This is a guest post by Trevor Ginn, who is an entrepreneur and blogger, he lives in Bethnal Green London, UK. His internet baby store, Hello Baby, is unashamedly unoriginal, though, at least in his opinion, well executed. He is also a consultant at Vendlab and you can follow his exploits on twitter @trevorginn.

Many people, when starting a business, think that it is important, for their self esteem if nothing else, to launch an interesting, innovative company which will take the world by storm.Unfortunately not many businesses can be as exciting and successful as Facebook or Google and most entrepreneurs would do much better if they set their sights a little lower.



The fallacy of the great idea is that in order to start a successful business, it is necessary to have a groundbreaking new concept.  By falling for the fallacy, many entrepreneurs ignore simple business plans with a higher chance of success but a lower potential upside for risky, complex projects which could make them rich under the unlikely scenario that they succeed.

Do not get me wrong, if you feel that you have an idea which is going to be a true world beater and you have the tenacity, skill and resources to pull it off, by all means go for it and good luck to you.  However, having a brilliant idea is not nearly as important as finding a business model which works.  Dreaming up the next Google will make its founder a billionaire but there will be thousands who don’t make it.

In truth most businesses in the real world are really rather mundane.  A quick look at the Sunday Times list of the 100 fastest growing companies in the UK reveals that many of them are reassuringly mundane.  For example there are companies in recruitment, retail, food production and road resurfacing.  Many great entrepreneurs made their mark in unexciting businesses.  For example, Richard Branson’s first venture was a student magazine.


Beware of great ideas

Seth Godin, in his book The Bootstrappers Bible, noted that of his Stanford MBA class, half had publically proclaimed that they wanted to start their own business sooner or later but 20 years later only 10% had actually done it.  He believed that the rest were waiting for the right idea or the right backing, for ‘an engraved invitation and a guarantee of success’, as Godin put it.  The disadvantages of betting the farm on a novel idea are:

• Great ideas are often not that Great.  The failure rate for start ups is pretty sobering.  Behind every failed business was someone who thought it was a really, really good idea
• Great ideas are disruptive. Launching new products often involves people changing patterns of behaviour which is very difficult
• Great Ideas are expensive.  Innovative ideas will require bespoke development work which takes time and money
• Great Ideas are an excuse for inactivity.  Many people say that they would like to start a business but they don’t have a good enough idea.

Think Simple

The internet has heralded a golden age of the entrepreneur.  In many areas such as retailing and publishing, the costs of market entry have been slashed to a fraction of the pre-Internet levels.  By using open source technologies and outsourcing work to low labour, a business can be created for only a few thousands pounds.

A simple, low cost idea that works is much more attractive than a sexy idea which fails.  There is no shame in launching a business which is not based on a bleeding edge idea.  As the saying goes, only fools and cowards don’t copy.  The benefits of launching with a simple idea are as follows:

• Quick to market.  Simple business plans can be launched quickly as they do not require any bespoke infrastructure.  Getting fast to market will allow the idea to be road tested and developed. This iterative process will hone the concept and may lead in unexpected directions.  This valuable feedback can only be gained by experience.
• No need for angel or VC funding.  Entrepreneurs can hold onto more equity by reducing cost and hence the need for external funding.  Many aspiring entrepreneurs spend months planning their businesses and struggling to raise the necessary capital only to find that their idea is considered too risky for investment.  Also, when it comes to the point where additional funds are required to grow, the business will have a trading history to which to refer, making fund raising that much easier.
• Profitable within months not years. By keeping start up cost low, a company will quickly reach breakeven.