It happens all the time. People ask me if I think they have a good business idea. I don’t even wait to hear the idea any more. My answer is always the same: "I have absolutely no idea."
I say this because just having an idea for a business is meaningless. Anyone can have a great idea (or a terrible one) that on its own seems like bad business. Many people want me to sign a confidentiality agreement before they will share their business plan with me. Investors never do.
I always tell them that 10 people in this country are probably thinking their exact idea at this very moment. I agree with Bill Reichert, managing director of Garage Venture Technologies. When entrepreneurs express to him that they are afraid someone will steal their idea, he says: "Someone else has already stolen this idea and your next one."
After two failed businesses, I remember in the early 1990s when my father begged me not to start another business. With my wife pregnant with our first child, he told me what a horrible idea my new business was. He told me that customers would never buy our products. Luckily, he was wrong this time. What I learned from my previous failed business attempts is the idea for this business was no worse than the idea from the previous two. The difference was through experience and a great partner, I was able to execute this idea.
Anyone can have a great idea. Having that idea and executing that idea successfully are two different things. Execution is probably one of the biggest competitive advantages that businesses typically overlook. Investors would always rather have an "A" driver with a "B" idea than a "B" driver with an "A" idea. This is why investors always rate the management team as the key criteria they use to decide where to invest their funds. Ideas don’t make profitable businesses. Management teams that successfully execute their ideas make the money.
A great example in American business of not having a unique business product but having superior execution is Microsoft Windows. Many of the ideas of the mouse and graphical interface did not originate with Bill Gates and Microsoft. Many would argue that Gates got these ideas from his competitors. What he did better than anyone else was execute a superior marketing and distribution strategy.
More than 10 years ago, Gates went to major computer manufacturers and negotiated a deal that would put the Windows operating system on every computer they shipped. This perfectly executed strategy made Windows the de facto operating system on the personal computer in the world. As a result, Gates’ superior execution strategy is responsible for his dominant market share (not his product line).
Outside the technology world, the concept of a discount airline has been around for a long time. It is a current topic of conversation in a struggling industry. Major airlines such as United and American have tried to execute such a notion many times. Only Herb Kelleher at Southwest Airlines has figured out how to make a low-cost, point-to-point airline profitable. While the idea is not unique, the successful execution is rare.
This is also why I don’t think "first-mover advantage" is much of an advantage at all. In any of my businesses, I always wanted competition. Examining the successes and failures other people made with the same idea will always help you execute better. I prefer to learn from the mistakes of others rather than my own. To paraphrase Matt McCall from Portage Venture Partners, starting a business is about "making as many mistakes as possible as quickly as possible with as little money as possible."
Finally, a business idea is just an idea. They are just words on a page. It’s only the beginning of something. It’s far too theoretical for me and doesn’t represent a real business. You and I can sit safely and discuss the merits of a business idea all day. It’s academic. Only when you go out there and ask a customer to buy your product do you have a real business.
Only through execution will your business be born, evolve and grow. Execution of your idea forces you as the manager to learn what the customer likes and dislikes. Execution enables the market to determine whether your idea in action is a success or a failure. If at first you don’t succeed, "morph" or change your business into something that can give you another chance of success. I always urge people to "do something, do anything."
So you have an idea for a new business or an idea for your existing business. Will it be successful? Admit that you really have no idea. Go out and try it. Your customers will buy it not because it is a good idea but because you executed well. That’s what really counts.
Barry Moltz is an award winning entrepreneur, author and national speaker. He co-founded Prairie Angels, a group of private investors committed to investing in and mentoring early stage companies and their entrepreneurs. His new book is titled "You Need to Be A Little Crazy: The Truth About Starting and Growing Your Business." For more information, please visit Moltz.com.
(Originally published at Eprairie.com)