Saturday, April 28, 2012

Stock of opportunities

I had the pleasure of engaging with Prof Casson from Reading University on the topic of opportunities. Prof Casson is an economist, and in one of his papers he discusses the stock of opportunities. The question is whether the number of opportunities is limited. The discussion is very interesting, but a key factor for me was the fact that Prof Casson suggests that there is an inverse relationship between the number of opportunities and the complexity of the opportunities. In other words, the less complex an opportunity is, the more of them exist, and the more complex it is the fewer exist. While on the face of it, this appears to be very simplistic. However, when considered in greater depth it is very interesting. Complex opportunities have less competitors. The greater the complexity, the greater the barrier to entry. Is this not what we are all seeking? Bigger barriers to entry means fewer entrants and therefore increased profitability. The question is, when we are looking for opportunities, do we factor these thoughts into our thinking, or do we too grab at the first thing that crosses our mind/desk? This is particularly applicable to SMEs, who too often take whatever comes first that looks easy. They immediately put themselves at a disadvantage. Do you?

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