggests uses in gardening, decoration, engineering, and energy-saving. The second shows flexibility by shifting perspectives. Flexibility prevents narrow thinking and promotes originality.

65. Components of Creativity 3. Originality Originality is the ability to generate rare or novel ideas. It reflects uniqueness . While most people may suggest common uses of a bottle, an original thinker might propose filling it with water and embedding it in rooftops to act as a low-cost solar bulb (a real solution applied in the Philippines). Originality often arises from unexpected combinations of unrelated concepts.

66. Components of Creativity 4. Elaboration Elaboration is the ability to expand and refine an idea with detail. It reflects depth and completeness . A basic idea such as “use a bottle as a flower pot” becomes elaborated when details are added: cut design, self-watering mechanism, decorative features, and eco-friendly branding. Elaboration transforms rough sketches into market-ready innovations.

67. Components of Creativity 5. Cognitive Factors (Mind-based Enablers of Creativity) Divergent Thinking: Generating many solutions rather than searching for one correct answer. Analogical Thinking: Applying knowledge from one field to another, such as using nature-inspired designs (biomimicry). Problem Sensitivity: Detecting subtle issues that others ignore, which often leads to opportunity recognition. Tolerance for Ambiguity: Comfort with incomplete, uncertain information and willingness to explore regardless. Working Memory and Attention: Holding multiple ideas in the mind simultaneously and linking them into new patterns.

68. Components of Creativity

69. Components of Creativity 6. Environmental Factors (External Influences on Creativity) Freedom and Autonomy: People create better when allowed to explore independently without rigid control. Collaboration and Diversity: Interaction with individuals from varied backgrounds leads to cross-pollination of ideas. Resources and Infrastructure: Availability of labs, funding, tools, and technology makes experimentation possible. Encouragement and Recognition: Positive reinforcement from teachers, managers, or peers sustains motivation to innovate. Cultural Climate: Societies and organizations that reward curiosity, experimentation, and risk-taking nurture greater creativity.

70. Components of Creativity

71. Components of Creativity Case Example: LEGO’s Revival (2000s, Denmark) Fluency: Generated hundreds of new toy concepts. Flexibility: Expanded beyond toys into movies, games, and educational kits. Originality: Created LEGO Mindstorms, combining robotics with play. Elaboration: Built detailed user communities and co-creation platforms. These successes were possible because of strong cognitive inputs (diverse thinking teams) and a supportive environmental climate (embracing community feedback and innovation).

72. Components of Creativity - Preparation Preparation is active groundwork. Collect domain knowledge. Read papers and reports. Interview users. Map constraints. Build basic skills and small experiments. Frame the problem sharply. Output: clear problem statement, hypotheses, resource list.

73. Components of Creativity - Preparation James Dyson wanted a vacuum that did not lose suction. He studied cyclone separators, learned airflow mechanics, and built thousands of rough prototypes. Those repeated, informed attempts refined his design and materials knowledge. Result: a robust technical solution born of deliberate preparation.

74. Components of Creativity - Preparation

75. Components of Creativity - Incubation Incubation is subconscious processing after active work. Step back. Stop forcing solutions. Let the mind recombine inputs. Maintain low-pressure exposure: walk, sleep, switch tasks. Output: surprising associations and softened assumptions.

76. Components of Creativity - Incubation Chemist August Kekulé wrestled with benzene’s formula. After long periods of study and reflection he dreamed of a snake biting its tail. That image led to the ring-structure model of benzene. Incubation turned focused study into a novel mental pattern.

77. Components of Creativity - Incubation

78. Components of Creativity - Illumination Illumination is the sudden clear idea or “Aha”. It often follows incubation and is brief and vivid. Capture it immediately. Sketch, voice-note, or make a quick prototype. Output: a testable core concept or insight.

79. Components of Creativity - Illumination Georges de Mestral noticed burrs stuck to his clothes and his dog. He inspected them under a microscope and saw tiny hooks and loops. That observation became Velcro i.e. a hook and loop fastening. Illumination came from acute observation plus prior exposure to textiles and mechanics.

80. Components of Creativity - Illumination

81. Components of Creativity - Verification Verification is testing the idea against reality. Convert insight into prototypes, experiments, or pilots. Measure against your hypotheses. Collect data. Iterate. Output: validated concept, pivot decision, or discard.

82. Components of Creativity - Verification Drew Houston made a short demo video showing Dropbox’s sync idea before building the full product. The video drove large signups and validated demand. That low-cost experiment saved months of development and directed priorities. Verification can be cheap and high-impact if designed well.

83. Components of Creativity - Verification

84. Components of Creativity - Verification Drew Houston made a short demo video showing Dropbox’s sync idea before building the full product. The video drove large signups and validated demand. That low-cost experiment saved months of development and directed priorities. Verification can be cheap and high-impact if designed well.

85. Critical Thinking Process Definition : Critical thinking is the ability to think clearly and rationally, understanding the logical connection between ideas. It is not about “what to think” but “how to think.” Helps filter biases, assumptions, and emotions.

86. Critical Thinking Process Ensures decisions are evidence based, not impulsive. Reduces errors by questioning assumptions. Helps weigh alternatives and anticipate consequences. Example: A manager deciding on market expansion uses data, competitor analysis, and risks instead of gut feeling.

87. Critical Thinking Process

88. Critical Thinking Process - Stages

89. Critical Thinking Process Stages - Interpretation Understanding information accurately. Identify what data means in context. Clarify definitions, symbols, or messages. Example : Doctor interpreting lab reports before diagnosis. Misinterpretation = wrong treatment; correct interpretation = life-saving decision.

90. Critical Thinking Process Stages - Analysis Break down complex info into smaller parts. Identify patterns, causes, and relationships. Example : Business case: Sales dropped. Analysis → Is it pricing, competition, customer dissatisfaction, or supply chain? Dissecting helps find the true cause.

91. Critical Thinking Process Stages - Inference Drawing logical conclusions from evidence. Predicting outcomes based on available data. Example : Meteorologist: dark clouds + drop in pressure = inference → likely rain. Inference is reasoned prediction, not guesswork.

92. Critical Thinking Process Stages - Evaluation Assess credibility, strength, and relevance of arguments. Ask: Is the source reliable? Is the evidence strong? Example : Evaluating whether a WhatsApp forward on “miracle cures” is backed by scientific research. Decision: Reject unreliable info → avoid harm.

93. Critical Thinking Process Stages - Explanation Communicating reasoning clearly. Justify your decisions with evidence so others can follow. Example : A project leader explains why a costly but durable material is chosen → backed by lifecycle analysis. Explanation builds trust and alignment.

94. Critical Thinking Process Stages - Explanation Communicating reasoning clearly. Justify your decisions with evidence so others can follow. Example : A project leader explains why a costly but durable material is chosen → backed by lifecycle analysis. Explanation builds trust and alignment.

95. Pathways to New Ventures Entrepreneurs can build businesses via three key pathways. Creating New Ventures Acquiring an Established Venture Franchising

96. Creating New Ventures Start from scratch with a new idea or product. Involves product development, business planning, and launching. Examples : Tesla (Electric Cars) Airbnb (Home Sharing) ENGIE Factory Singapore (Corporate Studio)

97. Acquiring an Established Venture Purchase or inherit an existing business. Leverages proven models, customer base, and infrastructure. Examples : Facebook acquired Instagram Google acquired YouTube Finmark was acquired (Business exit example)

98. Franchising Operate under an established brand and system. Lower risk, ongoing support, and recognizable branding. Examples : McDonald’s KFC Domino’s Pizza Marriott 7-Eleven

99. Franchising Pathway Description Example Brands Creating New Venture Build from scratch  Tesla, Airbnb, ENGIE Acquiring Venture Buy existing business  Instagram, YouTube Franchising Franchise model  McDonald's, KFC

100. Pathways to New Ventures

101. End of Module 2