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Chapter 2. Identifying Valuable Opportunities > Better Information Processing

Better Information Processing

Access to information is only part of the explanation for why some people and not others identify opportunities for new businesses. Another important part is that they are better able to formulate new business ideas from pieces of information about the changes that make new businesses possible. This part is not trivial. Just because you know that a new technology exists doesn’t mean that you will be able to think of a business to exploit it. Take, for example, the Swiss watchmakers who invented the digital watch technology. Because these watchmakers couldn’t figure out how to use this technology to make watches, they effectively gave away the technology to Japanese companies, who figured out how to commercialize it.

Several aspects of people’s mental capabilities influence information processing and help them to recognize entrepreneurial opportunities. Some people have mental schemas about markets and the ways to serve them that allow them to understand and use information in ways that other people cannot.[14] The information that leads to the recognition of an entrepreneurial opportunity does not come in the form of a prepackaged product or service ready for introduction. Rather, it comes as a hint or trigger that something could be done to create a new business given the new technology, new regulation, new industry structure, or new demographic trend. Therefore, identifying valuable business opportunities is a mental process that involves extrapolating from bits and pieces of information.[15]


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