I posted recently that there is no such thing as a billion dollar idea. Of course there are ideas that ended up being billion dollar concepts (social networks, smartphones, parachute pants) but my point was that the team, the leader, the passion, the ability to pivot along the way, the execution…all of those things are what really make a company successful. Too many people think that if they have a great idea (an idea that, by the way, no customer has yet to tell them is great) they can make a ton of money. Just doesn’t happen without all of those other things.
But, there are definitely non-billion dollar ideas. Or to put it more clearly, there are ideas that have limited upside. And that’s an important distinction.
For example, let’s say you want to build a gigantic business. Your goal is to eventually be this guy and have your own island. And your idea is to create an online matching system for amateur jugglers and kids birthday parties.
Now, you know this will work, because you, in fact, are an amateur juggler. And for some extra cash, you enjoy performing at kids birthday parties. Only, its tough getting gigs. You’re a member of the International Jugglers’ Association (it’s a thing) and you’ve talked to your other amateur juggling friends and they all have the same problem.
Great! You have an idea that seems to be needed in the world. And its a concept that would help you personally, which is always a great way to start.
The problem with this idea, however, is that it likely isn’t able to help you achieve your big goal. It’s too narrow. There are approximately 9,435 amateur jugglers* in the US. And while there are over 10 million kids birthday parties**, only 2,000*** will be seeking a juggler to perform.
And even if you could somehow grab half of the market (not likely,) we’d be talking about 1,000 events each year. Assuming the average juggler gets paid $50 to perform, and you’d most likely make a cut of that – let’s say 10%, or $5 – which means you’d be pulling in around $5,000.
Look, maybe the idea can grow and you start providing content to the jugglers – then you’d be competing with the IJA, by the way – and you charge a subscription fee to the site, you’re still only talking about under 10,000 possible amateur jugglers.
The point is, IF your idea is to create a HUGE company (that shouldn’t be your driving force, by the way) then you have to make sure the idea isn’t self-limiting. You might have to expand your idea, in this case maybe creating a site to match up any kind of performer at any kind of party, but then you’d need to research the competition and make sure that’s something you’re equally passionate about. Again, its all about the execution and the ability to pivot.
So make sure your idea aligns with your big goal, and that you’re not starting off with something that won’t allow you to achieve your dreams even if you crush it.
* I totally made that up.
** And that.
*** And of course that.
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Hi, I’m Jeff. I’ve founded a few companies – including Spunlogic, 48in48, and my current company, Dragon Army. If you enjoyed this post, please consider signing up for my email list. And of course, you can reach me on Twitter and LinkedIn.