4 Valuing ideas
4.1 Introduction
Every teacher will recognise the situation in which his or her students want to get started on an idea as quickly as possible without it being clear why they chose it, or vice versa, in which students have a good idea but leave it unattended. Certainly when it comes to group work, it is difficult to find out what was actually behind the initial choice. Compared to the scholarly attention paid to generating ideas (diverging), valuing (and converging) ideas, and doing this in a structured way, seems to be neglected in both entrepreneurship education and research. When is an idea a good idea? And what should, or can you pay attention to as learner or teacher? Learning to generate ideas is important [see Spotting opportunities and Creativity], but evaluating and pursuing them is just as important. After a good brainstorm, it is impossible to work out all the ideas, so where do you start? It would be a shame if you throw away that one idea - that actually had a lot of potential - too soon or, just as bad, if you select an idea and forget to validate it properly. The phrase 'building something nobody wants' is a popular phrase in entrepreneurship education.
4.2 Insights
Idea evaluation should not be seen separately from idea generation [1]. Wrong steps or outcomes in both processes influence the outcome of the creative process. After all, without sufficient variation in ideas there is too little mass to evaluate properly. The result is probably more of the same and thus little chance of newness and originality [see: Creativity]. When there is enough variation in ideas, the evaluation process becomes even more important.
Yet it seems that idea generation and idea evaluation are really different skills, each with their own unique set of thinking processes. Whereas it is important to diverge, to be unconventional, surprising and as broad as possible when generating ideas, the opposite is true for idea evaluation. Here it is all about logical reasoning, using what you already know, meaningfully combining it with your own motivation, capacities and circumstances and funnelling it all together. This process is primarily personal and future-oriented. The entrepreneur (or the team) asks himself: what do I find an interesting opportunity? Is there demand from the market? What suits me and my norms, values and identity? And which opportunity is interesting to pursue given the circumstances, my network and available resources [see: Mobilising resources]?
Role of the team
When selecting ideas, good use can be made of the various qualities and insights of the team. A team can ensure that the idea is looked at from different perspectives, experience and knowledge domains, which strengthens the evaluation process [see: Working with others]. In this (group) evaluation process the role of novelty is a particularly interesting one. Some degree of novelty is important from an entrepreneurial perspective [see: Creativity]. If the student group does not want to give that novelty a potential chance in the evaluation process, they may slaughter the potential goose with the golden eggs too soon. For example, student teams may have too much of a tendency to focus only on those ideas that are feasible, and thus not give truly new ideas a chance. This is because team members tend to focus on ideas that fit well with their individual perspectives and backgrounds. Anything that deviates from that has little chance. The opposite can also happen, however, namely that groups are not critical enough and tend to focus too much on a wild idea. If wild ideas are given too much space in the evaluation process, it can be a disastrous road (the so-called reckless variability trap).
Role of knowledge and experience
Selecting promising ideas is therefore not easy. Acquiring knowledge and experience seems to play an important role in evaluating ideas. The more often you develop ideas, the more important certain criteria, heuristics or rules of thumb become. After all, beginners think differently than more experienced entrepreneurs. Entrepreneurship psychologist Robert Baron asked novice entrepreneurs (students) and experienced entrepreneurs (started several companies) how they evaluated business ideas [2] [see also: Spotting opportunities]. What did they look for? It appeared that experienced entrepreneurs indeed used very different evaluation criteria than students. Students often look at novelty, technology and the potential to change an industry. Novelty and originality are certainly important, but do not guarantee success. It is therefore not surprising that experienced entrepreneurs focus on the manageability of risks, whether there are others [see: Mobilising resources] with whom the idea can be further developed, and whether the idea solves a problem. Research therefore shows that it is useful for students to work with a set of criteria with which they evaluate their ideas. The criteria from Baron's study are very suitable for this purpose.
An example of an evaluation model aimed at evaluating product ideas is the CPSS model - Creative Product Semantic Scale - developed by Susan Besemer back in the 1990s [3]. Product ideas can be evaluated on their market potential using three dimensions - novelty, resolution and style. Novelty refers to the consideration of new materials, processes, concepts and other elements of novelty in a product. The second dimension is resolution; this dimension indicates how well the product does what it is made for. In other words, it must be a product that functions well, and that people know how to use. Style is the last dimension; it describes how a product presents itself to people, the presentation style of the product.
The centrality of value
From an entrepreneurship point of view, an idea will needs to be considered - as soon as possible - from the concept of value. Does the idea potentially create value for someone else? Value is subjective: something has value at the moment that someone finds or experiences that it has value. An idea has value if, for example, it solves a problem for someone, removes a pain or enables people to achieve a goal. Value therefore always has a relationship with a particular target group or user. Value can be economic, social or cultural and can be viewed from multiple levels, for example an individual, group, organization or society. Identifying potential value is a crucial step in the idea evaluation process. This is the reason why many entrepreneurship programmes use design thinking type of approaches, in which the focus is on evaluating the idea as quickly as possible with as many potential users as possible. By sharing the idea at an early stage with others, including those outside your team, such as experts, informants and preferably potential users of your idea, you will quickly find out whether it is worth developing the idea further. Although research into the effectiveness of design thinking in entrepreneurship education is still scarce, a 'user-centred' approach to evaluating ideas does seem to be helpful. Some researchers go even one step further by arguing that in all entrepreneurship education, students should be exposed to value creation processes [5].
Sharing ideas
Sharing your ideas quickly is somewhat counterintuitive for some students. After all, why share your idea at this point? Someone else could steal it! The reality is that ideas are often so rudimentary that the chance of your idea becoming better is many times bigger than the risk of someone else (with exactly the same background) stealing it. Another argument is that if ideas are picked up by several people, there is obviously a need, which is in general a positive thing. This is not to say that students should be naive about the potential of their ideas. There are various ways of protecting ideas: from patents to copyrights or trade secrets [6]. This can be an advantage if funding is needed in a later stage [see: Financial and Economic Literacy]. For example, investors in some sectors will demand this when considering investment.
Yet it seems that idea generation and idea evaluation are really different skills, each with their own unique set of thinking processes. Whereas it is important to diverge, to be unconventional, surprising and as broad as possible when generating ideas, the opposite is true for idea evaluation. Here it is all about logical reasoning, using what you already know, meaningfully combining it with your own motivation, capacities and circumstances and funnelling it all together. This process is primarily personal and future-oriented. The entrepreneur (or the team) asks himself: what do I find an interesting opportunity? Is there demand from the market? What suits me and my norms, values and identity? And which opportunity is interesting to pursue given the circumstances, my network and available resources [see: Mobilising resources]?
Role of the team
When selecting ideas, good use can be made of the various qualities and insights of the team. A team can ensure that the idea is looked at from different perspectives, experience and knowledge domains, which strengthens the evaluation process [see: Working with others]. In this (group) evaluation process the role of novelty is a particularly interesting one. Some degree of novelty is important from an entrepreneurial perspective [see: Creativity]. If the student group does not want to give that novelty a potential chance in the evaluation process, they may slaughter the potential goose with the golden eggs too soon. For example, student teams may have too much of a tendency to focus only on those ideas that are feasible, and thus not give truly new ideas a chance. This is because team members tend to focus on ideas that fit well with their individual perspectives and backgrounds. Anything that deviates from that has little chance. The opposite can also happen, however, namely that groups are not critical enough and tend to focus too much on a wild idea. If wild ideas are given too much space in the evaluation process, it can be a disastrous road (the so-called reckless variability trap).
Role of knowledge and experience
Selecting promising ideas is therefore not easy. Acquiring knowledge and experience seems to play an important role in evaluating ideas. The more often you develop ideas, the more important certain criteria, heuristics or rules of thumb become. After all, beginners think differently than more experienced entrepreneurs. Entrepreneurship psychologist Robert Baron asked novice entrepreneurs (students) and experienced entrepreneurs (started several companies) how they evaluated business ideas [2] [see also: Spotting opportunities]. What did they look for? It appeared that experienced entrepreneurs indeed used very different evaluation criteria than students. Students often look at novelty, technology and the potential to change an industry. Novelty and originality are certainly important, but do not guarantee success. It is therefore not surprising that experienced entrepreneurs focus on the manageability of risks, whether there are others [see: Mobilising resources] with whom the idea can be further developed, and whether the idea solves a problem. Research therefore shows that it is useful for students to work with a set of criteria with which they evaluate their ideas. The criteria from Baron's study are very suitable for this purpose.
An example of an evaluation model aimed at evaluating product ideas is the CPSS model - Creative Product Semantic Scale - developed by Susan Besemer back in the 1990s [3]. Product ideas can be evaluated on their market potential using three dimensions - novelty, resolution and style. Novelty refers to the consideration of new materials, processes, concepts and other elements of novelty in a product. The second dimension is resolution; this dimension indicates how well the product does what it is made for. In other words, it must be a product that functions well, and that people know how to use. Style is the last dimension; it describes how a product presents itself to people, the presentation style of the product.
The centrality of value
From an entrepreneurship point of view, an idea will needs to be considered - as soon as possible - from the concept of value. Does the idea potentially create value for someone else? Value is subjective: something has value at the moment that someone finds or experiences that it has value. An idea has value if, for example, it solves a problem for someone, removes a pain or enables people to achieve a goal. Value therefore always has a relationship with a particular target group or user. Value can be economic, social or cultural and can be viewed from multiple levels, for example an individual, group, organization or society. Identifying potential value is a crucial step in the idea evaluation process. This is the reason why many entrepreneurship programmes use design thinking type of approaches, in which the focus is on evaluating the idea as quickly as possible with as many potential users as possible. By sharing the idea at an early stage with others, including those outside your team, such as experts, informants and preferably potential users of your idea, you will quickly find out whether it is worth developing the idea further. Although research into the effectiveness of design thinking in entrepreneurship education is still scarce, a 'user-centred' approach to evaluating ideas does seem to be helpful. Some researchers go even one step further by arguing that in all entrepreneurship education, students should be exposed to value creation processes [5].
Sharing ideas
Sharing your ideas quickly is somewhat counterintuitive for some students. After all, why share your idea at this point? Someone else could steal it! The reality is that ideas are often so rudimentary that the chance of your idea becoming better is many times bigger than the risk of someone else (with exactly the same background) stealing it. Another argument is that if ideas are picked up by several people, there is obviously a need, which is in general a positive thing. This is not to say that students should be naive about the potential of their ideas. There are various ways of protecting ideas: from patents to copyrights or trade secrets [6]. This can be an advantage if funding is needed in a later stage [see: Financial and Economic Literacy]. For example, investors in some sectors will demand this when considering investment.
4.3 Further reading
[1] Arthur Cropley in his review article discusses the importance of generating and evaluating ideas. Both need to be in balance to achieve good results. Cropley, A. (2006). In praise of convergent thinking. Creativity research journal, 18(3), 391-404.
[2] A classic article showing that people use different criteria when recognizing opportunities, and that experienced entrepreneurs use different criteria than inexperienced entrepreneurs. Baron, R.A., & Ensley, M.D. (2006). Opportunity recognition as the detection of meaningful patterns: Evidence from comparisons of novice and experienced entrepreneurs. Management science, 52(9), 1331-1344.
[3] In this article, Susan Besemer tests the CPSS model in a survey of 128 students. Besemer, S.P. (1998). Creative product analysis matrix: testing the model structure and a comparison among products - three novel chairs. Creativity Research Journal, 11(4), 333-346.
[4] Rainer Harms and Mario Schwery recently investigated the relationship between the use of the lean start-up method by start-ups and the performance of these companies. Harm, R. , & Schwery, M. (2020) Lean Startup: Operationalizing Lean Startup Capability and testing its performance implications, Journal of Small Business Management, (58)1, 200-223.
[5] For his dissertation, Martin Lackéus examined the role of value creation as a pedagogical lens for entrepreneurship education. Lackéus, M. (2016). Value creation as educational practice - towards a new educational philosophy grounded in entrepreneurship? Chalmers University of Technology.
[6] The RVO's Intellectual Property Compass makes it easy to find which intellectual property rights are commonly used in various sectors. https://www.rvo.nl/sites/default/files/2014/10/IE-kompas-Doorklik.pdf
[2] A classic article showing that people use different criteria when recognizing opportunities, and that experienced entrepreneurs use different criteria than inexperienced entrepreneurs. Baron, R.A., & Ensley, M.D. (2006). Opportunity recognition as the detection of meaningful patterns: Evidence from comparisons of novice and experienced entrepreneurs. Management science, 52(9), 1331-1344.
[3] In this article, Susan Besemer tests the CPSS model in a survey of 128 students. Besemer, S.P. (1998). Creative product analysis matrix: testing the model structure and a comparison among products - three novel chairs. Creativity Research Journal, 11(4), 333-346.
[4] Rainer Harms and Mario Schwery recently investigated the relationship between the use of the lean start-up method by start-ups and the performance of these companies. Harm, R. , & Schwery, M. (2020) Lean Startup: Operationalizing Lean Startup Capability and testing its performance implications, Journal of Small Business Management, (58)1, 200-223.
[5] For his dissertation, Martin Lackéus examined the role of value creation as a pedagogical lens for entrepreneurship education. Lackéus, M. (2016). Value creation as educational practice - towards a new educational philosophy grounded in entrepreneurship? Chalmers University of Technology.
[6] The RVO's Intellectual Property Compass makes it easy to find which intellectual property rights are commonly used in various sectors. https://www.rvo.nl/sites/default/files/2014/10/IE-kompas-Doorklik.pdf
4.4 Exercises for students
1) The 'means' approach
Students first generate a large number of new ideas [see: Creativity]. Then, individually or in groups, they make an inventory of their means. In other words, what am I good at, what contacts do I have, and what makes me enthusiastic [see also: Self-awareness and self-efficacy]. They then use their means to select ideas. Which idea would they be able to get to work on immediately - preferably tomorrow - based on their means?
Explanation: There are many ways to evaluate ideas. It is good to realize that popular methods and techniques are just tools. In the entrepreneurial process ideas die regularly and it remains difficult to predict which ideas will make it. Learning to work with idea evaluation tools is therefore worthwhile for students in order to gain experience with the process and with different approaches. In this exercise the emphasis is on evaluating/valuing from a 'means' point of view.
2) Checklists
There are very few ideas that have not already been tried and tested somewhere in the world. So it is certainly worthwhile to google an idea to see if there are more similar ideas and compare them with your own. A second step is to use existing tools and checklists to further evaluate the idea. Besides the somewhat formal CPSS scale there are also many practical tools and checklists available. Examples are the value proposition canvas (https://www.strategyzer.com/canvas/value-proposition-canvas) by Alexander Osterwalder and more generic checklists, Small Business - 21-Point Invention Evaluation Checklist (entrepreneur.com) and Entrepreneur, business - Idea Evaluation Checklist.
Explanation: In this second exercise the emphasis is on evaluating by using checklists.
3) Intuition
While the means approach is a personal, and checklists are a rational way to evaluate ideas, there is also a more intuitive way to evaluate ideas. You often hear entrepreneurs say that they step into certain projects based on experience or gut feeling. Using a number of start-up cases, such as those developed by the city of Amsterdam (https://entrepreneurshipcases.amsterdam/welcome), you can ask students to select the ideas that they think have the greatest chance of success. You can then ask them what arguments they had in mind for doing so. If it is known what happened with the idea, then a good discussion can take place about why the idea was or was not a success.
Explanation: In this third exercise, the emphasis is on the intuitive evaluation of ideas.
4) Idea Advocate
A group evaluation of an idea. This is a fun way to evaluate ideas in a group (when there are not too many), and, at the same time work, on learning how to do business in a group. The idea advocate pitches his or her idea to the group, where the idea is discussed extensively in the group. During the discussion the hats of Edward de Bono can be used to give group members an explicit role. The task of some group members is to burn the idea ('black hat'), the task of other group members is to see where the strength lies ('yellow hat'). On the basis of this process, the group decides which idea it wants to take forward.
Explanation: Besides individual ways of evaluation, you can also evaluate in groups. It is important that students learn to adjust their original idea based on such feedback.
Students first generate a large number of new ideas [see: Creativity]. Then, individually or in groups, they make an inventory of their means. In other words, what am I good at, what contacts do I have, and what makes me enthusiastic [see also: Self-awareness and self-efficacy]. They then use their means to select ideas. Which idea would they be able to get to work on immediately - preferably tomorrow - based on their means?
Explanation: There are many ways to evaluate ideas. It is good to realize that popular methods and techniques are just tools. In the entrepreneurial process ideas die regularly and it remains difficult to predict which ideas will make it. Learning to work with idea evaluation tools is therefore worthwhile for students in order to gain experience with the process and with different approaches. In this exercise the emphasis is on evaluating/valuing from a 'means' point of view.
2) Checklists
There are very few ideas that have not already been tried and tested somewhere in the world. So it is certainly worthwhile to google an idea to see if there are more similar ideas and compare them with your own. A second step is to use existing tools and checklists to further evaluate the idea. Besides the somewhat formal CPSS scale there are also many practical tools and checklists available. Examples are the value proposition canvas (https://www.strategyzer.com/canvas/value-proposition-canvas) by Alexander Osterwalder and more generic checklists, Small Business - 21-Point Invention Evaluation Checklist (entrepreneur.com) and Entrepreneur, business - Idea Evaluation Checklist.
Explanation: In this second exercise the emphasis is on evaluating by using checklists.
3) Intuition
While the means approach is a personal, and checklists are a rational way to evaluate ideas, there is also a more intuitive way to evaluate ideas. You often hear entrepreneurs say that they step into certain projects based on experience or gut feeling. Using a number of start-up cases, such as those developed by the city of Amsterdam (https://entrepreneurshipcases.amsterdam/welcome), you can ask students to select the ideas that they think have the greatest chance of success. You can then ask them what arguments they had in mind for doing so. If it is known what happened with the idea, then a good discussion can take place about why the idea was or was not a success.
Explanation: In this third exercise, the emphasis is on the intuitive evaluation of ideas.
4) Idea Advocate
A group evaluation of an idea. This is a fun way to evaluate ideas in a group (when there are not too many), and, at the same time work, on learning how to do business in a group. The idea advocate pitches his or her idea to the group, where the idea is discussed extensively in the group. During the discussion the hats of Edward de Bono can be used to give group members an explicit role. The task of some group members is to burn the idea ('black hat'), the task of other group members is to see where the strength lies ('yellow hat'). On the basis of this process, the group decides which idea it wants to take forward.
Explanation: Besides individual ways of evaluation, you can also evaluate in groups. It is important that students learn to adjust their original idea based on such feedback.