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Does your startup idea have "it"?

December 6, 2005

I may be beating a dead horse, but I think would-be entrepreneurs are too focused on the initial idea. We like to believe that the big, hugely successful companies implemented some idea that had "it". The "it" empowered the company with a kind of manifest destiny where all they had to do was "not screw it up" and success flowed from the power of the idea.

I worked in a big multi-billion-dollar-revenue "powerhouse" of an IT company. The history of this particular company is very interesting with respect to initial ideas. As far as I can tell the company didn't even have an initial idea, being formed with the sole intent of forming a company. To make ends meet, the company started out as an office furniture reseller. Later it transitioned to selling after-market memory modules for minicomputers. Finally, after years of operation at various levels of success, they released the product that changed their destiny and put them on a course to become the computing juggernaut that they are today.

I can't stress enough that it seems like the majority of companies achieve success with something other than their initial idea. Human limitations in understanding complex systems virtually guarantees that the founding idea of a company will be limited in some way, if not grossly wrong. I found this post, on the blog of the CEO of Return Path, at almost the exact moment I posted this. In it he says:

If you had told me when we started the company that we'd execute on ECOA but also be market leaders in email delivery assurance (which didn't exist at the time), email list management and list rental (a huge market by the time we started), and email-based market research (which only barely existed at the time), I would have said "no way!"

He calls this effect "You can't tell what the living room looks like from the front porch."

There are a lot of people who talk about starting a company, a disproportionate number of these people are waiting for the "perfect idea". I think this love of the "perfect idea" comes from a subconscious social reaction to our "work ourselves to death" ethic here in the United States. Some people think that if they could just come up with the perfect idea, it would be akin to a winning lottery ticket. The power of the idea alone would generate success, a kind of entitlement for being clever and lucky.

If this is your image of starting a company, stop right now. I personally don't believe there is a perfect startup idea, and if there is, the likelihood of it being yours is probably similar odds to winning the lottery (and please send me an e-mail with the details:) ). I like this quote from a talk given by Paul Graham

Actually, startup ideas are not million dollar ideas, and here's an experiment you can try to prove it: just try to sell one. Nothing evolves faster than markets. The fact that there's no market for startup ideas suggests there's no demand. Which means, in the narrow sense of the word, that startup ideas are worthless.

So if your startup idea is almost certainly flawed in some way, what is the value of the starting idea? The starting idea is a focus to begin implementation, a way to start the exploratory process to find your real idea. That quote is from a talk given by Paul Graham at his startup school. In it, he further discusses this same topic. I highly recommend reading it.

Too many people, interested in starting a company, are paralyzed with the fear that their idea doesn't have "it". I would argue, that "it" is really just experimenting with your idea, tweaking it when necessary, and completely changing it when called for. The experimental feedback is the market and customers. This is similar to the business advice of "give the customers something they want" but because market systems are so complex, even the customers don't necessarily know what they want. My approach is a little more like "Here, customer, do you like this? No? Why not? How about this? What if I tweak this piece?" In the end there's no "it" in it.