That’s right, we really don’t know.

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Ever since I started telling my friends and family that I was quitting my job and starting this company, the number one question has always been, “What will your company do?” And I’d always respond, “We don’t know yet.”
I got two reactions to this while I was still at my old job. Some people were confused and shocked that I would jump into something like this without a great idea all figured out. Other would just accept it and move on to other questions about when, where and with whom.
The funny thing is, after I quit my job I found out the second group mostly thought I was lying. I heard a lot of this: “OK, now that you’ve quit, stop being coy. Really, what are you guys going to do?” To which I’d respond, “No really, we don’t know yet.” And they’d be even more confused and shocked than the first group.
The non-intuitive truth is that a great initial idea is not necessary for a successful business. In fact, it can actually hurt your chances of succeeding.
This is surprising to many people. Shouldn’t you wait until you have a brilliant idea before you jump in? Well, no. Most startups change their business plan, often more than once. In fact, being able to change ideas as necessary is actually a crucial part of the success of many small companies. To quote from a great article at OnStartups
The Idea Can (And Should) Change: I’ve read numerous times that most startups that end up being ‘successful’ will change the idea along the way. I recall from a Clayton Christensen presentation that his studies indicated that on average startups change their basic idea/business about four times before finally landing on the one that makes them successful. He actually goes further and says that in order for startups to succeed, they need to be flexible and have the ability to change the idea based on market feedback instead of doggedly sticking to their original plan. So, the point here is, your initial idea for the startup, as brilliant as it might be, is probably going to change anyways multiple times. For this reason, it doesn’t seem prudent to get overly attached to the idea or give it too much weight in the early stages.”
That last point is especially important. Let’s say that John has a brilliant idea for a company. He quits his job, moves, and starts a company. Jane decides has a few OK ideas for companies. She quits her job, moves, and starts a company. After thinking more about it, she starts pursuing one of her ideas.
Six months later, both John and Jane start to feel that their initial idea isn’t working out. Who do you think is more likely to be able to change the game plan six months in? Bob is probably going to be less flexible, if only because he went into the whole endeavor betting everything on one idea.
In the (highly recommended) book Good to Great, Jim Collins shows that the belief that it takes a great idea to be successful is simply a myth. He includes this great quote from Bill Hewlett of Hewlett-Packard:
“When I talk to business schools occasionally, the professor of management is devastated when I say that we didn’t have any plans when we started – we were just opportunistic. We did anything that would bring in a nickel.”
So if I great idea isn’t a good reason to start a company, then what is? Why didn’t I just start one right out of college? Or before college?
First of all, to start a company you need to have a lot of faith in yourself and the people you work with. I don’t think I had the experience I needed to successfully run a business before college or even right after. But now, I have a lot of faith in myself and my co-founder. If you don’t trust the other people in your business, you’re in trouble. I won’t say any more about this because it’s explained in great detail in Good to Great.
Secondly, I think you have have to accept the level of risk in your situation. Starting a business is always a risk, no matter what. But some people have more on the line than others. Personally, I don’t have a mortgage or kids to feed. If this doesn’t work out, I can get another job. So, relatively speaking, my risk is low. People in other situations may have much more severe consequences if they fail and that should affect their decision about the right time to start a business.
But if you are OK with the risk and have faith in the people you work with, go for it. If you have a great idea, that’s even better. Just be careful not to cling to that idea too tightly. And if you don’t have that idea yet, don’t worry too much. But you will probably get some weird looks.

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6 Responses to “That’s right, we really don’t know.”

  1. scott Says:

    I agree with your post 100%. With respects to starting a company, another idea from Built to Last (written by Jim Collins too) is that a core ideology (made up of values + purpose) is more important to a visionary company than an idea. Having a clear ideology provides the necessary shape, flexibility and direction without nailing you down to a particular product. So I’m with you guys on this – even if it does seem counterintuitive.

  2. -dominic Says:

    Like Scott, I completely agree with you. Your post does a good job at quelling the doubts of friends and family. Nicole and I are/were behind you both 100%… Even when we thought you were crazy.
    Now I’ve just got to subdue this jealousy rising from good friends chasing their dreams in our early 20s.
    Good luck and we’re here to help.

  3. Joe Entrepreneur Says:

    Well, there are lots of startups which succeeded on their original Idea (EBay, Hotmail, Netscape, Digg, YouTube). They never changed their game plan. I believe that having passion for your idea and persistence are also equally important things. So important is to strike balance between flexibility and passion for the idea that you are following. Changing ideas too often can also be disastrous. Specially if you have not completely tested it. I am also working on starting a Web 2.0 startup (Info @ http://onista.wordpress.com/) and I feel very passionate about the idea that I am pursuing.

  4. Jon Vaughan Says:

    I’m not sure about the others mentioned but Hotmail started off as something called JavaSoft, which was a browser accessible database. Perhaps is important though that pretty much every successful startup I have heard about had AN idea, even if it didnt turn out to be THE idea.

  5. Ben Says:

    I should clarify one important point: while picking one particular idea is not very important, having (hopefully many) ideas is very important. You should not quit your job and start a company if you can’t come up with any good business ideas.
    We’ve spent the last six months or so coming up a whole set of ideas we think are promising. Of those, there are probably five or so that we really, really believe in.
    But we didn’t feel the need to select a single one before starting the company. We know we need time to research and debate the ideas before we can be confident in picking one to start on. And we know an even better idea may come to us while debating or even while developing our product.

  6. Joe Entrepreneur Says:

    Ben,
    That is all well and good as long as not too much time is spent on just finalizing the idea. The most important asset of any startup is the team. As time goes by just on searching for idea, the team may start loosing the interest. (May not be true in your case, but I have seen that happening in one of our previous attempt).
    Jon, thanks for telling me about Hotmail starting as JavaSoft. I did not knew.

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