Monday, August 24, 2009

'Flush' with ideas

Last month there was an interesting article about Toto, the Japanese bathroom and kitchen ceramics company in the Economist. Toto is trying to get their fancy lavatories into houses in America - with heated seats, music and 'hiding odor' features!

At the end of the article, it is remarked on Toto's 800 engineers working on new toilets, but that even still "they will have a hard time getting around the biggest obstacle to the use of its fancier lavatories in the West: the lack of electrical sockets in bathrooms."

Toto's President, Kunio Harimoto says that it took Japan 20 years to get this change added to homes, but that they are ready to wait until it develops in America.

What struck me about the article was how often the business ideas (or plans) I am presented depend on 'getting electrical sockets in bathrooms' - that is, some large structural change that a single new startup will be hard pressed to enable.

A startup by its nature has a limited life; it either catches a segment or customer base quickly or it starves. Structural changes take time. If your business idea depends on a major change happening, you will need even more capital and more time - which increases risk. The entrepreneur who started Segway already had made millions before Segway, and it still has not happened yet.

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