Got a Great Idea - What Now?

I founded Carte Blanche in 2014 and went through what many start-ups also go through. It’s all a whirlwind of an experience, a real life MBA as some have said.

Having a great idea is one thing but turning it into a profitable business is a whole new universe.

Thomas Edison once said “Genius is one percent inspiration and ninety-nine percent perspiration” and this has resonated in what I call the 10-20-70 rule of start-ups.

10-20-70 Rule

A great start up is 10% a great idea, 20% a solid business plan and 70% is perspiration or executing. It is usually the boring operational management stuff that makes or breaks a new start up.

I would put it that a successful startup is less than 10% good idea, there are thousands of great ideas that never make it to a successful business and there are many great startups founded on relatively simple ideas.

To be successful a start up has to have an idea, not necessarily a revolutionary idea. With a good idea you then need to have a solid business model (20%) on paper and the rest is execution (70%).

Great Idea

Carte Blanche has used a relatively simple idea of offering financial advice where advisors put their money where their mouth is. Where the advisor and clients are equals. That is they have similar backgrounds - professionals, similar wealth so that they can share the same concerns

It is the same reason that a sommelier at a fine restaurant will taste the wine that they serve – they can only talk about fine wines if they have tasted the wines they are serving. There is only so much that you can read about wines and that is the same as a financial advisor, someone who has never invested their own money and never faced loses will offer advice with a disregard for risk.


I did the market research on the options for investment advice in Hong Kong and found my model is quite hard to copy. For private banks the advisors cannot be equals with their clients, for mass financial advisory firms the bulk of the customer facing staff are in their twenties.

Business Model

For Carte Blanche the business model is pretty straightforward and is the same model that is dictated by the industry. I had explored changing the model but ran into a regulatory brick wall. So that was short and simple.

On paper I had the numbers needed to make money, how much assets I need to manage, what the costs would be and how long it will take me to get into the black.

If you have a great idea and can’t get the numbers to add up even on paper then there is no point taking it further. It may sound like common sense but many people start a business with only a good idea.

I have an entrepreneurial spirit and a passion for coffee and toyed with the idea of turning this hobby into a business. I had many great ideas for doing things differently to Starbucks but when it came down to the numbers I would need amazing volumes to make any serious money, breaking even would be attainable but to make any serious money would take a lot of effort and there were many risks along the way such as rising labour costs, rising rents and food price inflation. At the end pursuing this dream would be costly, risky and have a long payback period so I scrapped this idea at the business plan stage.

Check your assumptions, ask your friends to check for you as it’s easy to assume something as fact where as it may be a flawed assumption. In my café business case I had initially assumed even distribution of customers throughout the day where as a more realistic assumption is that customer demand would peak and ebb at certain times. Having no experience in this I made some flawed assumptions that other people picked up quite quickly.

With a strong business case you can move forward to execution.

Execution

Execution is about planning and following that plan to achieve the business case.

At first there will be a whirlwind of activities. Simple things like registering a company and business will be new. Branding and marketing, trademarks, etc. Book keeping and accounting was all quite new. IT systems, backups, data integrity, ensuring confidentiality etc.

Clearly this was not what I signed up for. For me there was also licensing and regulatory, compliance. Exams, exams and more exams.

Some things, even though you may be able to do, are best left to professionals so you can focus on where you deliver value.

It’s the same thing that I tell my clients: some things are best left to professionals. And even some things that you can do yourself you need to ask is that the best use of time but I learnt this first hand and ended up delaying things unnecessarily.

Something that illustrates this perfectly is Pinterest. Most people are familiar with Pinterest, the famous DIY website where you can make a molten crayon artwork or a Ninja Turtle birthday cake. But do you know about Pinterest Fails? If you google it you will see some hysterical failures compared to what should have been.

At the other end of the spectrum it’s easy to get carried away with paying for services and outsourcing things you hadn’t planned for. All these services come at a cost and without a discipline it is easy for your costs to balloon. That is why it I important to go back to the business case, is this what I planned? If there are additional items you are spending on that wasn’t planned, will that change the business case? Review that and make sure with the new spending the plan is still workable.

In Summary

A successful startup is not about a great idea but about good management and meticulous execution of a well thought out business plan that evolves with the business. A great idea is not enough to start a business a great idea is about 10% of the business, another 20% is the business model and 70% is execution. It’s the boring stuff and discipline that makes a business successful.