That Original Idea

As we embark on our InvestorQuest Challenge, we ask are you like John Nash in A Beautiful Mind (looking for that original idea that will be the basis of your business, rather than just delusional). Surprisingly, good ideas for a business are often less than original and are often pretty simple. In 1978 (yes, nearly thirty years ago) I wrote a program to play blackjack, so you could blame my 'idea' for all those Internet betting sites out there today. Simon Nixon, the founder of moneysupermarket.com, had a brilliantly simple idea to provide consumers with independent comparison of insurance products that he took from inception through to a £1B stock market flotation.

What differentiates those that succeed is often not the idea for the business, but their single minded focus to exploit an idea and find an addressable market for it. Turning a fledgling idea into a marketable product is the key and so is avoiding the pitfalls along the way. That's why when asked whether an investor is more interested in the idea or the management, often the answer is the latter. Good ideas are surprisingly plentiful, it's the ability to execute that maketh the business. That said, you need an idea!

Don't Trash The Competition

Marketing is all about differentiating yourself from the competition, but what's with the current spate of adverts that lead on what's wrong with your competitors, rather than what's right with you? I was always told never to speak badly of the competition when in the company of customers. "I couldn't possibly comment" says eons more than any direct insult ever could.

This seems to be a bank thing. Nat West and Nationwide are both running TV adverts parodying a fictitious bank that doesn't listen to its customers and employs morons. Maybe it's just me, but I can't help thinking the only association created is precisely the unintended one.

Has anyone done any studies on this? Put viewers in a room and show them the employees in the advert and ask who they work for. My guess is that there will be a significant correlation that isn't the desired one. Surely, a marketing agency is spending millions of pounds on this without thinking this one through (surely, it doesn't work like that?). Or just maybe mud does stick to the slinger...

Work On The Business, Not In It...

The Prime Minister, Gordon Brown, has curtailed his holiday in sunny Dorset to rush back to Downing Street following the outbreak of foot and mouth disease on a British farm. Is this driven by a need to be seen to be doing something from a PR perspective or does the CEO of UK Plc need to work on his delegation skills more?

Any good CEO has to balance involvement (interference?) in operational matters against taking a more strategic view. Delegate to little and too much weight lands directly on his/her shoulders. Delegate to much and risk the fate of Metropolitan Police Commissioner Sir Ian Blair by being accused of not being in control.

A key stage in any business is when the CEO can focus on working on the business, rather than in it. This requires that a management team is assembled that can take primary responsibility for operational matters. Sure the CEO might be the best person to do everything and make every decision (which he probably had to do to in the early days), but he or she has to sleep sometime (and even take the odd holiday).

Suck IT and See

Do visionary/successful companies try lots of things consistent with their goals and and keep the stuff that works. Or do they know exactly how to get to where they want to be and home in on perfection like a wasp buzzing towards your pint of beer?

The ultimate suck it and see company has to be 3M. All things big start off small, but who knows for sure what will grow? They recognised that you need to develop a pipeline of little things and keep nurturing those that work. Time to market is also key. In the 1970's Glaxo was one of many drug companies climbing the greasy pole. Then their researchers discovered a potential wonder drug, ranitidine. Instead of doing toxicology testing sequentially, they decided to save time by running the toxicity studies in different species in parallel. By taking a calculated risk Glaxo were first to market and the rest, as they say, is history.

So one could conclude that if you want to make a bee line for success, you need to take a leaf out of Charles Darwin's book and try lots of things and keep the ones that work, and if you are going succeed, make it snappy!