In startup circles, it’s quite common to say that business ideas are useless and execution means everything. There is no marketplace where you could sell just an idea; without execution – i.e. building a product and gaining customers – the idea is worth nothing. A great idea alone is not enough.

But a bad idea is crushing. Looking at more than 50 idea-stage tech companies that our team members have led or invested in, we have witnessed how companies that are built on bad ideas will either switch to a good idea – or crumble.

On the other hand, great ideas have a way better possibility to become strong tech companies, and eventually big businesses.

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A great business idea consists of many interrelated elements

When we are talking about ideas for a strong tech company in this guide, we use a very broad definition of an idea – not just the product description. A product description can be summarized in a sentence, but you cannot do so with a great idea.

A great idea makes use of many interrelated elements, like team, market, competition, and timing.

Because of this broad definition, we understand why pivots – in other words, changing directions significantly – are behind many successful tech companies. Even these companies have kept some elements of the original idea while simultaneously made big changes to some other elements.

One example is Shopify, a company that began as an online store for snowboarding equipment. And when building an online store, the e-commerce platform means a lot not only for the user experience but also for the management of the store. The founders of Shopify were unsatisfied with the existing e-commerce products and decided to build their own, a one that would better match their needs as e-commerce entrepreneurs. This product eventually became Shopify and the company’s main product.

Nowadays, Shopify is a publicly listed company with a revenue of $580 million and 3000 employees.

The three idea catalysts


Even though great ideas are usually a product of a somewhat random process and multiple iterations, the initial catalyst for an idea always comes from a founder who is driven by one or many of the three following catalysts: market, technology or skills.

Market

“I want to start a company that helps people to rent out their empty apartments to travelers.”

A vast majority of the strong tech companies have started by identifying a massive problem that should be solved. Among the VCs, founders, and academics, there is a rather clear consensus that this is the best starting point for any company. This can be a huge opportunity no one else is tapping into, or identifying a massive problem that should be solved.

Looking at our portfolio, most of the companies we have invested in have market-driven catalysts. Take for example Kodit.io, that is entering the housing market that has not been disrupted since the online marketplaces came to be almost 20 years ago.

Technology

“I have developed a new battery that is 10 times smaller and lasts 10 times longer than existing batteries. Now I want to start a company that capitalizes on that technology.”

Many strong tech companies have started through a technological breakthrough. Even though the technology would never be truly commercialized by the original company, the whole idea may have a happy ending after a large company acquires the technology in order to commercialize it.