Observation is something we all know about. It's just looking at stuff - right? Well only kind of right, there are different ways of observing and tricks that you can use to make your observations more effective in the context of entrepeneurship.
Let's first consider that to be an effective observer, in this context, one needs to empathise with the people/situation under scrutiny.
An obvious way to build empathy into the process is to become like the people you are observing (going native) - this is an approach that is used widely and requires a high degree of dedication and often time.
Next down the list is moderate participant observation with the researcher observing and participating in some actions - kind of like work shadowing where people know that you are a visitor. This would be a practical approach to participation where you don't have the time and / or resources to fully submerge yourself.
Passive participation is also useful, where you are present at the scene but do not engage with those that you are observing (people watching). This is particularly useful as one does not necessarily need the permission or cooperation of those being observed.
Of course you can go to another level of detachment where you are not even present at the scence, e.g. watching film footage or reading about behaviour in certain situations.
Sometimes it helps to codify the observation process by preparing a list of categories under which the observations can be logged, e.g. space, time, objects, actions etc
You can do this yourself by sitting in a public place (cafe, pub, shopping center) and making observations based on (your) pre-determined guidelines. Do this for quite a while (couple of hours?) then review your field notes and try to come up with ideas for new services or products that are inspired by this process. Be careful not to concentrate just on extraordinary events - sometimes the interesting stuff can be found in the mundane.
Keep having fun!
