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Building People-powered businesses

You will often hear professional investors say:” I don't invest in products, I invest in people”. These are words to live by - as an investor - and to keep in mind as an entrepreneur.

Most entrepreneurs you meet will quickly, if asked, pitch you an idea. Some idea they have on how to solve some big (or small) problem a group of businesses and/or people face. It is entirely natural for one to make various problematic assumptions about the intrinsic viability of their business idea(s) without any consideration invested in the prospects of said idea becoming a profitable business.

Given that we all, as humans, believe in our heart of hearts that on some level, we are the smartest guy or gal in any given room we occupy, it is easy for one to look at their ideas as unique, and much-needed. The thing about business and ideas and the ideas that go into building businesses is that you are rarely the first to think of such a solution - Virtually any solution. In fact, a quick search of an idea (in the 21st century), will produce many results across the globe.

First-mover disadvantage

In other words, your business ideas are hardly ever one of a kind. And in the rare instances that you do have something on your hands that is truly unique. When you have a first-mover advantage, say, like a Netflix (NFLX) or Tesla (TSLA), you often face an array of challenges that come with being "the first". Think of all the money, time, and energy spent trying to explain a new Streaming service to folks who have no earthly idea what you are talking about. Folks who are accustomed to doing things one way, and get paid to do so.

Early days at Netflix

I am speaking of the many movie studios and content creators the folks over at Netflix (NFLX) Probably approached who just didn't see this new thing becoming a successful enterprise. Not to mention the millions of consumers they had to convince to cough up $9 at the time for the chance to watch their favorite TV shows and movies online.

Seems like a natural thing to do now, but this was not the case just 10 - 15 years ago. My point is, Startups rarely have new ideas. This, however, does not mean that one cannot build a wildly successful business by making certain material alterations to on old way of doing things.

Of course, such is the case with both firms mentioned. Elon Musk did not invent the automobile. Neither did Reed Hastings Invent the Internet or the television set. Both men just found new ways to do a generally popular thing.

The "People" Factor

That being said, one's focus when looking to build and grow a successful company, once we graduate from the "ideas" stage, should be solely focused on assembling the right team.

Sometimes, you, the entrepreneur will also have to face some very harsh realities about your skills, abilities, and limitations, and take steps to assemble a group of men and women who possess the relevant skills, experiences, and favorable track records to help you develop your idea, bring it to market, collect money for the consumption of your idea-inspired product or service and create a profitable entity out of all your work.

The "People" side of things should not be taken lightly at all -for this is the one thing that will undoubtedly make or break your organization. If you have ever been part of a startup team that went nowhere, you know what I am talking about here. Delve into the inner workings of any idea that never was, and you will find that above all else, the folks charged with building a cash-generating firm out of the idea just couldn't get along, get it together, or both.


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