What if I were to tell you that having a good business idea is NOT essential for your business’s success? Yes, ideas are important, but not the most important determinant for success (as you may think or have been led to believe). Now, that may be incomprehensible to some, but to others, it’s a complete paradigm shift. However, experienced entrepreneurs are already well aware of this.
Many entrepreneurs start a business and develop this false sense of security about the importance of their idea, but most ideas can easily be copied or circumvented, (even if they have intellectual property protection, such as a patent).
Let give me give you some context, in my 30 years experience of building my own businesses, assisting others to build their businesses, and formally studying and teaching entrepreneurs, I always see new entrepreneurs and business owners continually making one fundamental mistake, namely: they fall in love with their idea(s). Many of these “newbies” tend to start their businesses based on an exciting vision drawn from their first or second idea, and then run with that idea, which ultimately fails because there is no need for it. They simply rely on their “gut feel” with very little, (if any), market validation or even experience in establishing an enterprise. Many of these businesses crash and burn (typically within the first three years of operation), and over a period of time, can lead to a slow, painful, and constricting death, sucking the life and vitality out of the owners and those around them, such as spouse and family. This death could last from many months to years. Sometimes this comes at a significant personal, emotional, or psychological cost. It almost always comes at a significant opportunity cost to the entrepreneur and their stakeholders.
Many new entrepreneurs suffer from what’s known as the “New Entrant Cognitive Bias”, and rely on their cognitive biases to make important decisions with very little evidence-based product-market fit testing and validation (other than some basic customer interviews, which often just reinforce their biases anyway). This combined with a severe overestimation of the entrepreneur’s capabilities results in over-confidence leading to poor decision-making processes due to not knowing, what you don’t know, (also known as the Dunning-Kruger Effect).
So, what is a product-market fit? It’s simply creating a product or service that solves the customer’s problem (through a need or want) to which they are willing to pay (i.e., delivering value). To do that, you need to first, identify a paying customer, then understand who they are, and second, have insight into “what is their job(s) to be done”? By having these insights and connections, only then can you can develop a suitable solution(s) and a business model that is able to deliver value to the customer via your “customer promise”.
So, the next time you think you have a good idea, remember ideas are a “dime a dozen”, (i.e., ideas are cheap and common). The question is how will you test and validate that idea(s)? What experimental processes will you use, and how will you measure that success? So, what metrics will you be using? Ultimately, the success of an idea, is not built around the idea itself, but is determined by your timing and how you can build a team to execute it effectively. Until then, it’s simply an idea.
Furthermore, the chances of you successfully executing your original idea (without a pivot) are very slim. Very rarely have I ever seen anyone execute this without a pivot or numerous pivots. This is because you, as the entrepreneur, is unable to dictate your idea’s success. Rather, it is the market and customers that dictate the level of success of the idea, not you. Until you are able to realise this, then your chances of business success are very slim, in fact, infinitesimally slim!
By Tobi Nagy