Startup Adoption vs. Invention

There is a myth in the startup community that, “a startup’s core idea must originate with the founding team.” Current dogma says that without the original inspiration, ownership of thought and core IP, the leadership won’t have staying power. I call this a myth because it is propped up by stories, not stats. Startup Studios and Venture Builders, which often have much higher success rates than other startup ecosystems, rely on the fact that great entrepreneurs can adopt inventions better than inventors can build businesses.

The Myth:

The script goes something like this — A genius invents something amazing that the world needs and despite insurmountable obstacles and opponents, the hero entrepreneur succeeds in spreading his dream to the world. You can insert any number of amazing successful entrepreneurs into this story, such as Henry Ford, Bill Gates, Thomas Edison, or Mark Zuckerberg. But ask yourself, were any of these people actually first?

Henry Ford didn’t invent the automobile. Thomas Edison wasn’t the first to invent the lightbulb, a British scientist Warren de la Rue did nearly four decades earlier. Bill gates didn’t invent the first GUI desktop operating system. Despite the movie, Mark Zuckerberg didn’t invent the social network — there were plenty of social networking sites years before.

First Mover Myth:

The concept that creative visionaries have to be on the founding team is debunked by the fact that at least 52 percent of first-movers succeed whereas 92 percent of fast followers succeed (once they reach a certain stage of funding and customer adoption). The first-mover advantage is real, but there are many other factors at play. In each of the four examples above, they weren’t the first movers. They just focused on refining a better fly wheel than competitors.

The Reality:

Most of the great leaders we revere took an idea that was already floating out there and refined it. They saw the potential, adopted the solution as their own and adapted the current status quo into a marketable business solution. More importantly, they took the necessary steps at the right time. These great individuals had persistence and persevered even though they didn’t invent the solution. In fact, most of the time, these leaders were working with substandard product, but had a better business plan. They took less pride in the invention than in winning the market.

Multiple Discovery:

History is riddled with many instances where people across the globe make roughly the same cognitive leap at the same time, but completely independently. This suggests that there really aren’t any original ideas, just inevitable solutions. It doesn’t take a great person to come up with a great idea. It takes a great person to transform the idea at hand into something marketable and to persevere long enough to beat out the competition. Betamax and VHS are the classic example of multiple discovery — Betamax may have had a superior technology, but VHS had the better distribution mechanism, so it won out in the end.

Pivot:

Most startups go through a pivot (or twenty). The original idea or customer shifts. As the team learns more, the product and solution change. The final product, while still potentially the same thing, may look nothing like the original idea. If so, why is it important for the founder to have had the original spark? In fact, I often see that founders cling to their original idea for much too long. They don’t want to switch verticals or change their product to customer demands. These founders have self-imposed blinders to pivots that could save their companies. Meanwhile the co-founders who didn’t have the original idea typically want to pivot much earlier to suit the customers wishes.

CEO Stats:

Did you know that only twenty Fortune 500 companies are run by their founders? That is only 4 percent. Given that the average Fortune 500 CEO is 25 years older than their company, it seems plausible that founding CEOs would outnumber non-founding CEOs in this rarified group. Pop culture and reporters would have you believe founding CEOs dominate — very few non-founding CEOs get the notoriety, media frenzy, or public acclaim.

Given that only about 10 percent of startups have solo founders, ninety percent of startups begin with one or more founder who didn’t come up with the idea. While some of those co-founders may have been present while the other founder had their Eureka moment, the odds are that one co-founder contributed more to the original idea. The co-founder who adopts the solution quickly takes ownership as they learn more and begins contributing more and more to shape the company.

Startup Baby:

My co-worker, Marco Vienna, pointed out that adopted parents don’t love their children any less. As I’ve written multiple times, creating a startup is like having a baby. To nurture a baby or a startup, you must put everything you have into it. You must worry and spend countless sleepless nights ensuring a better future. Some people would never adopt in a million years. But for those who adopted, they wouldn’t have it any other way. The same is true with startups.

Fun Bits:

One of the most classic examples of Idea Jinx is the telephone, notoriously invented by Alexander Graham Bell. Elisha Gray came up with the idea for a telephone at the same time.

Step & Stone goes more in-depth with startup motivation in this article.

More information on first-movers versus fast-followers from Harvard Business Review.

Originally published on June 27th, 2017 on our previous blog.