Let me quickly give you a few businesses that were very successful without a novel business idea.
- McDonald’s certainly was not the first, or last, hamburger joint, so clearly that business idea—“Let’s open a restaurant selling hamburgers!”—wasn’t what made McDonald’s successful.
- Starbucks wasn’t the first coffee retailer, nor the only means to get coffee. In fact, when Starbucks was founded, you could get coffee at nearly every convenience store, Dunkin’ Donuts, or even at home if you preferred. The business idea of opening coffee stores on every corner certainly wasn’t the reason why Starbucks was successful.
- Then, there is the Snuggie—the blanket with arms that’ s basically just a bathrobe that you put on backward. This wasn’t a new idea— bathrobes have been around for a long time— and Snuggies aren’t even attractive (you look like a monk when you wear one), but they are marketed brilliantly and more than $100 million worth of Snuggies have been sold in a year’s time. It may be more of a product than a business, but whatever you want to call it, the basic idea is not what made Snuggie successful.
As you can see from the aforementioned examples, the business ideas had very little influence on the outcomes of the various businesses. Basically, the ideas are just a starting point to help you get focused. It is what you do afterward that creates the value.
Nobody whose head is screwed on straight will buy a business idea from you, or anyone else, because any value related to a business idea is in its implementation. Maybe if you give someone a business idea, they will one day send you a coupon for a free product, but that is about it. The further something gets away from an idea, the more value that exists. Things like customers, profits, and competitive barriers to entry create value. The reality of the lack of value in business ideas is a shock and a disappointment to many people who want to get compensated for thinking of “the next big thing.” If I haven’t persuaded you yet, then the best way that I can illustrate to you why, in the grand scheme of business, the idea has such little value is through the chart on the next page. I have taken some, but certainly not all, of the facets required to run a business and broken them down. A few of the tasks are specific to certain types of businesses, but most are required by all businesses.
So, in looking at this whole thing we call a business, would you place a lot of value on a one-time idea that took no risk to produce, or on the other thirty-plus tasks that have to be done indefinitely, day in and day out, that take a ton of risk and hard work? Hopefully, that answer is crystal clear, and my breakdown gives you more insight on why business concept ideas have no value so that you, like me, can also make peace with not getting compensated for them.
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