As was discussed in my previous post a brilliant idea is worthless unless you can execute on it. Few people have the skills & resources required to build a billion dollar company. For an idea to be valuable you also need to possess the skills & resources for executing it. Therefore the idea needs also to be suitable for you. Let's call these kinds of suitable, brilliant ideas brilliant opportunities. So how does a brilliant opportunity look like?
The general understanding of what makes a brilliant opportunity is somewhat scattered. The best guide would be Peter Thiel’s From Zero To One. With his seven questions that every market-creating business must answer, he created a good evaluation sheet on what makes a brilliant business opportunity. According to him, with such an opportunity you can answer a bold YES to these seven hard questions:
- The Engineering Question: Do you have a breakthrough technology?
- The Timing Question: Is your timing right?
- The Monopoly Question: Do you have something no-one else has?
- The People Question: Do you have the right people?
- The Distribution Question: Can you sell and market your stuff?
- The Durability Question: Will you be still around in 10 years?
- The Secret Question: Do you know something nobody else does?
However coming up with such an idea is very hard because you're limited in your resources. Especially in case you're not an experienced professional yourself, as thus by employing yourself you don't have the best team.
A first-time entrepreneur should focus on an opportunity, where he plays an unique role in the executing the idea (no, just coming up with the original idea doesn't qualify). Most ideas can be done, but they shouldn’t be done by you. Evaluating that something could work is definitely not enough for the opportunity to be brilliant. The idea must match your capabilities. You should be working with something, that you are in an unique position to understand (e.g. younger audience, unique niche market or exceptional technology) or you should have some unique relationships (e.g. unique connections through your family/friends or agreements with top scientists in a field instrumental to the business idea).
On top of being in an unique position for the idea, it is important that your idea is easily testable. If you can test the customer demand easily and fast with your current capabilities, then you might be able to convince more senior professionals about your opportunity. This way you might get funding and advisors that help you gather your A-team required to execute the idea well. You also start playing a crucial role in the development of the idea, as you're the one with the best data and understanding of the test market.
This is what Mark Zuckerberg did. He didn’t possess the skills to create a global social network. He just knew enough to build the first version and thus he was able to connect the people in Harvard University. This proved the potential of the idea and he got experienced advisors to help him bring the company to the next stage.
The seven questions might leave a lot of potential first-time founders thinking, finding a brilliant opportunity is almost impossible as very few have the required combination of skills, experience & relationships that make the opportunity unique. Well, this matches well with the fact that more than 90% of first-time founders fail in their first venture. It is hard to come up with brilliant opportunities that fit this criteria.
The skills of evaluating billion dollar opportunities are not only important for founders. Equipped with the right skills to detect opportunities, you could always join or invest in a startup that is executing on a world-class opportunity. This might have a much better potential upside, than executing on your own idea. If you understand the founders’ opportunity in-depth and their unique position to pursue it, you can usually really impress the founders. Founders want to have people onboard who are passionate about the same things as they are and understand the secret. As Eric Schmidt once told Sheryl Sandberg: "if you’re offered a seat on a rocketship, don’t ask which one, just get on board”.
So from a career perspective is it better to pursue your own idea or join a winning team? Well, if you actually do have a brilliant opportunity the choice is easy. However, most people don't. In my next post I will discuss the tradeoffs with this choice.