Every company begins with an idea. This idea defines a company’s purpose, which indirectly also defines the solution that the company offers. For example, the idea behind eBay was to offer auctions over the Internet. The idea behind Priceline.com was to let people establish their own prices to pay for items such as airline tickets.
To be profitable a successful idea must solve a pressing need for a large number of people. Although an idea can lay the foundation for a company, it’s not necessarily the crucial factor for success.
Perhaps the biggest myth of too many entrepreneurs is the belief that success relies on having a unique idea that nobody else has ever thought of. Unfortunately, if you have such an unusual idea that nobody has ever considered it, chances are good that you’ll have a hard time marketing it. Potential customers may not understand how your product can solve their most urgent problems. Or even worse, they may simply be reluctant to change their habits to adopt your solution.
At one time people used to shop at markets by holding a basket in their hands. The basket limited the number of items any single person could comfortably carry and hold. When Sylvan Goldman invented the shopping cart in 1937 for Piggly-Wiggly Markets, nobody wanted to use shopping carts even though they could see that shopping carts made it easier to carry more and larger items without strain. Men considered shopping carts effeminate and women complained that shopping carts looked too much like baby carriages. It was only after Mr. Goldman hired models to demonstrate how to use shopping carts in actual markets that people finally saw the advantages of using them. If Mr. Goldman had failed to do this, there’s a good chance that nobody would have seen the benefit of shopping carts and this invention would have withered away, despite its obvious usefulness.
The truth is that a unique idea by itself won’t necessarily carry a company to instant success. If you focus your entire startup on the belief that you need a unique idea, you’ll be in for a surprise. Take any idea, search for it on the Internet, and you’ll probably find half a dozen other people with similar ideas. Their solutions might be implemented differently, but they may be closer to your own idea than you like.
Everyone has a good idea. Even some of the biggest failures, such as Pets.com (an online pet supply store) started off as a good idea. Since a good idea alone can’t sustain a company, the real key is to find the right idea and then find the right way to implement that idea profitably.
The fact that half a dozen (or more) people have the same idea simply validates that you have a good idea in the first place. If you’re truly the only one with a unique idea, chances are good that you’re the only one with that idea because nobody else thinks that idea will work.
One reason why entrepreneurs believe they need a unique idea is that they think such an unusual idea will give them “first-mover” advantage. This means if you’re the first company in a particular field, you can become the dominant leader by default.
While this first-mover advantage is certainly helpful, it can’t sustain a company in the long-term. Being first into the market may give you a head start on your competition, but it could also mean you’re paving the way to make it easier for competitors to follow and eventually to catch up and pass you.
In the early days of the personal computer industry, Microsoft was a small company while a much larger company (called Digital Research) had the first-mover advantage in cornering the personal computer operating system market. The only reason that Microsoft surpassed Digital Research was that the market abruptly changed.
When IBM decided to enter the personal computer market, they needed an operating system for their computers. IBM initially approached Digital Research, but failed to reach an agreement. After being rebuffed by the market leader (Digital Research), IBM had no choice but to look for a solution from one of Digital Research’s many competitors, one of which happened to be Microsoft. Since Digital Research was slow to respond to changing market conditions, Microsoft took advantage and blossomed into a billion dollar organization.
If you base the success of your company just around an idea itself, you’ll probably waste time and money trying to develop a market for your idea. If you think having a great idea will give you first-mover advantage, you better have a plan to keep you in the dominant position because you could otherwise lose this lead. What you need is a good idea that you can also implement strategically.
- Jon Fisher: ‘Strategic Entrepreneurism’
