Conventional wisdom says that great companies are built by business leaders with the greatest vision. However, the truth is that groundbreaking businesses tend to come from entrepreneurs who were smart enough to out-execute everyone else in their space. That means getting products out there and growing a loyal customer base rather than trying to engineer a product to its supposed perfection.
Microsoft is a great example of company that has succeeded by out-executing its competitors. They've rarely been first to market with any of their products, but they've successfully brought them to market, figured out how to improve them, and reintroduced them again and again. This is the approach that puts you in the Fortune 500.
Why do entrepreneurs believe so fervently in the myth that they need to be first to market with a never-before-seen innovation? Because that's what they're told in business school. The primary problem with this piece of wisdom is that it encourages business leaders to wait around for a mythical breakthrough idea to fully form.
The myth is fed by the public's perception of groundbreaking companies as having come out of nowhere to rock the world. But companies like Facebook rarely, if ever, spring into being with no antecedents: MySpace and Friendster were in the market first, but Facebook did social networking better than anyone else had done before. Google wasn't the first search engine ever. AltaVista probably deserves that title. But Google advanced the search experience to the point that we all believe they were the breakthrough innovator.
The point I'm making here is that you don't need to have breakthrough vision to launch your company -- you need to have breakthrough execution. Launch your company even if your concept is similar to someone else's idea, and figure how you will change the business model.
When you stall your entry into the market, you run the risk of getting outrun by competition who will have gathered valuable on-the-ground information and solved problems before you've even planned your launch party. At a certain point, the ecosystem around your market will have become so strong that consumers will not be willing to accept a new entrant. For example, anyone who launches a Facebook-style social network right now confronts the seemingly impossible task of convincing users to totally rebuild their social network.
On the other hand, if you can tweak this idea for a new market -- a social network, for instance, that specifically serves the health care community -- you can launch without an entirely new concept. Or you can go to a locale where you're not first in the market, but where there is greater potential to become a player.
For example, you can be first to market with widget XYZ in Seattle, where there's only a moderate interest and market potential for your product. Or you can be tenth to market in Tulsa where there's a far greater need for widget XYZ, giving you plenty of room to gain customer share. Here's how to position yourself for entrepreneurial success without playing the waiting game:
Follow your heart, but use your head. As an entrepreneur, you should always develop businesses that you are passionate about, since that enthusiasm will keep you pushing ahead when times are tough. But that doesn't mean you can't think rationally about how to apply what a competitor is doing to a different market segment or locale.
Listen to the market, and tweak as needed. The reason for launching sooner rather than later is to gather feedback from initial customers, so that you can redesign or retool as needed. Without this early feedback, you can only guess as to what customers are willing to pay for.
Don't wallow in brainstorming. Time spent fiddling with a business plan or filling up whiteboards with ideas is time that you could spend actually launching your business and seeing if the idea floats. Launching gives you real, solid feedback, instead of the imaginary "what if" scenarios dreamed up in a conference room.
Launch early enough that you're embarrassed by your first product release. Entrepreneurs are likely to be somewhat off-base about their first launch and what features customers really want, but they won't make a product better until people are actually using it. LinkedIn founder Reid Hoffman says that his co-founders wanted to delay launch until they introduced the professional social network's "contact finder" feature, but it turns out it wasn't necessary -- eight years later, LinkedIn still hasn't added that feature.
Be your own worst nightmare. Once you do have that toehold in the market, ask yourself how you would outflank your company if you were a competitor. Constantly out-innovate yourself, and determine how to make your product offerings obsolete with each iteration.