In the pre-Internet 1900s, people protected business ideas because the opportunity to be “first” was a realistic possibility. Being first-to-market was a huge competitive advantage. To entrepreneurs like Thomas Edison and George Westinghouse and even the early dot-com boomers, ideas were hugely valuable and worth protecting.
In the 2000s, business ideas are now a dime a dozen (just Google “startup ideas”) and the popular stance you’ll find is that ideas are worthless and execution is everything. Paul Graham, Derek Sivers, Steve Blank and other leaders hold this view: that an idea alone is worth zero dollars. It requires action to turn the idea into something with actual value.
While I largely agree, there’s just one problem with this philosophy.
Without an idea, execution is worthless.
It’s true that an idea requires action to become monetarily valuable, however, to go as far as to say “ideas are worthless” is a gross overstatement.
This is how Uber started, according to CEO Travis Kalanick:
“Jamming on ideas, rapping on what’s next is what entrepreneurs do. Garrett and I would get some good music, good drinks and jam until 5am.” Source
How Snapchat started:
“I wish these photos I am sending this girl would disappear,” said Brown. Soon after, Spiegel had heard about the idea and was jazzed about it. Source
How Airbnb started:
It started with an email. Joe Gebbia sent his roommate, Brian Chesky, an idea: What if they made a designer’s bed and breakfast, complete with a sleeping mat and breakfast? It was a way to “make a few bucks.” Source
How Amazon started:
The wake up call was finding this startling statistic that web usage in the spring of 1994 was growing at 2,300 percent a year. You know, things just don’t grow that fast. It’s highly unusual, and that started me about thinking, “What kind of business plan might make sense in the context of that growth?” Source
Jamming with beers. Texting photos to girls. Renting out a mattress. Reading a statistic.
Small, worthless ideas. By themselves. But look what they led to.
You need an idea before you can execute on it. A painter has a vision before she paints. A pilot has a destination before he takes off.
Executing for the sake of executing is a waste of time, money, and mental capital. It’s spinning wheels, driving in circles; it’s only a matter of time before you run out of gas.
Not all ideas are created equal
Yes, there are myriads of ideas on the web but not all ideas are created equal. Unicorn startups began as an idea in the heads of the founders, yet not every startup is a unicorn.
An idea in the mind of a creator is like a pile of wood in a carpenter’s shop. The carpenter has to take action to turn the wood into a bed frame or table. The pile of wood is nothing by itself.
However, the pile of wood afforded the carpenter the opportunity to build a valuable piece of furniture. Without the wood, a gorgeous Windsor chair never could have happened.
So how much is that pile of wood worth?
What’s more valuable: goals or systems?
A similar analogy is New Year’s resolutions.
Every year, hundreds of thousands of people set a goal for the new year to change themselves for the better. To write that book. To drop that weight. To run that marathon.
The day after everyone publishes their resolutions, the pragmatists slam them for being short-sighted and impulsive. “Your goal means nothing,” they scold, “The system by which you accomplish the goal means everything.”
Here’s what the pragmatists mean: imagine you have a goal to run 10 miles in 10 minutes. The system to get there would involve a fitness tracker, a weekly training regimen, a personal coach, a specialized diet, and the discipline to stick with it.
In this example, the system is what actually changes you; the perspiration, mental willpower, and physical pain are what shapes you to accomplish the goal.
But the system never would have happened without the motivation of reaching the goal in the first place. The goal initiated the system. And the goal inspires and sustains the system. Otherwise, without the goal, why continue? You’ll find there’s always a goal to any system.
Similar to the value of a New Year’s resolution, the value of a startup idea is the vision of a better future.
What’s valuable about a vision?
The value is that not everyone has your vision.
And that scarcity creates value. Scarcity value is an economic factor that increases an item’s price based upon its relatively low supply.
The reason why everyone thinks ideas are worthless is that, due to the ubiquity of the Internet, ideas are everywhere. The “supply” of ideas has never been greater and the “demand” for ideas is at an all-time low. Ideas aren’t scarce.
But here’s where people go wrong. They’re thinking on a global, historical level. They’re thinking like Thomas Edison and George Westinghouse — “we gotta be the first to bring electricity to America!”
But it’s not like that anymore.
“To be successful in business does not mean changing the world. It means meeting a need (regardless of size) well and dependably over time.” -Anonymous Source
When you add in you as a factor, the world becomes a lot smaller and ideas become more scarce. You might not be able to build rockets like Elon Musk or transform web media like Ev Williams, but you sure as sugar can roast coffee beans or start a blog.
The “ideas” that are purely made up of self-aggrandizing words where people think beyond their realistic means are just that. Only words. But an idea that motivates you to take action is certainly worth money; maybe not to an investor, but certainly to you.
Next time you hear someone say they have a “million dollar idea,” don’t sit them down and say, “Actually, your idea is worth nothing.”
Rather, sit them down and say, “Pursue this idea. It seems to be motivating you to solve a problem. That might be worth a lot of money.”
A pile of wood is not special, but it’s special to the carpenter in whose shop it sits.