March 30, 2008

Building On Other People’s Ideas

Starting a business does not necessarily mean creating a new technology, or coming up with something radical that has never been done before, or inventing a new product or service from scratch. This is a common misconception. Many would-be entrepreneurs spend years trying to come up with an earth-shattering idea, when there are really opportunities all around them, every day. Many of the most successful business people all over the world have simply adapted an existing idea, implemented an existing product or service in their own way, or improved on somebody else’s creation.

Perhaps one of the greatest examples ever of leveraging an existing idea is always sexy Bill Gates and Microsoft. Gates has become one of the richest people in the world (his personal fortune is measured in the billions) based on somebody else’s idea. That’s right, the product that started it all for Bill — called DOS, which stands for disk operating system — was not an invention of Bill’s.

In 1980, IBM was building the first commercially viable personal computer, and they needed an operating system to run it. They approached Microsoft, who agreed to supply the software — the design for which they bought from Seattle Computer Products for around $50,000. There were several different computer companies and operating systems in the early days, but Microsoft and IBM went on to dominate the industry worldwide, thanks in a large part to DOS. Years later, Bill gates borrowed another idea from Apple computers. Microsoft brought out a new operating system called Windows, which used an icon-based system and a mouse instead of text commands to run a computer. Apple had been doing this for years, but it was a revolution for Microsoft users.

Coca-Cola started in the same way. Coke was invented by Dr John Pemberton in Atlanta in 1886. He made efforts to promote the drink, but it did not take off. During the first year, he sold an average of just nine drinks per day. He later sold the rights to the drink to businessman Asa Candler. By 1892, Candler’s flair for marketing had boosted sales nearly tenfold. Today Coca Cola operates in over 200 countries and has nearly 400 brands.

While travelling, Janine Allis saw that there was a hole in the Australian market for a healthy fast-food alternative. She often had trouble finding something healthy to eat or drink when she was in a hurry. She thought the American juice bar trend could be brought to Australia. When she came home, she developed a business plan and raised $250,000 through friends investing in her idea. She consulted nutritionists and naturopaths to come up with natural, healthy juice recipes. The first Boost store opened in Adelaide in 2000, and over the following six years more than 170 stores have opened throughout Australia and New Zealand. Janine found a great idea overseas, and successfully implemented it in Australia.

Richard Branson never invented anything in his business career. He has run a record label and an airline, opened music stores, released a brand of cola, and now offers financial services. None of these are new ideas. So why has he been so successful? Perhaps more than any other business person, Branson demonstrates what can be done with a bit of imagination, a lot of marketing, and putting your own personality into your business. His company name — Virgin — attracts attention instantly, and he is a shameless promoter, using sometimes outrageous publicity stunts to attract attention to his brand. He appeared in a wedding dress to open his bridal store, and he drove a tank down Fifth Avenue in New York to introduce Virgin Cola in America. Across all his products, the thing he is selling most is his brand, Virgin.

In 1948, brothers Richard and Maurice McDonald opened their hamburger restaurant in San Bernardino, California. Its success was based on its limited menu and rapid service. But are the McDonald brothers responsible for McDonald’s dominating the fast food market around the world? No, that honour goes to Ray Kroc, who sold milkshake mixers. Ray heard about the McDonald’s hamburger store, and how it ran eight milkshake mixers at a time. He jumped in his car and went to investigate. When he arrived, the store was doing a roaring trade, and Ray had never seen customers served so quickly. He immediately saw the potential of the store’s unique methods, and suggested to the brothers that they should open up more restaurants. When they asked him who could do that for them, he replied, ‘What about me?’

Ray opened the second McDonald’s restaurant in Illinois in 1955. There are now more than 30,000 McDonald’s restaurants in 119 countries around the world — all thanks to Ray! McDonald’s later added another innovation to the fast food world — the drive thru. This was an idea that had first been used by banks throughout the USA, with drive thru access to ATMs

Some of the largest and most successful companies in the world were started either by buying somebody else’s idea or simply creating a better way of doing something. There is nothing wrong with this — it is a common approach to business, and as you can see from these examples, it can be an extremely profitable one.

HEY, did you know i’m running a contest while I am away…

MARCH MADNESS CONTEST Firstly, here is what is up for grabs… A signed copy of my book, which these excerpts come from – ‘How To Turn Your Million Dollar Idea Into A Reality’ [valued at AU$29.95] Unleashing The Power Of Publicity Audio CD – Interview with Pete Williams & Dale Beaumont [valued at AU$27.95] Business Essentials Audio CD – Interview with Pete Williams (May 07) [valued at AU$27.95] Why We Want You To Be Rich Book – Robert Kiyosaki & Donal Trump [valued at AU$29.95] and… A Hand Crafted Pen Crafted From The Authentic Timber of the Melbourne Cricket Ground[valued at AU$189.95] Total Value: AU$ 305.75 There are two prize packs to be won. To Enter: 1. Post a ‘review’ of one of these book excert posts, on your blog, with a link back to the relevant post on my blog. Does that make sense ? I’ll see the link or the trackback. 2. Include an email address in your post unless your whois information is correct. 3. Promise to give a review of the entire book on your blog once you have received it and read it. 4. I’ll randonly draw the 2 winners when I get back after April 18 2008. It’s that easy!

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Related Preneur Marketing Blog Posts:

1. Want Profitable Ideas? Become A Fisherman.
2. Risk Reversals… The Why?
3. There’s No Such Thing As Failure
4. Adding A Back-End To Your Business
5. Creating Systems To Meet Your Goals

Filed under Business Building, Pete's Book