Investor Michele Romanow has heard thousands of business pitches, mostly from her time scouting the next big idea on "Dragon's Den," Canada's version of "Shark Tank." This experience has honed her ability to detect the common threads inherent in the most successful ideas. It's a valuable talent, considering about half of small businesses fail within the first four years. Here are her words on the three things all really great ideas have in common.
1. Great ideas have the potential to scale.
This is the power of technology. Think about the previous generation of businesses like Coca-Cola. For them to scale they had to open each geography separately with offices, supply chain and infrastructure. In comparison, when WhatsApp sold to Facebook with just 55 employees they had 420 million users. So when I look for ideas on the Den even if they are products, I'm looking for those that can leverage technology for mass scale.
2. Great ideas are constantly iterating.
All of my best ideas didn't start that way. They started with me finding a good problem, in a growing industry and then iterating from there. When we first started SnapSaves--which was sold to Groupon--it started off as a mobile coupon site. That didn't work so we tried sample boxes. Then that didn't work so we tried an app. Then the app started working when we accepted pictures of receipts. It was a giant game of iteration, but when we got it right we were able to generate millions of downloads.
3. Great ideas are built with grit.
I look for founders that are not going to give up easily. I look for people who really want to win and won't be afraid of setbacks and failure along the way. It's always the founders that build ideas. Not the other way around.