When To Dump That Great Idea

When To Dump That Great Idea

Wil Schroter 07.09.07,
11:00 AM ET

A while ago, you had an idea for a new company that would change the
world. You stayed up all night feverishly sketching your plans for
global domination.

Yet there you are, months later, still sitting in your cubicle, that brilliant flash a distant memory.

Wake up: Not every idea–even a great one–turns into a money machine. In fact, it’s often just as useful to know when to dump a good idea as it is to pursue one–if only so you can get to work on that next "great" idea.

Here are three ways to know when enough is enough.

Paying Customers Never Show Up

So your friends are high-fiving, investors are salivating and
the media is gushing. So what? The difference between having an idea
and having a real company is a throng of paying customers.

The
classic case of early exuberance later squashed was the Segway–that
two-wheel, stand-up "human transporter." When Dean Kamen unveiled the
Segway in December 2001, top-tier investors like venture capitalist
John Doerr and Amazon.com‘s
(nasdaq:
AMZN

news


people
) Jeff Bezos applauded. The media blared that the device would change the way cities were built.

Customers were less enthralled. The Segway sold less than 30,000 units in over six years: not exactly a revolution.

Some ideas are simply ahead of their time. Remember the Apple
Newton? One of the first "personal digital assistants," the Newton was
a brilliant idea that the market didn’t yet appreciate. A few short
years later, Palm
(nasdaq:
PALM

news


people
) re-introduced a similar concept, to huge fan-fare; now PDAs are a fact of life.

At bottom, it doesn’t matter how ingenious your product is–if you can’t communicate its value, it may as well not exist.

You Can’t Sustain a Competitive Advantage

Novelty alone is not a competitive advantage. A new idea is
bound to attract competition. (If it doesn’t, chances are the idea
wasn’t as good as you thought.) The key is being able to survive the
onslaught.

Launched in 2002, Friendster, the pioneer of social
networking Web sites, was a brilliant idea that couldn’t sustain a
competitive advantage. Ultimately, Friendster’s strategy and technology
were easy to replicate and extend. That’s why News Corp.‘s
(nyse:
NWS

news


people
) Rupert Murdoch was happy to shell out $580 million for rival MySpace in 2005.

Remember:
Your idea is what gets you in the game; your competitive advantage is
what keeps you there. If you can’t figure out how to stay ahead in your
market, start looking for a new one.

You’re Not Ready To Quit Your Day Job

You can only moonlight so long before your kids start calling
you "that weird guy in the garage." At some point, you actually have to
trade in the comfort of a two-week paycheck for the uncertainty of
starting your own shop. If you can’t muster the courage to make the
leap, it’s time to dump your idea.

Here’s why: When you’re really, really ready
to head out on your own, your day job seems like a millstone. Heck,
you’re so consumed with your new project that you’re probably a
liability at your job anyway.

Chances are, if you’re going to
make that leap, you’ll do it sooner rather than later. Commitment to an
idea spurs action. Driven entrepreneurs can’t wait to hit key
milestones–incorporation, building prototypes, drumming up customers.
The uncommitted take the "Mr. Rogers" approach: They sit down, take a
shoe off, talk a while, slide a sock off, and maybe, someday, they
might be ready for action.

If you’re not moving fast, it’s probably time to move on.

>BackTrack

Leave a Reply