One of them was that to create something truly innovative, you can’t think about things linearly. Groundbreaking innovation doesn’t happen in a straight line. It’s more of a mashup. The big ideas really tick off a lot of people. But, true innovation should do that. True innovation should threaten existing businesses in the sector and potentially put them out of business.
Are there already businesses in the space? Do your research. Are they well funded? How long have they been around? How many failures in the space? What can you learn from those failures? Be honest with yourself. Is your idea similar, and just has an easily replicable feature? Or is it truly way out of the box?
Why think small? Think big. Startups are so freaking hard that you might as well go for Mars and Jupiter. The Moon has already been caught. If there are already startups in the space, and they have funding, it might not be worth pursuing.
For example, we hear a lot about Big Data these days. Internet of Things. Sensors. Which one of these companies is truly mashing up a lot of different ideas and retranslating them into a meaningful business? Will any Fortune 1000 companies go under because they are successful? I am not picking on them, but merely putting the idea out there.
Bitcoin/Blockchain is a very disruptive idea. But it only becomes a disruptive business if people create companies that don’t replicate exactly what we can do with fiat currency today. My friend William Mougayer created this tableau of Bitcoin companies. Which ones are truly out of the box, and which are analogue? In the case of Bitcoin, innovators have the advantage of having a base layer of virtual currency and a transparent online ledger that is software. Software can be twisted, remade, reconstituted and rebuilt to fit into any nook or cranny.
Sometimes creating a groundbreaking startup is like ordering off a Chinese menu. Take something from column A, something from column B, and something from column C and mash them together to create something totally different that no one has ever seen before.
Better yet is the mashup that creates network effects. Network effects are totally misunderstood. Lots of startups claim network effects, but few businesses really have them. Sometimes you can design network effects in from the get go. Other times, they are uncovered as the business develops. Once you find that there are true network effects in the business model, design incentives to put a rocket under them. They aren’t always price incentives either. Well designed incentives will help that segment of the business grow faster than anything else.
If your business doesn’t have network effects, it still might be groundbreaking or solving a tough pain point. The strategy behind the execution of the business is different, and the metrics you will need to hit for financing rounds are different.