Lessons in Entrepreneurship - How to Steal a Business
September 20th, 2007 |Today, I met with the head of a TV production company that helps various organizations, executives, and professionals, to become better known.
Lets say super-CPA John Doe wants to get more business. He would pay a fee, be interviewed by the production company in their studios, and the resulting tape would be aired on TV. Then, Doe could post the interview to his web site, send it to other media outlets, and hand it to potential clients.
Its a cool concept, and having heard about it, by accident, I wanted to learn more.
So, I set an appointment and met with the head honcho for an hour and we chatted.
He revealed enough to me to suggest:
(1) Currently, this is a profitable business, and potentially, a great business.
(2) He will not exploit its full potential because his vision for it is painfully limited.
(3) I would be reluctant to work with him given the restrictive provisions in his contracts that would handcuff me from using what he might construe later as his methods (versus mine) after parting company.
(4) It could make more sense for me to simply open my own shop and improvise, while suffering my own growing pains.
You might wonder, Is this stealing? If you relish originality as I do, at first blush it feels like it, but Im convinced it is not.
Its called Creative Imitation, a highly recommended entrepreneurial technique, by none other than management guru, and my late professor, Peter F. Drucker. Your goal is to do substantially what someone else does, but better, cheaper, faster, or on a larger scale and with your own flair.
Its done all the time. One of my consulting clients, a large photography company, told me this is exactly what the founder did after having glimpsed a small, successful studio in a remote vacation venue.
He loved their concept, but thought they would never exploit it, properly. So, with a partner, they opened their own, tweaking the program, prices, and feel of the place.
Ill bet youve seen one of their units, but youve probably never seen the original.
Ditto for McDonalds. Ray Kroc is commonly referred to as the “founder” of that worldwide brand, but it was the brothers McDonald that were its originators, in San Bernardino, CA. As their multimixer distributor, Kroc had his eyes wide open as he watched their sales grow.
With a vision for expansion, he bought the rights to franchise the enterprise. In retrospect, after adding his own genius and hard work to the mix, we might say he negotiated a “steal of a deal.”
It’s more commonplace for innovators to reap short term rewards on their own, but out of ego, ignorance, or a lack of resources, to fall off the radar, unless someone with a larger perspective, such as a Ray Kroc, comes along.
Do you remember the Bomar Brain, a calculator with lots of functions? In its day, it was really something, as was the original Commodore laptop computer. Neither of these devices exists today, outside of a technology museum or dusty garage.
Should we care? Not really, because todays successors, imitators and improvers, sell much better products at cheaper prices than the originals.
While there are successful lawsuits that can be brought against those that steal copyrights, trademarks, patents and trade dress, i.e. the look, feel, color scheme, graphics, logos, and other proprietary aspects of businesses, the IDEA of a business cannot be kept completely exclusive.
Thats what smart entrepreneurs are on the lookout for–great, under-exploited ideas that the formulators refuse or simply decline to exploit properly on their own.
For entrepreneurs, in this context the winning question isnt: Whats an original idea that will work? but What original idea can I work BETTER?
