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STARTUP

A Great Idea Is Never Enough

Entrepreneur and VC Eric Paley explains why it takes a lot more than just a good idea to build a successful company.

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Back in 1995, I purchased a used Mac laptop via auction on the Internet. The company that enabled that transaction doesn't exist today. That same year, eBay was founded and today is worth $68 billion.

Amazon wasn't the first company to sell goods online. Google didn't invent search, and Dropbox wasn't the first server-based storage offering. Pick a successful company, and you can almost always point to the sad story of a failed predecessor that had the same core idea.

When the movie The Social Network became a commercial success, many of my friends outside of the technology industry asked me what I thought of Mark Zuckerberg stealing the idea for Facebook from the Winklevoss twins. I told them that the technology community thought the Winklevoss claim was laughable and opportunistic.

Facebook is far from an original idea. Social networks had been around for nearly a decade, in companies such as SixDegrees, Friendster, and Myspace. Facebook's success didn't come from the idea but instead from countless ideas and iterations around product implementation, go-to-market approach, and customer engagement.

In October 2002, my co-founders and I started Brontes Technologies, a company based on an invention created at MIT that used 3-D imaging to enable mass customization in the dental industry. Numerous venture capitalists passed on Brontes after their technology advisers told them that the idea behind the technology was highly risky and probably wouldn't work.

They were right.

By late 2004, we had abandoned the initial technical idea on which our business was created. But although those VCs were right that our idea probably wouldn't work, they were wrong not to invest. We made the necessary changes and eventually were acquired by 3M--which provided a healthy return for our investors. Our doubters incorrectly assumed that the company was built simply on our initial idea, rather than the problem we were trying to solve and the people working to solve that problem.

I believe this is why the technology community has so much disdain for our patent system, where nonpracticing entities--otherwise known as patent trolls--that have never faced the challenges of building a product or a business can make claims solely on the basis of simplistic ideas. The system vastly overvalues ideas and undervalues execution. (And it's still a pain to use; see "Patents: The Race Now Goes to the Swiftest.")

Great entrepreneurship is in the execution. Rarely does the initial idea dictate the outcome-;perhaps never. Success is about the thousands of ideas and decisions that are made along the way and the speed at which those insights are implemented according to customer needs and feedback.

So are ideas worthless? I wouldn't go that far.

Every company needs a starting point. I encourage entrepreneurs to focus more on falling in love with the problems they want to solve rather than their initial ideas. As founders dig deeply into that original hypothesis, they will learn, adapt, hit walls, adapt again, and build critical expertise that they never considered when starting out.

In fact, in many cases the original idea later seems humorous or at least incredibly naive compared with the lengths to which the start-up needs to go to become successful. Like scientists, entrepreneurs solve problems through a tremendous amount of work validating and invalidating early ideas-;not from a single spark of inspiration. Great entrepreneurs build their success over time, not in a single moment. Ideas are static. Entrepreneurship is dynamic.

IMAGE: MaraB./Wikimedia
From the June 2013 issue of Inc. magazine

ERIC PALEY is an entrepreneur and a managing partner of Founder Collective, a seed-stage venture capital fund. He is based in Cambridge, Massachusetts.
@epaley




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