The difference between ideas and opportunities
I see entrepreneurs being interviewed all the time. They are inevitably asked: “how did you come up with the idea for your business?” The word “idea” is always substituted for the word “opportunity.”
Why do people express themselves this way? Simply because nobody has focused on the fact that there is a huge difference between an idea and an opportunity. Why? Because they don’t understand the incredible importance of focusing on opportunities as a route to success. They don’t understand how likely they are to fail if they focus on nopportunities instead of opportunities.
As my father told me many times, “ideas are a dime a dozen.” There are obviously trillions of ideas floating around in the world, but very few are opportunities.
From a business context, 99.9% of ideas are worthless. Many are even worse than worthless, because they are likely to destroy rather than attract resources to you. These are the nopportunities that need to be avoided.
If you simply pursue an “idea” because you like it, rather than carefully vetting it to see if it’s an opportunity, your chances of success are very small. My experience having met with hundreds of entrepreneurs is that most of them choose to pursue their idea under the mistaken assumption that it is an opportunity, without proper vetting.
Whether they are startup entrepreneurs or experienced businesspeople, they typically get their ideas by using the xerox machine. They rely on the power of social proof to provide opportunity identification and validation. People see that many others are doing something, and measure truth based on majority opinion. This is almost always a poor way of discovering or measuring opportunities, because opinion polls deliver predominant opinions, not truth. And they often wrong!
I once had a client interested in starting a new business in digital media. He hired me to help find a great opportunity. To understand the trends in the sector, we met with over 100 startups in the sector. I was amazed how many of these people were pursuing the same nopportunity. Obviously, most of them would never get to the stage where they could raise venture capital. I asked all of them: “why did you decide that this is a good opportunity?” very few of them had done even any basic vetting of their opportunity before plunging into implementing it.
Why? Because they didn’t use a process for choosing opportunities. They didn’t understand how crucial it is to do this. Why didn’t they think of carefully choosing and vetting their opportunity? Because until now nobody has publicized the idea that you need to do this.
Opportunities are the seed from which all successful businesses grow. If you start with the wrong seeds, even if you work hard and provide all the nutrients needed, how can you possibly grow a large tree?