A great idea doesn’t always translate into a great business.
I know this from personal experience, having worked at a web startup, Word of Mouth, that allowed its users to read and write reviews of businesses. At the time it launched in 1999, it was a novel idea that several clients embraced. But several does not equal thousands and before you knew it, the likes of Yelp were dominating the space because they were better financed and (this hurts) probably smarter than us.
We’re not the only ones to fail at turning a good idea into a great business. Look at these headlines:
Avis buys Zipcar: At first blush, the corporate giant’s $500 million purchase seems like a big win for the innovative car-sharing startup. But when you look more closely, the price is more than 30% below its IPO price in 2011. (Read more)
Al Jazeera buys Current TV: The cable channel, co-founded by Al Gore in 2005, launched with the idea of its content largely being “user generated concept.” It was a great idea (See Facebook, YouTube, Tumblr) that never caught on. A recent shift to a more liberal political format, which included the ill-fated hiring of Keith Olbermann, failed as well.
So repeat after me: just because you have a great idea, you don’t necessarily have a great business.
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