There’s no such thing as a great business idea. Let’s get this out of the way, as it’s one of the first and most important lessons to learn as an entrepreneur. We may have recently discovered the Unicorn, but the million dollar idea doesn’t exist. It’s a myth.
Ideas are worthless without action. They’re so worthless that Seth Godin gladly put up 999 of them on his website to prove the point. “Ideas are a dime a dozen. The money is in the execution," he adds.
So what do Facebook, Instagram, Airbnb, Groupon and Uber all have in common?
The answer is ‘timing’. But more specifically, more quantifiably, it is external trends and paradigm shifts.
So What Exactly is a Paradigm Shift?
In 1962, Thomas Kuhn wrote The Structure of Scientific Revolution, and popularized the concept of paradigm shifts: explicit changes from one way of thinking to another.
Let's look at some real-life examples that savvy entrepreneurs took advantage of:
They played on the shift from feature phone to smartphone, utilising GPS, HCE (Host Card Emulation) payments and 4G technologies to provide a service that could create efficiencies in an industry that was struggling to embrace technology.
There were many crowd sourced video websites created before Youtube launched in 2005, but all of the preceding struggled with a lack of high speed internet (for uploading and streaming), adoption of a single common media player and having to download software locally. A shift to the cloud, however, allowed Youtube to build a platform which was both quick and seamless.
However many get their timing wrong. Almost anything you build on the web has already been tried in one form or another. Sometimes you might have a great idea, but the market just isn't ready for it.
Ironically, some of the most successful businesses are recycled ideas:
Letsbuyit.com (founded in 1999) failed at group buying, to be succeeded by Groupon (2008)
Kozmo (1998) tried to create the on-demand infrastructure, but Postmates (2011) actually make it work.
Boo.com (1998) and Gilt (2007) both went into the branded eCommerce market, but Boo.come became one of the greatest dotcom busts, while Gilt continues to grow.
SixDegrees (1997) flopped as a large-scale social network until Facebook (2004) revolutionized social networking by starting with the earliest of adopters: college students.
How Will I Know if the Timing is Right?
Everett M. Rodgers wrote the landmark book Diffusion of Innovations in 1962, popularizing how new innovations spread through society. It became known as the Bell Curve of Innovation.
The concept was that a ‘Chasm’ existed between the ‘Early Adopters’ and the ‘Early Majority’, this was the moment where you wanted to launch your company/product. Judging this level is the tricky part, as launching a company isn’t like switching on a light switch. It can take up to a year from idea to product launch.
Ready to Build the Next Big Thing? Ask these Questions.
Are your potential users comfortable using the technology?
Look at early adopter areas like California, and then equally at those just behind like Western Europe. If they aren’t, then it may be too early.
Does your industry have a lot of competitors?
Be honest. Do the research. If so, then what are you going to do that will make you stand out?
Are your potential customers currently underserved?
Ask them, look online at user feedback. What’s the opportunity that could serve them better?
What trend is happening, that will cause a product to be developed which could not of been created before?
It doesn’t have to be technological either, it can be social, political, etc. For example, high unemployment was a catalyst for a new generation of on-demand workers.
Chris Dixon, a partner at Andreesen Horrowitz and well respected technology blogger, offers some excellent advice:
Entrepreneurs should always ask themselves “why will I succeed where others failed?” If the answer is simply “I’m doing it right” or “I’m smarter,” you are probably underestimating your antecedents, which were probably run by competent or even great entrepreneurs who did everything possible to succeed. Instead your answer should include an explanation about why the timing is right – about some fundamental changes in the world that enable the idea you are pursuing to finally succeed.
Recent Example of a Paradigm Shift
Zenefits is an HR & payroll software company. In 2014, they were crowned as the fastest growing startup in the world, and a great example of timing a paradigm shift. They have targeted small businesses - a growing sector - and built cloud software - a shift from current HR enterprise systems - in an area of a company's administrative processes that have previously been underserved - a vastly underserved gap - but the real kicker, the piece of beauty, is that they offer their service for free and then make money from selling health insurance plans to the employees, thereby replacing physical brokers with technology. This works so well because it builds on the shift caused from the Affordable Care Act, that just so happened to come in at the same time as Zenefits was launching. You can bet the folks at Zenefits actually read the legislation.
Timing has an element of luck. But trends can be seen with a deep understanding of your core and periphery markets. This type of pattern matching is a foundational type of knowledge needed not just to help you build out your plan at the start, but also in becoming a dynamic, well-rounded entrepreneur and community builder. It’s the "never stop learning" attitude which will enable you to not only see the opportunity now, but track its progress, iterate if it doesn’t happen quickly enough, and even see bigger opportunities down the road.
Riding the wave of a paradigm shift with your business? Tell us about it in the discussion.