So what does “execution” even mean? I mean it’s like I said, it’s all the rage these days, right? Well, when you’re spending time on your company, you’re doing one of two things: you’re either creating value or you’re either happy with what you’ve produced and you’re actually setting out to actually generating revenue from what you’ve done. This is referred to as executing.
It’s taking your carefully crafted plan, so your strategy, and then executing on that strategy. It’s actually going out putting the tactics to making things happen. What you get out of your effort in building a business depends on two things: your idea and then how well you go about executing on that idea.
So execution matters because let’s take an example, imagine we take a hundred entrepreneurs and we all give them the idea for Spoil, right? Can you imagine the first day for each of those entrepreneurs? It would surely be different, right? One will start working on the business plan, one will get into presales, one will start working on social, one will start working on their website, you know, there’s so many different things that you can get started with and the way that you go about doing these things is the way that you go about executing things. So that’s the two are the same, it’s just giving a word to this concept of making things happen.
Now the key here is that because we know that each entrepreneur would do something different, then we know that a large majority will not actually make this idea come to life, right? We know that a large majority will fail, we know that some of them might do okay, maybe would get a limited potential out of the startup, but very few, maybe one or two or three will actually do amazing.
So we tend to think of execution as being a multiplier for your idea. So let’s say that I’ve got a good idea, right? And we’re going to assign ideas with either being bad ideas, weak ideas, average ideas and so forth, and you can assign a sort of multiplier to each of them just for the sake of explanation. So assuming I’ve got a good idea and that I have, you know, some limited insight as to how to go about executing on that idea, so perhaps will take that example of a hundred entrepreneurs who are given the idea for Spoil, right? And each of them will have a varying degree of execution. Some will have weak execution because they just won’t know how to make it happen. Some will have some previous experience perhaps in a bigger company that might actually help a lot.
So for example, Spoil’s biggest challenges initially lied in making sure that customers wanted to spoil people. They needed to make sure that it was profitable from a price point of view. So charging $30 for a Spoil if we were to go out and buy users for example and do marketing for those users, would it be profitable in the end game? And so forth, perhaps there’s the supply chain portion where we actually have to have the products shipped to the person who is spoiled, right? Are we doing that on the same day, are we doing that the next day, right? So we have to figure all of these things out.
So the way that we go about executing these things act as the multiplier for the idea of Spoil. So if I take the idea of Spoil and we say it’s a good idea and I execute average where perhaps I’m only able to reach a certain portion of my market because I haven’t been able to segment it properly but I might able to only be able to extract $10,000 for the average execution, that would mean 10 times $10,000 which would give us a $100,000 as the final product, right? We exit this company with $100,000 which is very weak, right? This is a good idea. If you were to execute good, great, or amazing, you would have a much higher multiplier and we could see here that just because it’s a good idea, if we were to execute amazing, we would actually be able to extract $100 million out of this company. So really, this is just a matter of demonstrating the importance of your execution and the goal of this course is to raise awareness on the parts of your business where focus has an important role and in execution, the focus portion of that execution is actually making sure that you focus on the things that will generate the most value.