While meeting interviewing entrepreneurs for Falak’s investment programs, we stumbled upon multiple potential entrepreneurs asking our investment team to sign a nondisclosure agreement to share an idea. Our first response to this is: meeting canceled. If any to-be entrepreneur thinks that they’re the only ones currently thinking of a specific idea, they are delusional and we automatically know they don’t fit our criteria because the ultimate truth is: while you’re ideating, creating, and researching. there are tens if not hundreds working on the same idea; none of that matters and all that matters is execution.
That being said, an NDA is key when there are trade secrets or sensitive numbers involved, but these trade secrets or numbers only come after the idea comes to life in the real world.
Ideas Vs. Execution
Mediocre ideas with great execution have the potential to become disruptive ideas with experienced execution, and genius ideas with no execution don’t even deserve the time to talk about them.
That being said, why do so many genius ideas die in their birthplace? The willpower required to execute an innovative idea cannot be compared with the willpower required to write a business plan on paper. There are 3 key ingredients to successful execution: focus, momentum, and reflection.
With focus, you will find the commitment required to follow-through.
With momentum, you will find the motivation inside you to lift your head high in the bad days.
With reflection, you will know how to assess if you are on the right track, and if not, you will know where you need to develop based on real-market insights.
Take Netflix for example the company started as a single DVD rental service when clients would be charged with late fees and expensive prices. At that time, Blockbuster had the highest market share in DVD rentals, and Netflix needed to innovate to be able to compete because Blockbuster had more resources and more customers.
Netflix’s first disruptive idea happened in the midst of operations when they decided to become a subscription based business, and to allow customers to pay a one-time monthly subscription fee in return for DVD rentals. As the idea evolved, Netflix now serves more than 120 million paying subscribers with an estimated annual revenue of $12 billion. Not bad for a company that initially started as a DVD single rental service.
Netflix’s first disruptive idea took place when they offered subscription services for DVD rentals with no late fees and to mail movies to consumers’ homes: they learnt how to recommend movies to customers based on previous selections and coordinating logistics to ship to customers.
Their second disruptive idea took place when broadband connection became widespread, they conquered the opportunity when they built a massive streaming infrastructure while also improving the customer recommendation engine to recommend renters their next DVDs to take home. Most importantly, in this same phase, they also learnt how to negotiate licensing rights with movie studios.
Netflix’s third learning curve was the most difficult, which was developing their own content. They climbed the learning curve of competing with Hollywood studios that had a century of experience in the field. Today, Netflix is a leader in original videos and movies. They learnt which content to develop based on the data they had, and they had the courage to outbid competitors when they believed strongly in certain content to be winning content.
Reading all of Netflix’s disruptive ideas and intense learnings throughout the way, we see the (1) focus that made Netflix committed to innovating in their industry; we see the (2) momentum that kept Netflix motivated to stay ahead of the curve and all of their competition by meeting their customers’ needs continuously, and finally we see the (3) reflection that made Netflix discover which opportunities to tap into, and how to not repeat the same mistakes of their competitors of being too comfortable-as Blockbuster was when Netflix was just starting out.
Truth in the matter is that it was the market, the experience, and the operations that led them to think of an even greater solution to what already existed. Had they waited to stumble upon the idea to start Netflix as it is today with that time’s resources, the company may not of existed today. It was great execution and continuous learning and reflection that made Netflix what it is today, not a great idea.
Ideas on their own aren’t worth anything, it’s execution that matters-not to undermine the importance of executing a great idea (I’d say good but good is no longer good enough).