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  • Writer's pictureTom Viinikka

Big Idea? Big Deal.

"That is a million dollar idea!" Ha! I feel like I've heard this about a million times. Only from one type of person though - someone who has never turned a great idea into a real business. In other words, most of us. Sometimes its a person who wants to start their own business but who doesn't realize the magnitude of what they are embarking on. Sometimes its the dreamers who have or wish they had a big idea or even the 'philanthropic idea guy' who is always happily giving out business ideas to other people. Big ideas are a dime a dozen. I mean that. I've seen tons of great ideas. For every successful business that started with a big idea there are a thousand other people who had the same 'million dollar idea'. What they lacked was the ability to turn it into something.

For some reason I feel like the general population would define a big idea in much the same way they would define a lottery ticket. "One day I was doing so and so and I thought, there must be a better way! The next day I was running my multi-million dollar business". That sounds an awful lot like "I woke up one morning and saw my numbers on the Powerball. The next day I was swimming in my pool of money". It's as if the idea itself picked you up and delivered you to success. I do think that a kind of 'lottery idea' does exist. Even among only the greatest of ideas, the lottery idea is rare. Struck by lightning rare. Most great ideas are nothing like this. I'm willing to bet that you can't even think of one true real life example of this type of idea. That said, I'm also willing to bet that you THINK you can rattle off a couple dozen of these types of ideas. That's my point. Most people think that all great ideas are a slippery slide you step onto and at the bottom is the prize. They're not. Most of the great ideas were not incredibly unique. Some of them are flat out copies of other people's ideas. The great businesses you see that are founded on a great idea were built because of incredibly driven and savvy entrepreneur(s) who knew something far more important than the idea itself - how to make a great business out of a great idea.

I'm in the middle of this misconception myself. My co-founders and I are building a tech company. Given the nature of the technology, when we tell people about it they are generally very excited and can't help but say the words, "that's an amazing idea!" While I agree, it is a great idea, I wish I could feel flattered by that. But I can't. I can't detach myself from all the pain and stone cold reality of turning that great idea into a great business. It's tough! You never realize how far a great idea is from a great business until you immerse yourself in the process of developing it and realize how precarious each step is. There is a reason that eating ramen noodles in your parents basement is a part of almost every entrepreneur's story. Building a business takes you to the very edge. I've stared deep down into the abyss more than once in my entrepreneurial career. When that happens it's no mistake. It's the necessary path. It's where a great idea is forged into a great business. Even those who are lucky enough to be driving a Benz during the process are not immune to the tremendous stress of knowing how quickly things can change or how fine the thread is that is holding you out of the abyss.

At this point I might sound a little whiny. After all, what's my point? My problem with the misconception of a great idea isn't that entrepreneurs are misunderstood or undervalued. It's that great ideas actually go to waste because the people who have them don't understand what it takes to turn them into something. Sometimes that manifests itself in a pathetic effort to make a business. Sometimes its simply never even trying because of some scapegoat of not having the right connection or enough money. Sometimes its being greedy with the idea instead of putting it in the hands of a person who can convert it. Imagine if you thought that buying skates was a slippery slope that ends in the NHL. How much would you actually work on your skill if you thought that buying skates was the most important thing? Even if it only causes you to let up 10%, that's enough at that level to completely miss the goal because you have to beat thousands of other people who are trying their absolute hardest to make the NHL. To be clear, buying skates IS critical to making the NHL however it has essentially nothing to do with getting there. The actual business idea is critical, like skates, but also like the skates, the idea has very little to do with making it successful. If you overstate the value of your idea, your focus and determination are highly likely to undershoot what is required to convert that great idea into a great business. Your idea becomes a safety net. You will believe that no matter what your own failings are, the momentum of the idea will push you through. This is preposterous. If you ever met a real entrepreneur in your life you will know right away that the very opposite is true. The entrepreneur is the one with the momentum that pushes the idea through to fruition, not the other way around. Overstating the idea will kill your momentum, blind your eyes, and stifle your progress.

This should all come as good news to most of us. If what I'm saying is true, you don't actually have to have an incredibly brilliant idea to make a great business. The quality of the first idea isn't necessarily what determines your outcome. It's the quality of the next 50 ideas that are much more critical. Mark Zuckerberg's first idea wasn't very creative. It wasn't even his. As the story goes, the idea of a social network at Harvard was brought to him by the Winklevoss twins. Regardless of how that all went down, a social network wasn't a new idea anyway. MySpace was already on its way to becoming the largest social network in the world. Most people look at Zuckerberg's rise as being one great idea that worked out brilliantly. In reality it is one 'me too' idea followed by a series of brilliant moves or in other words, brilliant ideas. Zuckerberg and his team's insight into our social behaviour is what really took them to the top. The 'like' button was a brilliant idea. The news feed was a brilliant idea. Keeping it ad free was a brilliant idea (and one not shared by his co-founders). All of these big ideas and millions of other little ideas are how Facebook arrives where it is today. By contrast, MySpace did not read the market nearly as well and eventually fell victim to Facebook, never mind the hundreds of other attempts at a social network that were being made during that time. Every one of them had the same initial idea. The real value was and is in who could continue to have great ideas or innovate.

So what of the great idea then? First, recognize that all you have is an idea. Unproven. Not bad but not great. I've had dozens of great ideas that eventually turn into really bad ideas as I dive deeper into them. I've seen bad ideas turn into great ideas when more information comes to light. Just because you think it's amazing today doesn't mean you'll believe that tomorrow. You could spend two years pursuing an idea only to discover it was fatally flawed. I once paid money for such an idea. It was actually past the idea stage and well into money. It was a small parking enforcement business. We had a lot that had a ton of offenders and it had been producing substantial fine revenue for a couple months. The model we had was fantastic. We had no receivables as fines were paid on the spot, our employees were students who could make money while studying and the lot owner was overjoyed to have their lot back. It seemed to win all around - it was a brilliant idea. But then we learned something that you can't learn in the idea stage. Something you won't know until you try it. Once it happened it seemed quite obvious and looking back we should have predicted it. We were too good. Our job was to clean up the lot and we did an amazing job. The problem is that if the lot is clean, there is no revenue. Our business model relied on offenders and we had so effectively chased them all away that we killed our own business. At that point I learned the next lesson. You have to recognize that an idea won't turn into anything without a lot of other ideas and a lot of work. The end of my parking business shouldn't have been the end. There are other options and avenues that could be explored but that required new great ideas, innovation and much more work. I was in the middle of several other businesses at that point and I didn't have any time to do that so I took my lumps and pulled out of the parking enforcement business and let a great idea go to waste.

Sadly I've seen a few incredible ideas that were hatched by the wrong person. They weren't the wrong person because they couldn't do it all by themselves. They were the wrong person because they wouldn't get the help they needed. I call them idea squatters. These are people who come up with something amazing but then prevent it from ever becoming anything because of ignorance or greed. One of those ideas was created in the mind of a friend who was the absolute perfect person to promote the idea. The rest of the skill set wasn't perfect but really, that doesn't matter. Many ideas require skills that by nature are in the minds of fundamentally different people. Unfortunately, the idea was so good that it made it difficult to see how much work there still was to develop the business. As a result, the entrepreneur focused efforts in the wrong places, couldn't address the gaps in the skill sets of the team, and over valued the company while seeking funding. There is a paradox here. The creator of the idea must believe it is worth sacrificing everything for the idea while at the same time recognizing it is totally worthless unless acted upon. The more you act on it, the more it's value evolves, for good or for bad. There is a market that describes this. It's the investment market and it is generally quite efficient. There are two types of investment money. There is idea money and there is scaling money. All business ideas find themselves somewhere on a scale between these two points. Idea money is expensive. Scaling money is cheap. A rational investor looking at an idea that is unproven can see all of the other ideas and work that will be required to bring it to fruition. Occasionally they may act irrationally and bid high because of a fear of missing out but when based on fundamental principles, they will pay much less at this stage. Once an idea is proven an investor can make a much more educated estimate of return and will pay much more for the lack of risk. Typically, the only people at the idea inception stage that will give you money are unsophisticated investors who are highly biased in your favour. In other words, your family. It is only when you have begun stringing together multiple ideas and a progression begins to develop that a savvy investor will begin to become attracted. These are Angel Investors. While they are usually much more sophisticated, they still are investing at a very risky stage. Statistically they know your idea probably won't hit. Even the next stage, a Venture Capitalist, knows only a small handful of all their investments will hit. That's not to say they don't think you have a great idea. They just know there are a lot more ideas needed to make you go all the way. One idea is worth very little. A progression of ideas that point to some comprehensible end is what is very valuable.

Ideas are bubbling up into people's consciousness every day. I believe the rate at which we have ideas will only accelerate as technology opens doors and our world becomes more educated. Like anything, the more common new ideas become, the less value they will have. An idea's value will increasingly become related to WHO has it and whether they possess the tenacity to go after it and the humility to recognize the difficulty of the road ahead. Truthfully I hope my thoughts serve as a motivator to people who are working on their big ideas rather than a bucket of cold water. I hope your take away is that you CAN do it. It's not a magical big idea that gets you there. It's YOU. True, some of us may not have all of what it takes but at least you have some control over that. Being successful as an entrepreneur isn't winning a lottery. Being an entrepreneur is working your hardest to come up with a string of great ideas and being humble enough to recognize when you need someone else to help you keep the great ideas coming.

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