1. Opportunity Identification
Chapter 3

2. What is an Opportunity? Idea for a new product
Product description in embryonic form
Newly sensed need
Newly discovered technology
Rough match between a need and a possible solution

3. Types of Opportunities
Familiarity with the solution likely to be employed.
Familiarity with the need the solution addresses.

4. Opportunity Horizons
Horizon 1: Improvements, extensions, variants, and cost reductions of existing products for existing markets
Horizon 2: opportunities push out into less know territory in one or both dimensions of the market or technology
Horizon 3: attempts to exploit opportunities that are some way new to the world.

6. Tournament Structure of Opportunity Identification

7. Effective Opportunity Tournaments
Generate a large number of opportunities
Seek high quality of the opportunities generated
Create high variance in the quality of opportunities

8. Opportunity Identification Process
Step 1 – Establish a charter
Step 2 – Generate and sense many opportunities
Step 3 – Screen opportunities
Step 4 – Develop promising opportunities
Step 5 – Select exceptional opportunities
Step 6 – Reflect on the results and process

9. Step 1 – Establish a charter
FroliCat:
Create a physical product in the cat toy market that we can launch to the market within about a year through our existing retail sales channel
Dry erase marker with ink-level indicator
Create a dry erase marker similar to existing markers that wool have an integrated ink-level indicator indicating when the marker is empty or close to empty. We will launch to market within one year through via a new LLC and internet sales plus major chains such as Target, Wallmart, Staples, Amazon, OfficeMax.

10. Step 2 – Generate and sense many opportunities

11. Techniques for Generating Opportunities
Follow a person passion
Compile bug lists
Pull opportunities from capabilities
Study customers
Consider implications of trends
Clothes sizing
Green
Wireless
Imitate, but better

12. Techniques for Generating Opportunities
Imitate, but better
Media and marketing activities of other firms
De-commoditize a commodity (competition based on price)
Drive an innovation “down market” – cheaper products with same or similar functions, not all the bells and whistles
Import geographically isolated innovations – Starbucks, Redbull

13. Mine Your Resources
Lead users – people with advanced needs that are not begin met.
Representation in social networks
Universities and government laboratories
Online idea submission

14. Step 3 – Screen opportunities
Pick opportunities with high likelihood of creating value
Consider – market need, technological feasibility, alignment with strategy, etc.
Two methods
Web based surveys
Multivoting
Group must have at least 6 members. More than 10 preferred.
Members must have relevant experience

15. Step 4 – Develop promising opportunities
Invest modest resources into developing a few opportunities
Search internet for existing solutions
Talk to customers
Quick prototypes
Estimate market size and growth rate
Resolve the greatest uncertainty surrounding each one at the lowest cost in time and money.
List major uncertainties and cost to resolve, then pick the biggest ones with the lowest cost first.

16. Step 5- Select exceptional opportunities
Real-Win-Worth-it (RWW) method – 3M
Is the opportunity real?
Market size?
Is technology available?
Lkelihood product can be delivered at the right time and price.
Can you win with the opportunity?
Establish a sustainable competitive advantage?
Can you patent or protect it?
More capable of executing it then your competitors?
Is the opportunity worth it?
Do you have the rources?
Will investment pay off sufficiently

17. Step 6 – Reflect on the results and process
How many opportunities came form internal sources vs external?
Did we consider dozens or hundreds of opportunities?
Was the innovation charter too narrowly focused?
Were our filtering criteria biased?
Are the resulting opportunities exciting to the team?

18. Thought Questions
2. Would consumers make good raters in an opportunity screening process? 3. Can you really answer the question of whether an opportunity is real before developing a product concept? 4. Could a great opportunity identification process result in a product that fails in the market? 5. How do the risks differ between two types of Horizon 2 opportunities, one addressing a current market need and the other using a current solution?