In the ‘Pursuit of Opportunities’ series, so far we have reviewed three techniques to help identify opportunities – connecting the dots, reframing and surfacing hunches. In this post, we take a look at opportunity enactment, which I will explain in a second.
No amount of ideation will suffice unless you take your idea to the next step, which is to act on it. It’s only when you roll up your sleeves and start working on your idea, does the opportunity really start to develop and evolve.
The process of enactment is about getting others to experience your idea and weigh on it. You’ll be surprised at how far from the original idea you will be by the time it takes its final shape. Letting others contribute is a big part of opportunity creation through enactment.
There are several great examples of companies that ended up looking very different from their original avatars; but were super successful nevertheless. Starbucks first started off selling espresso makers and coffee beans. It was only later that Howard Schultz (current chairman, president and CEO) decided to transform it into a phenomenally successful coffeehouse. Even Paypal first began as a tool that allowed people to “beam” payments from their PDAs before it found success as an online payment system.
Like I had written in an earlier post on opportunities, entrepreneurs create an opportunity through a process of enactment. What is enactment? Entrepreneurs build something based on their beliefs about what the market needs. Then they wait for the market to respond, adjust their own beliefs based on the response, and make changes to the offering. This sequence of actions and reactions goes on until the opportunity is fully formed and exploited. This is the process of opportunity enactment.
Let me illustrate this through a fictitious example. Let’s pretend you have just come up with a brand-new business idea. Let’s say you realize the need for fresh, healthy home-cooked dinners in your community, and you want to do something about it.
Step 1: Start with Something that You Believe the Market Needs
You start with a market need. Here’s your hypothesis: Everyone wants to eat healthy and avoid junk food, but the logistics of sourcing fresh ingredients, cooking and cleaning up make it impossible for several households. This is especially true for households where all the adults are working outside the home or where there are young children.
You decide to start a service that home-delivers a meal every evening at 6:30 p.m. You invest in some cooking equipment. You tie up with local farms or grocers to ensure a supply of fresh ingredients and get working. You sign up a few customers, maybe friends or friends of friends, and get started with a small menu of 3-4 options.
Step 2: Cross-validate the Idea with the Market
As business grows, you encounter certain logistical issues. You find that because you are handling the deliveries yourself, they often get delayed. While the first dinner is delivered at 6:30, it is after 8 by the time you deliver the last one. Besides, customers are concerned about the disposable packaging, given that it’s bad for the environment. You might start getting requests for different cuisines or for vegetarian or Kosher food.
New possibilities surface along the way. Your suppliers suggest that buying one protein in bulk can give you significant cost savings rather than buying different types. Some of your customers say they prefer to pick up the dinner on their way home from work, rather than waiting for it to arrive at home.
Step 3: Refine your Offerings Based on Inputs
Based on the feedback, you choose to focus only on vegetarian or vegan food because you realize that there is a very high unmet need for it in your community and 70 percent of your current customers fall into this bracket. You invest in reusable glass containers that need to be returned against a deposit. You provide the option of takeaway. You tie-up with a delivery service to handle your deliveries such that they reach on time. In short, you refine your offering to suit the requirements better.
Step 4: Iterate, Iterate, Iterate
Over time, you decide to scrap home deliveries all together and make it a take-out-only offering. You decide to add breakfasts or packed lunches too. You find a niche that you are comfortable with and that works for your customers too.
When you look back, you are amazed at how far you have come from the original idea that you started out with, but you also realize that your current offering is in perfect resonance with the market needs. Reaching this point is impossible without the process of enactment.
As the opportunity grows, you might explore the need to expand your offerings; maybe to new neighborhoods or to other cities. The process of growing your opportunity such that it is tune with your existing resources and expertise is the process of effectuation, which is the subject of the next (and last) blog in this series. Stay tuned!