As both an entrepreneur and an investor, I’d like to talk about one of my favorite subjects: The Big Idea. Where do I find a big idea, and once found, how do I go about vetting it?
When I started my first company – Lombard Brokerage – I had a dream that I could create a company that best merged the coming advances of technology with finance. In short, my “Big Idea” was online stock trading. I knew there were many brokerage firms out there, that there were lots of technology companies dabbling in providing specialized market tools, but I also knew that none had thought to (or better yet, none had tried to) put stock trading on the Internet. The very idea lit a fire in me and I was off to the races. It felt as if I had seen the future, and it was up to me to make it happen. Having built and sold Lombard Brokerage, and helped numerous entrepreneurs do the same with their companies over the last decade, I’d like to share with you how I go about assessing big ideas that I’m looking at persuing personally and/or investing in.
First, lets talk about how you can measure or find your “Big Idea.”
- Find an idea that makes it hard for existing players to exist. In my case, I was aiming directly at full service brokers by providing better information and doing it at a fraction of their cost.
- Don’t just copy a good idea; come up with one better. Find an alternative, a better way. I completely changed the way investors got quotes, real time graphs and automated account updates.
- Take what’s hard to do and make it simple. Very often it’s not the best idea that wins, rather it’s the one that’s simplest to execute.
- Often times the answer does not lie in some new technology, but in a better, or new business model. Fight the temptation to look at technology as an ends – it’s almost always the means by which you’ll achieve your goal.
- Does my Big Idea solve a very real problem; does it solve one of my own problems? Great businesses are often built by people looking to solve a problem they personally deal with on a regular basis.
Next, let’s take a look at your idea and see if it really is something you would like to pursue.
- Do you see yourself waking up at night furiously writing new ideas and ways to get that big idea out in the market?
- Are you willing to walk the plank for it? Are you ready to give up that secure job and put your life on the line?
- Is your idea one you can communicate and recruit top talent around?
- Can you explain what it is you hope to do in 15 seconds or less?
- Do you posses a unique skill set or confidence in this area?
- Is the execution of your big idea as a business, a capital efficient one? In other words, do you need to build a big factory or plant to make it work? If so, start again.
- Can you in short order, and at low cost, validate the potential of your idea?
- Is the business sustainable over the long term or is it a “one trick” pony?
Finally, lets face a few hard facts about “Big Ideas,” and startups in general.
- About 2% get funded.
- Over 70% of companies getting all the way to being funded by VC’s, fail.
- Within the first 90 days of executing your “Big Idea” in the marketplace, 90% change course completely and it’s off to the next…Big Idea.
- Is the market big enough?
- Will my market benefit from new economies and viral marketing?
- Is my idea a long tail business?
In conclusion:
Getting a “Big Idea” off the ground is fraught with peril and is in all cases, very hard work. That being the case, I would not change my experience building companies for anything in the world.
I love the act of creation and I love what makes that spark in each of us ignite. If you’re one of us, you know exactly what I mean. No wall, no building, no ocean, no stream of no’s, will ever be enough to keep us out of the fight. We are entrepreneurs and we love what we do. We honor others who do the same and seek opportunities to unite and help them.
So if you have that big idea, one burning a hole in you…
DO IT!!!
