Building the X of Y

Entrepreneurs share something in common with artists, architects, poets, and other creatives: the ability to envision something entirely new and then make it real. We reward these pursuits with social status and financial reward (sometimes) because they make the world a better place to live (usually). But the real marvel is not the improvements they create, so much as the ability to envision them in the first place.

This aspect is so valued in the arts that we use the word “derivative” with disdain. A work that derives itself from another is inherently less worthy. As a rule, works should be entirely new and original. To the extent that they borrow from others, it should be only to provide grounding and accessibility to the new elements that will give something unexpected to the audience.

Upon closer inspection, this rule has some flex. It turns out that not all creation is creative. True originality is rare. As T. S. Eliot put it: Good writers borrow; great writers steal.

This rule is suspended entirely in entrepreneurship. Stealing and copying are encouraged, with adaptation only required to seize a larger share or reach a different market. This could involve offering a cheaper version of a high-end product, a localized version of a product from another region, or simply a better version of something with proven customers.

Steve Jobs echoed a sentiment close to Eliot’s statement (attributing it instead to Picasso), but it’s less surprising to us when said by a business leader. Many of the most original innovators in business and technology simply offer better versions of something pre-existing. Microsoft and others released tablet computers years before Apple’s iPad broke the marketplace wide open.

Technology platforms and tools are especially prone to this copying. As a recent Economist briefing noted: “There seems to be a near-endless succession of bright young people promising venture capitalists that they can be ‘the Uber of X’…”

The oddest manifestation I’ve heard of this was at a pitch event in Brooklyn last year. An aspiring entrepreneur had identified a need in home health care for the elderly, but she was still trying to find her model. Would her company be an “Uber for elder care” or “Yelp for home health products”? Fueled by pizza and beer in a co-working space, a diverse group of professionals from technology and other sectors helped refine her approach, throwing out a bewildering array of analogies to existing services.

This works outside of tech, of course. Near my office, there’s a restaurant called Hummus & Pita Co. that could safely be called the Chipotle of Mediterranean food. Hummus & Pita has the same line of build-a-plate servers, adding fresh and hot food to your meal as you walk along a counter. The customer experience is identical and the price-points are similar; only the cuisine and decor vary.

Let’s call this a “building the X of Y” approach. What can be said about it? Creatively, it provides inspiration for new approaches to unmet needs. Conceptually, it helps outsiders understand what the entrepreneur proposes. And analytically, it helps investors or other backers find relevant data to assess the new venture’s prospects.

Here’s an important thought question: Is it more important that the entrepreneur understand X (model being adapted) or Y (need for which it’s adapted)? It probably depends on how much the context of Y varies from the context of X.

In the development and social good sectors, this question is pretty important. We seek to “scale up” or “replicate” proven successes, but we feel skittish about imposing outside solutions. Our worries about fit and adaptation for context spring precisely from the fact that we are often pulling X from a context that we understand and putting it against a Y that we don’t.

Of course, this doesn’t need to be an either/or. Those two forms of expertise—context and model—might exist in the same person. Often though, this would suggest the co-founder approach. I’ve seen this in many social enterprises in places like Nairobi, where unmet needs abound and outside capacity could be brought to bear, if properly channeled.

The blend of these two is the crux of many entrepreneurial ventures. It may still be “derivative” and certainly “commercialized”—neither of which are generally considered lofty qualities—but it’s where creating a business becomes art.