This piece was first published on January 29, 2008.
According to Paul Graham, investor and founder of Y Combinator, the best way to get a winning business idea is to not think of any. Instead, you should be looking at which problems you can solve.
“The very best start-up ideas tend to have three things in common: they’re something the founders themselves want, that they themselves can build, and that few others realize are worth doing,” Graham said in a blog post in November.
“Microsoft, Apple, Yahoo, Google and Facebook all began this way.”
Now that the working year is well underway, there will be plenty of unfulfilled employees wracking their brains for that one business concept that will make them their fortune.
Here are the stories of five great ideas that actually managed to blossom into highly successful businesses:
1. Innocent Drinks
Friends Adam Balon, Jon Wright and Richard Reed appeared to have been pretty well set after leaving Cambridge University.
Two became management consultants. One moved into advertising. They all made good money and lived comfortable lives in London.
But there was a shared nagging feeling that there was a bit more to life. On a snowboarding holiday in 1998, the trio did little else than throw around ideas for a new business.
They realised there was a gap in the market for a new type of smoothie product, one based on natural ingredients and overtly ethical values.
After spending six months blending different combinations of fruit at home, the trio set up a stall at a music festival to test the concept.
The decision whether to continue was left entirely in the hands of consumers. A sign above the stall read “shall we give up our jobs to make these smoothies?” One bin read ‘Yes’, the other ‘No.’ Customers would make their judgement by throwing their empty bottles in either bin.
Happily, ‘yes’ won. Balon, Wright and Reed went on to write and re-write their business plan 11 times, before being turned down by a succession of potential investors and banks for funding.
A desperate email with the subject line ‘Does anyone know anyone rich?’ was sent to everyone the founders knew, resulting in Maurice Pinto, a wealthy American businessman, pitching in £250,000.
Innocent Drinks made its first million in turnover in its second year and now sells around two million smoothies a week, commanding a 75% market share in the UK. In 2009, Coca-Cola took an 18% stake in the company for £30 million. A year later the beverage giant paid £65 million for a 58% stake.
Reed says: "If you're 70% sure about an idea then go for it. Because if you wait till you're 100% confident in business… you'll never make a decision, you'll never get anywhere."
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