• Chihiro Kurokawa

Idea -> Education -> Execution -> Wealth

Business school was an idea-rich environment. We had startup accelerators, case competitions, angel investors and the like within our sphere of influence. I even had an idea - a savory health snack that could be bought on the go. Today, "healthy" snacks such as Clif Bars are sweet. I figured that if somebody's really trying to be healthy, they could go without all that sugar.


Dreams and Ideas

Here's the thing: dreams and ideas are essentially worthless. People don't dream of being in jobs they don't like for 45 years but that's what happens. People don't have ideas about divorce when they romanticize marriage but they divorce anyway.


When I was in college during the dotcom boom, there were many businesses designed to eliminate tiresome shopping by allowing people to order online and receive their products at the address of their choice. Webvan, Kozmo.com and others built systems and processes to achieve those complex business plans, but today they're in the dustbin of history. If actual, built-from-the-ground-up businesses can end up worthless (along with billions in investor capital), what's the value of my snack idea? Zero.


Side note: if you have a business idea, in nearly all cases it's pointless to guard it jealously in fear of somebody stealing it. Your idea is likely worthless so it's not worth guarding or stealing. At best, an idea has the potential to create value. At worst it's an annoyance, like your stoned college buddy going on about his grand plans.


Education

To get on the path towards generating value, an idea has to be complemented by an education about how it can be realized. You need to devise strategies, tactics, teams, systems and processes. What materials are needed and from which supplier should those materials be purchased? Due diligence is a lot of work and typically costs money, potentially large amounts of it. This obviously means you need to risk your money, reputation, family life etcetera.


After taking those risks, you may well end up with nothing. Remember, those companies I mentioned above got well past this point and ultimately lost it all. The education phase primarily weeds out entrepreneurs who quit once they realize how much work is required before a dollar is made. Secondarily, this phase weeds out ideas based on lack of merit.


Execution

One thing hasn't changed from the 1990s until now. Consumers then and now like the idea of buying stuff from their living rooms, then receiving it as quickly as humanly possible. Amazon wasn't the only company to think of this but they became the best in the world to execute it.


It clearly wasn't the idea of ecommerce, nor the considerable due diligence around it, that made Amazon #1. They figured out how to become the world's best while they were doing it. Execution is what leads to radical change - in the way something is bought and sold (Amazon), eaten (Chipotle), fundraised (Kickstarter), experienced (Youtube, iTunes, Netflix, AirBnB) etc. Facebook has literally changed the way that we live, and they've protected their ability to do so by out-executing their numerous competitors.


Thus it is execution that creates value. Even while executing a business plan, there are tremendous risks and you're still statistically likely to fail. Case in point: Amazon was founded in 1994 and didn't turn an annual profit until 2004.


As an entrepreneur I've gone through these three stages and I will need to continue going through them because evolution is necessary to stay alive.

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