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Are you Chasing a Mirage?

February 28, 2012

Considering how easy it has become to start a company – and the legions of young entrepreneurs keen on doing so – I guess it shouldn’t surprise me that I get pitched so many identical ideas.

One perennial source is college entrepreneurs who, drawing from their limited personal experience, tend to pitch me ideas having to do with dating, course selection, tutoring, text book rental, and the other inconveniences of college life.

For obvious reasons I also get pitches from the hundreds of companies all aiming  to be the “Netflix Of” something.  I’ve seen (in no particular order) companies wanting to become the Netflix of Toys, Batteries, Books, Games, Anime, Sports, Clothes, Flowers, Cosmetics, Baby Clothes, Skis, Cell Phones and Neckware.  And that’s just scratching the surface.

Other times there just seems to be a flavor of the month.  Recently it’s been Airbnb and Getaround wannabe’s, all trying to bring peer-to-peer sharing to new categories like bikes, tools, sporting goods, and clothing.

The tragegy here is not that the ideas are derivative or not particularly creative, it’s that so many of these ideas have been tried before.  And failed!

I call it chasing a mirage.

When you are chasing a mirage, your brilliant idea shimmers with promise when seen from a distance.  It’s only after you’ve expended valuable time and money crossing the desert that you ultimately discover that there was never really anything there.

But the real tragedy isn’t the loss of time and money, it’s that the inevitable failure was tragically knowable in advance if only you had taken the time to research those previous efforts and think analytically about why previous efforts to do this very same thing had met with failure in the past.

I still can’t quite figure out why so many people are willing to plunge lemming-like over a cliff that someone else has already jumped off.  It’s seems to be an equal mix of ignorance (“I had no idea anyone had ever tried this before”) and hubris (“I’m better than those other jokers”).

Whatever the case, it’s gotten so that whenever I find yet another entrepreneur gearing up to strike out across the desert toward their personal mirage, I ask them, “why you?”

In this case, asking “why you” is not a knock on them personally.  It’s not questioning their abilities as an entrepreneur, nor their perseverance.  (In fact, overflowing self confidence is an important weapon against the endless chorus of people telling you you’re idea won’t work, or that you can’t pull it off).

No, “why you” means “why are you going to be successful with this idea when others have not”? if you don’t understand exactly why the pioneers who went before you failed, than you risk repeating the exact same experiment with exactly the same results.  It’s one thing to have confidence. But it’s hubris to think that you are so much smarter and harder working than the others.  The key is what you do, not how hard you do it.

If you think you’ve found a blank space on the map, a little warning bell should go off.  Why has no one done this?  Why is no one doing this now?  If you can figure out what went wrong with other tries, you’re in an infinitely better place to get it right with yours.  And if you truly have found an idea that has never been tried before, the proper emotion should probably be fear rather than excitement.

As Santayana famously wrote, “those who do not remember the past are condemned to repeat it”.  But I think there’s a simpler way to think about it:  If you’ve come up with a seemingly novel idea that seems to good to have not been tried before – well it probably has.

Or, as any poker player will tell you, If you can’t tell who the sucker is at the table, It’s you.

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15 Comments

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    Nice post, though equal weight should be given to both the strength of the idea and its execution. Facebook, Google, YouTube, even Windows (in its day), were not the first in their space, but they were able to execute better their derivative ideas than the pioneers in their space and so emerge victorious. We even see this on TV, where The Voice has found a twist on the existing American Idol reality talent competition formula to now be ranked the #1 TV show in the US. So, yes, being able to articulate a differentiation is critical for a start-up, but this differentiation could be in the business model, operations, market segment, or quality of execution. An original idea executed as-best-you-can leaves room for someone else to follow on, learn from your mistakes, and improve on the execution, leaving you with only the bill for market education. A better mousetrap can own the market category.

      I completely agree with you and was (trying) to say something similar. One should never be afraid to try an idea that has been tried before – and that applies whether the previous idea was a success (like American Idol was when The Voice launched) or a disappointment (like MySpace was when Facebook burst on the scene). The important point is that you have to be fully aware of the what has been tried before and make sure that you’re new idea incorporates – and builds upon – that. Had Facebook purely aimed to emulate MySpace, but somehow just “do it better” they certainly wouldn’t have had the success they had. What your comment has helped me realize is that in many ways it might be an advantage to follow an idea that has already been tried, since if you’re smart about it, you can incorporate all the learning that took place on someone else’s dime.

        Well put — now we can agree 100%. Makes the post even better.

        Thanks,
        Seth

      MySpace (since it’s come up) would be well served (and I’ve tweeted this before) to go after the “Web Vegas” space.

      Not gambling of course… You know, fun, sorta kinda trashy, what-happens-on-myspace-stays-on-myspace kind of thing. They have all the pieces in place to be absolutely impregnable in that niche.

      What an Epic Pivot that would be.

        Dave — couldn’t agree more. I think you are dead right. Send Justin your idea — I think he would relate. :)

        Best,
        Seth

    Marc, thanks for the sobering reminder. It is so very true. And so very easy to get on the bandwagon as the entrepreneurial adrenalin rushes through so many people’s minds right now.

    Miss Piggy

    Marc, Thanks for this great challenge. I’ve been mulling over a similar sort of problem lately, namely what my husband and I call the Nirvana Scenario.

    Mostly this is Husband’s Nirvana, which is for me to grow my business to the point where he gets to potter in the garden all week. Yep, he wants to be a kept man.

    My Mirage I keep banging my head against – pardon the turn of phrase – is that my Excel spreadsheet tells me I can achieve Nirvana in 24-36 months (the business is growing very rapidly and profitably off a currently stable infrastructure, which is nice in its way, but makes me edgy) if only I double my customer acquisition rate for a 12 month period.

    But (a) if it were that easy why haven’t I figured out how to do that already, and (b) any idiot can buy new customers but blow themselves up in the process.

    When I try to break this feedback loop I end up in a vortex full of dodgy salespeople, consultants and SEOs. Aaaargh! **waves arms Kermit-Styley**

      A good point, that illustrates that earl success may not always be an indicator of the future, especially in your case where you have achieved success at small scale and fear what happens as you get larger. Especially challenging when getting larger doesn’t just mean more customers, but also means moving into adjacent spaces. If its any consolation, that never gets easier. Go for it, but keep you’re yes open.

    One thing to keep in mind is timing. There were tons of video sites before YouTube. YouTube executed well, but they were also very lucky to strike right when video on the web started being a very viable idea from a technology standpoint. So when asking “why you” you might also want to ask “why now?”.

      True, and one of the ultimate challenges for any startup. I’m starting to think that an essential skill for young startups is to try and be a bit early, but to be developing the attributes that will make you successful when you are early, but still be compelling when the market starts coing your way. Netflix for example was very early for streaming, but built all of its customer attributes around being compelling to disc renters that would still be compelling when streaming eventually came around. Ie., we were about selection (which is delivery agnostic) rather than around plastic shipping (which is not). That allowed us to grow, thrive, and be in a great place when customers eve tual.y wanted to try getting their entertainment digitally.

    I agree with your post, but it may have overgeneralized. Where do the exceptions come from? it could come from someone with years of experience in an industry. Or it may come from someone with a defensible intellectual property. Or it may come from a sector where new products ans services are part intrical to the space (food n beverage) .. There are more but they follow a similar theme.

      Each of the exceptions you’ve listed may be a very valid reason to take another run at a category or an idea that has been tried already. But it’s having the exception that is the important part. What I was trying to illustrate was the frequency with which people take on old problems without having figured out what they would do differently. If more experience, or better ip, or a leveraged entry from an adjoining space, is truly the thing that will allow you to succeed where others may have failed, then that’s a much fairer fight. (It’s always going to be brutally difficulty — even with advantages — but a fair fight none-the-less).

    Very insightful post Marc. The “me-too” copycat startup model or rebuilding an empty mall can be a devastating waste of time. I appreciate Johnathan’s comment on “why now” as timing can be a major external factor in technology companies. A devastating failure such as pets.com can return successful 10 years as wag.com with a minor change in strategy.

    What’s difficult is after all the study, customer development, and white boarding you often can’t tell if something is truly a mirage until you get close and touch it. Or as Mark Twaine once said, “If you hold a cat by the tail you learn things you cannot learn any other way.”

    Marc,
    I saw you quoted in the April 2012 issue of Harvard Business Review and instantly recall you as my outstanding instructor on the Wind River Mountaineering course in July 1977. I recall being on top of a mountain together when an electrical storm made our hair stand up on hand. You had the good sense to yell “run”. You were a great leader even then. I still am in touch with Bill Briggs. NOLS was a spectacular experience and I am planning on sending both of my kids there. I sent you a linked in connection invite if you’d like to be in touch. I find your background and career fascinating. Congratulations. Michael Fanger

    This post is chocked full of wisdom. I am so glad when I left my last startup I kept your blog bookmarked. The huge thing about building a concept or idea is understanding the market you are targeting and helping with a real pain point either solving it or solving it more than an existing solution. There are way too many people starting businesses just because everyone else is doing it. I can tell you I have learned over the last 5 years if they are not ready to learn, persevere and fight through some pain they have picked the wrong career.