How important is having a “big idea” for startups? Ideas can generate a lot of buzz and capture attention from investors and potential customers, but long-term success really depends on the capabilities of the team.
It’s often said that investors typically look for an “A” team with a “B” idea rather than a “B” team with an “A” idea. The reason is that once you start developing an idea, things change, models need to pivot, and teams must be able to adapt. This makes a lot of sense because if all you have is an A idea and hit an obstacle, the venture fails. However, an A team can iterate until it finds success.
It’s easy to find examples of companies that started out with decent ideas, but their ultimate success was based on the team’s ability to be resilient and pivot. Zappos started out playing the role of the middleman. Rather than spending a lot of time and money on inventory and a fancy website, it simply put a few photos of shoes online to test the market. Over time, the Zappos team found that the key to encouraging people to buy shoes online was the free return. Because they were resilient, they were able to build on this strength to become a popular online retailer. Had buying shoes online not caught on, the team likely would have pivoted and tried something else.
Other examples include Amazon, which began with the idea to sell books online and evolved through the years to basically sell everything. FedEx began with the notion to deliver a package overnight, and Uber started with the simple idea of providing on-demand transportation. None of these were necessarily “big ideas” at first, but the teams adapted and grew to become major successes.
Only a good team can make this happen. When thinking about the team, there are several factors that founders need to consider.
Read the full post at Xconomy
Joseph Hadzima is a Senior Lecturer in the Martin Trust Center for MIT Entrepreneurship.