If you are an entrepreneur, you will constantly here things like: “That can’t be done.” “That won’t work.” “That isn’t the way that things work in our industry.” It is really difficult sometimes to see if you have an bad business idea, or just a business idea that is unconventional or not yet understood. Giving guidance to entrepreneurs is sometimes challenging because you need to see things from an unconventional but still commercially viable perspective.
I like to look at ideas from the perspective of what has changed in the ecosystem or overall environment that makes this idea feasible now when it wasn’t possible say five or ten years ago. Are there real customers with a real need that they are willing to spend money to solve? How many of these customers are there? Is this a big market opportunity? Why hasn’t anyone else done this yet?
Justin Bieber – Direct to Consumer Music Distribution
In the music industry, the conventional wisdom was that you had to get a producer and an agent. Get your songs playing on the radio, and tour to promote your music. This is still the most conventional way to establish yourself in the music industry, but Justin Bieber: did it a different way. He went directly to the listening audience using the internet and YouTube. He engaged with his fans using social media. Of course he had a good product, music that was popular with a particular audience and demographic, but he defied the conventional wisdom and took his product direct to consumers using a new distribution mechanism. He defied the conventional wisdom that to be successful in entertainment, you need to get a top agent who has connections with the right studios and can get you airplay on the radio.
Henry Ford – Mass Production of the Automobile
Henry Ford had a vision that every American should have an automobile. Cars were a luxury item for the elite and wealthy. The conventional wisdom was that “You can’t make a car at a low enough cost to make it affordable for every family in America.” Using the assembly line, mass production, standardization, and efficiency, Ford was able to defy the conventional wisdom of the day and become one of Americas greatest entrepreneurs and titans of industry.
Fred Smith – Overnight Shipping
According to urban legend, Fred Smith got a C on his paper in an economics class outlining an overnight delivery system in a computer information age. The conventional wisdom was that you can’t ship things across the country overnight. It just isn’t feasible. Smith later moved to Memphis, started Federal Express, now FedEx, and things get shipped overnight every day.
Jeff Bezos – Online Retailing
Jeff Bezos defied conventional wisdom by using the internet to sell products online, and now Amazon is the worlds largest retailer. In fact, Amazon’s market capitalization is two times higher than WalMar. Bezos stared with books, then expanded his distribution system and electronic ordering and fulfillment system to other products. He stared with products that are standardized and easy to understand, delivered them quickly through advanced logistics, and provided additional information to consumers like reviews.
Innovation and the Innovator’s Dilemma
Don’t instantly buy-in to the idea of “That doesn’t work in our industry.” For one big thing, the internet changes everything, and it this truth is still in the early stages in some industries. What new technologies or techniques are there to reshape how things can be done? Read Clayton Christiansen’s The Innovator’s Dilemma, and learn to think outside the box.
Like a friend of mine said many years ago, “No one will pay $5 for a cup of coffee.” Please tell this to Howard Schultz from Starbucks who now has a personal net worth of $3.1 billion.