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What's more important: a strong business idea or good execution?

01.11.11 | Posted in Entrepreneurship

A few weeks ago I was a panelist for the closing event of Small Business September, a NSW Government initiative. The guys either side of me were Jeremy Levitt from ServiceSeeking and the gorgeous Dan Joyce (disclosure: he’s my good mate) who founded RedRoom DVD.

SBS Closing Event

One of the questions we discussed was: ‘Is it essential to have the best business idea? Or is it all about execution?’

It’s something I wholeheartedly disagreed with the guys on. They said it was all about execution, and I said it was all about having a viable business idea in the first place.

Dan’s take on the question is that no one knows whether they have the best business idea until they get started on it. And while I agree (I see a lot of people stuck in fear and inertia who’d do well just to give it a go), I’ve also seen plenty of people execute their business ideas well when they shouldn’t have even started. They throw themselves into it, give up their well-paid job, work their butts off to make it happen, and will tell you that they love what they do. Problem is that the idea/business is not viable and they’re flogging a dead horse.

So how do you know if your business idea is going to fly?

  • Explain your idea to strangers or people you don’t know well and ask them if they’d buy it (don’t necessarily rely on the opinion of family and friends as they’re likely to be more positive and biased)
  • Pitch your idea to venture capitalists or well-established entrepreneurs who have been around the block to see if they think it’s going to work
  • Don’t get too attached to an idea for a business – if you are emotional and can’t be swayed then chances are you’re too close to it
  • Remember that just because you think it’s a good idea, there may not actually be a real need for it. Test the market first through surveys within your key demographic – are people actually wanting your idea or do you just have your heart set on launching it?

I remember when I first wanted to buy Business Chicks. Every cell in my mind and body was saying ‘go for it’ but I still wanted to make sure it was a good move. I asked friends and colleagues what they thought and if they’d support the concept and I also paid a management consultant to run some financial scenarios to see if it could be viable. His answer was positive and that gave me more confidence to go ahead with the deal.

What do you think? Is it more important to have a strong business idea or be skilled at execution?

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5 Comments

  1. Cat Matson

    Great article Emma … and an interesting dichotomy – idea or execution?

    I agree with your argument – execution is what will make the difference .. even a weak idea executed well can gain traction …

    and I think what this debate highlights is it’s the combination of BOTH a good idea and solid, strategic, persistent execution, that will make an entrepreneur successful. Just like anything in business, or life for that matter, it’s not an ‘either / or’ conversation … it’s far more integrated than that :-)

  2. Amey Lee

    Hi Emma,

    It’s an interesting conundrum and one that tracks around the creative industry very frequently!

    Whilst I agree that you need to road test a business idea (or any idea!) before you put it into full swing, for me this is just the first stage of execution. And if you never take something to the first stage of execution, you’ll never know whether you’re sitting on a great idea.

    I’ve seen plenty of half-baked ideas do exceptionally well, simply because someone kept ticking the boxes. Which is why those of us that have great ideas owe it to the world to execute, execute, execute!

    Scott Belsky has written a great book about this very topic called Making Ideas Happen. It includes strategies for execution, as does his website http://the99percent.com/ (1% inspiration, 99% perspiration!)

    Cat above is right – it’s not an either/or proposition. But execution is really key.

    The idea might be nothing without the inspiration, but the inspiration amounts to nothing without the work.

    Thanks for the article!!
    Amey

  3. Melanie Miller

    Hi Emma,

    While I would love to argue the guys point and back yours all the way, I do think that execution beats idea.

    A strong enough execution can convince buyers to purchase the strangest of useless items. MLM schemes that tend to benefit only the very top continually suck people in – it all about the execution as the idea fairly well stinks!

    Some fantastic ideas have failed miserably (I can’t help but think about the De Lorian here….yes I am a child of the 80’s and former Back to the Future fan).

    My view is that a 20/80 mix is where it sits. 20% – idea and 80% execution!

    Great article and great discussion piece.

  4. Emma

    As a side note to this…. I’m re-reading Tony Hsieh’s Delivering Happiness book at the moment (Business Chicks is hosting him for two events here in Australia next month: http://www.businesschicks.com.au/events) and this is what he had to say on the topic:

    “In business, one of the most important decisions for an entrepreneur or a CEO to make is what business to be in. It doesn’t matter how flawlessly a business is executed if it’s the wrong business or if it’s in too small a market.

    Imagine if you were the most efficient manufacturer of seven-fingered gloves. You offer the best selection, the best service, and the best prices for seven-fingered gloves – but if there isn’t a big enough market for what you sell, you won’t get very far.”

  5. Qinnie Wang

    I threw myself into Oz Fair Trade, a charity that relies on a sustainble business model selling fair trade products to Australian and international consumers. I came back from a trip to Southeast Asia with such a burning desire to do something to help these people and to make right what I saw was an unjust and unfair trade system. The only research I did was looking at how many similar businesses were operating in Australia vs America and Europe. I was shocked to learn only 50% of Australians know about fairtrade. I wasn’t exactly sure what I was getting myself into by starting an e-commerce without any IT or business knowledge, but I knew I had to do it. So I did, but I kept my day job and started small. I agree with Emma that idea is essential to the success of the business no matter how good the execution is. But I stilled jumped for emotional reasons. Not sure if things will turn out as I hoped, but I’ll keep going with a determination to push forward the Fair Trade movement.