What makes a business idea good? That’s the question I’ve had in the back of my mind for a while now. My friends and I have spent a few weeks on Skype, throwing around ideas for various businesses that we could potentially set up. We’ve gone through a lot of ideas and have done a lot of research. But the question is, how do we assure that what we come up with is worth working on?
When I first started publishing online, I was mainly writing about companies that focused on consumers. Companies like Foursquare, Twitter. It’s easy to see why these companies are so captivating. The possibility of going from a small website that was built over a weekend to a platform with hundreds of thousands of loyal users is really appealing.
Then, something changed. I started to lose interest in these companies. Why?
What happens when you put together a team of four inexperienced Bachelor’s students, sign up for a national strategy case competition, and go up against actual consultants and people in the final year of their Master’s degree in strategy?
It turns out that you end up losing.
Of course, I think we can be pretty happy about our result. Out of the 50 teams that applied, we got into the final round of four. What we lacked in knowledge of frameworks and financial calculations, we tried to make up for in presentation and creativity. During the first day, it worked. The company in question was related to online news, and we were able to provide substantial recommendations. It was a topic we knew enough about to get through to the final round.
The next day didn’t go as smoothly. It can pretty much be summed up in the first question the judges asked us:
“Ok, here’s a simple question to start out with. What about the revenue?”
Regardless of how many business books I go through, the one that I keep referring back to is Good to Great.
The book is based on an interesting premise. Jim Collins and a team of researchers identified and studied eleven companies that made the leap from good to great, and then sustained that greatness for at least fifteen years. Both the results of the study and the way in which Collins presents said results contributed to this book quickly becoming one of my favorites.
What is surprising, considering the simplicity of the ideas presented in the book, is how few companies actually adhere to the principles that were developed based on the findings. The companies that fit the strict criteria that Collins laid out didn’t include the big names that we usually read about (Coca Cola, McDonalds, Microsoft), but rather, the likes of Wells Fargo or Gillette- companies which rarely seem to be brought up in case discussions.
Even more interesting is that whenever you read about a company performing poorly, they are usually in violation of one or more of the principles that Collins found all eleven good-to-great companies shared.
So, what are these principles?
After reading ’Business @ the Speed of Thought’, my respect for Bill Gates has increased exponentially. That isn’t to say that I wasn’t a fan of his before. I’ve always been impressed by the strategies that Microsoft carried out in its early days, but that doesn’t come close to how impressed I am now. In this book, published in 1999, Gates outlined how information systems, the Internet, and technology in general would change the way that businesses function. Along the way, he made some incredibly accurate predictions, most of which have since become huge industries: smart phones, smart homes, social networks, and an array of other uses for the Internet-a few of which have yet to be developed.
While reading A Study in Scarlet, I came across an interesting list. Dr. Watson had taken the time to outline Sherlock Holmes’s strengths and weaknesses. Now, here’s the interesting thing about Holmes. He is the ideal detective. He’s dedicated his life to the pursuit of reason and solving crime. If we put it in terms of the 10,000 hours to master a skill rule, he’s invested a lot more than that into the subsets of what it takes to be a perfect detective. Let’s take a look at the list.
For some time now, I’ve been jotting down quick notes and ideas on getting attention for startups. This started out as a personal record, but now I’m publishing it in hopes that it might be of some use to others. Every time I’ve come across an interesting idea, I’ve added it to this list.
A significant portion of the most successful Silicon Valley companies we hear about were started by coders. Facebook had Mark Zuckerberg. Google had Larry Page and Sergey Brin. Dropbox, Drew Houston. All Computer Science majors.
There must be a reason behind this correlation. Is their success simply based on knowing how to bring their ideas to life without spending time on the process of finding and hiring a developer? Or does being a programmer possibly lead to having better ideas?
I think that the answer is involves a little of both. Let’s look at some of the benefits founders have when they know how to program.
I started writing a collection of articles featuring the stories behind how startups acquired their first users about a month ago. While the research got tiresome at times, I enjoyed finding out about some of the lesser known strategies that they used- such as Airbnb’s spamming of Craigslist. Discovering a clever method like that is a lot of fun, and writing about it insures that I have a good resource to refer back to in the future.
Not really knowing what to do with them, I posted them on /r/Entrepreneur.
Airbnb, the massively popular website for renting out lodging, was last valued at about $10 billion. Not bad for a company that got started in 2008.
It really is a great service too. But that’s not what I’m interested about when it comes to Airbnb. No, it turns out that their customer acquisition methods were quite fascinating. Did they really building a significant portion of their userbase by spamming Craigslist? Let’s take a look.