Social Entrepreneurship

Discovering Opportunities for Social

Ventures
 Discovering Opportunities for Social Ventures

Learning Objectives

• 1) Discuss the nature of entrepreneurial opportunities

• 2) Discuss opportunity recognition in social entrepreneurship
• 3) Describe the uniqueness of social venture opportunities
• 4) Discuss global social entrepreneurial opportunities

2
 Discovering Opportunities for Social Ventures

• What is an Idea?
• Entrepreneurial ideas are mere thoughts and the point of departure of the entrepreneurial process.
• Ideas are not opportunities by themselves.
• Ideas are ‘grist for the mill’ and commodities of the entrepreneurial process.

Sources of entrepreneurial ideas:

• Personal experiences.
• Hobbies.
• Accidental discovery.
• Systematic search.
• Awareness created by media.

3
 Discovering Opportunities for Social Ventures

• What is an Idea (cont’d)

Table 1. Three Types of Business Ideas
Type A Ideas Type B Ideas Type C Ideas
Involves identifying a Involves identifying entirely Involves creating new
new market for an new products or services. processes for producing or
existing Example: The launch of the delivering existing products
product or service. iPad in 2010 by Apple. or services.
Example: Expand the Reengineering a company’s
sales of cell phones to processes to be more efficient
rural areas in Africa or and responsive to customers.
South East Asia.

4
 Discovering Opportunities for Social Ventures

• What is an Entrepreneurial Opportunity?

• Entrepreneurial opportunities are situations in which new goods, services, raw materials, and
organizing methods can be introduced and sold at greater than the cost of their production.
• Entrepreneurial opportunities are economic or social value.
• Characteristics of an opportunity (Timmons & Spinelli, 2007)
• (1) ability to add value to the customer.
• (2) adding value by solving a customer’s problem or fulfilling a
customer need.
• (3) ability to capture a market and generate profits
• (4) compatibility with the skill set of the entrepreneur who
pursues them.

5
 Discovering Opportunities for Social Ventures

• What is an Entrepreneurial Opportunity? (cont’d)

• The Four Cs of an opportunity (Gartner & Bellamy, 2010)
• Customer
• Individual willing to buy the products or services of a firm.
• Consideration
• Value provided to the customer.
• Connection
• Getting the product to the customer.
• Commitment
• Willingness to devote time and energy to pursue the opportunity.

6
 Discovering Opportunities for Social Ventures

• What is an Entrepreneurial Opportunity? (cont’d)

• From an Opportunity to a Business Concept
• A business concept refers to a set of favorable events involving customers,
consideration, connection, and commitment (the 4 Cs) that have the potential to
become a successful business (Gardner & Bellamy, 2010).

Figure 1. Evolution from an idea to a business concept.

Business
Idea Opportunity
Concept

7
 Discovering Opportunities for Social Ventures

• How Are Entrepreneurial Opportunities Formed?

Table 3. Key Assumptions of Discovery and Creation Theories
Discovery Theory Creation Theory
Nature of Opportunities Opportunities exist, independent of Opportunities do not exist independent
entrepreneurs. Applies a realist of entrepreneurs. Applies an
philosophy. evolutionary realist philosophy.
Nature of Entrepreneurs Differ in some important ways from non- May or may not differ from non-
entrepreneurs, ex ante. entrepreneurs, ex ante. Differences may
emerge, ex post.
Nature of Decision Making Risky. Uncertain.
Context

8
 Discovering Opportunities for Social Ventures

• How Are Entrepreneurial Opportunities Formed? (Cont’d)

Table 4. Methods for Opportunity Discovery or Creation

Discovery Creation
Active 1. Systematic 3. Idea generation
search
Passive 2. Alertness 4. Design Thinking

9
 Discovering Opportunities for Social Ventures

• How Are Entrepreneurial Opportunities Formed? (cont’d)

1. Systematic Search
• Entrepreneurs actively search for opportunities. They do so by relying on their
competencies, personal and professional experiences.
• Systematic search is a narrow process that is limited to the entrepreneur’s
experience.
• Subject to the corridor principle.
• According to the corridor principle, once an entrepreneur starts a firm, he or she begins a
journey down a path where corridors leading to new venture opportunities become apparent
(Barringer & Ireland, 2012).

10
 Discovering Opportunities for Social Ventures

• How Are Entrepreneurial Opportunities Formed? (cont’d)

2. Alertness
• Ability to identify opportunities that are overlooked by others.
• Includes three dimensions:
• 1) scanning and searching for new information.
• 2) connecting previously disparate information.
• 3) evaluating whether the new information represents an opportunity.

11
 Discovering Opportunities for Social Ventures
• How Are Entrepreneurial Opportunities Formed? (cont’d)
Table 5. Evolving Views of Entrepreneurial Alertness.

Early Kirzner Later Kirzner Recent developments

Role of markets Disequilibrium gap to be identified. Adjustment of opportunities to fit the Opportunities emerge from macro
market. changes.
Role of knowledge and Helpful to the extent that it triggers the Prior knowledge can be expanded to Prior knowledge and information
preexisting conditions ‘aha’ moment. further pursue opportunities. processing inform observations and
feasibility assessment.
Alert scanning and search Passive; a unique preparedness. Passive and active; pursue specific Cognitive capacity (creativity,
opportunities. intelligence) and personal fit.
Alert association and scanning Lying dormant waiting to be identified. Still lying dormant but room for
creativity and further development.
Alert evaluation and judgment Largely unaddressed; assumed that Evaluation of opportunities can evolve Combine benefits/insights and desires
entrepreneurs would act on over time. for a judgment on venture prospects;
opportunities. distinction between first- and third
person opportunities.

12
 Discovering Opportunities for Social Ventures

• How Are Entrepreneurial Opportunities Formed? (cont’d)

3. Idea Generation
• Includes an active and passive phase.
• Draws from effectuation theory and creation theory.
• Uses tools such as:
• Brainstorming.
• Focus groups.

13
 Discovering Opportunities for Social Ventures

• How Are Entrepreneurial Opportunities Formed? (cont’d)

4. Design Thinking
• Consists of using ethnographic methods, such as observation to come up with
new ways of solving problems.
• Iterative, exploratory process involving visualization, experimenting, creating,
and prototyping of models, and gathering feedback.
• Deals with complex, ill-defined problems.
• Design thinking is construed as a cognitive style, a process or a resource.

14
 Discovering Opportunities for Social Ventures

• How Are Entrepreneurial Opportunities Formed? (cont’d)

• Design Thinking (cont’d)
• According to Herbert Simon, a design thinking process could have seven stages:
• Define
• Research
• Ideate
• Prototype
• Choose
• Implement
• Learn

15
 Discovering Opportunities for Social Ventures

• How Are Entrepreneurial Opportunities Formed? (cont’d)

Table 6. Elements of Design Thinking
Define Research Ideate Prototype Choose Implement Learn
Decide what issue Review the history of the Identify the needs and Combine, expand, and Review the objective. Make task Gather feedback from
you are trying to issue; remember any motivations of your end refine ideas. descriptions. the consumer.
solve. existing obstacles. users.
Agree on who the Collect examples of other Generate as many ideas as Create multiple drafts. Set aside emotion and Plan tasks. Determine if the
audience is. attempts to solve the same possible to serve these ownership of ideas. solution met its goals.
issue. identified needs.
Prioritize this project Note the project’s Log your brainstorming Seek feedback from a Avoid consensus Determine resources. Discuss what could be
in terms of urgency. supporters, investors, and session. diverse group of people, thinking. improved.
critics. include your end users.
Determine what will Talk to your end-users that Do not judge or debate Present a selection of Remember; the most Assign tasks. Measure success;
make this project bring you the most fruitful ideas. ideas to the client. practical solution isn’t collect data.
successful. ideas for later design. Reverse judgment and always the best.
maintain neutrality.
Establish a glossary Take into account thought During brainstorming, Create and present actual Select the powerful Execute. Document.
of terms. leaders’ opinions. have one conversation at a working prototype(s). ideas. Deliver to client.
time.

Source: Simon, H. A. (1969). The science of the artificial. Cambridge, MA: MIT Press.
 Discovering Opportunities for Social Ventures

• Nature of Social Entrepreneurial Opportunities

• A social entrepreneurial opportunity is likely to solve a social problem while
maintaining the social venture sustainable.
• Social entrepreneurial opportunities maximize social utility.
• Social utility refers to the benefits accrued to society or a community by the
exploitation of a particular opportunity.

17
 Discovering Opportunities for Social Ventures

• Nature of Social Entrepreneurial Opportunities

• A social entrepreneurial opportunity has five features (Zahra et al., 2008)
• (1) Prevalence
• (2) Relevance
• (3) Urgency
• (4) Accessibility
• (5) Radicalness

18
 Reading
• Students should read chapter 5 from the book to enhance their
further understanding.
• https://online.vitalsource.com/#/books/9781136655937/epubcfi/6/30%5B
%3Bvnd.vst.idref%3DfC05_chapter
%5D!/4/2/10/26/10%5Btab5_3%5D/4/2/2/2%400:0

19