You need an idea
Remember the company essentials of doing the right thing and doing it right? Whatever your idea is it must allow you to match at least one of these. Both would be better. Both would be much better.
If you have an idea but you cannot do it right you had better be very sure it is something that needs doing. If you cannot prove it is the right thing to do, but can tell a good story you can probably get someone to fund you but do not expect to succeed as a business.
If you do not know how to do it right you may find it easier to get someone else to run the company after you patent the idea.
Just because having a business means you must have an idea, that does not mean it has to be an original idea. McDonalds was a business set up to sell food, and it would be hard to argue that this was an original idea. There is something to the argument that the way they operated might have been original, but the same cannot be said for the second or third coffee bar chain.
There was a demand, possibly based on fashion, for coffee bars, so they were doing the right thing. There were several me-too coffee bars at the time, so only the ones who did it right survived and grew, spreading from state to state or country to country.
Another company that spawned a great deal of imitation was Ebay.
Ebay started as an exchange of Pez dispensers. For those of you who do not know Pez they are a type of lozenge shaped sweet. They are dispensed from novelty dispensers
In terms of starting a business, having an idea that you are already using has advantages and disadvantages. The positives are that you know it works, and that it has genuine utility. The negative is that it is generally much harder to protect.
At the time of the Internet bubble there was a lot of noise being made about first-mover advantage. This is the idea that while there is no competition you can capture enough of the market to make your position unassailable. As a lot of search engine companies found out to their cost having a lot of users today means nothing about tomorrow on the internet. If one free search engine works better than another why would you not use the best? Brand loyalty is no match for convenience.
So where does the first mover advantage really exist? The answer is in the relative levels of convenience. If changing your supplier is inconvenient or difficult that adds to the first mover advantage. If there is an advantage in being the same as everyone else that adds as well. The first point is clear; if I have to do a lot of work to change then I need a very good reason before I will change. The second is clearly illustrated by the paucity of land-line video phones. These have been available for many years and have a clear advantage over the voice only phones. The problem is who would you phone? If no one else has a video phone you are stuck with talking to yourself. It turns out that the most profitable market for video phones was as conference call facilities for businesses to communicate internally. This allowed both ends to be bought at the same time by the same company and so the “who to call” question went away. Sometimes they are now used to call between companies, but rarely as they are thought of as an intra-company tool.
A similar issue has been, at least in part, responsible for the Microsoft Word’s dominance in the word processor market. There was a time when if you wanted to send documents to other companies you had to send them as Word documents because that was the word processor that everyone had. Oddly enough MS was not a true first mover as there were other market dominant products before Word became popular. What MS did which had the same effect was to bundle the word processor with the computer so that everyone had it whether they bought another product or not. This meant it became the de facto standard; it was safe to assume your recipient could read a document sent in this way.
So what is the alternative to the first mover advantage? Well the late mover advantage is the ability to learn from your competitor’s mistakes. This happens on a large scale when countries come late to a technology and leapfrog their competitors. A great example of this is the way that the Japanese leapfrogged the USA in terms of car manufacture. Their factories were more modern, more automated and more efficient.