Entrepreneur Myths (11 page)

Distribution is the pimp. And your product is the bitch. Never forget it.

Brain Candy: questions to consider and ponder

(Q1)
When you developed your product or service, how did you launch it? Did you put tons of marketing dollars behind it or did the product just take off?

(Q2)
How does publicity and viral marketing play out in launching a new product? Have you used these effectively?

(Q3)
What is the chance of your product being distributed in the marketplace?

(Q4)
If you plan to distribute your product in retail stores, do you have salespeople on your team with retail experience and contacts in the retail channel?

Entrepreneur
Myth 17
| Ideas and ideation come through purpose or special intent

Some people think an entrepreneur comes up with ideas by sitting in a quiet corner with no disturbance and suddenly,
poof
, ideas flood into their head at 100 miles an hour. We can debate this myth forever. However, in my opinion: ideas and ideation are, first, a state of mind.

Ideas, like life situations, arise from randomness. Randomness does not allow predictions. Predicting when you will come up with that one “eureka” idea is nearly impossible.

If you want to be a great idea person, study the life of Nikola Tesla. If you aren’t familiar with Nikola Tesla, that’s too bad.  He invented the A/C motor, transformer and wireless — just a few simple things that we cannot live without today. Nikola Tesla was a genius. Only Albert Einstein and Isaac Newton are in his intellectual capital league.

Tesla was a loner. Unlike his nemesis Thomas Edison, Tesla invented most of his inventions by himself. Thomas Edison, who tooted his own horn as the best inventor in America, if not the world, did quite the opposite. Edison is famous for experimenting thousands of times before cracking the code on making the light bulb work. But he didn’t invent alone. He had a team. Most people don’t know that Edison actually took credit for inventions developed by others in his lab.

Tesla had an incredible record of coming up with new inventions. He calculated and played out every detail of a new invention inside his mind before he even put it on paper. I learned from studying Tesla that visualization of an idea is critical. When Tesla developed the solution to the A/C motor, the visual came to him as he was strolling through a park with his friend, discussing a Serbian poem. Random, non-related events can enable any entrepreneur to come up with a genius idea if their mind is open to it. Ideas, if you want them, will come to you if you’re ready for them.

When I was younger, I believed you had to be an expert in a particular area in order to come up with an idea. Formal education does not play as important a part as some people think. Einstein said, “Imagination is more important than knowledge.”

How do you come up with ideas? Here’s how it works for me:

Step 1:
Keep your mind open and willing to receive ideas.

Step 2:
Always be fully aware that ideas will come to you — often at odd times and hours.

Step 3:
Random events can cause trigger points for an idea. The trigger points may or may not be related to the idea itself. It depends on the idea, situation, person, environment, etc.

Step 4:
The idea will flash in your mind, and it will play out all the way to the end like a movie. It only takes a second or two.

Many inventors say ideas come to them in this manner. It works for me all the time. The key is to keep your mind open to all kinds of trigger points. Trigger points can come to you from anywhere - media, newspaper, internet, television, humans, events, etc. I can’t tell you how to develop the trigger points. I’m still trying to figure it out myself. My guess is that you just have to be aware of your surroundings.

One day I was talking with my business partner about something completely random, and two completely unrelated words triggered an idea unrelated to the words. The two words were trigger points for new idea generation. This time they coupled together to create a new and unrelated idea. Anyone who has experienced this knows what I’m talking about. If you haven’t, I promise shit like this happens.

I developed this ideation process after reading Tesla’s biography. So if you think of an idea based on reading this book, thank Nikola Tesla. He was a genius. Next time you switch on a light, remember, it happens because of Tesla. When you use your cell phone, it’s thanks to Tesla. When you run any electric motor anywhere, which is pretty much everywhere, Tesla is the reason. Study him. Learn from him.

Ideas can come to you anytime and anyplace. I funded two different entrepreneurs who had created environments conducive for idea generation. One of them made the workspace fun and child-like. The other had more adult games, such as pool tables, throughout the space. You often see the headquarters of high-tech companies in Silicon Valley emulating a fun work environment to keep employees in the state of ideation. 

Your brain is the most important asset you have. Nurture it and guard it as if it’s the only thing you’ve got.

Brain Candy: questions to consider and ponder

(Q1)
How do you come up with ideas? Do you do it alone, or with friends or partners? Do you do it with a special purpose in mind, or is it in a bar over a few drinks?

(Q2)
What are you doing when the ideas come to you? Are you walking in the park, running or taking a shower?

(Q3)
Have you heard of Nikola Tesla? If so, what do you think of him? Do you think Edison or Westinghouse took advantage of him? What about Marconi?

Entrepreneur
Myth 18
| You must be first to market

Christopher Columbus was the first to discover the New World. He did not capitalize on his discovery. Other explorers after him sailed through his charted waters and found the pot of riches. I once thought being first to market was the most important goal in any venture. Now I know better. Being first to market could get you a bunch of arrows in your back.

Launching into new markets

Ten people simultaneously, across the globe, come up with a similar idea. Out of those ten people, five don’t do shit with the idea. They sit on their ass, pontificate, pick their nose, and think of numerous excuses why they can’t get it done. Out of the five left, three of them attempt to do something with it. But because of their lack of knowledge, ambition or inability to finance the idea, they quit.

Two entrepreneurs are left to enter the new market. It’s between you and some other ambitious bastard to duke it out. Good luck. Take no prisoners. However, be careful of being first to market. You’ll either build an advantageous position in the marketplace or end up like Columbus.

Groupon was the first to dominate the coupon market on a global scale but they were not the first in the category. They revived the social buying category; now other entrants are riding their wave. LivingSocial.com is following closely behind and it seems like new coupon sites are forming daily. Just because you launch into a new market and become a leader doesn’t mean you’ll stay one.

Don’t worry about being first to market

If you’re not out in the market first, please do not panic. More important, is who sticks it out the longest as the market evolves and matures. Even when someone else launches the product or service first, you can still play on the same playground, and perhaps change the playground rules during the market’s changes.

Google
was not the first search engine
.

Apple
was not the first computer.

Microsoft DOS or Windows
was not the first operating system.

Ford
was not the first car.

Whole Foods
was not the first grocery chain.

Facebook
was not the first social media site.

Being first has its advantages, but so does being second or even third. The most important consideration is how you differentiate your venture, service or product from the competition. A good example is the photo sharing sites sector. Instagram was not the first or second photo sharing site on the internet. They exploded into the market with a simple consumer solution while competitors like Photobucket and Flickr fell sleeping at the wheel. In less than a year, Instagram users had uploaded more than one hundred million photos. They’re flying at warp speed to possibly overtake the market, not because they were first to market. They made photo-sharing easier and that propelled them ahead of the first-to-market players.

The same is being played out in the social network sector. Google+ came out to compete directly against Facebook. Many other social network sites came before Google+ launched in 2011. Count them: Friendster (2002), Myspace (2003), Orkut (2004, Google’s first social network), and Facebook (2004). Friendster and MySpace came before Facebook — even though Mark Zuckerberg believes he created the social media category. When you become the biggest gorilla in the sector, you can change history and make claims like Mark has done.

Nature holds the secret: differentiation is life or death

Think about competitive differentiation. Let me take you out into the woods where you can hear the birds singing. Nature has millions of species. As Darwin taught us, the survival of each species depends on their differentiation and where they fit into the ecosystem. Differentiation is crucial for the survival of your venture too. When you compete against others in the marketplace, you have to know exactly what makes you unique. If you don’t, neither will the consumer.

Entrepreneurship is more like running in a marathon than a 100-yard dash. You have to go the distance to win. The significance of being first depends on the sector or market application. But don’t forget that consumer needs or acceptance can change rapidly. Being first to market can be deadly. Remember Texas Instruments (TI)? TI was one of the first to come out with a personal computer. Do you remember Amiga? They were another early entrant that crashed and burned in the PC space.

Being first to market can be detrimental if: (1) your vision is off or blurry, (2) the customer needs to be educated, (3) you lack the necessary capital to work out the kinks of your customer offer, or (4) your management team is too inexperienced to deal with the uncertainty of a new market. Worse, you might just be too fucking early. I invested time and angel money into a venture offering a solution of mass-customized delivery of online banners ads, making one-to-one marketing to the consumer on the internet a reality. The technology was ahead of the market so it was difficult to raise venture capital because neither the VCs nor the customers understood it.