Just about everyone seems to have the next great disruptive business idea that will make them rich and famous and transform the lives of millions of people. As the 19th century French writer Victor Hugo once famously said: “There is one thing stronger than all the armies in the world, and that is an idea whose time has come.”
Unfortunately, however, many ostensibly brilliant business ideas – disruptive or not – barely get off the ground before they flounder and die. Often that’s because a lot of businessmen bite off more than they can chew. They’re not strategic thinkers who work through possible challenges and plot important moves and countermoves in advance of implementation.
On a practical level, thinking through potential roadblocks, regulatory actions, the arrival of new competitors, etc. and how you and your team will tackle them should be an important part of your investor presentation. Those details will make you and your idea that much more credible when talking to the guys with the money.
Most of the points below aren’t relevant just to entrepreneurs with big audacious ideas, but also to leaders of existing companies looking to disrupt one or many competitors, make a powerful impact on their industry or turn an organization around. There are also thousands of small businesses that are quite disruptive and successful by focusing their efforts on a very specific problem or activity like Sheila Lirio Marcelo who simply wanted to revolutionize how people get the right kind of medical assistance when they need it.
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Choose the company or industry you’re going to disrupt carefully.
Fragmented industries with 10,000’s of small companies and just a few strong players are generally the most likely to be disrupted. Even better are industries that aren’t regulated or only slightly regulated. Industries that fit into both categories are gold mines for disruptive leaders and their ideas.
Jeff Bezos’ first big idea disrupted small book sellers that were barely eking out a living and a few of the larger chains like Barnes & Noble and Borders. In addition, the government had bigger fish to fry than to slap sellers and distributors of books with myriad regulations. No wonder Bezos was so successful so quickly.
On the other hand, Elon Musk took on not one but two extremely powerful industries – oil/gas and automotive – which are dominated by large incumbent corporations. powerful lobbyists and entrenched consumer buying habits. In addition, these are two of the most regulated (and unionized) industries that exist. No wonder Musk’s efforts haven’t been quite as successful as those of other great disruptive CEOs, even if he and Tesla galvanized the movement towards ecologically friendly vehicles.
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Be prepared to overcome hurdles and frequent attacks.
Even if an industry isn’t highly regulated on the federal level, there might be significant state, city or foreign hurdles to get past. Even worse are new regulations put in place that could stop your efforts dead in their tracks such as changes to tax laws, licensing requirements, etc.
Lawsuits are almost a given as disrupted companies fight for their lives and government officials face political pressure to halt or slow down the dramatic changes your idea is causing and which they may not even understand. The media might go after you, often fueled by inevitable challenges to accepted cultural norms or beliefs caused by a highly disruptive idea.
Some of the biggest opposition can come from inside your own organization, especially in situations in which some or most employees will be impacted.
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Make sure the idea has a high level of attractiveness.
We’re currently in one of the tightest labor markets ever. Although there are many ways to attract the best and brightest, your idea needs to be so compelling that your employees will do anything to help you achieve your vision and goals. In many cases, your idea and how well you present it will be the difference between failure and raising the money necessary to build the initial infrastructure and pay the bills.
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In the end it’s all about making money.
If a disruptive idea can’t generate revenue early on, then it’s not an idea…it’s a fantasy. Profitability, on the other hand, is another issue. Some disruptive companies, (Amazon is the best example), can run at a loss for years if the story is good. If told well, narratives about using profits to grab market share or continuously investing the money back into the company can buy a new business the time it needs.
If a disruptive idea can’t generate revenue early on, then it’s not an idea…it’s a fantasy. Profitability, on the other hand, is another issue. Some disruptive companies, (Amazon is the best example), can run at a loss for years if the story is good. If told well, narratives about using profits to grab market share or continuously investing the money back into the company can buy a new business the time it needs.
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