In university, a number of friends and I got together to start a business. We didn’t have any idea what we’d create, but we figured we could collectively brainstorm something. We called our little project Project Alpha. Looking back, it’s humorous how little we knew and how unprepared we were.
We never made it past the first hurdle, because we kept stumbling over this one issue: all our supposedly unique and innovative ideas we’d brainstormed had already been done. There were already other products out there that did the same thing we wanted to do.
We scrapped every idea we looked at, and continued moving down the idea list. To no surprise, pretty soon we had exhausted all of our ideas. We had completely failed in our minds, and we thought it wasn’t meant to be. The group never officially disbanded, but it gradually faded away thereafter.
We were clueless.
What none of us realized at the time was that just because there are competitors in your market doesn’t mean you can’t enter yourself. It sounds obvious, but while we were in that room brainstorming and assessing ideas, none of us had brought up that point. Our idea of entrepreneurship had been flawed, because we placed much more emphasis on the idea instead of the execution.
In effect, it was an early sign that we weren’t ready yet to be entrepreneurs.
If you think about it, it’s inevitable that of the seven billion people on this planet, others will have thought of the same idea. Thinking up the initial idea is relatively easy. This is why ideas by themselves are fairly worthless. The real significance behind any idea is in its execution.
Derek Sivers mentions this in a blog post, where he explains that ideas are just a multiplier for the execution and are worthless otherwise. To make a business, you have to multiply the two.
Thus the most brilliant idea with no execution is worth $20. The most brilliant idea with brilliant execution, however, is worth $20 million.
The second reality is if there are competitors to your idea, it’s a good thing. It means they’ve likely already validated the market, decided there was an opportunity there, and entered. Your competitors have done the work you’re supposed to do initially by researching the market.
In fact, if I were starting a business now, I’d be worried if there weren’t any competitors (barring some super specialized niche field). That signals that there may not even be a market for your idea. Chances are someone in the past thought of the same thing you did, perhaps tried to enter the market, realized demand wasn’t there and/or it was unprofitable, and exited.
Doing the initial due diligence to ensure there is market demand before you enter is so crucial. It can be the difference between spending years and years of effort and time launching a mediocre business versus an “overnight success.” As venture capitalist Marc Andreessen says, “Markets that don’t exist don’t care how smart you are. Similarly, it doesn’t matter how hard you’ve worked or how passionate you are about an aspiration: If someone won’t pay you for your services in the career marketplace, it’s going to be a very hard slog. You aren’t entitled to anything.”
I try to keep this in mind in my endeavors going forward. If something seems really difficult to gain headway on, it’s a sign that the demand just isn’t there and it’s a sign to move on. In almost every successful startup story, traction came fast and furious for them once they found their niche and competitive advantage. They may have had to pivot multiple times to get there, but they knew right away when they had a hit on their hands. And then they ran with it, riding the wave of momentum forward to success.
The funny thing is, our ideas back then for Project Alpha were pretty good. Some of these ideas are million dollar companies now. But because we let the fear of competition scare us away, we’ll never know what may have been. Frankly, if we were that scared of the competition even before we had even started, we would have been crushed by the competition eventually anyway. But it’s nice to imagine what if.