The Important Idea
Ideas. Are they a dime-a-dozen or the key to success? The common answer is that ideas are simple and easy, and the key to success is execution or implementation. As an entrepreneur and engineer, I have always been fascinated by this mantra and how it’s entirely the opposite of what I’ve observed inside of start-ups.
Keywords: Ideas, Execution, Implementation A dime a dozen.
I’m going to examine how ideas are a dime-a-dozen from a few different perspectives using my experience in multiple start-ups and some observations of public companies. By no means is this some all-encompassing analysis – it’s mostly my observations and ranting, so reader beware...
I’m going to review this using elements of the mantra often given as to why ideas are “a dime a dozen” - the key features of the mantra that I’ll be looking at are: that creative people come up with great ideas; that people give away good ideas; the (patently false) premise ideas by themselves are worthless, and that being too focused on an idea prohibits the materialization of a product or service.
My First Startup
My very first start-up wasn’t a start-up at all – we were a newly formed division of a construction company – with an initial focus to create software which could generate framing estimates from plan take-offs. The idea was to help, and finishing companies work through plans more efficiently to produce accurate quotes rapidly. As we iterated through prototypes and released versions of the software for the company, the founders realized that they could generate additional revenue from multiple streams by spinning out a new entity which built software products. The key to spinning us out as a new entity, replete with the associated complexities and costs, was another idea: software on a PC which could send electronic paging messages would be very useful (at this time everyone had a text pager...and yes: I’m that old).
Our Second Product
We now had a new software company which, while it did continue to help build construction software, was primarily focused on developing communications software, specifically a PC based software package that was flexible, simple to use, and enabled sending long paging messages. We sold the software through catalogs and retail channels and had entities as large as entire states use our sub $100 product. So we had gone from a new division to a new company, solely based on just two ideas. Both of which were based on clear needs...
Takeaways from my First Startup
The founders of the construction company weren’t “creative types” nor were they attempting to be creative – they had an unmet need – and created a division in their company. At no point did the company give the solution away. And our spin-out company was the result of yet another unmet need in the market (for paging software).
Additionally, we filed for IP protection (patents) on the paging software design and architecture – which proves that the idea by itself did have value. Since a patent is just a very clear articulation of an idea and how to execute it (without any requirement to execute), it means that the idea itself has intrinsic merit and value. Why would companies file for patents if the expressed ideas lacked value? Companies file for patents because they know ideas by themselves have value. Finally, we did focus on making our product better and better – to the exclusion of taking on new opportunities. It is arguably this is why our product was a top-ranked paging software package during that period. In short, none of the typical elements of the “dime a dozen” mantra fit what I observed in my first startup.
Some other counter-examples
Of course, my example above is anecdotal, and while I could delve into any of the other startups that I was involved with, it’s illustrative to look at some of the largest tech companies in the world and how they handle ideas...
Apple is a fantastic example of how focusing on an idea can create entirely new product categories – from the iPod to the iPad to the iPhone). These products also generated a raft of new IP and patents – all based on ideas. Proof that the ideas (patents) had value in and of themselves was the huge lawsuit between Apple and Samsung.
Another point which demonstrates how ideas have value is the fact that companies require employees to sign over inventions – regardless of any intent to execute on any of those inventions or ideas.
In another example, while Google is certainly more than just a search engine today, the company is the direct result of a single idea - a novel search algorithm.
Finally, Amazon attempted to protect “one-click” ordering - with multiple patents and lawsuits. The value of that patent is in the billions. It isn't the execution that’s worth the money – it’s the patent – the thing that explains how to do it in clear detail. Without the patent, all the execution in the world around one-click would be worth nothing...
* It’s certainly true that there are millions of bad ideas – but it’s also pretty clear that good ideas spark everything from IP to the creation of product categories to the formation of entire companies.
* It isn’t true that ideas are given away freely. IP just isn’t given away. It’s held tightly by companies ranging from appliance manufacturers to pharmaceuticals.
* Creativity is not required to have a great idea – plenty of inventions aren’t from creative types – they are from people trying to solve a need.
* Focusing on developing the right solution for the right problem isn’t a hindrance to developing the product.
* Finally, the next time you have a brilliant idea, work through it and remember that some of the largest companies in the world were formed based solely on an idea. Then go forth and build it. Because the only part of the mantra that’s true is that ideas won’t build themselves.
September 14, 2018