One of the most important questions to ask before tackling a problem is, “Will this require a brand new answer or an age old answer?” Said less eloquently, “Do we throw the baby out with the bathwater or keep the baby?”
Ben Gilbert and David Rosenthal (of the Acquired Podcast) use a version of it when interviewing founders to make investments. They want to know if the business idea applies to a new and emerging market, or an established legacy market. Founders in emerging markets better be bringing an approach that’s never been seen before. Founders in legacy markets will need to demonstrate their niche knowledge or experience on what incremental improvement they can make and how.
When we are trying to answer our own business questions, we can take the same approach. Think of them as “baby and bathwater” problems. In a legacy situation, don’t throw the baby out with the bathwater. Focus on what to keep and what to leave behind to make progress. In an emerging situation, and this might sound controversial at first, but we probably need to throw the (old) baby out with the bath water and truly start everything over. Both take guts. Both take strategy.
Most of the time we’ll be saving babies and operating in the legacy universe. The really big ideas are really big, bold, and rare for a reason. However, we still want to ask the question and think about the context our answer belongs in. What matters most is that we continue to make progress and create value. And, who knows? If the universe serves us a problem to which the only answer is to throw everything out and build anew, we should seize the opportunity.
Listen to Ben Gilbert and David Rosenthal’s interview with Patrick O’Shaughnessy on the Invest like the Best podcast ep. 196 for more.