An eternal debate has been raging for decades, with those who believe that the business idea is the root of all innovation and progress in business and technology pitted against those who are saying that the idea, while mildly relevant, is completely secondary to its execution, which save a bad idea if done correctly, or spoil a good one if done badly.
But when you think of it — what are the makings of a successful business? There are numerous ways to analyse one, of course; but I’m sure we will all agree that we can isolate three general elements:
- The product is the actual thing that is being sold to the customers and is bringing revenue to the company. It doesn’t have to be an actual physical product — it may be a piece of software, a service, anything that gives enough value to someone’s life that this someone is willing to pay money for it.
- The way this product is actually produced — which could be called its quality or, if you wish, the execution — is another element, separate from the first one. We may have two functionally identical products, but one can easily be better than the other: will last long, will operate smoothly and without delays, etc.
- And the third element, which rounds up our little group, is the market: a more or less clearly defined group of customers which might share different qualities, but the most important one is that they are (at least in theory) interested in our product.
As we can see, there is no idea. So how is it that there are so many debates about something that doesn’t exist?
Actually, I lied a bit — there is something we might call “an idea”, lacking a better word, but it isn’t anything concrete or specific. Most generally, what most people call “an idea” is in reality a more or less vaguely defined combination of the above elements.
In other words, an idea is a concept of a certain product, executed in a certain way, for a certain market. For example, many countries have recently seen a slew of Groupon clones — i.e. the same product and the pretty much same execution as Groupon, only for different markets. Or, applications like The Daily are a known product (a publication) for an old market, only with a new execution (on the iPad).
It’s quite difficult to come up with a truly novel idea, i.e. something that innovates in all three areas. Luckily that isn’t necessary, since it is usually enough to differentiate in only one to gain a significant competitive edge. But often one isn’t enough — while the Groupon clones can work because their model is basically local, previous stabs at local Facebook clones have invariantly failed, since their differentiation — local language — was easily defeated by the original Facebook.