Startup companies, and their corresponding entrepreneurs, often focus on the “big idea.” Recently I disappointingly saw an entrepreneur state “all the big ideas have already been taken.” Wow, has history proved that wrong again and again. As an angel investor myself, it’s often easy to focus on the big idea: is it original? is it defensible? is the market big?
But I believe we focus too much on the idea, and too little on the execution of the idea. Execution is often the difference between winning and losing. What does that mean for investors? Focus on the team, their perspective, and their plan.
Here’s some evidence: in a statistical review of 32 startup company postmortems, this review categories 20 failure reasons. By my count, execution makes up 13 reasons that startups failure. Strategic failures make up the next biggest category.
Execution means that we must focus on process: decision making, customer support, problem solving, spending, and so on. Startups like to believe that process is the domain of all, boring, mega-companies. They can believe that, but only to their own peril.