What Makes a Good Idea?

MYOB 2008-06-30
Show #84
Release date: 30 Jun 2008

Notes

In one of their occasional ‘semi-live’ shows, Guy Kingston and John Richards catch up on some listeners’ comments and take a look at what makes a good business idea.

How ruthless should one be in assessing an idea? And, just how important are the size of the addressable market, the marketing and pricing strategies? How innovative does a business idea have to be?

And this discussion leads to a follow-up on Show 80, Business Plans, where again Kingston and Richards debate the advantages and disadvantages of detailed business planning. Is a business plan any use if it turns out to be wrong two minutes after it was finished being written?

Listener’s Link

Mark Lee’s Tax Advice Network: Most accountants are like your local GP, they are great at dealing with most things but every now and then a client has a tax issue or problem that requires specialist tax input. Accountants and business people without accountants can use the Tax Advice Network website to identify the perfect tax adviser and contact them directly.

The Big Idea

Many entrepreneurs spend their lives looking for the One Big Idea that will make them rich.

Most believe the idea will come to them in a sudden instant of clarity that is often called the “Eureka Moment”.

The original Eureka Moment is said to have occurred when the ancient Greek mathematician and engineer Archimedes discovered his law of the displacement of water while sitting in the bath – basically, Archimedes in, water out.

He was so pleased by this that he immediately leapt out of the bath and ran into the street, naked, shouting “Eureka” – Greek for “I have found it”.

Or so the story goes. Even if it is true, the point is that the Eureka Moment was only part of a long process of study, research, and reflection. This is true of nearly all Eureka Moments.

This has not stopped scholars trying to find ways to replicate the Eureka Moment, to find short cuts to thinking up the One Big Idea.

The study of “creativity” pre-dates even Archimedes, beginning with his fellow Greek, the philosopher Plato, who believed the ability to imagine ideas was innate in every human being and could be unlocked by proper education.

Although few modern neuroscientists would go all the way with Plato on innate ideas, his belief that every human being has a potential that can be unlocked by proper education is attractive to many today.

In recent times, a lot of effort has gone in to trying to promote “idea generation tools” or “creativity techniques”. Among the most popular are “association” – using the subconscious to link different concepts – and “brainstorming” – a “group creativity technique” which performs similar functions.

Yet are all these clever schemes barking up the wrong tree?

For a start, in most cases, as Archimedes would be the first to point out, there is no substitute for long study and hard work.

More importantly, from the entrepreneur’s point of view, originality is not necessarily the way to go.

It is unfair but the Great Innovator or the Great Inventor is rarely the one who reaps the rewards of his discoveries. It is the Great Adaptor who usually gets rich.

There are exceptions – Edison being the most obvious – but original thinkers are usually viewed with suspicion by the less imaginative masses. They often die poor. It takes a more conventional thinker to see how the original idea is relevant to people like himself and to sell it to them in their own terms.

Bill Gates has never made an important discovery of his own, but he is brilliant at applying the discoveries of others to the problems of the masses. He is therefore a great entrepreneur but not a great original thinker.

Similarly, the ancient Greeks, who were great original thinkers, were eventually conquered by the Romans, who rarely had an idea of their own, but who were great at adapting the ideas of others – notably the Greeks.

With this in mind, the Roman Consul Marcellus, who conquered Archimedes’s city, gave orders that the great engineer was to be taken alive.

Alas, poor Archimedes was so wrapped up in solving a mathematical problem that he failed to identify himself when challenged by a Roman soldier and was killed by mistake.

This is truly symbolic of the fate of Great Innovators at the hands of Great Adaptors.