The Parting Shot

In 53 BC the Battle of Carrhae was fought in Persia. In the battle, the Parthian Empire took on the Roman Republic. And, legend has passed down to us what has come to be known as the “Parting Shot.”

Today, I will leave you with a couple, simple examples of the folly of the bright idea. In this, my last post, I will use ridiculously basic businesses. Let us first take a step back and revisit how we might have gotten here.

I think the thought coming up with an earth-shaking, great idea can be pretty glamorous. It is a rather sexy proposition. And, that is a big part of the reason people attempt to come up with bright ideas.

The little known secret, or, at least the one that is seldom admitted, is the fact that very few glamorous ideas succeed. It would be nice if sexy ideas succeeded. But, the truth is, they don't.

So, I think we are well-advised to remember the words of the late business tycoon, Felix Dennis, “Forget glamorous.”

Personally, I believe a wise task is to take the mundane and make it transcendent. Meaning, take something that needs to be done and do it better than anybody else. A good example is Eric McLean.

Who is Mr. McLean? Well, very simply, he is a notary. Talk about unsexy! Now, I am most certainly not suggesting that you become be a notary. But, the example is instructive.

As you likely understand, a Notary is a person, “with legal training who is licensed by the government to perform acts in legal affairs, in particular witnessing signatures on documents.”

What McLean did was he built himself a nice, little empire for $36. What did he do? He created "ASAP Notary" based on the simplest of ideas: a mobile notary. Instead of the customer coming to the notary, the notary would travel to the customer. And, $36 was all it cost Eric to get his license.

(Another good example is Wayne Huizenga. Dude got super rich as the trash man!)

As I have quite clearly demonstrated, over the last few weeks, the notion that entrepreneurs need bright ideas is a complete fallacy. And, I will wrap things up by giving the final words to Gary Vaynercuk.

Gary Vee said, “Every idea has been thought about. There is nobody who has come up with a big idea. I am telling you. All of them. Every one of them. People executing, or having the pieces in place to be able to execute, or the right time in their career, or the right resources, financially, energy, skills, opportunities, those are the variables, not the ideas.”

Speaking of Chiquita Bananas...

Last week I talked about the fact that Chiquita Brands purchased Fresh Express for $855 million. So, obviously, the company is not doing too bad. But, this was not always the case. And, their folly is very instructive.

This story affirms two lessons. One about the importance of integrity. And, the other, about advertising's ability to shape peoples' belief systems.

As it pertains to my blog, leadership is an integral part of entrepreneurship. And, integrity is the sine qua non of leadership. Taking shortcuts can really hurt a person. In the case of Chiquita, it might have wiped them out.

According to Arthur Freeman, “Back in the 1940s, a highly popular advertising jingle for Chiquita Bananas ended with the line: 'Bananas like the climate of the very, very tropical equator, so you should never put bananas in the refrigerator. No. No. No. No.'”

According to a former vice president of the company, that marketed Chiquita, the only reason the word refrigerator was mentioned in the jingle was that it rhymed with equator.

The company wanted to position their product as being exotic, coming all the way from Central America. The truth was, of course, that bananas can go in the fridge, and indeed last longer if they are cold.

However, this was not a big deal, in the forties, when refrigerators were tiny and the majority of women went grocery shopping almost daily. What mattered then was that people loved the Chiquita jingle, sang it everywhere, and bought lots of bananas.

As a matter of fact, the jingle became so popular recordings of it appeared in jukeboxes. And, the U.S. Government borrowed the tune for a song about conserving water during World War II.

At any rate, what had seemed to be the prefect ad campaign began costing the company sales in the fifties when the suburbs boomed, refrigerators doubled in size, and shopping became a once-a-week event.

Shoppers would buy a dozen apples or a dozen oranges but only three bananas because they “knew” that bananas should never go in the fridge. The company tried in vain for years to counter the jingle's message but finally gave up.

In many ways, Chiquita got what they deserved. Advertising can be an extremely powerful activity. The main reason being advertising's ability to shape peoples' beliefs. And, once those beliefs are formed, they are quite difficult to change.

For this reason, if you wish to influence peoples' minds, I encourage you to get it right. Please, do not take shortcuts. Not only can your shoot yourself in the foot, but you can also destroy your integrity.

Successful entrepreneurship requires leadership, and leadership requires integrity. Remember that, and please don't compromise yourself.

Healthy Eating

These days, a lot of people are interested in eating healthy. And, one staple of the healthy diet seems to be the salad.

Let me ask you a question. How much time do you spend thinking about salad? Hopefully, not too much. But, it is a great lesson in entrepreneurship.

As I have been trying to prove, the great idea is largely a myth. This has been the premise of my last few blog posts. If you have not read them yet, go here and here and here.

You see, a lot of companies have an Inside-Out perspective. That is to say, they ask themselves what can they produce and how can they sell it.

This is essentially the chotsky phenomenon. A lot of companies create products that do not have viable markets. Essentially, they are creating junk, or, solutions for which there exists no real problems.

A much better approach is an Outside-In perspective. Meaning, we need to be market and customer focused. Drucker would call it, "Looking out the window." We need to search for real problems to solve. And, sometimes, the solution is mind-numbingly obvious.

Let's talk about Fresh Express.

While it is true that a lot of people want to eat healthy, it is also true that most people want convenience. And, eating healthy can often be at odds with convenience. Meaning, healthy eating usually requires more effort.

Enter the bagged salad.

A little company, in Salinas California, called Fresh Express, was able to see what the big boys could not. The big produce companies, as big companies often do, kept their attention squarely inside their own windows.

What I mean is, while the big boys were focused on their commodities, things like lettuce, carrots, and radishes, Fresh Express was focused on the customers' problems. This allowed Fresh Express to pick up on what might be called the "elusive obvious." The company did not have some bright idea. They simply saw what other people could not see.

The people, at Fresh Express, asked themselves, “If people want to be healthy, but they also want convenience, why don't we give it to them?” The solution? They created pre-made, single-serving salads and put them in a convenient, airtight bag.

People want to eat salads, but they do not want to go to all the trouble of making a salad. Fresh Express fixed the problem.

Was it a big problem? Well, in 2005 the company got acquired, by Chiquita Brands, for $855 million. Not too shabby for a bunch of lettuce! Next time you are at the grocery store, see if you notice them in the produce section.

To take single-serving salads, and put them in a plastic bag, is ridiculously simple. It is the very antithesis of a great, or bright, idea. And, it is the essence of entrepreneurship.

The fact of the matter is, most successful innovations are amazingly simple. So, if you wish to succeed as an innovator, do not get all sophisticated. Remember to keep it simple.

Zipcar

It is important to remember you do not need a great idea to start a business or to become an entrepreneur. As a matter of fact, you do not even need an idea of your own.

The Austrian economist, Joseph Schumpeter, has been called the Prophet of Innovation. Schumpeter said that capitalism was characterized by a phenomenon he called creative destruction. Creative destruction is the very definition of innovation.

Though Schumpeter did not give much instruction on how to innovate, he was a large influence in the life of Peter Drucker. Drucker built upon and extended Schumpeter's work. 

And, Drucker was no fan of the great idea. In fact, Drucker said, “In the theory and practice of innovation and entrepreneurship, the bright-idea innovation belongs in the appendix.” Strong words.

The reason Drucker disliked the bright idea is pretty simple. Contrary to popular belief, entrepreneurs do not love risk. In truth, if you wish to succeed as an entrepreneur, you are well-advised to minimize your risk.

The main problem with the bright idea is that it is the riskiest of all methods of innovation. Statistically speaking, the bright idea is, by far, the least likely to succeed. Indeed, very few bright ideas end up being a success.

Enter Robin Chase and the stolen idea.

Drucker recommended that all entrepreneurs, and executives, search for the future that has already happened. Robin Chase started Zipcar in her fifth decade of life. At the time, she was living near Boston, had three children, and a strong desire to become an entrepreneur. But, she was never able to come up with the big idea.

Fortunately for Chase she has a very astute friend named Antje Danielson. Danielson is originally for Germany. On one trip back home, Antje noticed a new business concept. Namely, rental car companies that were offering cars by the hour instead of the day or the week.

All Chase and Danielson did was to import the idea of the hourly rental car to America. I say this with nothing but love, but, Zipcar is a stolen idea. And, in 2013, the company was acquired, by Avis, for $491 million. Not bad for about a decade's worth of work. Especially considering that neither Chase nor Danielson had ever been in the automotive industry. Chase did not even like to drive!

Hopefully you agree that entrepreneurship need not be some mystical or elusive endeavor. In fact, like most things entrepreneurship can, and should, be studied systematically. And, as the title indicates, the systematic study of entrepreneurship is a big part of what is blog is all about.

For more examples of the future that has already happened, visit my site courtneyleeds.com

Primekss

This is a concrete story. And, it is a tale of innovation.

Last week I mentioned that I am going for a full-out assault against the myth of the great idea. A lot of people think entrepreneurship is dependent upon having great ideas for products and services. I will be giving you concrete examples to debunk this unfortunate myth.

How much do you know about concrete? Me, I do not know very much. But, what I learned is, concrete and cement are the third leading producers, of CO2 gas, in the entire world.

Obviously, this means concrete and cement are massive contributors to global warming. This is a very real problem. And, as you know by now, entrepreneurs use innovation to solve problems.

Problems are opportunities. The thing is when people think of innovation they tend to think about new products and services. And they miss enormous categories of opportunity.

While it is true that you can start a business around a new product or service, it is also true that you can innovate around various processes. Let me give you an example.

There exists a company, in the country of Latvia, called Primekss. Primekss was founded, in 1997, on a very simple premise. The premise was to create a more environmentally friendly form of concrete.

In order to do this, the folks at Primekss first looked to history. What they found was that it was the Egyptians who first developed concrete. One of the things the Egyptians (and later the Romans) did was add blood and horse hair to their concrete.

This caused the Primekss people to think about re-engineering the process of creating concrete. The result was their product that made come to be known as PrimeComposite.

PrimeComposite reduces the emission of CO2 by 30-50% (depending on who you ask.) What's more, builders end up using less PrimeComposite than they had traditional concrete. And, PrimeComposite is less likely to crack than old school concrete.

Now, I do not know about you, but, for me, concrete is about the least sexy product in the world. In fact, on Primekss's website, they brag about being boring.

You see, it is okay to not be sexy. Because, properly understood, entrepreneurship is not appeal sex appeal. It is about making the world a better place. Entrepreneurship is about solving real problems. And, the bigger the problem, the bigger the payoff.

As I stated at the start of this post, entrepreneurship is not about great ideas. Entrepreneurship is about problems, solving problems.

Problems come in many shapes and sizes. In the case of concrete, the solution was to redesign the creation process. Not a great, earth-shattering idea. But, a valuable idea nonetheless.