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THE CONVERGENCE OF GOOD IDEAS: WHEN AND HOW DO ENTREPRENEURIAL MANAGERS RECOGNIZE INNOVATIVE BUSINESS IDEAS ?
Alice J. de Koning
Daniel F. Muzyka
Boulevard de Constance
77305 Fontainebleau, CEDEX, France
Telephone/Fax: 33-1-60 72 41 76 / 33-1-60 72 42 23
The opportunity recognition skills and processes of "repeat entrepreneurs" (i.e. having multiple successes) are investigated, resulting in a multi-dimensional model of opportunity recognition. The study uses unstructured interviews to cover a range of potentially important factors, including social context (incl. networks), personal contacts, cognitive processes and knowledge, personal factors (e.g. events) and other issues, all of which have already been identified by various published studies. We sort out what factors are most salient, in the perspective of the repeat entrepreneurs, and build a series of propositions and a model to describe the opportunity recognition process.
A biased sample of 20 repeat entrepreneurs was selected, with whom interviews lasting about one hour were conducted. An interview protocol was used, to ensure that the major topic areas, as identified in our literature review, would be discussed. The field notes were then analyzed, comparing and contrasting the entrepreneurs' responses.
Although our analysis is decidedly preliminary, so far we have found that cognitive aspects, especially expertise, and good judgment in identifying potential partners having complementary skills and knowledge, dominate the results. In the cognitive aspect, there are two interesting emphases: one, the growing confidence of the entrepreneurs in their own tacit knowledge of business or industry, and two, less reliance on formal quantitative analysis. This shift in their approach to analysis of opportunities is partly due to growing experience and knowledge, but also due to growing confidence in their own judgment. One entrepreneur also noted he often made connections between industries that others didn't make, suggesting an ability to reframe situations creatively, thus 'creating' an opportunity which others did not perceive. Regarding the reliance on complementary partners, repeat entrepreneurs in our sample seemed to enjoy enough self-confidence to openly compensate for their weaknesses by relying on other people. Most entrepreneurs seemed to agree that opportunity was often a person or team-specific concept, because the relative potential business value of a situation depended on being able to make a specific and appropriate contribution to the ventures' success. Thus, opportunity recognition was often a question of "opportunity fit".
Our preliminary results suggest that entrepreneurs looking for a second success, or would-be entrepreneurs, would benefit from building a domain of knowledge in specific types of businesses or industries. This knowledge base gives an entrepreneur a comparative uniqueness vis a vis potential opportunities, allowing for improved judgment, but more importantly, allowing for 'reframing' a situation into an opportunity. The ability to share confidence in complementary partners is also useful.
We also believe that our findings will allow us to develop a richer understanding of chance or fate, as an interaction of the explicit and tacit knowledge base of the entrepreneur with the specifics of a situation.