- Opportunities are everywhere — you shouldn't wait around for one to fall on your lap.
- You can achieve success by recognizing and capitalizing on the opportunities that are right in front of you.
- There are three steps to recognizing opportunities: identify your talents, connect the dots to see the big picture, and maximize your network.
The following is an adaptation from "Born to Build: How to Build a Thriving Startup, A Winning Team, New Customers and Get Your Best Life Imaginable" by Jim Clifton and Sangeeta Badal:
Opportunities are everywhere. Extant literature on entrepreneurial cognition and psychology indicates that an individual's likelihood of recognizing opportunities increases with:
- Prior knowledge of the environment (business, political or social)
- Motivation to change the status quo (due to improvements in a process; new developments in regulations, technology or industry; or unexpected events or demographic shifts)
- The extent of their networks
Selecting the right idea to pursue may be the most important choice you'll make as a builder.
Your ability to identify opportunities depends on how prepared you are to recognize them. First, you need to be open to recognizing opportunities in your environment. And second, you need to determine if the opportunity in front of you is the best one to pursue.
Path to opportunity recognition
Instead of waiting around for opportunities to show up, let's discuss a process you can use to become alert and sensitive to unexpected events, to shifts in the market or customer needs, and to the possibilities that arise from the changing conditions around you. Cultivating builder alertness will help you discover opportunities. The steps to becoming alert to opportunities are:
- Start with your talents
- Connect the dots
- Maximize your networks
Step 1: Start with your talents
Pay attention to what you like to do and what you don't like to do. Remember, you're likely to be more successful when you are using your natural talents because the opportunities you see and the solutions you build will be meaningful to you.
To identify activities and situations that engage your talents, pay attention to these three clues: level of engagement, accelerated learning, and superior performance.
Level of engagement
Have you ever been so immersed in an activity that you lose track of time? If you have, you were using your talents. Positive psychologist Mihaly Csikszentmihalyi discovered that when people are completely absorbed in an activity, they have an "optimal experience," which he calls "flow."
Talent accelerates engagement with a task or an activity. Think about your experiences with a challenging exercise, a difficult project or a new hobby when you stretched yourself to the limit to achieve something difficult but worthwhile.
If you were "in the zone"— a heightened sense of alertness, effortless performance, genuine satisfaction and immense enjoyment — you were in a state of flow. When you are in a state of flow, you are using your talents.49 The Second Key: Recognizing Opportunities
Building something is so challenging and will require so much effort that if you don't enjoy it, it will be hard to stay interested and committed. But when you apply your talents to an opportunity, you're more likely to be good at it — and that will give you the satisfaction, inspiration and stamina you will need to stick with it.
Accelerated learning
Think about times in your life when you learned a new task, tried a new hobby or participated in an extracurricular activity. Now, think about the ones that you picked up and improved at quickly.
Talent accelerates practice and learning. When you learn an activity or task quicker than your peers do, you likely have an innate talent for it.
Superior performance
When have you naturally risen to the top? You may have noticed early success in writing or public speaking. Someone may have given you positive feedback about your musical ability or praised your performance in a sport. You might be good at organizing people or planning activities.
Talent increases performance. Look for opportunities in areas where your special abilities shine. You are more likely to achieve your goals when you are at your peak performance.
To begin the process of opportunity recognition, start an opportunity journal. At the end of each day, record all the activities and tasks you did that day. For each one, use a 5-point scale (where 1 is low and 5 is high) to rate your level of engagement with the activity, how quickly you learned or improved, and your performance.
As you get more involved in a particular activity, you will begin to develop a heightened sense of awareness about unmet needs, gaps, problems and issues related to that activity. Your awareness will lead to ideas that can change, improve and create new products, processes or services in that area. Select one or two ideas to focus on. These ideas will turn into opportunities as you connect the dots.
Step 2: Connect the dots
Now that you have a good idea of what you like and don't like, start to pay attention to the events, changes and trends in your area(s) of interest that you identified in your opportunity journal. In other words, connect the dots.
Research on human cognition suggests that builders identify opportunities by making connections between seemingly unrelated events. Their ability to see patterns in disparate pieces of information and make sense of social, demographic, technological, policy or other changes happening around them leads them to ideas for new products and services.
Here is an example. Consider the events that led Charles Schwab to launch his online brokerage firm:
- A major regulatory change by the SEC
- Proliferation of personal computers
- Development of software that could track online transactions of goods and services
- Ability to make secure financial transactions over the internet
- Individual investors' frustration with high brokerage fees
How did Schwab recognize an opportunity? He was able to "connect the dots" between these seemingly unrelated events and shifts in his environment, which led to the identification of a new business opportunity.
You may ask, "What leads some people to recognize patterns and make connections between various events, while others in the same environment miss those opportunities?" Existing research on opportunity recognition suggests that an individual's ability to connect the dots depends in part on innate talent (e.g., creativity, optimism, perception of risk) and to a large extent on prior knowledge and life or work experiences.
Schwab had many years of experience in the financial industry. His vast knowledge of the field helped him see how new technological developments "connected" to changes in regulation and to customers' changing expectations. His experiences, knowledge and talent put him in a unique position to recognize the opportunity at hand. Another person might have worked in the same industry but may have had different experiences, different knowledge sets and different talents and so would have been less likely to connect the same dots.
You may be thinking that "connecting the dots" is all well and good for those who have extensive work experience, education and expertise, but what about novice builders? How do they connect seemingly disparate events and information?
Once you have narrowed down the idea(s) that emerge from your opportunity journal, pay attention to the trends, events and changes relevant to your idea — issues, problems and gaps between what is andwhat should be. Be as specific as you can in your journal entries. The greater the specificity of your notes, the clearer the links between seemingly unrelated events and changes will be.
Step 3: Maximize your networks
The next step in the opportunity recognition process is to talk to people in your social circle, especially those who are working in or are knowledgeable about your area of interest. Start with your board members. They are invested in your success and your future. Use them as a sounding board for your ideas.
Consult the expert and the role model on your board. Your role model may be someone you don't know personally but who is well-versed in your area of interest and a source of inspiration for you. Read about this person's experience in the early stages of the building process.
It is also a good time to touch base with your mentor and coach. Get their feedback. They might introduce you to others in the field, give you advice, offer alternatives or identify resources you will need to turn your idea into reality. To make the best use of everyone's time, make a list of questions to ask each board member.
Assessing opportunities
Now that you are beginning to think like a builder, it is time to vet your ideas. Determining whether an opportunity is practical and worth pursuing is a critical part of the opportunity recognition process. You may start with one idea and continue to iterate on it until a final product or service emerges, or you may have multiple ideas that you can process simultaneously.
Vetting your idea(s) might lead you in new and different directions than you originally anticipated. Rarely do builders start with a fully developed idea or know what their venture will ultimately look like.
Opportunity recognition is an ongoing process. Be prepared to continuously refine and develop your ideas and fill your knowledge gaps as you adapt and adjust your goals. Be open to the process of exploration.
To get started, ask yourself:
- Why are you doing this? (Purpose)
- What are you building? (Product/Service)
- Who are your customers, and how are you helping them? (Customer needs)
- What differentiates your product/service from others in the market? (Value add)
- What financial and social resources and skill sets do you bring to the table? (Resources)
- How much are you willing to risk/lose to make your idea a reality? (Affordable loss, which Saras Sarasvathy, a leading scholar of entrepreneurship at the University of Virginia, defines the affordable-loss principle as a determination of how much one [a builder] is willing to lose in order to start a venture)
- What does success look like? (Success)
As you evaluate the feasibility and potential economic value of your ideas, you will begin to see a viable path forward.
Adapted from Born to Build: How to Build a Thriving Startup, A Winning Team, New Customers and Get Your Best LifeImaginable by Jim Clifton and Sangeeta Badal. Copyright 2018 Gallup, Inc. Reprinted with permission from Gallup Press. All rights reserved.
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