How a vague observation or hunch turns into a developed, evaluated business idea. The textbook breaks it into five stages:
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Preparation. Background work, exposure to the domain, gathering experiences. The mind acquires the raw material. A rough idea may exist; connections to other concepts begin to form.
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Incubation. Small refinements, time letting the idea sit. The mind continues processing in the background; new angles surface. This stage often takes weeks or months and resists direct effort.
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Insight. The idea crystallises into a viable solution: you recognize a specific opportunity exists and see a path to address it. The “aha” moment.
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Evaluation. Analytical scrutiny of whether the idea is genuinely viable. Does it solve a real problem? Is there a market? Are there competitors? Is the business model defensible? Some ideas die here; the survivors get refined further.
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Elaboration. Fleshing out the details: business case, sales pitch, financial projections, operational plan. The idea takes formal shape as a business plan.
The model is one version of older creativity theories (Wallas 1926; Csikszentmihalyi 1996). It alternates between expansive phases (preparation, incubation, insight: gathering and combining) and convergent phases (evaluation, elaboration: pruning and refining).
Group dynamics. The textbook recommends a focus group of 5-10 people with diverse backgrounds. Diversity matters more than size: a group of like-minded specialists converges fast on familiar answers, while a diverse group surfaces options the others wouldn’t have considered.
This is the strong-tie distinction. Novel ideas come from connections across previously-unconnected domains. A team all from the same background has strong internal ties but weak external ones, so limited idea diversity. A team with diverse external networks brings in more raw material.
Research support. Libraries (still useful), industry publications, market research firms, and online resources all support idea-development. Trade-off: structured sources (libraries, paid market reports) are credible but slow; the internet is fast but credibility varies wildly. A serious pass mixes both.
Encouraging new ideas. Within an organisation, the practical levers: establish a clear focal point for ideas (a channel to submit them, a team that triages them), build a culture that rewards creativity, and protect the early-stage evaluation process from premature criticism.