OK -- first, let's dispense with the myth of the golden idea. Ideas are everywhere, and everyone has them. Most business ideas are terrible, and some are OK. A very select few are great, but the great ones aren't usually obvious to most people.
Starting Google -- the 10th (or more) search engine in a crowded, non-differentiated, commoditized, and free product category was AT BEST an "OK" idea. As a business idea, Wal-Mart, was pretty much terrible. Would you invest in Davy-Mart, my new hypothetical bargain-bin retailer store in northwest Arkansas? Heck no!
At my company, , our original business idea was pretty much a flop. It "seemed" genius (at least to us). Alas, it was pretty much a flop. Fortunately, we found a better business, but very little about what makes our business great today has to do with the original idea.
Business is all about execution (and a little luck). Execution is not the same as "hustle". Execution is about building the right team and focusing on the right things. Execution is what separated Google from Geocities and Wal-Mart from Kmart.
Occasionally, there are truly great business ideas, and as I said, they tend to be non-obvious (otherwise everyone would be doing them already). The best business ideas have some of the following elements:
- Not obvious to most people (ex: Apple's prebuilt hobby computers in the 1970s)
- Build a natural moat as they grow (ex: Amazon's Flywheel)
- Are a necessary solution to a big problem (ex: Genentech's synthetic insulin)
- Technologically realistic, but possibly in a non-obvious way (ex: Tesla's v1 roadster)
But as I said earlier, the value of the idea is pretty minimal compared to the value of the execution. That being said, there are some ideas that no amount of great execution can fix. A lot of times it's easier to pick the losers than the winners. Bad ideas usually have some combination of the following:
- Focused on the solution, not the problem/customer (ex: almost every blockchain ICO company)
- Undifferentiated "me too" solution (ex: rideshare company No. 3 to No. 500, after Lyft and Uber)
- Chasing a trend (ex: many of the AI/ML companies today and dot-coms in the 2001 bubble)
- Nice to have vs. need to have product (ex: Juicero -- their juice pouches could be hand squeezed)
- Unsustainable business model (this is rarer, but lots of VC money can mask it)
As a general rule, I suggest staying away from business ideas with those elements. Then again, you might be missing the next Wal-Mart! If you're founding a startup, remember you can always change the idea (and should adapt it as you learn), so focusing on great partners (founders, employees, and investors, if you need them) will get you far.
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