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   Home >> DTDIY >> Editorial >> A Successful Entrepreneur 'Always' Starts with a Great 'First' Idea – That’s Hogwash!
   Editorial
 
A Successful Entrepreneur 'Always' Starts with a Great 'First' Idea – That’s Hogwash!
Steven Philip Warner, Editor | Issue Date - 01/10/2011

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Failures test an entrepreneur’s character. So do poor ideas. Interestingly, some of the best visionary corporations that continue to thrive today, actually began with a big dash of poor ideas. This is a lesson for those willing to ride the entrepreneurial bandwagon – you don’t really need an E=MC2 formula every time to start a venture that bears the potential to become a world-beating business corporation. To begin the dream is most necessary; albeit with an ordinary idea, but with a vision. History is proof. Ideas which have seemed almost foolhardy at first blush, have often marked the beginning of entrepreneurial expeditions, which have led to ecosystems that prevail – and ready for primetime – decades after the founder CEOs have stepped aside.

In September 1945, a 37 year-old engineer named Masaru Ibuka rented a 110 square feet windowless, third-floor space in a World War II-bombed-out Shirokiya Department Store. All he had was a precious $1,600 in savings and seven people who trusted that he would put his engineering experience to take a blockbuster of an idea to market. The company was christened Tokyo Tsushin Kogyo (Totsuken). For weeks, the employees, along with Ibuka, discussed on what business the company should enter. Clearly, Ibuka had a company, but was short of any great idea to begin with. Three months later, the company’s first product – the electric rice cooker (which mostly prepared undercooked or overcooked rice) had become a failure. This is what the company’s website has to say about the idea: “It was a memorable first failure for Ibuka and his staff.” His second idea too – the wire recorder – was a failure. Today, Totsuken is called the $86.65 billion-a-year topline-earning Sony Corporation.

Many instances of notable entrepreneurial bets that began with a whimper of a failed idea, exist. In the summer of 1972, Paul and William got together to launch their maiden business venture. They wanted to create a product that measured traffic patterns by measuring the count of car wheels that were supposed to run over pressure-counting tubes. Two continuous years of hard work followed. Using Intel's eight-bit microprocessor, and with some help from an electrical-engineering undergraduate, they got the first prototype of the machine ready for $1,860 (which overshot their budget of $1,500). Twelve months later, with efforts to sell the product to various customers and counties in both North and South America, guess how many orders they had received. Zero. There were some rare orders and three years post-release, William's and Paul's first entrepreneurial idea had resulted in losses amounting to net losses of $3,494. "Traf-O-Data was a flawed business model. It hadn’t occurred to us to do any market research. We closed shop shortly thereafter. Traf-O-Data remains my favorite mistake because it confirmed to me that every failure contains the seeds of your next success," confesses Paul. The very year Traf-O-Data was unofficially shut, these two first-time failed entrepreneurs, started work on another project (the name of which was kept as a portmanteau of microcomputer and software). It is today called the $70 billion-a-year topline earning giant Microsoft.
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When Dave and Bill got together in August 1937 to start a company, they had no idea about what they would be selling. This is how the company's website quotes Bill: “When I talk to business schools occasionally, the professor of management is devastated when I say we didn't have any plans when we started. We were just opportunistic." All of their first five ideas became classic business failures for the company, but thanks to their vision, the company today, has become the largest IT company in the world, having sold $358.95 billion worth of products and services in the past 3 years. We call it HP. There are more names: He was fired by Editor of Kansas City Star newspaper because "he lacked imagination and had no good ideas," and his first cartoon series idea was an outright failure. We call him Walt Disney. When William, a 25 year-old American, offered to sell his first idea called the Bluebill to the US Navy, he got rejected. The Bluebill was killed. Today, William's then-startup is known as Boeing Co. Even Henry Ford’s first company called Detroit Automobile Company. It was shut down in 1901.

Umpteen entrepreneurial success stories also come to mind when we imagine people who became entrepreneurs with ordinary ideas. Paul Calvin’s first business idea made his start-up (Galvin Manuf. Corp.), a struggling repair service provider of service battery eliminators for Sears. Today, his company is called Motorola. Even Sam Walton began his venture as small retail outlet. Ordinary ideas, but the vision was intact.

So what is expected to make entrepreneurs successful? The solution – David McClelland’s Theory of Needs, which states that those with a high need for achievement, tend to avoid both high-risk and low-risk situations. Don’t be confused. The very entrepreneurs whose names we called, were/are those with a moderate appetite for risk, but a high appetite for determination and toil. These were/are visionaries who realised in time that the "first" idea an entrepreneur has, is seldom the best. And that's their first true secret of success.
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