A little more on Innovation versus Invention from Martin Zwilling at Entrepreneur.com:
starting a new business that builds on an existing technology or business model is usually less risky than introducing that ultimate new disruptive technology… The advantage of imitation, with innovation, is that it gives you a solid base for building experience. There is always time later for your next startup, using that disruptive technology of your dreams. Or you may decide that your dream was not really the great idea that you thought it was.
Zwilling goes on to list 5 reasons why Innovation/Iteration/Imitation is better for first-time projects and for lower-risk projects. I’ll add 3 additional reasons to his list:
- Less grandiose projects are easier to build when the founder/startup is outside of the typical technology hubs (Silicon Valley, NYC, LA, Boston, Boulder, Seattle). Innovation is an “outsider’s” best friend.
- Investors are investing in fewer Series A rounds (we are in the tail end of the Series Crunch mentioned elsewhere) so if going after seed or angel money, keep this in mind when choosing which idea to actually commit to – because the seed and angel investors will be looking at the potential for future rounds when deciding where to put their initial investment. If you can anticipate these concerns, you can still effectively position yourself for investors that are looking for more of a cash-flow return than a unicorn, albeit it at smaller raise amounts.
- Lifetime entrepreneurs (“Lifers”) are not investing their time and effort in the potential “walking dead” startups that can’t get through the A round crunch. This includes startups and products that just don’t produce enough revenue to attract new investors. If your sincere numbers produce an estimate that your idea is a $10-20 million product, then it’s not the typical “swing big” idea that Lifers and Series A VC’s typically look for. Rather than a home run, these ideas are at best a double, and might have trouble attracting bigger rounds at higher valuations. So you probably will have less competition in this market size. Less competition means you can focus on just building a good product, without the distractions of strategic interference.