There are plenty of people out there with brilliant ideas and concepts.You hear about them every day, pitching to investors or trying to get funding to make their startup dream happen. You see them on TV shows like Shark Tank, trying to convince the judges their idea is the next Uber of… you can fill in the blank.
A great idea is a good place to start for a business. But an idea alone does not a business make.
The tech revolution means millions of people are writing code, creating apps, looking for ways to come up with the next ‘unicorn’ idea. There are plenty of inspirational role models too: Mark Zuckerberg, Travis Kalanick, the guys from Airbnb, and the list goes on.
It’s worth remembering that along with an idea there are two other crucial aspects to a great business: execution and business model.
“Execution is a specific set of behaviours and techniques that companies need to master in order to have competitive advantage. It’s a discipline of its own” — Ram Charan and Larry Bossidy, Execution: The Discipline of Getting Things Done
Your idea might be stunningly original, capturing the imagination of all who hear about it, but can you execute? History is littered with examples of great ideas poorly executed.
To execute you need to have the skill set and personality to make it happen. This is why investors look for strong startup teams, with co-founders who have complementary skills such as tech and sales.
This is why your core hires are so important. Can they execute your idea? Do they have the drive and initiative to get things done? Can they fill in the details of your big picture vision?
First-mover advantage is not always a guarantee of success. Look around and you’ll see many examples of companies which have copied an idea but have done it better. Sometimes doing it second allows you to learn from a trailblazer’s mistakes.
“The same products, services or technologies can fail or succeed depending on the business model you choose. Exploring the possibilities is critical to finding a successful business model. Settling on first ideas risks the possibility of missing potential that can only be discovered by prototyping and testing different alternatives.” – Alex Osterwalder, business model strategist
The next vitally important thing you need is a business model: you have to be able to monetise your idea. At its most basic, a business model is the structure and functions built around the questions of “who is my customer and how do I sell to them?” It entails value proposition, customer relationships, channels, customer segments, cost structures, and revenue streams.
For example, an online marketplace is a two-sided platform business model. The customers for this model are vendors and consumers. The marketplace is an intermediary between these two sides of the platform. This is the business model my company Marketplacer used when we launched BikeExchange in 2007.
It’s a powerful thing when you pull all three elements together: idea, execution, and business model.
If you’ve come up with a brilliant business idea, great! You’re on the way to a potentially valuable business. The next step is to have a plan and strategy for executing your idea, and work out a business model to monetise what you’re doing.
About the author
Jason Wyatt is the co-founder and managing director of Marketplacer. He is a serial entrepreneur, having started multiple online marketplaces including BikeExchange, winner of Telstra Business of the Year in 2012.