Is a startup really about the idea? Is the success of Google a factor of their genius idea of search? Is Microsoft's success over the years due to their choice of their first product?

I'd say "No."

It's easy to get hung up on the romantic notion of founders dreaming up a killer idea and then making a successful company on the back of that idea.

But that is not how the above ideas worked out. Nor, it seems, is it the common practice of startups. Let's look at a few examples:

• Google
  First Product: Search Engine (new ranking algorithm)
  Successful Product: AdWords (they make their money on the back of this product)
• Microsoft
  First Product: BASIC for Altair
  Successful Product: MS-DOS (licensed to IBM and included with all PCs)
• Fog Creek
  First Product: "Content Management System"
  Successful Product: FogBugz (bug tracking software)
• PayPal
  First Product: "Beaming" money between Palm Pilots
  Successful Product: Sending money by Email, particularly to pay for eBay auctions

If startups don't succeed or fail based on the quality of the founding idea, what then makes the difference?

Agility: Changing Direction

From looking at various startups, it would appear that what happens after you have the initial idea is what sets apart most successes from failure. (That and some other factors such as timing and sales ability.)

"The core skill of innovators is error recovery not failure avoidance."
Randy Nelson, HR @ Pixar

Make no mistake, when you are launching a startup, you are creating something new and you have no idea where you are headed. That is, you have an idea, but it may turn out to be wrong. And that is OK. In fact, you should expect that and prepare for that shift.

Plan not just for the hockey-stick growth graphs, but also for the scenario where your core idea is not the right idea for the market and you try something else. And maybe something else after that.

People

If it's not ideas that predict success, it's how you react, how do you prepare for that? This really boils down to the people involved.

• Are they stuck on the initial idea?
• Are they able to change direction and find new ideas?
• Are they people who can execute?

As Jim Collins might put it in Good to Great: Are these the right people to have on the bus?

"[You] first get the right people on the bus ... before you figure out where to drive it."
p. 44

Summary

It's a nice thought of the genius having the "Eureka!" moment1 and then working hard to make it a success.

Leave that for the story books, and when working in reality, set aside the story book and approach your activity and planning according to what normally does happen: you'll shift focus and iterate on ideas. So you want people who can work with this, not just the "perfect people" to execute on the initial idea.

In the introduction to Founders at Work, Jessica Livingston makes the following summary2:

"People think startups grow out of some brilliant initial idea like a plant from a seed. But almost all the founders I interviewed changed their ideas as they developed them."

Links & Notes

1. http://www.youtube.com/watch?v=amt3ag2BaKc#t=9m29s
   A great lecture, but a particularly great line about Eureka moements:
   "How, if you want to be an inventor..., how does knowing about the bathtub [the 'Eureka story' of Archimedes] help you? It doesn't."
2. This is an excellent book. If you are interested in startups, go out and buy it and read it cover to cover. There are many more examples of startups changing their direction during the startup process.
   If you are really short on time, pick it up in a bookstore and just read Jessica's intro - it summarizes some key points.