Unit III Discussion Board

Alertness

To address the question of why some people spot opportunities and some don’t, researchers have suggested that opportunities are everywhere waiting to be discovered, but discovery is made only by those entrepreneurs who have  alertness , which is the ability to identify opportunities in their environment. 21  This means that entrepreneurs do not necessarily rationally and systematically search their environment or their particular information sets for opportunities. Rather, they become alert to existing opportunities through their daily activities—in some instances, they are even taken by surprise by what they observe.

Alertness: the ability some people have to identify opportunities.

Think back to Dr. Spencer Silver, the inventor of Post-its®, mentioned earlier in this chapter. Silver was not actively searching for an opportunity to invent a specific adhesive to create sticky notes, but he became alert to the idea through his scientific experiments. He then collaborated with a colleague to create a product that would prove to be a huge market success. Silver’s experience adheres to this concept of alertness that suggests that we are capable of recognizing opportunities even when we are not looking for them.

Richard Lindon with enhanced rugby balls

Credit: Wikimedia Commons/Public Domain

The origin of the rugby football is another interesting example of alertness. 22  Until 1860, footballs were made of animal bladders, which were blown up into a plum or pear shape, then tied and sealed. Because the bladders were constantly exploding, shoemakers were often called upon to encase the bladders in leather to protect them from bursting so easily. A young shoemaker in the town of Rugby, England, named Richard Lindon was employed in this trade, and he enlisted the help of his wife to inflate the bladders by blowing air into them. However, after his wife died from an illness attributed to contact with infected pigs’ bladders, Lindon started to look for a safer option. He found a way to replace the bladders with inflated rubber tubes and used a pump to inflate the footballs without any contact with the mouth. He is credited with inventing the oval rugby football we know today, as well as the hand air pump. The point is that although Lindon had not started out looking to revolutionize the football, he was able to recognize an opportunity when it appeared.

Some researchers believe that entrepreneurs may be more adept at spotting opportunities than non-entrepreneurs for several reasons:

· They have access to more information.

· They may be more prone to pursuing risks than avoiding them.

· They may possess different cognitive styles from those of non-entrepreneurs.

These reasons can be attributed to an entrepreneur’s level of alertness as well as their persistence and optimism. Persistence helps entrepreneurs power through obstacles and optimism helps drive persistence. 23  The combination of persistence and optimism encourages a state of alertness and readiness to identify and act on new opportunities that others may miss or just don’t see.

Building Opportunities: Prior Knowledge and Pattern Recognition

There has been a great deal of research on measuring how entrepreneurs recognize opportunities. We have explored the importance of actively searching for opportunities, alertness to recognizing opportunities when they arise, and the importance of taking action to support the formation of opportunities. But once entrepreneurs have identified opportunities, how do they go about building on them?

Allen Lim was able to use his prior knowledge to build his company, Skratch Labs.

Courtesy of SkratchLabs

Researchers have identified two major factors in the building of opportunities: prior knowledge and pattern recognition. 24  As described in our earlier discussion of the finding approach,  prior knowledge  is information gained from a combination of life and work experience. Many studies indicate that entrepreneurs with knowledge of an industry or market, together with a broad network, are more likely to recognize opportunities than those who have less experience or fewer contacts. 25 Successful entrepreneurs often have prior knowledge with respect to a market, industry, or customers, which they can then apply to their own ventures. 26

Prior knowledge: the information gained from a combination of life and work experience.

Allen Lim, founder of Skratch Labs, a company that provides tasty, natural hydrated food and drinks to athletes, was able to apply the knowledge he gained while working as a sports scientist and coach for professional cycling teams. 27

Similarly, Sara Blakely, founder of Spanx, spent weeks researching the shapewear industry before using the knowledge she gained to create her seamless pantyhose product. Steve Sullivan, founder of functional and fashionable outdoor clothing company Stio, spent a number of years working in outdoor retailing before launching his venture.

These are just a few examples of how prior knowledge can be crucial in an entrepreneur’s ability to build on an opportunity.

Another key factor in building and recognizing opportunities is  pattern recognition : the process of identifying links or connections between apparently unrelated things or events. Pattern recognition takes place when people “connect the dots” in order to identify and then build on opportunities. 28  The “nine-dot exercise” ( Figure 3.4 ) illustrates the limitations of our thinking. The challenge is to connect nine dots by drawing four straight lines without lifting your pen from the paper and without backtracking. If you have difficulty completing the task, your mind may be blocked by the imaginary “box” created by the dots. Try to look beyond that imaginary constraint.