Picking winning ideas is not easy to do. But one good approach is to examine a company’s strategy from multiple points of view. In his book The Unicorn’s Shadow: Combating the Dangerous Myths that Hold Back Startups, Founders, and Investors, Wharton Professor Ethan Mollick explains how to examine a strategy from multiple points of view: by exploring a company’s hires, buyers, suppliers, and walls of fire.
Hires covers the company’s employees and sometimes contractors. Organizations need to align workers with their strategic vision and empower them to execute.
Suppliers refers to partner organizations that a company requires in order to execute on areas that the hires cannot fully deliver on their own.
Buyers are customers or partners like retailers and wholesalers.
Wall of Fire are the sources of competitive advantage for a company – their defenses against the competition. These must have value, must be rare (so that you stand out), and must be hard to copy.
While there is no one framework for picking a winning idea or company, methodical analysis using a framework can help you narrow down your choices and prevent you from relying on your intuition alone. Once you narrow down your choices, you can explore them in more detail, conducting interviews and examining documentation.
Another useful tool for evaluating business ideas is your imagination: imagining future scenarios can help you plan ahead and avoid pitfalls. A way to reduce the chance of failure for any business is to imagine a future in which the business succeeds and one in which the business does not succeed. Imagining future paths to failure can help you avoid those paths. And thinking about a future success can help you work backward and think of the events that can get you to that imagined future. Remember: successful ideas need time to grow, your imagination, coupled with careful and methodical analysis from multiple viewpoints can help you gain insight and pick a winning idea.
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