The Myth of the Unique Idea – One

This post was written by Jawwad Farid originally here - I am republishing to share it with everyone.

How important is it to start off with an idea that no one has ever
thought of before. Something absolutely unique, different and able to
stand up on its own. A concept that would win you grudging respect from
your friends, colleagues, class mates and neighbors. “That is one smart
dude” they’d whisper as they bowed their heads and paid respect to your
esteemed presence and your many varied accomplishments.

Shall we carry on dreaming (as in the British Carry on series)

Every once in a while, one of us will come with a new idea that will
rewire conventional thinking and reset the bench mark. The two key
words here are every once in a while and one
of us. And since there are quite a few of us, the probability of that
being you or me is quite low. But it will certainly be the one person
you despise the most and would have never thought capable of doing
anything half way decent. Such is fate.

Having said that, every now and then, quite a few of us, will take
an existing idea and tweak it for a new market or a new application and
find that the shortest path to success is actually through learning
from someone else’s mistake. Giving a new twist to an old idea is a lot
easier than building an entire industry from scratch.

So what’s a girl to do? Forget the unique idea?

Here is what I recommend

Take a personal inventory and pick two things that you can do for
the next 30 years without being bored. Be specific. I can read for the
next 30 years as long as I have a little bit of work. I can write for
the next 15 years as long as I am obscenely rich. I can teach as long
as I can read and write and be obscenely obnoxious. I can play with
numbers and excel sheets forever… There you have it – my personal
inventory – now build your own.

Once you have your personal inventory, think of the many (or any)
ways that you can actually get paid for doing stuff that you don’t get
bored with.

I am an actuary by profession but when I came back home conditions
weren’t exactly conducive for actuarial practice (another story,
another time). So I did the next best thing – the thirty year thing – I
did a little bit of work and I taught. I taught at local universities
(actuarial science and entrepreneurship) and ran custom workshops for
banking customers. The first led to friends like Adnan
(lootmaar), colleagues like Rabia (LUMS and then Mashreq) while the
second helped us build our products (Alchemy Risk Manager – ARM) and
lead to our current ARM customers.

It wasn’t that easy. With hindsight I sound like a genius, but in
May 2003, 5 months into doing my own thing, I was mildly upset.

Scratch that, I was very angry and equally depressed. Here I was, a
fellow Society of actuaries, with no insurance companies as customers.
Whatever little work was available was as exciting as reading a
dictionary. I wanted to change the world but the customers whose worlds
I wanted to change were in no mood to cooperate. In our first two years
of existence there were three instances where I came very close to
packing up and taking a job. Anywhere on this planet, including outside
Pakistan. Just so that I would get to finally real work for a change,
satisfy the burning professional itch inside me.

So be prepared for some trial and error. A spot of frustration and maybe a little bit more.

Was risk management this absolutely cutting edge, new new thing? The
unique idea whose time had come? An ode to our brilliance and street
smart tactical thinking… Here is another secret. It wasn’t even my
idea. A good friend who dropped by for lunch suggested that I should
take a look at the Basel II document. I did.

It wasn’t new or unique, brave or bold. It was at least two decades
old and three hundred companies were already on it. Still it wasn’t
exactly common and it wasn’t boring, which helped. And to get it you
had to go through not just the Basel document but do something that
traditionally technology companies have always had trouble doing. Put
business utility before geeky coolness.

Was this the only thing we did? Nope. In our first two years we
flirted with training, courted consulting engagements, pitched for some
HR work, and did some insurance advisory – if it paid the bills, it was
kosher. Mid 2004, 18 month down the road, it seemed as if a few things
were sticking more than others.

How did we measure stickiness? If it got easier to pitch and close
and if we could raise our prices every few months, it was sticky enough
for us. Risk training was sticky, HR work was not. Consulting and
advisory work was seasonal but far more importantly beyond a certain
price point stopped being sticky.

The next question was, how long could we count on risk training to
feed my little children. After about 12 workshops we had come close to
training the entire market. There was still work in the pipeline but
the initial excitement and participation from the market on risk
training was fading. In about 15 months we had covered basic
derivatives to advance interest rate modeling and if we kept the same
pace we would very quickly be out of topics as well as participants to
train.

Lesson here… Keep your eyes open to harvesting your current product to build a better one.

A number of customers had indicated an interest in buying formal
modals for the material covered in our training workshops. We started
asking them about demand, price points, utility, key decision factors
and the one thing that would make the sale happen. Ten conversations
later it was getting obvious that there was a market. The only problem
was the competition. How does a itsy, bitsy, teeny, weeny, rinky,
dinky, little company like ours, with no money or capital would compete
with Bloomberg, Reuters, SAP, Oracle and their numerous other rich and
successful cousins.

“There is a tide in the affairs of men
Which taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries”

And so went Shakespeare (Mark Antony, Julius Ceaser, 4.3.218)…
You could ignore the tide, hope for the best, carry on dragging
customers to yet more exotic training workshops and consulting
engagements but at some point the party had to end. We could end it
ourselves, here and now, on our terms or wait for it to end without
notice.

We opted to give the tide a shot.

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