Nivi · June 19th, 2008
There were a lot of good comments on yesterday’s Do you know any idea investors? post. Here’s a few of them.
Michael Staton says:
“I’d say if you can’t bother to build it yourself, get potential customers lined up, build revenue on an easier offshoot, or convince someone else to build it in their spare time, then you should reevaluate whether you are an entrepreneur.”
Luca says:
“The idea is the easy part. If you are a first-time entrepreneur, try scaling down your concept to something whose value you can prove with friends & family money, then go to professional investors. If your idea does not lend itself to such an approach, try your hand first with something you can bootstrap.”
Ben says:
“An idea has a dollar value of $0. If you don’t believe in the idea enough to commit your cash/sweat equity to build it or a version of it to show it can work, why should friends, fools and family?”
Topics Ideas · Starting Up
I just had a chat today with some investors, and they complained how a lot of people come to them stating that the idea is everything. Then I realized that there is a simple way to make the point to those people.
Just ask them: “If the idea is everything, then why do you need the money?”
Sound advice, good commentary. So, what forum, place, venue do ideas get created, valued, analyzed, etc? Ideas and creativity seem to have a bad name which is astounding.
I’m working on a start up to create an environment for open-but-private communications between those with ideas and investors. It is a clearinghouse of sorts. A place for an communications exchange without commitment or complication.
People with capital are looking for ROI not just a place to invest. People with imagination are looking for backers with capital to help them realize their dream or vision and make them rich.
Seems like there is a sense that ideas are cheap but Facebook, Disneyland, YouTube, etc don’t sound like much on paper. After all, who needs yet-another-amusement-park?
Oh dear. Ideas aren’t worth anything? Sure. Oh wait.
Lets say someone comes to you and says, “I work as CTO at Cisco Systems, and I’ve just realised something really important, and it could actually derail Cisco if its true”…. Is this a valuable idea? you bet. 20 years of inside, detailed industry knowledge, and a sudden deep insight into the economics of that business is valuable. Is weighing up the connections between websites as a measure of popularity, as a proxy measure of authority a good idea. You know, I think it was.
Deep insights do not “pop” up every week, or indeed every month. But the people that these insights tend to occur to have many ideas every week, and are constantly generating the opportunity for insight.
If you are not in conversation with these kinds of people your opportunity for catching these trains of thought is reduced, and you hamper your own ability to generate insight. So, invest your time.
Now if you can’t figure out how you are going to recognise the next great insight, and how you might best invest in it, you might be in even more trouble.
Finally, I was at a conference and I asked a few people “why are your here?”. The top people replied “To get some insight”. And this was a trade show people, not Supernova, not TED, but a customer service trade show.
Paul, I agree with you that ideas do have value. But in the case of Google, the idea was not entirely novel. Tim Berners-Lee had written about using hyperlinks as a measure of a web page’s importance and popularity several years before Google existed. He didn’t bother implementing it, so he’s not the one with the money. He did bother to implement the Web (largely Doug Engelbart’s idea), so he’s the one with the knighthood. Certainly there can be no action without ideas. But more often than not it’s the person who does the work of realizing the idea that gets the reward.
Qian Wang, I agree with you as well. I guess I was not making my self very clear. The deep idea has value, in that it is worth while implementing. I didn’t intend to imply that it was worth money on the table in the “I’ll buy that idea as IPR” kind of way. Here’s another spin on the topic: the best teams I have seen have an “insight” or “great idea” on how to get this done better than anyone else, i.e. implement. In some companies this can even become a part of their “secret sauce”.
Ideas are the minimum standard. Without the idea, there is nothing for anyone to ‘buy into’; customers, employees or investors. There is no impetus.
I would venture even further to say that the idea is MORE important than the money. A great idea can create money, but money cannot create a great idea. Great ideas can survive money, but there is not enough money to save an idea that won’t catch on.
If ideas have no value, why patent?
“Idea” is a fuzzy word which confuses the issue.
An idea is a terrible place to start a business, if you define idea as a potential solution to a problem.
A better approach is to start with a need and only after you conclude that that particular need is the one you want to address should you start having ideas about how to do so.
Otherwise, the idea becomes one of an infinite number of possible solutions, nearly all of which have been discarded in favor of the one you select.
Since 98% of all patents fail to earn back their cost of patenting, it would seem that ideas are not the valuable commodity. The ability to spot the biggest needs with the biggest current demand is the most valuable, in my mind. Sometimes you don’t even need an idea once you have done that part. A ready solution exists that you can now implement, since you saw the NEED.