Business Opportunities: Discovered or Created?

The satellite office campus of eBay in the North First Street neighborhood of San Jose. PayPal is based here, along with several other eBay divisions. By Coolcaesar
eBay in the North First Street neighborhood of San Jose. By Coolcaesar

Nearly every core aspect of the entrepreneurial process is subject to paradox. When thinking about entrepreneurs, are they born or made? And what about the emergence of opportunities: discovered or created? Then there is the evaluation process of an opportunity: instrumental or legitimate? In organizations, is the process of pursuing an opportunity based on planning or improvising? And the resources needed: exploit versus explore? And the networks: rational or embedded? Or even about the development of business plans: are they a management tool or creativity inhibitor?

I would like to focus on one in particular: the opportunity emergence paradox. Are business opportunities discovered or created?  Definitely not an accidental choice since opportunity is a central element, perhaps even the central element, of the entrepreneurial process. What about business opportunities like WhatsApp, eBay, Amazon, Amgen, Starbucks, Blink, Buyvip, eDreams, Sephora, Mango, Nespresso, Indisys, Veritas, Symantenc, Softonic Were they discovered or created?


The fact is that there are two well-known perspectives on this issue. Generally speaking, when thinking about how opportunities emerge and are identified, I get the feeling that many of us were at some point inclined to think that the business opportunities are discovered . “How did he/she come across such an opportunity?” we often hear someone say.

Starbucks Coffee Shop in Guangzhou, China. Photo by Peter Rimar
Starbucks Coffee Shop in Guangzho. Photo by Peter Rimar

Unconsciously we advocate for the discovery perspective.  Are we right? Yes! No!  First they all share a key attribute: they all are business ideas that grew and turned into opportunities. The “idea” was able to create value for its target customers, and a market was created.

However, think for a moment of the emergence of the opportunity itself. If we do perceive that such opportunities were discovered we would then be seeing them as given objects in the environment. Under this view opportunities are simply a part of our environment, and they are out there to be discovered. So they exist independently of human intervention, time and place. Why don’t we then all jump on them to take advantage of the profit gaps in the market? Why do some people do so? How come others do not?

Tricky answers. Some entrepreneurs are very proactive in seeking opportunities. But a great deal of opportunities emerge when an entrepreneur discovers one without even, let’s say, consciously searching for it. Some entrepreneurs are more alert than others: They seem to be equipped with a warning system that allow them to turn their attention and give response to unforeseen opportunities more o less involuntarily; some entrepreneurs discover new opportunities without actively going after them . How? While opportunity is objective, remember, discovery is a subjective process; it is linked to the individual.

A Mango shop in the Palms Mall, sited in Victory Island, Lagos (Nigeria).
A Mango shop in the Palms Mall, sited in Victory Island, Lagos (Nigeria). Author: Gons.

Then there are other considerations, for example, relating to the role played by the individual, information on a particular activity or field, his/her previous personal and professional experience, and his/her social network and personal effort through which he or she “benefits” from a greater degree of knowledge of eventual solutions, and new ways of addressing challenges.

A fundamental assumption of this perspective is that the opportunity discovered remains the same over time. In the academic world this type of opportunity is known as Kirznerian because of the British economist Israel Kirzner, a distinguished disciple of the Austrian School of Economics founded on the early works of Ludwig von Mises and Friedrich A. Hayek. In addition some followers of Kirsner’s perspective argue that our ability to discover opportunities is largely determined by our ability to analyze and interpret information, to for example, find solutions to either one’s problems or others’ problems (“holes” in the market), by our level of intelligence (of course), and also by how our brain works, that is to say, the way we understand and think about what is going on in our ecosystem and within ourselves.

Or Created?

But what if we think that there’s nothing to discover in our environments? There are many who think this way. They think that there would not be opportunities without human intervention: Opportunities and markets have to be invented, made, constructed, created, etc., by humans. Thus opportunities are subjective, not objective, realities. When we perceive opportunities in such a way we are talking about Schumpeterian-type opportunities.  No need of introducing Professor Schumpeter here. When interpreting an Schumpeterian opportunity, everything pivots around innovative human action.

The opportunity is not based on past or current information on markets, prices, consumer preferences, etc.  Instead, it is based on individuals’ ability to act creatively by designing new combinations, and thinking in an innovative manner, and where entrepreneurs’ interaction with others – their contexts and themselves – is a factor in the creative process.

Amazon website
Amazon website

Opportunity is therefore linked to the individual’s actions, which are rooted in a social context, and the process of opportunity emergence requires a creative individual. Instead of perceiving opportunities as objective truths that are present at all times, and eventually visible to all, opportunities are seen as a everyday phenomenon as a result of the interaction between the entrepreneur, other people and their ecosystems in daily life. So opportunities are dynamic, they are constantly evolving as a result of this interaction, in Schumpeter’s words, as new creative combinations of the existing order.

For example, eBay’s founder has been asked many times (perhaps hundreds of times) how the opportunity emerged, and he would always reply, “When I launched the company in 1995, eBay was not my business… it was my hobby. I had to build a system that was self-sustaining…” Beyond the network computing complexities to put the project in place, and a multimillion deal with Facebook this year, Jan Koum, one of the WhatsApp’s founders, recognized at the Mobile World Congress (MWC) in Barcelona a few days ago that the emergence of his opportunity had an embryonic link back to when he as just a teenager.   He had emigrated to the U.S. from Ukraine at the end of the 90’s, and he had a constant unmet need of communicating with the friends he had left there. Under the creation perspective the entrepreneur does not necessarily determine the development of the opportunity-creation process; he or she is just one of many actors who have influence on such a process.

So, Discovered or Created?

Which perspective do you like most? It is not a question of “one or the other.” There is always a third way. Given that standing in-between usually is a more relaxed path to conjecture, I will take this track. So I would agree with those who argue that perhaps both are reasonable views since there are opportunities waiting to be discovered, and also opportunities that require a diverse kind of players involved, including entrepreneurial founders, to act effectually to create them. We’ll discuss further.