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      With these positives comes a downside. More people than ever are starting companies. The lack of barriers to entry allows terrible ideas to be pursued. Investing time at the very beginning to understand how to come up with a good opportunity is more important than ever.

      That is the purpose of this book.

      CHAPTER 3

      Opportunities

      At some point in your life you had an entrepreneurial epiphany. You suddenly came up with an idea that you couldn’t stop thinking about. You might have believed it was an idea that could change the world and bring you fame and fortune. It might be something that you wanted to create to solve a problem you had, or it could have been something you were completely fascinated by and obsessed with.

      Throughout history, whenever there is a problem or an unmet need, humans have tried to create something to provide a solution. The academic literature talks about these unmet needs as being the result of “suboptimal solutions,” a status quo that leaves the user or customer unsatisfied. The telegraph was invented to address the fact that the postal service was a suboptimal solution for rapid communication and addressed the unmet need of instant communication over large distances. Airplanes provided a solution to suboptimal long voyages by ship. Facebook aggregated and improved on several different suboptimal solutions for sharing information with your friends and family.

      The Four Criteria for an Opportunity

      All opportunities start with an idea. While ideas are at the heart of all opportunities, for an idea to be an opportunity, it must be actionable (i.e., an idea that can’t be executed isn’t an opportunity) and have the following characteristics:7

      1. The idea is durable: It is not a fad and will last long enough to allow it to be monetized.

      2. The idea is timely: The market is ready to buy the solution.

      3. The idea is attractive: The potential rewards and returns on investment far exceed the foreseeable costs and resources to create the product.

      4. The idea adds value: It must lead to a product or service that creates or adds value for its buyer or end user.

      Sean has spent years listening to pitches from entrepreneurs seeking investment on the business reality show Dragons’ Den, the Canadian version of Shark Tank. Throughout this book we’ll include short examples from Dragons’ Den and Shark Tank to illustrate our points. We will start with DJ R Dub,8 an entrepreneur with an idea that missed on all four of these characteristics. DJ R Dub came on Shark Tank to raise capital for his “love song dedication show.” It didn’t go well. The investors declined to fund this entrepreneur because the idea was not: