The story of Airbnb’s early days lends credence to this maxim. When Brian Chesky and Joe Gebbia pitched their idea of a service that would offer people accommodation in random homes instead of hotels, investors decided it was a bad idea and refused to fund their startup. Paul Graham of Y Combinator also thought it was a bad idea but he put down the money to help the founders run the business.

Why? He was convinced the guys would at least be smart enough to pivot to a reasonable venture when reality had rid them of their delusion. He believed in the founders enough to invest even if their idea was doubtful. Today, that bad idea has a valuation of $80 billion! The startup’s success is perhaps a combination of many factors, but the attributes of the founders contributed to raising the necessary funding in the first place.

Entrepreneurs Focus on Ideas, Smart Investors Want to Know More

Many entrepreneurs swear by their ideas. They think their ideas will change the world. And they guard these ideas with all they have, protecting them, nursing them, waiting for the smart investor. They are certain the smart investor will jump at financing their super ideas as soon as he or she hears them.

Smart Investors Invest in People, Not in Ideas

 

While these investors truly want to hear those great ideas, they are more particular about the person (and increasingly the people) pushing the idea. They are more interested in the entrepreneur’s history, their exposure and experience, their education and networks. They want to know about the person’s capacity, character, and competence. Investors want to know what they have been able to achieve in the past because past success could be a predictor of future success. Beyond ideas, investors are keen on the entrepreneur’s ability to execute.

You can begin to take certain steps to become that prime candidate smart investors are looking for no matter where you are on your entrepreneurial journey.

Pay Attention to Your Growth

So, what do you need to do? Focus on building your three Cs — Your Competence, Character, and Capacity.

1. Competence: Keep learning, keep developing the right skills to do the job. This includes not just technical skills relatable to your specialty but entrepreneurial and business skills as well. Take courses in marketing, finance, leadership, or even public speaking. Take an inventory of your skills and begin to bridge your competence gap.

2. Character: Pay attention to your attitudes, values, and priorities. Be your authentic self, but above all strive to inculcate the disciplines and habits for success. Do you value delivering on your promises? Are you a person of integrity striving to do as you say? What do the values of integrity, respect, collaboration, and perseverance mean to you?

3. Capacity: Your competence and character naturally lead to building your capacity. How much of what you can do are you able to do? It refers to your stamina–physical, mental, psychological, essentially how far you can keep going under the demands of work and responsibility.

The good thing about all these traits is that you can learn, grow, and improve in all three dimensions as you address them. This is the way to develop qualities as a person who brings value to the table. Certain ideas will only occur to you as you grow in those three areas.

Teams Offer Confidence

Just a note on teams: Investors feel more comfortable with teams of founders than with single stars. They want to know that critical roles such as product development, marketing, and finance are manned by competent members of a founding team. The team’s competence is a reflection of each member’s competence. A mediocre team can take a good idea and create nothing significant of it. But a good team can take a plain, obvious-to-the-eye, plain-as-vanilla idea and make an empire of it.

Members of a team are able to complement one another thereby presenting a strong case to investors. That is another reason to pay attention to your personal growth. It becomes easier to attract smart people to yourself as you grow.

In conclusion, great ideas only translate to value with the right execution. It takes the right mix of competence, character, and capacity to take an idea from concept to value delivery. Smart investors know this, which is why they invest in people, and not in ideas.


Entrepreneurship is about identifying and solving problems using new ideas. The greater the scale or impact to which this is achieved, the more successful people and organizations can be. Let’s talk about three important elements you need to achieve success as an entrepreneur. You need to have

  • an intuition for identifying problems,
  • the character for seeking solutions to the problems, and
  • the acumen for monetizing the solutions.

Of course, many other variables come into play such as the team involved or marketing, but these are the core components. Let’s take a quick look at these core activities.

 

1. Identify the Problem

You need to identify a real problem faced by people at a location you can reach. You cannot assume, the issue must be real. Now, saying this does not mean it must be a functional problem, some problems are psychological or luxury-seeking.

For instance, the lack of potable water in an African community is a functional, life-threatening problem. Searching for bottled water in the UK is also a problem, not one of thirst or survival, but of preference or choice. But a problem is a problem, it just depends on whom you are addressing and where you are, that is, the context.

 

2. Develop a Problem-Solving Idea

Secondly, you should seek to develop a problem-solving idea. Consider the context, that is, the people, economy, or timing, what type of solution would eliminate or at least begin to address the problem in question?

With Project Loon, Google tried to address the problem of internet blackout or poor coverage in the remotest parts of developing countries. The idea was to deploy wi-fi using balloons floating over the areas with poor or service blackouts. On the other hand, Elon Musk’s Starlink is on a mission to solve the same problem using satellite technology.

 

3. Convert the Idea into a Source of Income

Finally, you have to find a way to convert that idea to a form in which people can pay you money for it. Again, the factor of context must be considered.

For instance, someone may identify the problem of poor infant nutrition in her community. Her idea may be to offer nutritious food to families to solve this problem. Now, should families be able to buy the food on-demand or have it delivered monthly? Should it be a large food basket able to sustain the child for the month or should it be chunked up into more affordable units (in the short term)?

The answers to these and more questions would depend on knowing the attributes of the target customers and tailoring the solution to fit their capacity as it meets their needs.

 

Successful Entrepreneurship

Lifebank founder Temie Giwa-Tubosun identified the problem of access to safe blood for women in cases related to pregnancy and childbirth in Nigeria and Africa. She came to this reality after her own “complicated and harrowing” experience during childbirth despite the fact that she had her child in the US.

The question was: how did women in less fortunate situations in Africa fare during such experiences? With the rate of maternal deaths in Nigeria at nearly 20% of the global count, she knew she had identified a real problem she could help solve by providing briding the logistics gap.

Having identified the problem, she founded Lifebank to provide the required logistics to source for and deliver the much-needed blood to hospitals on-demand 24/7. The organization partners with blood banks across Nigeria and Kenya with other countries on the horizon.

Patients and doctors place orders for whole blood, other blood products, and oxygen via their website, mobile app, or telephone, Lifebank contacts the nearest blood bank closest to the patient, and delivery is made. This could be by car, motorcycle, boat, or a drop-in delivery by drone if that is what the occasion demands.

Lifebank continues to innovate by launching new solutions such as the

  • SmartBag, explained as “a blockchain-powered product that helps patients and health providers discover the safety records of blood and blood products”,
  • Blood and Oxygen Access Trust (BOAT) for creating universal access to healthcare for low-income patients,
  • Home Kit for COVID-19 tests, and
  • DonorX, an online portal that allows blood donors to book donation appointments at the closest blood banks.

In 2019, Lifebank won the $250,000 first prize of the Africa Netpreneur Award Initiative by the Jack Ma Foundation.

 

It’s Your Turn

Look around and you will find that these three key building blocks are the pillars of successful businesses around you, regardless of the industry. Do these thoughts stir up any ideas? Do feel free to comment, like, and share this post.