A VC in Vacationland

'There's nothing more dangerous than an idea if it's the only one you have'

fortune cookie ..

I was eating out the other night–the same night I got food poisoning before my flight to SF–and unlocked the above fortune in my cookie. It made me think about entrepreneurs and success, and how a good to great startup is actually needs a multitude of ideas to succeed.

Let's be clear up front. I am not and never will be a fan of so-called 'pivots' in the startup world, especially those that look nothing like the idea that was the basis for the original investment. For sure, some of them succeed, but are very different than the original pitch deck.

The cbinsights had an interesting piece on the original pitch decks of five companies that now have multi-billion dollar valuations. What struck me about looking through the decks was how close the entrepreneur stayed true to the original concept, like AirBnB, but morphed the execution over time to conform to changing market and competitive conditions. And these decks had numerous ideas in them on how to execute around the key concept, such as renting your spare room. Any good entrepreneur has to be ready for many objections when they first try and pitch their new concept to the market.

But let's get back to the original idea of this post–the concept that having only one idea is dangerous for an entrepreneur. I've had all sorts of pitches in my life and here's why the 'one-trick pony' approach to starting a company does not work:

• too narrow focus market–the overall idea is good, but the entrepreneur has chosen a very small customer segment to go after. I saw a company the other day that wanted to sell to small businesses that needed a certain specialized technology. The market was tiny, and not worthy of a beta
• good idea, poor execution–I see a lot of companies that want to be the Uber for shipping. Well, for one thing, Uber is likely to enter that space and how will you be better? No real answer, except that 'competitors are healthy'.
• Great go-to-market, lousy corollary ideas— the entrepreneur worked hard on a brilliant go to market strategy, but had nothing to offer customers beyond a simplistic solution in a space begging for more capabilities. One idea just is not the formula for success in the startup world.

So, entrepreneurs, be sure you give a lot of thought to what I'll call your 'idea portfolio'–the collection of innovations that will make your customers happy for a long period of time and allow you to capture increasing value add from the portfolio. So much better than just one idea…and less dangerous.