I have a billion dollar idea: Start a grocery store. Seriously. When you have enough money start another. Keep going until you have thousands. It can't fail.
Another billion dollar idea: Start selling well designed Scandinavian furniture really cheap. Build a few megastores around the world, and make sure to squeeze your suppliers to keep prices down.
These two amazing ideas made Sam Walton and Ingvar Kamprad billionaires. Execution you say? Nah, these ideas are so obviously amazing that they've probably spent most of their time in business fending off blonde playmates while drinking martinis at the beach.
WalMart's big innovation was to apply sophisticated, dynamic just-in-time production methods to its product distribution system, cutting out both inventory costs and out-of-stock sales losses. The efficiencies from JIT logistics allowed the company to grow big enough that it could dictate prices to suppliers, driving competitors out of business and further locking in its monopoly in discount retail.
Walmart has been a huge company since, I don't know, I did a report on their stock in grammar school in the '80s. Is it really the case that sophisticated/JIT/dynamic/etc has always been their key differentiator?
> As the chain began to take off, [Sam] Walton made major adjustments to manage the growth - again always seeming to see ahead. As early as 1966, when he had 20 stores, he attended an IBM school in upstate New York. His goal: to hire the smartest guy in the class to come down to Bentonville, Ark., and computerize his operations. He realized that he could not grow at the pace he desired without computerizing merchandise controls.
Neat! Here's a question. When Wal-mart started "computerizing", the technology was in its infancy. The modern Walmart supply chain/fulfillment operation is ultra complex, and every advance has to be retrofitted onto their existing systems.
If you were Sam Walton today, starting afresh, do you think the technology required to reach Walmart levels of efficiency would be nearly as complex as what they have now? You get to design your whole operation around the software, instead of the other way around, right?
It's an intriguing question, encompassing complex issues around the linearity of application development, the constraints of path dependency, and so on. Frankly I don't know enough about the internal workings of WalMart's operations to answer helpfully.
The question is: would they really start from scratch or would they try to shoehorn their processes into some existing application that kinda, sorta does what they need and then hack-and-patch the rest of the way?
It's more like, if you were starting a retail business of any sort, are there tech decisions you could make very early on to drastically reduce the eventual cost of operating a nationwide chain?
It's a tough call. You don't want to optimize too prematurely for scaling, because the kind of system that would work effectively for a nationwide chain would likely be a very poor fit for a single store or small regional chain. My guess is that a more valuable trait would be an aggressive willingness for the business to 'kill its darlings' and break from processes that can't scale, rather than falling prey to the psychology of previous investment and chasing its losses.
In addition to the JITing and the computerization mentioned elsewhere, WalMart had a very specific strategy of geographic domination: they defined their service areas, and then ensured that no one in that area ever had to drive more than 20 miles (later 10, etc) to get to a WalMart. The wave of WalMarts started in the east and spread steadily west as the company expanded.
They can dictate more than prices to suppliers: they can also dictate financing terms. This allows them to collect from customers before paying supplies. So in some cases they literally can lose money on every sale and still make it up in volume, by investing suppliers' capital for their own purposes.
Really? Not that I doubt the placebo effect, but in today's litigious climate, I'd be very surprised if modern doctors were actually engaging in the necessary equivocation to produce the placebo effect.
My take on modern medicine is that most doctors in the U.S. are pretty much limited to cover-your-ass medicine. That is, ordering unnecessary tests and writing unnecessary prescriptions.
Two things, one: the world is a lot larger than just the US.
Two: doctors aren't going to go out of their way to tell their patients they just got some compressed sugar because that would take away the effect.
There is a class of patients that will run to the GP every chance they get and they won't leave until the doctor 'has done something' which translates in to 'had prescribed them some medicine'.
In these cases doctors prescribe placebos without any qualms at all, and to the happiness of both the patient (the placebo works!), insurance company (they're cheap) and the GP (patient leaves them alone).
I imagine that some prescriptions for antibiotics by doctors are more or less because the doctor doubts it calls for antibiotics but rationalizes that the placebo effect will help, coupled with patient's angst that they may leave the doctor's office empty-handed.
Anti-biotics are not prescribed unless there is some need for them because there are serious detrimental side effects of using anti-biotics when they are not strictly speaking required.
From your replies, it's pretty clear that you're not familiar with medicine in the United States. Antibiotics are frequently prescribed without necessity by doctors that would rather have a happy (and continuing) customer than lose a client for doing the right thing.
The Placebo effect was debunked in the New England Journal of Medicine several years ago.
When you do studies that track three groups -- treatment, placebo, and no intervention -- the placebo resembles the no intervention group. People just tend to get better when they get sick and that is conflated with a placebo effect.
For me a business idea also encompasses the possible path to getting traction. "If we had x and Walmart would sell it, we would make billions" does not count - is has to include "Walmart will sell it because".
Another billion dollar idea: Start selling well designed Scandinavian furniture really cheap. Build a few megastores around the world, and make sure to squeeze your suppliers to keep prices down.
These two amazing ideas made Sam Walton and Ingvar Kamprad billionaires. Execution you say? Nah, these ideas are so obviously amazing that they've probably spent most of their time in business fending off blonde playmates while drinking martinis at the beach.