By far, the most underestimated success factor for any business (idea) is understanding its context. An idea that might work well in a particular time and place might fail spectacularly in another setting or timing. But context is much more than simply testing for ‘product-market-fit’. It is about understanding context in a broader perspective. The same way that architect Eliel Saarinen approached designing things by always considering them in their larger context: “a chair in a room, a room in a house, a house in an environment and an environment in a city plan”.
The bigger context
Businesses like Airbnb and Uber have flourished in the context of an economic downturn. People were looking for ways to make extra money. At a time of full employment and prosperity, why would anyone want to let out a room to strangers, or spend time driving around giving people rides? A critical mass of people willing to offer those services, combined with consumers looking for a cheaper option than conventional hotels and cabs provided the right context for these businesses to succeed.
The right time
Similarly, a few decades ago, businesses around alternative energy were initiatives of a few individuals who may seem visionary now, but were considered as cranks back then. Traditional carbon-based energy was readily available, relatively cheap and (seemed) unproblematic. Even someone with a brilliant idea around renewable energy struggled to turn it into a successful business. Nowadays, with the climate conversation at the top of our agenda, multi-facetted concerns about our dependence on fossil fuel and solar power quickly becoming cheaper than coal-based energy, the context is right.
The right place
It is obviously important to be close to your key markets and customers. Moreover, it’s no coincidence that different sectors tend to form clusters in particular places, like finance in the City of London or tech in Silicon Valley. These are places where industry leaders rub shoulders, fruitfully exchange ideas and benefit in many other ways from proximity to each other, to leading edge research from academia, to abundant capital from investors and to a large talent pool. If you want to make a difference, you have to be prepared to go wherever the action is. Impact simply won’t happen remotely.
Are you adding value to your eco-system?
In addition of being in the right place at the right time, it is vital to actively shape your eco-system. It’s not just about opening an office in the right place. It’s about being ‘plugged in’ to a whole system of stakeholders and actively contributing to this eco-system. The more stakeholders benefit from your idea, the more likely it will be realized. It is about growing the pie not competing for the slices. Compare the Apple Newton that Steve Jobs killed after his return to Apple in 1997 to his introduction of the iPhone and its historical success ten years later. Half-baked and unreliable technology versus sophisticated, beautiful and intuitive. Tiny niche versus global market leadership potential. Complex and closed system versus adding unprecedented value for a plethora of developers, software companies and device manufacturers.
So, have you taken an honest look at your business (idea) and truly understood the bigger context? Is the time really ripe for your idea? Or do you simply expect reality to bend to your wishes? Are you in the right place? Or is it just convenient to be where you are? Do you actively contribute to your eco-system? Or are you waiting for others to do the heavy lifting? No matter how good your idea is, it will only succeed in the right context.
P.S.: This post is the second in a series of six blogs covering the key ingredients for a successful business. Stay tuned for the others to follow over the coming weeks! You can find links to the published blogs below: