After studying this chapter, you should be 
              able to…
                  1. Distinguish among the different types and sources 
                          of startup ideas and identify the most common 
                          sources of startup ideas.
                  2. Use innovative thinking to generate 
                          ideas for high-potential startups.
                  3. Describe external and internal 
                          analyses that might shape the 
                          selection of venture opportunities.
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                  4. Explain broad-based strategy options                                                                                                                                                           h
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                          and focus strategies.                                                                                                                                                                     D
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                  5. Assess the feasibility of a startup idea                                                                                                                                                       h
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                          before writing a business plan.                                                                                                                                                            
                                                                                                                                                                                                                    ©
       © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted 
       in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.                                                                                 3–2
                                     Coming Up with Startup Ideas
               • Opportunity Recognition
                       Identification of potential new products or services 
                              that may lead to promising businesses
               • Entrepreneurial Alertness
                       Readiness to act on existing, but unnoticed, business 
                              opportunities
               • Good Investment Qualities
                       Products that serve clear and important needs
                       Products that customers know about
                       Products that customers can afford
                       A good idea is not the same as a good opportunity.
       © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted 
       in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.                                                                                 3–3
                 Creating a New Business from Scratch
                             To develop a                                                                                                                      To tap into 
                               To develop a                                                                                                                     To tap into 
                               commercial                                                                                                                           unique 
                                commercial                                                                                                                            unique 
                                market for                                                                                                                      resources 
                                  market for                                                                                                                      resources 
                             new product                                                                                                                          that are 
                               new product                                                                                                                          that are 
                                or service.                                                                                                                       available
                                  or service.                                                                                                                      available
                                                                                     Motivations 
                                                                                      Motivations 
                                                                                             To Start 
                                                                                              To Start 
                                                                                        a Business
                                                                                          a Business
                              Wanting the                                                                                                                          To avoid 
                               Wanting the                                                                                                                          To avoid 
                              challenge of                                                                                                                    undesirable 
                               challenge of                                                                                                                     undesirable 
                               succeeding                                                                                                                      features of 
                                 succeeding                                                                                                                      features of 
                            (or failing) on                                                                                                                        existing 
                             (or failing) on                                                                                                                         existing 
                                  your own                                                                                                                      companies
                                   your own                                                                                                                      companies
       © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted 
       in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.                                                                                 3–4
               Types of Startup Ideas
               • Type A
                       Are centered around providing customers with an 
                            existing product not available in their market.
               • Type B
                       Involve new ideas, involve new technology, centered 
                            around providing customers with a new product.
               • Type C
                       Are centered around providing customers with an 
                            improved product.
       © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted 
       in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.                                                                                 3–5
                      EXHIBIT 3.1 Types of Ideas That Develop into Startups
       © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted 
       in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.                                                                                 3–6