Hi George,
Daniel Scocco here, and this is the Daily Blog Tips newsletter.
If you want to build a successful startup or company and make a lot
of money with it, especially in the tech sector, you need to come
up with some innovative product or service. Something that will
drastically improve the way things get done, something that will
solve an existing problem in a much better way, something that will
allow people to do things they couldn't before.
Most people know that.
What most people don't know is that you can build such a company
even if you don't invent the product/service yourself. Instead of
inventing it you can identify someone else's idea, purchase the
rights to it or partner with the inventor, and then bring it to the
market.
Not convinced? Here's a powerful example that backs up my case.
Most of the early database systems used a hierarchical model, where
data would be represented under tree-like structures using files in
the computer memory. Then in 1970 a guy named Edgar F. Codd
published a paper titled "A Relational Model of Data for Large
Shared Data Banks", where he proposed a new model based on
relations (tables), where users would be able to declare directly
what information they wanted back from the database, and the system
would take care of the rest.
Codd was working at IBM during that time, but the upper management
didn't give his idea any attention. Peer reviews of his paper were
even more harsh. Here's a quotation from one of them:
"This paper proposes that all data in a database be represented in
the form of relations--sets of tuples--and that all the operations
relative to data access be made on this model. Some of the ideas
presented in the paper are interesting and may be of some use, but,
in general, this very preliminary work fails to make a convincing
point as to their implementation, performance, and practical
usefulness.
Adding together the lack of any real-world example, performance
experiment, and implementation indication or detail, we are left
with an obscure exercise using unfamiliar mathematics and of little
or no practical consequence. It can be safely rejected."
There was one guy, however, that thought Codd's idea was
interesting, and he decided to build a company that would develop
and sell databases using the relational model. That guy is called
Larry Ellison, and the company he co-founded is called Oracle
Corporation. The relation model quickly became the de facto
standard for databases around the world, and Oracle the largest
company developing and selling those systems.
The interesting thing is that in this case the revolutionary idea
was just that, a concept. It wasn't a patent or a proprietary
design, so anyone was free to use it, and many did.
Want some more examples?
Apple and Steve Jobs didn't invent many of the flagship products of
the company. The mouse and the graphical user interface, for
instance, were invented at Xerox's PARC (Palo Alto Research
Center), and Jobs came across them while visiting the premises. He
then made a deal to be able to use them with the Mac, and Apple
became the first company to launch bring those innovations to the
market. Similarly Apple didn't invent the MP3 player, but it
managed to polish the concept with the iPod, which became the
industry leader.
MS-DOS was the product that solidified Microsoft's dominance as a
software vendor, back in 1980. Microsoft didn't create that
product, however. They knew a company called Seattle Computer
Products which had a compatible operating system to the x86
microprocessors (the ones used by PCs), and they knew they probably
would be able to purchase it for a moderate price. With those cards
in hand they approached IBM, and they managed to close a deal to
supply the operating system to the next line of PCs. Once the deal
was closed they purchased the software from the Seattle company and
renamed it MS-DOS.
The bottom line: keep your radar on and always be looking for
innovative ideas and products, as identifying one of them can be
just as profitable as inventing one yourself.
Talk to you next week,
Daniel Scocco
http://www.dailyblogtips.com
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