In his book Masters of Enterprise, HW Brands paints an intriguing picture of John Jacob Astor, the ambitious young German often cited as the creator of the world’s first global company, arriving in the US at the age of 20 with little more than the clothes on his back and a burning desire to make a fortune.
On arrival, he discovered that he could make a pile of money trading fur. In the 1800s, people travelled in cold carriages and lived in houses with no proper heating. Fur coats and men’s black top hats, worn by both wealthy and middle-class men, were a must-have utility and fashion accessory.
Astor travelled across wild America bartering cheap trinkets for fur with the American Indian community. This exploitation of uneducated communities would be deemed quite unethical by today’s standards, but the trade in fur became so successful that he set up trading posts across the globe. By the time of his death, he was the wealthiest man in America.
The simple idea that made Astor a multinational business tycoon was a response to a basic need for warmth.
If Facebook was a country, it would be one of the biggest countries in the world; currently it boasts more than 800 million active users. Yet the idea of starting the world’s most successful social network was not developed by one of the Fortune 500 corporations, or a media industry think-tank.
It came from a group of youngsters still at university. Their idea was to find a way of reducing the degree of separation between people.
Similarly, when Google was first established, the founders did not even know how this business was going to generate income, all they had was an idea that they believed could change the world. And it did – very few businesses have added a verb to the English language, just as a start. Their simple idea wasn’t even all that original – it was simply a refinement of earlier internet search engines such as Michael Mauldin’s Lycos, which some of you who are early adopters and have had at least 30 birthday parties might remember.
The Google founders even tried to sell the company to another Silicon Valley trailblazer for about $1 million. If the transaction had been successful, they (and their heirs) would be more than a little upset, considering that Google has turned its founders into billionaires several fold.
The world’s most famous billionaire and philanthropist, Bill Gates, also quit a Harvard education to pursue a dream. His dream was to make computers accessible.
Enter Microsoft, Gates and Paul Allen’s brilliant idea. They first introduced DOS and then Windows, which made computer use a lot less scary. I know, I know – Mac fanatics would argue it was actually Steve Jobs who made personal computers user friendly. Whoever claims the credit, all these men had a vision.
There are few of us who have not at least flirted with the idea of running our own company. The freedom of making all the decisions yourself, regardless of whether or not they turn out to have been correct in the long run, rather than being bound by someone else’s patently incorrect notion, is a heady and tempting draught.
But it is intimidating to think that you have to come up with an earth-shattering idea to be successful. The thing to remember is that you don’t! If you look at the “problems” that all these businesses I have touched on attempted to solve, there is one golden thread: the mind-boggling simplicity of the solutions they offered.
You do not need to come up with a cure for cancer or some secret formula to make us live for 500 years to create a successful business. The ideas are all around us, every day and they are often very simple ways of solving everyday problems.
Remember that all Astor did was make it easier for people to keep warm! Apple did not invent music, but it sure revolutionised the way we listen, share and store it by developing the iPod.
Take Vuyo Jack, the founder of South Africa’s first black economic empowerment (BEE) rating agency. Before he had even turned 30, Vuyo left PwC to start Empowerdex.
To understand the simplicity of his concept, you need to understand that to give a company a BEE rating, you essentially perform an audit process to determine the level of economic participation by previously disadvantaged individuals in the business.
Vuyo spotted the opportunity well before the government even insisted that companies needed to have a BEE rating in order to do business with various state organs.
BV (Before Vuyo, to coin a phrase) typically, for a business to prove that it was sufficiently empowered to participate in a particular business opportunity, it would spend hours going through many different kinds of paper work collating the necessary supporting documents to prove that it had the requisite black empowerment credentials.
As an accountant by training, Vuyo understood the traditional auditing process and all he did was apply it to a new problem. This vastly simplified the process of getting a BEE scorecard and it could be done at a mass scale, lowering the cost for companies to acquire their BEE grade. In a sense, one could argue that he spawned an entire industry.
There is an old adage – in fact, it was even once a flash-in-the-pan political party – the Kiss principle: Keep it Simple, Stupid. And that is what the majority of successful businesses have done. Sure, there are exceptions, such as some of our celebrated BEE conglomerates, whose founders in my book do not even begin to make the grade as entrepreneurs, but I submit that if you want to make it in business, you need to come up with just one simple idea, and implement it efficiently and effectively.
Ezra Ndwandwe is the chief executive of Dualpoint Holdings and the creator of reality television show The Big Break Legacy, of which Business Report is a print media partner. For more information visit www.thebigbreaklegacy.com.