Carrying opportunities is expensive. Capturing opportunities can be profitable. Owners and managers alike enjoy identifying and developing opportunities. Many have developed habits and allocations to how much time and expense to allocate to product development. This is usually associated with the pace of customer change or the profit margin of the idea. Developing opportunities is one thing. Storing them is another.
Around Little Engine Ventures, I use the phrase, “think outside the formal boundaries” to reveal the mind of the entrepreneur.
“Entrepreneurship is the process of creating or seizing an opportunity and pursuing it regardless of the resources currently controlled” (Timmons, 1994: 7).
One must see the opportunity. Then design a system to profit from it. Then, execute the actions –usually with hired help– to capture it. As a business develops there is an incremental edge to the process capturing additional profits by serving more customers with the same solution, or more solutions to the same customers.
A strong business “stores” opportunity outside of the formal boundaries… ideally in prospective customers not yet served. A dry pipeline of opportunity is not as valuable to the owner as a full one. An efficient means of developing the pipeline necessitates exceptional satisfaction from the current customers. You must also have a means to profitably access this opportunity warehouse.
However, the cost of storing opportunities outside your formal boundaries is negative. That is, it makes the company worth more today if you know a systematic means of extracting opportunities in your future.
So, ask yourself, “where have I stored my opportunity?”
I know of a business that sells more to current customers when competitors are weak. When competition is high they develop new customers and sell very shallow offering. That is, the sales per customer is low and they develop new customers when the competition is thick. When, the competition grows weak, they go deeper with current customers. This is a very valuable means of storing opportunity in the marketplace –and in knowing how to extract it profitably.