Good or great?
Sometimes figuring out whether you’ve stumbled onto a good idea or even a great one isn’t as obvious as the idea may have been for you. Indeed, you may think you, rather easily, communicate the idea to an investor and the investor says yay or nay, which will determine whether you’ve got a winner. In this episode of Masters of Scale, Tristan and Reid delve into the complexity of no and yes as well as the content of a good idea.
Expect a no
Let’s begin with a premise: rather than refusing a no, you should expect a no. In other words, instead of refusing to take no for an answer, you should expect to take no for answer. The fact is, even the very best ideas faced a lot of rejection at some point. But strategically and philosophically, a no can be a healthy indicator of a good idea––although it will have to be a certain kind of no.
Early on, Tristan wanted to become as wealthy as he could as quickly as he could. He figured there would be three main routes to achieving his goal: 1) be an actor or an athlete. 2) work on Wall Street. Or 3) entrepreneurship. He was lucky enough to work on Wall Street, yet ended up hating it. Obviously, he took up the third option. He claims, as an entrepreneur, curiosity is way more important than any of the other stereotypical characteristics.
Don’t be afraid of geeking out
You don’t have to be an outright geek, but you’ll need to be very enthusiastic about ideas in a geeky way; moreover, your interest is a little out of step with––higher than––your peers.’ Tristan, for example, was fascinated by Twitter in the early days and his peers didn’t understand it. He cultivated an ability of seeing potential in a company and not only ahead of his classmates, but also ahead of the market. He ended up working at Twitter for a little while.
After spending nine months at Foursquare, Tristan landed on a shaving demographic as an inspiration for a new business. Before it, however, he wanted to solve obesity and other wellness issues. He learned, however, a big and scalable idea isn’t always answering a big issue as much as a neglected one. In this case, he was addressing the demographic men who lived with burns and bumps after using razors they weren’t intended for.
Be a contrarian
Historically, manufacturers go about resolving it in a similar way: add more blades in a cartridge. This actually works for a lot of men––predominantly white ones who have straight hair. Instead of adding more, Tristan decided to reengineer the single blade razor. It would be, specifically, for anyone with coarse or curly hair and it would be called the Bevel. Overall, people of color are the majority––even if the opposite appears true from our perspective.
Unfortunately, if you’re pitching to mostly male and white investors, they won’t be as aware of the promise of such a product. Moreover, existing entities can resist you with billions of dollars of patent protection. Thus you need to be creative and persistent. The first truth of entrepreneurial investing is very big ideas are contrarian because, otherwise, large competitors would have done it already. Their inability to identify every excellent idea levels the field.
Yes and no is better than one or the other
How do you know whether you’ve got a really bad idea or one that is only being received as really bad? Listen to the quality of a rejection and ignore their number. You are looking for a smaller number of investors to “squirm.” Instead of a ‘yes,’ see whether there is any friction as they’re reasoning themselves into a ‘no.’ Many investors will be unwilling to gather enough context to realize an idea like the Bevel razor is useful. If they are oblivious, move on.
You don’t want all ‘yay’ or all ‘nay.’ You want a polarizing idea, where some are saying yes and others are saying no, but everyone wants to say the two at the same time. You’ll need to be comfortable being the only one promoting and valuing your idea...for a while. In terms of figuring out an idea, Tristan asked himself what, in the world, he would be better at than anyone else. Instead of casting an enormous net, be authentic with yourself.
What is your competitive differentiation?
There may be another 100,000 like you: each can manage the task. And yet they neither know about the idea or have the resources to make it happen. Therefore, it’s really important to figure out your competitive differentiation, or, what about you is unique so you have a major advantage in plugging away at a goal another person may, conceivably, do. For Reid, the competitive differentiation was an understand of virality––Reid never got hiring processes.
You don’t always need to be an absolute expert in every aspect of a business to achieve or own a competitive differentiation. Instead, you need a unique angle on or a shot at an idea no one else will have or attempt. Once you’re certain you’ve achieved a competitive differentiation, you’ll no longer feel as if you’re in an ineffective war with conventional wisdom. You will believe everyone else will come around to your way of thinking.
If you’re unique, you aren’t competing as much
One thing frustrating Tristan is, despite living in an early adoption region for health and beauty products, he nevertheless knows little about its early adoption culture. There hasn’t been any disruption in this old industry even though there are a ton of people who would benefit immensely from it. This is how Tristan knew he was the best person to disrupt the industry: no one else was discussing it. This was liberating and he no longer cared about a new no.
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Justin is a writing intern for AbilitySEO with a passion for words and a love of both consuming and creating content. He studied philosophy and, outside of marketing, enjoys volunteering and pop culture. Contact him at firstname.lastname@example.org