Creativity and the Business Idea

1. SOURCES OF NEW IDEAS

A. A sound unique idea for a new product or service, properly evaluated, is essential to successfully launch a new venture.

B. Consumers.

1. Potential entrepreneurs should continually pay close attention potential customers.

2. This can be an informal or formal survey of consumers expressing their opinions.

3. Be sure that the idea represents a large enough market.

C. Existing Products and Services.

1. Potential entrepreneurs should establish a formal method for monitoring and evaluating the products and services in the market.

2. This may uncover ways to improve on present products, resulting in new product or service ideas.

D. Distribution Channels.

1. Because they are familiar with the needs of the market, channel members often have suggestions for new products.

2. These channel members can also help in marketing the new product.

E. Federal Government.

1. The files of the Patent Office contain numerous new product possibilities.

a. The patents can suggest other new product ideas.

b. Several government agencies and publications, such as the Official Gazette, monitor patent applications.

2. New product ideas can also come in response to government regulations.

F. Research and Development.

1. The largest source for new ideas is the entrepreneur’s own research and development.

2. This can be a formal endeavor connected with one’s current employment or an informal lab in the garage.

II. METHODS FOR GENERATING IDEAS

A. There are several methods to help generate and test new ideas as a basis for the new venture.

B. Focus Groups.

1. Focus group interviews involve a moderator leading a group through an open in-depth discussion rather than simply asking questions.

2. The moderator focuses the discussion on the new product area in either a directive or nondirective manner.

3. The participants are stimulated by comments from other group members in developing a new product idea.

4. The focus group is also an excellent method for initial screening of ideas and concepts.

C. Brainstorming.

1. Brainstorming allows people to be stimulated to greater creativity by participating in organized group exercises.

2. When using brainstorming four rules are followed:

a. No criticism is allowed by anyone in the group.

b. “Freewheeling” is encouraged.

c. Quantity of ideas is desired.

d. Combinations and improvements of ideas are encouraged.

3. Brainstorming sessions should be fun with no one dominating or inhibiting the discussion.

D. Problem Inventory Analysis.

1. Problem inventory analysis uses individuals in a manner similar to focus groups, but instead of generating new ideas, consumers are given a list of problems for a general product category.

2. They are then asked to identify products in this category that have those problems.

3. It is often easier to relate known products to suggested problems in the creation of new product ideas.

4. Problem inventory analysis should be used primarily to identify product ideas for further development.

5. Results from product inventory analysis must be carefully evaluated as they may not actually reflect a new business opportunity.

III. CREATIVE PROBLEM SOLVING

A. Creative problem solving is important in identifying a new product, but personal creativity declines with age, education, lack of use, and bureaucracy.

1. Creativity generally declines in stages.

2. Latent creative potential can be stifled by perceptual, cultural, emotional, and organizational factors.

B. Brainstorming, the most widely used technique, can generate possible ideas about a problem in a limited time through spontaneous contributions of participants.

1. Once the problem statement is prepared, 6 to 12 individuals are selected, with no group member being an expert in the field of the problem.

2. All ideas are recorded, with no criticism allowed.

C. Reverse Brainstorming.

1. Reverse brainstorming is similar to brainstorming, except that criticism is allowed.

2. Since the focus is on the negative aspects of a product or service, care must be taken to preserve group morale.

3. The process usually involves identifying everything wrong with an idea, then a discussion of ways to overcome the problems.

D. Brain writing.

1. Brain writing is a form of written brainstorming.

2. It is silent, written generation of ideas by a group of people.

3. Participants write their ideas on special forms that circulate within the group.

E. Gordon Method begins with group members not knowing the exact nature of the problem.

1. The entrepreneur starts by mentioning a general concept associated with the problem and the group responds with ideas.

2. The actual problem is then revealed, enabling the group to make suggestions for implementation.

F. Checklist Method.

1. A new idea is developed through a list of related issues.

2. The entrepreneur can use the list of questions to guide the development of an idea.

G. Free Association.

1. One of the simplest methods to generate new ideas is free association.

2. A word related to the problem is written down, then another, with each word adding something to the thought process.

H. Forced Relationships.

1. Forced relationships try to force relationships among some product combinations.

2. The steps in the process:

a. Isolate the elements of the problem.

b. Find the relationships between these elements.

c. Record the relationship in an orderly form.

d. Analyze the relationships to find ideas.

e. Develop new ideas from these patterns.

I. Collective Notebook Method.

1. A small notebook is prepared including a statement of the problem, blank pages, and background data.

2. Participants consider the problem and its solution, recording ideas several times a day.

3. A list or summary of the best ideas becomes the topic of a final creative focus group.

J. Attribute Listing.

1. Attribute listing is an idea-finding technique requiring the entrepreneur to list the attributes of a problem and look at each from a variety of viewpoints.

2. Unrelated objects can be brought together to form new combinations and possible uses.

K. Big-Dream Approach.

1. The big-dream approach requires the entrepreneur to dream about the problem and its solution, thinking big.

2. Ideas should be conceptualized without any constraints.

L. Parameter Analysis.

1. Parameter analysis involves parameter identification and creative synthesis.

2. Parameter identification analyzes variables in the situation to determine their relative importance.

3. The relationship between parameters that describe the underlying issues is examined and a solution developed (creative synthesis.)

M. Opportunity Recognition.

1. Some entrepreneurs have the ability to recognize a business opportunity which is fundamental to the entrepreneurial process.

2. The keys to recognizing an opportunity lies in the knowledge and experience of the individual entrepreneur.

3. Other important factors are entrepreneurial alertness and entrepreneurial networks.

IV. PRODUCT PLANNING AND DEVELOPMENT PROCESS

A. Once ideas emerge they need further development and refinement.

1. The production planning and development process is divided into five major stages.

2. This process results in the start of the product life cycle.

Stage 1: Establishing Evaluation Criteria.

1. Criteria for evaluation should be all-inclusive and quantitative enough to screen the product carefully.

2. A market opportunity and adequate market demand must exist.

3. Current competing producers, prices, and policies should be evaluated in their impact on market share.

4. The new product should have synergy with existing management capabilities.

5. The proposed product should be supported by and contribute to the company’s financial well-being.

6. The compatibility of new product’s production requirements with existing plant, machinery, and personnel should be evaluated.

7. Entrepreneurs should formally evaluate an idea throughout its evolution.

Stage 2: Idea Stage

1. Promising new product ideas should be identified and impractical ones eliminated.

2. In the systematic market evaluation checklist method, each new product idea is expressed in terms of its chief values, merits, and benefits.

3. This technique can be used to determine which new product alternatives should be pursued and which should be discarded.

4. The company should also determine the need for the product and its value to the company.

5. Need determination should focus on the type of need, its timing, the users involved, the importance of marketing variables, and the overall market structure and characteristics.

6. In determining the product’s value to the firm, financial scheduling should be evaluated.

Stage 3: Concept Stage

1. In the concept stage the refined idea is tested to determine consumer acceptance.

2. One method of testing is the conversational interview in which respondents are exposed to statements that reflect attributes of the product idea.

3. Features, price, and promotion should be evaluated in comparison to major competitors.

Stage 4: Product Development Stage.

1. In this stage, consumer reaction to the physical product is determined, often through a consumer panel.

2. The panel can be given samples of the product and competitors’ products to determine consumer preference.

Stage 5: Test Marketing Stage.

1. A market test can be done to increase the certainty of successful commercialization.

2. The test marketing stage provides actual sales results, which indicate the acceptance level of consumers.