By focusing less on your next “big idea” and more on the actual execution, you’ll have a better chance of building a successful new business.
by Karl Stark and Bill Stewart –
Maybe it’s the Facebook craze, or the warped view of entrepreneurialism that Hollywood and mainstream media have created. For ages, young and hopeful entrepreneurs have embraced the fallacy that great ideas are the root of entrepreneurial success and instant wealth. People say, “If only I would have thought of that, I’d be rich!”
Those of us who have built businesses know that success is rarely about the breakthrough idea. Clearly, a good idea is important, but it’s just not the source of limitless riches. Real entrepreneurial success most often comes from hard work, risk-taking, and developing a product or solution that creates real value for customers.
For example:
- Instagram was originally a check-in app (Burbn) that evolved to become a photo app because it filled a need in that category more effectively than existing applications
- Google was a slightly better search engine, and a platform for a number of “free” products that over time turned into an enormous profit generator
- McDonald’s thrived by making tasty, cheap hamburgers
- Starbucks offered better quality coffee in a pleasant environment
- Dell manufactured PCs better, cheaper, and faster than rivals
Working with CEOs, investors, and entrepreneurs to build new businesses, we’ve found that many initial ideas are frankly not worth much. Most eager entrepreneurs overvalue the initial idea and falsely believe that a unique idea is the key to value creation. They will even create extreme secrecy around the idea in the hopes of creating a first-mover advantage-which itself is not all that valuable in most cases.
Far more important is a rock-solid business model that creates value for a customer, especially relative to existing solutions. When the business model is battle tested through the incubation process, it becomes invincible. Very few businesses end up creating billions of dollars of value based on the initial idea – superstars such as Facebook, Apple, and Microsoft changed their business models many times before settling on a scalable solution.
When entrepreneurs come to us for help on their “killer idea,” here’s the advice we give:
Don’t be afraid to share your idea. The value is not in the idea, but in the execution. Experienced entrepreneurs, business owners, and investors can give you valuable advice. If your idea is any good, people will steal it. Your job is to execute better than them.
1. Stop perfecting the idea, and get out in front of customers.
The business you develop through a test and learn approach will be worth multiple times more than your original idea.
2. Don’t focus on things that don’t exist.
Instead, look at existing solutions and figure out ways to create more customer value than what those solutions offer.
3. Positively differentiate yourself from the competition.
Most products can’t be all things to all people. A differentiated product will attract a segment of customers that value different things. An innovative start-up is almost always advantaged when chipping away at a market leader if they can offer something different that appeals to a small group of customers.
Turn your idea into positive action, and build real customer value. Then, just maybe, you will be able to turn the next “big idea” into a successful business.
HT: Inc.com
