Many of the biggest and most profitable ideas from the past half-century have emerged from the same unlikely place.
The world's greatest investor stumbled upon his now-famous philosophy by reading a book about -- you guessed it -- investing. A shoe empire was conjured up by mimicking the Japanese approach to manufacturing cameras. The idea behind the largest retail company of all time was inspired by a small-town barber who showed a budding Arkansas merchant that the American consumer longed for low prices.
In all of these cases, the ideas that transformed industries and vastly enriched investors were lying in plain sight, simply waiting to be happened upon by a person with the foresight to recognize their potential and the audacity to pursue them.
The "discovery" of Starbucks
In 1981, a 28-year-old salesman of kitchen appliances noticed that a tiny retailer in Seattle was ordering an unusually large number of drip coffeemakers. Intrigued, he decided to investigate further, booked a plane ticket from his home in New York City, and arranged to meet with the company's management team upon arrival.
By his own account, Howard Schultz wasn't on the prowl for an entrepreneurial venture. He was earning good money at his current job, drove a company car, owned an apartment on Manhattan's Upper East Side, and was in the process of wooing his future wife, who was simultaneously establishing herself as a furniture designer and marketer. Instead, it was Schultz's job to court clients, and that's what he was flying out to Seattle to do.
Indeed, even if he were looking for the next big thing, it seems unlikely that the specialty coffee industry -- much less Starbucks (NASDAQ:SBUX), a chain of six coffee shops with little interest in further growth -- would have caught his attention. "Coffee was not a part of my childhood," he wrote years later. And while it's hard to fathom now, few people at the time drank the expensive, high-quality product that Starbucks served and has since become known for.
Yet Schultz was immediately captivated. He explains being "hooked" before finishing his first cup of Starbucks coffee. "I felt as though I had discovered a whole new continent," he recounts in his autobiography. And the feeling was even more powerful when, two years later, he happened upon the inspiration for the modern incarnation of Starbucks -- that is, an espresso bar -- while walking the streets of Italy. "It was so immediate and physical that I was shaking."
Where big ideas are found
To me, the story behind Starbucks speaks directly to the "discovery" of big ideas -- and, more specifically, to the fact that they hide in plain sight.
By the time Schultz first laid eyes on one of its actual stores, Starbucks had been in business for more than a decade. Tens of thousands, if not hundreds of thousands, of customers had passed through its doors. Yet it took a 28-year-old kitchen-appliances salesman with no previous passion for coffee to truly grasp its potential and then act on it.
And, to be clear, Schultz's experience is not unique. Many, if not most, of the other great ideas to have emerged over the past few decades are variations on this very same theme.
Sam Walton, the founder of Wal-Mart (NYSE:WMT), switched to discount retailing after a nearby barber opened stores with the philosophy: "Buy it low, stack it high, sell it cheap." Jeff Bezos developed the idea for Amazon.com (NASDAQ:AMZN) after reading that the Internet was growing at 2,300% a year in the early 1990s. And Phil Knight, the man behind Nike (NYSE:NKE), watched the Japanese co-opt the camera industry by producing less expensive products and figured the same model would work for running shoes.
For the budding entrepreneur and investor, the lesson from these experiences is simple. The secret to discovering the next big idea isn't that you should go out and look for it harder than anyone else. What's the use if it's simply lying around in plain sight? The secret is instead to leave yourself open to identifying it when the idea finds you and, more importantly, to then actually do something about it.