New Ideas Suck.

Posted: June 24, 2011 in Uncategorized
Tags: , , , , , , ,

Entrepreneurs have it all wrong. We only get excited about ideas that are new. We’re wired all wrong.

We barely flinch at the threat of future competition (cue the MBA student screaming “first mover advantage!”), but upon our first Google search of the idea we’re faced with disappointment: “shit, someone’s already doing it..”

really?

It’s over? Just like that? Are they profitable? Are they controlling significant IP that would prevent you from entering the market? Can’t you learn from their business and iterate/improve on it? What’s better than learning on someone else’s dime? (and finally, will this whole paragraph consist of sentences ending in question-marks?)

As Daymond John, Founder of FUBU and investor on Sharktank puts it:

“Pioneers get slaughtered….Settlers prosper.

Daymond "The Shark" John - Founder of FUBU "pioneers get slaughtered...and settlers prosper"

Having a truly unique idea generally results in early failure. Rather than spending your most important resources as a start-up, (time and money) on educating the market about your product – you must create the market in the first place. Before Ipod and Facebook, there were portable music players and Friendster. Being first, being new, and being successful are rarely related.

Now for some non-cliche examples.

You’re an entrepreneur, and its the 1990s (put your Ace of Base CD in your walkman, you still eat bread because you don’t know who the hell “Atkins” is yet, and deal with the fact that Uncle Jesse from Full House is your generation’s sex symbol).

You have a truly new idea. Online Poker – HUGE potential, easy user interface to build, and poker celeb Mike Caro is on board to be your spokesman. Your company is called Planet Poker – and you launch with a ton of buzz becuase you’re the first online platform to offer “Real Money” poker, elevating the game from free, Solitaire-status, to what will eventually become a $2,400,000,000/yr online platform.

Now before you plan that retirement in the Carribean, you have to deal with market mistrust*. It’s the 1990’s, people aren’t used to depositing money online. They don’t trust your online “card shuffling” algorithm. They don’t know if the other players are sitting in the same room somewhere and cheating by telling each other their cards. Like a boyfriend with a history of cheating, you’ll spend all your time and money ‘buying your customers flowers’ to convince them that you’re a sweet, trustworthy partner – rather than growing and improving your business. This all goes on for a few years until the more handsome and well-financed competitors Party Poker, Pokerstars, and Full Tilt swoop in to steal your customer base.

Now here’s the rub. Why do the settlers prosper? Doesn’t being first count for something? Well yes. It does. And while the later versions do make improvements on their pioneer predecessors, their distinct advantage is not their flashy new interface. It’s the fact that their idea is not new. They enter an existing market. They spend their money marketing, adding features like security, rapid payment processing etc..to steal your customers, while you went through the grind creating the market. They don’t waste time educating customers about where a product fits in their lives; instead, they focus on how their product is better than the existing options.

Don’t let yourself toil away, waiting for the next “new” idea. New ideas suck. They sap you of your time and money simply because the market is probably not ready to adopt it right away. When it works – it works great, but they are the exception, not the rule.  Don’t confuse starting a business, with having a truly unique idea. Innovation isn’t about creating a new product, technology, or industry – its about finding better solutions for age old problems.

Shaan

*Term Shaan made up. Refrain from using in academic papers.

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Comments
  1. Frank Calmuth says:

    On point. I wouldn’t go so far to say that they “suck”, but there’s definitely a misconception about “waiting for that great idea” among entrepreneurs…get out there and do something!

  2. Great post. I have a group of great “bplan team” of undergrads who are really disappointed that ‘their idea’ exists already and that people are out there ‘building’ a market already. I have tried to explain this was a good thing, but am going to share your post to underscore the point. Love the Sharktank reference/quote.

  3. Great post. I agree with you on this one. I was thinking the same thing here recently. Let someone else do the research and development in a new space, while you pay close attention to how the market reacts.

    Once a model has been established you will be able to identify strengths and weaknesses in the current model. If you decide to enter the market this could end up saving you time and capital.

  4. Being part of the “second wave” of entries to a new market gives a unique opportunity to learn from an existing companies mistakes and inadequacies, and capitalize on those gaps in order to help establish your brand to the market. It’s a natural first tendency to be disappointed when you see that someone else has tried to execute “your” idea, but usually with a little more research you see there are plentiful opportunities (depending on the market) to capture at least a niche of the total market share.

  5. I get the point, but if you are looking to have a reputation for being an innovator, and have long lasting legacy as the guy who did “X”, you’ll try the new idea and teach others how to use it. You’ll be the point of reference for “X” for the rest of your life, which can be a pretty cool thing.

    • sabisushi says:

      @MySocialVenture – I hear what you’re saying – but I think my point was that innovation doesn’t come from “what” you do, it comes from “how” you do it. You do it better, you do it bigger, or you pull consumers in a direction that nobody thought would work. Too many people look for things that have NEVER been seen before..when they should really be looking for things they can see EVERYWHERE, understand WHY those things work, and apply those principles to their own industry.

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