Why a novel business concept isn’t as valuable as it used to be
We’ve all seen it. An inventor on a TV show or movie has a flash of insight and sells his idea for millions of dollars to a roving businessman. This idea is so iconic that it has become part of the small business mindset. Entrepreneurs often struggle to come up with a truly original idea, and immediately get discouraged if they see another company starting something similar.
I would suggest that all this worry is wasted effort. Ideas don’t make money. Businesses make money. Transforming an idea into a profitable business is the difficult part, and success is all about execution.
Why ideas aren’t what they used to be
I wasn’t around back in the 1950s, but maybe it’s true that back then a company differentiated itself by their “big idea”. Today, however, it is easier to copy a product or service today than ever before. Even if you have an amazing original idea and you’re first to market, within six months you’ll likely have a swarm of imitators. Welcome to business.
Competition isn’t necessarily bad
Lack of competition can actually be a warning sign that your concept is flawed. It is possible that the reason nobody else is doing it that the idea isn’t marketable or viable. A few competitors at the start-up stage mean that there’s an opportunity that others have recognized. If you see no competitors, you might want to find a critical friend to take an honest look at your business model.
The importance of execution
So the real issue is not what big idea can set you apart, but rather how you can differentiate your business from the rest. Ask yourself how you want to do business, how effective and efficient your company is, and what your mission, vision and values are. Imitators may be able to copy an idea, but it’s harder to copy a business culture.
Here are a few business differentiators you may not have considered:
• A unique business model: Netflix rented the same DVDs as Blockbuster, but did it through the mail. Same product, different delivery.
• Customer-oriented culture: If clients just like you more because everyone is enthusiastic and helpful, that’s hard for competitors to mimic.
• Serve a different segment: Remember the Jitterbug? While all the other cell phone companies scrambled to reach teenagers, they went after senior citizens.
• Your Network: You can’t copy relationships. If you make friends with decision makers at firms that are important to your business, that’s a big
So don’t fret about the competition or get overconfident on your big idea. Instead, concentrate on putting the systems and people in place to turn your idea into a product or service that people are willing to pay for. This is the way to make your entrepreneurial dream come true.
About the Author: Nathan Williams is an MBA student in his last semester at John Molson School of Business in Montreal, Quebec. Student by day and blogger by night, he is interested in almost everything business-related that has a real-world application. In his spare time he does small business consulting and plays guitar.
He was not around in the 1950s.