Recently, Ted Leonsis told me an incredible story.
Yes, the Ted Leonsis who co-founded AOL and now owns the NHL’s Washington Capitals and the NBA’s Washington Wizards (among lots of other things).
The story he told me was about Groupon.
Well, Ted was on the Board of Groupon, and told an incredibly interesting story about the company.
Specifically, Groupon launched in November 2007 under the name The Point. The initial goal of The Point was to allow consumers to bond together to take action.
But specifically, it was based on negative action. The goal of The Point was to boycott companies who were providing bad service. So, if United Airlines, for example, was providing poor service, The Point would be the platform for customers to share their stories about United’s poor service, and plan a boycott of United in the hopes that United improved.
While Groupon’s founder Andrew Mason thought this was a cool idea, it never really caught on, and the company stagnated.
But then the breakthrough idea was born.
Why not change one letter in boycott? Specifically, why not change the second letter so that the focus of the company is “buycott.” And that’s just what Groupon did. It offers a “buycott” service; allowing customers to get deep discounts when they band together to buy large quantities of the same product or service.
Yes, a one-letter shift in the company’s strategy took it from nothing to a $1.4 Billion market capitalization today.
So what should this mean to you?
The biggest principle is that your first idea is rarely your best. Tons of great companies started doing one thing and shifted (sometimes dramatically) when their initial ideas didn’t work as planned. For example, PayPal’s initial product help one PalmPilot pay another. And Adobe got its start by making fonts.
One of the best ways to get feedback on your ideas and create breakthroughs is to have a Board of Advisors. It costs no money to assemble your Board (I recommend compensating them with stock options). These Board members, who you will handpick and will generally have lots of operating experience, will provide a wealth of knowledge and ideas to help you grow an amazingly successful company.
Want to learn more about creating a Board of Advisors?
In my Truth About Funding guide, I have an entire section dedicated to building your Board of Advisors (including my personal email template that I use to secure angels). Since, not only will they provide amazing advice, but they oftentimes will invest as “angel investors” in your company, and can introduce you to tons of other investors.