It's been six months (wow) since I wrote "Idea Versus Execution - A Stupid Simple Framework When Thinking about Starting or Running a Business." The genesis was personal, as a way to look back on my own successes and failures, to codify the thinking, especially since I now have the good fortune to interact with an increasing number of entrepreneurs.
My first business was a dud. I spent almost a year, off and on, trying to launch it. I had a site, checking account, several domain names, a phone number, stationary (it was 1998), etc., all the trappings of a real business. It went nowhere, but it wasn't for it being a bad idea. I could also make a case that it didn't fail for lack of cycle decidated to it. The problem was that the size of the idea exceeded my ability to execute that idea.
In thinking through ideas versus execution, there are three things I've had to come to terms with personally. The first is that I'm an idea guy through and through. The second is that a large number of my ideas exceed my ability to execute, and the most difficult is that almost all of my ideas have been thought of first by others. The ONLY thing that matters is who executes best - not even first but best. For idea guys, this principal can be painful, because it means learning to let go of ideas and realizing that ideas aren't where the value is.
Part 1: “I'd never join a club that would allow a person like me to become a member."
Recently, I had the chance to meet two different founders. One reminded me of me when I was just starting out, which unfortunately for him, is probably not a good thing. Age, I should mention seems only loosely if not at all correlated with entrepreneurial success as we see. This founder had an interesting idea that is best summarized as doing what Uber did for the for-hire industry to another field. It begins with the assumption and understanding that with mobile devices in the hands of customers and consumers, you can leverage that device to radically change how the two sides connect.
We met because he hoped I would become an investor in his business. As I enjoy the ideation process, I chose not to tell him that if someone actually needs my money we're both in trouble. After listening and asking, the problem with his business is not the idea; it's the likelihood he could execute on the idea. On the surface, he had a big market and a way to add value to it. He even had his first handful of partners that were generating revenue. What I was looking for was how it went from 0 to 10, 10 to 100, 100 to 1000, etc.
I'm sure his idea can get from 0 to 1000, but can he? He needs to be able to show that you understand every nuance of the business opportunity. He needs to have crafted a story strong on numbers standpoint. He needs to show that he understands the metrics that dicate the current ecosystem, understanding how customers and providers connect today and what specifically he would do to increase the yield such they would make a behavior switch. He should be able to paint the picture in a way that even if the investor said no, they would leave thinking, "Wow. That's a great opportunity. I wonder who might be interested in it."
Part 2: The ONLY thing that matters is who executes best - not even first but best.
About the same time, I had the chance to meet another Founder, this one of a company that grown like a rocket-ship. The idea in many regards is less interesting, the opportunity less accessible. Yet, it is this business that has investors wanting to pour money into. The idea is fine, but even the founder will tell you, his business is not about the idea, which was enough to get him going. It's an execution business. What makes his business even more impressive is that it is not a purely digital one. It is part of the new breed in customer acquisition businesses. It requires sourcing, warehousing, fulfillment, customer service, not to mention unique financing challenges all while trying to become experts in marketing.
I'm not saying this founder has succeeded because he predicted everything he would run into before beginning the business. The criticism of the previous founder is not an expectation of expertise that could predict the future. It is in hopes of knowing the entrepreneur could handle what they will face. The way they frame the opportunity now tells a lot about how they think and how they will solve future problems. That is what people invest in as that acts as expertise acts a proxy for execution.
Business building never goes as planned. That's why it's the execution not the idea that matters. Let's face it. The vast majority of the top businesses today were somebody else's idea!
