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Potential for Opportunity Recognition and Team Formation of Entrepreneurs

"Entrepreneurs see ways to put resources and information together in new combinations. They not only see the system as it is, but as it might be. They have a knack for looking at the usual and seeing the unusual, at the ordinary and seeing the extraordinary. Consequently, they can spot opportunities that turn the commonplace into the unique and unexpected." – Mitton (1989, p. 12)
"The significant problems we face cannot be solved at the same level of thinking we were at when we created them." – Albert Einstein
---------------------------------------------------------------- How Do You Spot Opportunities?
Planning for a business that you wished to prosper in the market, should primarily consider how to recognize and exploit the market opportunity to start the business or launch a new product to produce merchandise or service that fits the market's needs and available resources. Moreover, a business created to meet the new market opportunity is more likely to be successful than the one created out of a product idea that does not fit the market.
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Opportunity Recognition An opportunity is a chance to meet a market need, interest, or want through a creative combination of resources to deliver superior value (Schumpeter, 1934; Casson, 1982). The discussion towards opportunity recognition of entrepreneurs has a broad basis mostly from many research findings. The following were shortly discussed by theorists and practitioners who have developed the concept of opportunity recognition.
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Baron
Opportunity recognition is the active, cognitive process (or processes) through which individuals conclude that they have identified the potential to create something new that has the potential to generate economic value and that is not currently being exploited or developed, and is viewed as desirable in the society in which it occurs (i.e. its development is consistent with existing legal and moral conditions). (Baron, 2004b, p. 52)
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Drucker
Systematic innovation involves “monitoring seven sources for innovative opportunity” (Drucker, 1985, p. 35). The first four are internally focused within the business or industry, in that they may be visible to those involved in that organization or sector. The last three involve changes outside the business or industry.
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Mitchell
One of the components of Mitchell’s (2000) New Venture TemplateTM asks whether the venture being examined represents a new combination. To determine this, he suggests considering two categories of entrepreneurial discovery: scientific discovery and circumstance. The second set of variables to consider are the market imperfections that can create profit opportunities: excess demand and excess supply. This gives rise to the entrepreneurial discovery.
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Schumpeter
Schumpeter’s (1934) five kinds of new combinations (a) New or improved good/service (b) New method of production (c) Opening of a new market (d) Conquest of a new source of supply of raw materials (e) Reorganization of an industry, can occur within each of the four kinds of entrepreneurial discovery (Mitchell, 2000, p, 13)
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Murphy
Murphy’s (2011) multidimensional model of entrepreneurial discovery suggests that opportunities may be identified (a) through a purposeful search; (b) because others provide the opportunity to the entrepreneur; (c) through prior knowledge, entrepreneurial alertness, and means other than a purposeful search; and, (d) through a combination of lucky happenstance and deliberate searching for opportunities.
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Vesper
According to experimentation research, entrepreneurial creativity is not correlated with IQ (people with high IQs can be unsuccessful in business and those with lower IQs can be successful as an entrepreneur). Research has also shown that those who practice idea generation techniques can become more creative. The best ideas sometimes come later in the idea-generation process—often in the days and weeks following the application of the idea-generating processes (Vesper, 1996).
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Credits to:
The recognition of opportunities is a necessary condition for entrepreneurship, however, it is not sufficient. Subsequent to the discovery of an opportunity, entrepreneurs must shift their focus from assessing the viability of the various resource combinations that ultimately comprise opportunities to determining how exactly to exploit those opportunities (Choi et al., 2008). Here comes team formation to test.
Entrepreneurial team formation—the process through which founders establish a team to start a new venture—has important implications for team performance and entrepreneurial success. This team is expected to work along the process of recognizing and exploiting business oppurtunities without bound and is held accountable to the success of the business. Each entrepreneur have the interest, both financial and otherwise, interdependent in the pursuit of common goals and venture success of the team.

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