Few beliefs are as harmful when it comes to starting a business than the “I saw no-one was doing it” myth. We’ve all seen the interviews…
A 20-something start-up founder in a hoodie is talking publicly about his company for the first time. He explains that his company came into being because he personally had a need that no-one was filling.
“I was always frustrated by how hard it was to find a taxi in New York,” he explains. “So, I started Carster to revolutionize the transportation industry.” Or, “I noticed that the entire rocket building industry was stuck in the 1970s. So, I started Go Galactic to completely change the way that we launch satellites… actually, it’s all a part of the mission that I have had from the age of 12 to build a space colony on one of Saturn’s moons.”
I’m sure that there are many entrepreneurs and VCs out there who would violently disagree with me, but, for most people, coming up with a completely new idea is a bad idea.
For every Space X, Tesla, Microsoft, Facebook or Uber, there are 1,000,000 companies that were started on the back of a dream… and little else. These “Walking kettle” or “Uber for Cats” companies exist for as long as their founders are able to convince investors to believe that they are the “next big thing.” Then, when the music stops – and the money runs out – they disappear.
The only reason that we believe that looking for a completely original idea is the key to entrepreneurial success is that the few companies that actually succeed with this approach succeed massively.
So, if looking for an original idea is the wrong approach, what is the right approach? Having talked to hundreds of entrepreneurs, I can say that most of them started from the perspective of trying to make something better as opposed to making something new.
There are several reasons that this approach makes sense, particularly for entrepreneurs who are starting their first company in their 40s, 50s or better.
First, if there is genuine market demand for an idea, it is extremely unlikely that no-one else is working on it. In fact, as I will explain in a second, seeing a thriving market for a particular product or service is typically a good sign, not a bad sign.
Second, when you invent a genuinely good concept, you have to build demand among consumers at the same time as you build your product itself. Unless you (or your investors) have seriously deep pockets, it is unlikely that you will be able to do both demand generation and product development at the same time. Companies like eBay, PayPal and Airbnb are the exceptions that prove the rule.
Instead of trying to come up with a completely new idea, look for opportunities to improve on what others are doing. This doesn’t necessarily mean that you need to build a better product. You can innovate on customer service (Zappos), marketing (GoDaddy) and many other factors.
I may face backlash from the many older entrepreneurs who have gone on to “change the world” in the final decades of their lives. But, I would suspect that most of us, by the time we reach our 50s, are looking to leverage what we know to build profitable businesses that will secure our financial future, while living our lives purpose.
Despite this fact, many of us still get discouraged when we start to research our big idea and find that a number of companies have “beaten us to the punch.”
If this happens to you, before you give up, I suggest taking a long hard look at your potential competitors. Are they really doing a great job? Do they treat their customers well? Is there marketing amazing? Have they been lazy about upgrading their products?
If you are interested in building a particular business, chances are you have specialized knowledge or skills to bring to the table. As an older entrepreneur, perhaps you worked in a particular industry for decades and saw firsthand how badly certain customers were treated. Maybe you always thought that your employer should develop a particular product line and never recommended it, knowing that they would never have invested in it. Ideas like these can turn into profitable business ideas.
If you are thinking about starting your first business in your 50s or 60s, I am jealous! You are about to embark on an amazing journey! But, as you set out, I would strongly recommend that you looking at making the world a better place through incremental improvement than radical innovation… unless of course, you are Reid Hoffman (LinkedIn) or Robert Noyce (Intel), in which case, go for your big idea!
Have you thought about starting a business? What are the biggest fears that hold you back? Please join the conversation!
Tags Small Business