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TWIST YOUR STARTUP IDEA UNTIL IT SOLVES A BIG PROBLEM: "Better" is living death

This past week I was working with teams of four or five techies in my startup Entrepreneurship class at Cornell University.

What struck me was how tricky it is to get techies to see the difference between "better" and "BIG".

Great startups find BIG problems to solve.

Companies that get started and go sideways focus on making something BETTER.

Words ending in "er" are four letter words to VCs and experienced startup employees: faster, better, cheaper are not firing up their eagerness to join your new enterprise.

The founders who focus on solving a basic problem that ails a huge number of people produce the great startups. That takes courage and conviction, confidence and determination. There is a lot of emotion in making that decision.

To test your idea, ask yourself "Has this been done before?" Then ask "What that is similar has been done before?" Great ideas for startups find that idea is fresh, new, has not been done before. And the similar solutions are old generations of clunky solutions. You want to move from a ho-hum idea on to one that is very exciting, that has a lot of "WOW!" in it.

TWIST YOUR IDEA : 

Use your first idea to begin a process of altering it week after week, twisting it into different forms that solve different problems. That twisting process will advance your initial idea, most likely shifting it to focus on a very different problem to solve. That is what serial entrepreneurs are terrific at doing.

EXAMPLE:

Here is an example for you to think about: "Build a better game" is not going to lead your startup to greatness. But as you ponder building new games, you realize there is big decision you have to make: On what devices (computers, game boxes, smartphones, pads) should your game run on? It is a lot of work to make a game run on one operating system and one device. How about a dozen in various combinations? Now that is a BIG problem needing a solution.

So how about creating a language that can be used to build one game that works on the many different devices?

Sounds great!

But hard to do (good barrier to competitors).

That is Exciting!

And yes, there is a startup that is focused on doing just what I have mentioned. It is Game Closure. The company has built HTML5. It is a set of standards that lets Web browsers understand animations, videos, graphics, and other multimedia content without the need to download a plug-in like Adobe's Flash.

You can imagine how you might have come up with this idea yourself: as a game developer you grew frustrated at the basic problem of cross platform game playing software coding. You set out to solve it with a couple of ways, tried a few in the lab, kept on thinking and twisting your idea, and then "presto!" you get the idea that we have just discussed.

That is how to move from an initial idea to a great idea. Twist your first idea round and round until it transforms into a solution for a really BIG problem.

That is how you attract the great people and great financial backers.

BOTTOM LINE: Beginning with your initial idea, start twisting it and keep on going until it becomes -- in its transformed shape -- a solution to a BIG problem. That will be the foundation for building an unfair competitive advantage. It is how serial entrepreneurs do it. So can you.

I wish you The Best on your Adventure!

NEXT GENERATION STARTUPS: Use combinations to rise to the higher level

"We were thinking about using data on restaurants and parking to help diners have a more enjoyable dining experience. What do you think about that idea?"

This question opened a session with a first-time startup team yesterday evening (from my Cornell University class). From then on it was an intense workshop addressing the question "What can you make from this initial idea that can move it forward so it becomes a great idea for a great business?"

Most startups begin that way (vague, weak first idea) and the founders have the determination and intuition that drives them to start changing the first idea so it becomes something much more compelling ("cool") to a vast majority of end users and customers ("scaleable").

But that is not easy. Yet serial entrepreneurs can do it swiftly and very effectively.

So let's get you to understand the process the veterans use to lift their first idea up to "the next level".

DIALOGUE:

• "We are going to use data to help diners know how long the wait time is before getting a table and help them find a parking space. We see our expertise being in allocation of scarcity."
• Q: You must focus on either helping a restaurant or a the dining person. Which do you want:
  • A: Let's focus on helping the restaurants.
• Q: What is The Big Problem you are going to solve for restaurants?
  • A: Diners not frustrated.
• Q: Isn't that a non-problem for restaurants that are constantly selling all the seats every dining time?
  • A: Yes, well, then we have to help the other restaurants, the not-full places.
• Q: How could you help the underperforming restaurants fill more seats?
  • We could use their customer data to email and advertise to their Ideal Customers.
• Q: How about using operations research technology to analyse the patterns of booking reservations (like hotels do), predict the outcome (unless action is taken), and send out email alerts (to smart phones, PCs, pads) that a bargin (e.g. for next Tuesday Lunch is a 2:1 free desert)or other discount/coupon)?
  • A: Cool, and we could help them find the place on a map!
• Q: What could you do for people visiting a resort area and looking at the last minute for a place for dinner?
  • A: We could use location based technology to alert their quiries of Google Maps about local restaurants are nearby. Instant find, instant (automated) booking, walk in to your seats!
• Q: What could you do for a hockey game fan?
  • A: Well we could reserve a parking space, give Best Driving directions, and maybe suggest near-by restaurants!
• Q: Anything else for the sports fan?
  • A: We could offer near-by lodging and maybe discounts booked through us!

And so on the discussion went.

Notice how the movement went to using existing technologies to build a more focused, more compelling service.

The end result was a combination of Google + FourSquare + Open Table + Groupon. It was very different than the initial idea.

BOTTOM LINE: Serial entrepreneurs move swiftly from initial idea ("dream", "vision") to focus, add value, increase complexity and emerge with a loud "WOW!" idea for the new enterprise. Combinations of existing business models, technologies and marketing methods transform a weak first idea into a more powerful one. As more work is done (in secret), the idea grows more and more powerful. The serial entrepreneur does not stop until he has a plan that he is confident can be executed to deliver a powerful unfair competitive advantage. When you can do that with an idea, you'll have advanced into the halls of those few who can become serial entrepreneurs. It is worth the hard work and brain straining.

I wish you The Best on your Adventure!

BEST TECHNOLOGY WINS: No, the best marketed technology wins

On the plane ride back to California I sat next to a professor whose husband just finished raising a large A round for his first startup. She was a delight to listen to. A PhD all excited about fresh killer technology who explained how no other competitor would be able to beat the startup. It would quickly sell into a billion dollar market and probably be sold in a year or two, making a fortune for the founders and employees.

That is a Cinderella story I hear all too often. It sounds so good, is so compelling and we want it to be true. But real startup life does not work that way.

Instead, the best marketed technology wins. If you examine the history of startups, you will find that the gorillas of new markets never had the best technology. Microsoft, Dell, Amazon, Google and Nokia had very respectable technology but used other elements to compete and emerge from the startup fray as the ultimate winners, the gorillas, of their new market categories.

Techies like me never like to admit that. We love the promise of cool things able to be done with the latest and greatest inventions. We expect others to agree with us.

But the world plays cruel tricks on  techies. Apple ends up with two percent of the PC market after building the first commercial PC success. Microsoft crushes its competitors with inferior technology. Ouch! Sad but true.

So expect that. And learn to play the game that way. Spend time studying the marketing methods of the gorillas. Learn what they do to win. Then apply it to your startup.

BOTTOM LINE: Expect the best marketed technology to win. Expect the best technology to not win. Adjust your startup plans accordingly. Yes, you need technology to succeed, so go for it. Yes, tell your tech team to reach for the moon. But also tell your marketing team to use all of their tools to get that technology into the winner's seat, with customers ignoring the competition's offering, pounding on your doors to get you to ship your new thing to them as fast as possible. That is how to use cool technology. It is a powerful insight to add to the construction of your unfair advantage.