Your Ideas Aren’t Worthless, but They’re Pretty Close

I read an article yesterday from the Financial Times via Hacker News at YCombinator. In it, the author Kevin Allison argues that in order to keep a lid on your great idea, you should guard it as something valuable when pitching to investors and the like. Nonsense I say.

Entrepreneurs have a tenancy to place a tremendous amount of value in the ideas they generate. While this is helpful and motivating, it also places the idea itself on an undeserved pedestal. The truth is, you probably aren’t a genius and your idea isn’t unique. There are 6 billion people on this planet, and the odds are quite high that your unique idea has circulated in the heads of many people before it made it to you.

Thinking Millions

People like Paul Graham put zero value in ideas. For them, execution is all that matters. I’m not as harsh in my thinking, but it’s safe to say that ideas are like penny stock; there’s always potential.

There’s little more than potential until you act, however. That acting isn’t continuing to dream and build out the idea, it’s putting it into something that can be tested. When your idea is in motion, you begin to make assumptions about how that idea will play out. If you figure the idea is poor, you tend to berate it until you figure it isn’t worth perusing. On the flip side, if you figure your idea is strong, you build it up to the point that you’re heading a 100 Million dollar company in your head. Everything working just as you envision - all thanks to your idea!

Projecting your million dollar vision into reality doesn’t really help matters, because nobody really shares it. It doesn’t exist.

Stop Thinking and Do

The fastest way to get over your insecurities is to put them in motion. For many people, this becomes the time for operating in “stealth mode” for extended periods, or looking for VC’s to give you money, while at the same time not sharing too much of your grand master plan. Someone might steal it after all.

Once you get into this trap, you start to impart value onto what might be and not what is. One of the biggest assumptions that you made when you came up with your idea is how the market would react to it. You assumed this, because if you actually had empirical evidence of how exactly the market would react to your product, you wouldn’t have an idea, you would have an existing business.

You were most certainly wrong in this assumption. No matter how well you know your space, you have no idea of the subtleties in market preference that will emerge in reaction to the change you’re about to introduce. You need to be able to react to these and take advantage of them. Your business isn’t going to be what you think it will be, the goal is to make sure that whatever it is you build is successful.

Fail Fast and Prove Your Assumptions

The best way to avoid placing too much value in your idea is to remove that market assumption as soon as possible. You can do this by taking your master plan, reducing it to its core elements and building and releasing a real product. These days, the entire iteration could be done by a dedicated team (or individual) in less than a month. That means you’ll release your idea into the world then, warts and all. If there is interest, you can develop it. If there isn’t you can re-evaluate it. Either way you’ll start to judge a real product and not a figment.

You’ll be one month ahead of the game when it comes to the competition. If it took you a month to get to this point, it will probably take them just as long. If Big Corp loves your idea, they’ll probably ship something next quarter - if they are lucky. Odds are if they’re smart they’ll just invest in you.

There is no reason to hide your idea, because you now have a product to evaluate.

But I Need Money!

No you don’t. You need time and effort and a real product, but not money. You can worry about money at a later stage, once you have something to actually invest in. The research is in, and the less money you spend up front, the more likely you are to succeed. Take a look at this.

“Only 65% of the companies that started with more than $100,000 were in the black in 2001, compared with 83% of those businesses that were launched with $1,000 to $10,000.”

Those are pretty compelling numbers.

Ideas Are Nothing Until They Are Something

The idea in your head isn’t worth much more than you are right now until you make it worth more. You do that by creating a business from it. The only way you can do that is to expose yourself. If you choose to attach a value to your idea, you’re only attaching dollar figures to an arbitrary notion instead of an actual product. In other words, you’re wasting your time.

If your idea has passed the “you” test (i.e. you’ve thought it through and figure it has potential) you should be building. You need to know if you’re right. Once you’ve done that - then you’ve created value.