Quick Summary: Businesses based on the influence curve of an idea cluster are likely to be more robust and less risky than businesses based on the influence curve of one idea.
Ideas have a bell-shaped influence curve. Over time, ideas gain influence, reach a peak influence at a point in time and decline in influence thereafter. If your business is based on an idea, like all businesses are, your business is limited by the idea’s influence curve. To build a successful business, you would like to identify an idea early, build competence/ credibility before others during the growth phase, make money at peak influence, and exit/ diversify during the decline phase.
Different ideas have different influence curves. You can think of an influence curve in terms of height (peak influence), gradient (rate of acceptance) and width (life of idea). To build a successful business, you would like to identify an idea that has a fast rate of acceptance, a high peak influence, and a long life.
The bad news is that only a few ideas fit that description. Most ideas have a slow rate of acceptance, or a shallow peak influence, or a short life. What’s worse, it’s often not possible to identify which ideas will become really influential. That’s the reason why businesses built around one narrow idea are inherently risky, with high failure rates.
The good news is that ideas evolve in interrelated clusters, with independent but overlapping influence curves. Each idea in a cluster has a separate influence curve, with a separate starting point, rate of acceptance, peak influence and life. However, influence curves in an idea cluster start off in waves, feed off each other and and build towards the tipping points for the really big ideas. What’s more, competence/ credibility built around one idea often results in, and is often a prerequisite for, competence/ credibility in other ideas in the cluster.
The big insight is that the influence curves of individual ideas in an idea cluster add up to the influence curve of the idea cluster itself. The influence curve of the idea cluster has a sharper gradient (faster rate of acceptance), a higher peak influence, and a longer life than the individual influence curves in the idea cluster. Therefore, businesses based on the influence curve of an idea cluster are likely to be more robust and less risky than businesses based on the influence curve of one idea.
The way to operationalize this insight is to identify and track all the ideas/ trends that are related to the core idea your business is built upon. As you track ideas/ trends over time, you’ll be able to visualize the influence curves of independent ideas. Over time, you’ll start seeing new linkages between these ideas, new intersections between their influence curves, so that you can almost visualize the idea cluster influence curve in your mind. You may decide to stay focused on one narrow idea — because of skill set, resource or market potential limitations — but visualizing the idea cluster influence curve will enable you to spot tipping points and seed new businesses before your competition.
In the next post, I’ll use the idea cluster influence curve model to study the social media space. Stay tuned.
