Most good entrepreneurs I know come up with at least ten great ideas a year, and sometimes many more. These usually aren’t the “I should start business X” type of ideas, but rather opportunities that they discover as a result of being in the business they are in. The owner of an organic products grocery store, for example, might notice that organic meat is selling really well and, as a result, decide to pursue an opportunity to vertically integrate by starting an ranch that raises organic cattle, a la Neiman Ranch.
I have yet to meet a successful entrepreneur who is not confident in his own ability to out-execute and out-innovate the competition; and usually they’ve earned that confidence. Our aspiring rancher says to herself “How hard could that be? I’m sure I could do it well” — and may well be right. So should she? Keep in mind that this type of “opportunity” comes up many times a year, and that the bigger the existing business, the more opportunities are likely to present themselves.
I’ve faced this many times over the years and continue to face it now. The temptation to go and win at something new can be a powerful one. Like many entrepreneurs, I’m competitive and ambitious, and I find winning at something new deeply enjoyable. I even find the challenge, the stress, and the hard work deeply enjoyable. And yet the vast majority of these opportunities should be skipped. Why? Because of the concept of comparative advantage, which we were all taught in freshman econ. Even if it’s less momentarily invigorating than going off and starting the new new thing, and even if you could win in the new endeavor, the place to focus is the place where you have the greatest comparative advantage — the most differentiation.
So if you’ve got a good thing going, restrain yourself from chasing the new thing. Instead, double down on your existing winner and do more of it. Find a market where you are truly differentiated and then work hard to extend your lead. If you look hard, you’ll find an incredible amount of opportunity for innovation within what you are already doing. It almost certainly won’t be “big thing” of business page headlines but rather the small things which make the existing product superlative. You don’t want to lose the creative energy but channeling it so that it’s effective is critical. A good example of this is the way that Amazon, despite its size, returns customer service emails faster than anyone else? That’s not an accident; instead it’s the result of someone dedicating themselves to innovating on email customer service.
True true and point well taken. It can be hard to focus on the existing winner when there is so much more that could be done. HOWEVER, newness requires (practically demands) throwing darts. There is opportunity everywhere b/c nothing (revenue, consumer preferences) is really proven just yet. I have learned, by following some of the “new things” how to adapt to what my readers are telling me they want more of.
One of the things I think a lot about is sequencing. Over time you CAN do many things well but you can’t do them all at the same time and still do them well. So if one of your core areas of business is really running smoothly and perfectly already and it will kind of “maintain itself”, there is now more room to think about the next thing.
Its so hard to pass on good ideas though. And down the road its painful to see someone else coming out with an idea you had. Lets face it, you may have the most unique/creative/lucrative idea out there but its only a matter of time (and money) before that same idea pops into another persons head. I agree that spreading yourself too this is not the way to go but sometimes a good idea inspires a great one…