We sit in the YC house. We full well know that we rarely end up with the idea we start out with. This makes the idea itself, worthless, and starting to validate any idea much more important and valuable.
Ideas are relatively worthless because there's so many out there that are reasonably possible. "Software is eating the world".
Ideas are also relatively worthless because any idea person is paralyzed by at least 47 of their own before someone shows up asking to sign an NDA for the 48th. Ask any technically capable business minded person.
Ideas are also worthless compared to execution on them.
Ideas are also worthless without the implementation expertise and marketing expertise to get it real, and the money that it might take, whether its funding or bootstrapped.
If the idea doesn't come with an owner who can code or market, they better be bringing their own money or some way to pay for the time of others. I have plenty of my own reasonably validated ideas and niches dying for attention that I could rather lose time and my own money on.
The "idea" guys in my life know now an idea is worthless without the real legs that will prop it up, the skills to build, the skills to build the right thing, and the skills to find and reach your audience. Giving an idea more value than traction with a paying audience is confusing activity with results in many ways.
Ideas might be more valuable to someone who doesn't have any other value to add in getting from activity to a measurable result.
Got an idea that still stands that test? It's much more worth talking about :)
"Possible" ideas and "profitable" ideas are two different things. YC is a place where ideas are devalued the most since PG has admitted he's just taking a scattershot approach to investing and focusing instead on teams. At the end of the day, you need to have a good idea. Yeah, there are many ideas that are feasible but only a few blockbusters - that's the point.
I don't disagree with you. The clarification between possible and profitable is a subtle and important one.
An organization is only as good as the people behind it and their ability to chart a course forward.
I'm not sure if YC devalues them or values the team more -- I'd certainly want the people beside me to be of a certain caliber regardless of what we faced or came up with.
One thing to consider is the negative value of executing on a bad idea. This increases the abstract value of good ideas because the bad ideas actively sap execution potential.
Totally. One bad decision snowballs another and someone tries to channel their inner Steve Jobs, when, no one is Steve Jobs.
It's one of the things I really like about lean. It forces me to shut up and forget my own opinion or beliefs. It forces me to pursue a craft and get the measurements before moving forward instead of falling risk to hallucinating my own grandeur accidentally. I like it because it helps keep me grounded, pragmatic, and focused.
Huh? I'm talking in the abstract. Yes, people work on what they think makes sense, but they don't know what makes sense. Therefore an "idea guy" who tends to have good ideas has a value that may never be achieved by an engineer who can execute phenomenally well but tends to have bad ideas. Just because you can't quantify it doesn't mean it's not there.
Yes, people do know what makes sense to work on. That's why they choose to work on it, whatever it is at whatever time. They can change if they want, or if it doesn't make sense to do that thing anymore. What quantification is available? Do you mean "articulable?"
The reason this meme became popular here is that the audience to Hacker News is predominately developers, and many are sick of people that don't value the ability to execute and try to negotiate as if the developer would be lucky to join them.
Business = Marketing + Advertising + Sales + Idea + Implementation + Finance
Even this is too simple though. However, my point is that business isn't just about "execution" of an idea into a product...
The most important thing is working in skilled, multi-discipline teams where people will support each others weak areas.
>> many are sick of people that don't value the ability to execute
>> business isn't just about "execution" of an idea into a product
The ability to execute is not limited to engineering. It's also applicable to the business side (ability to successfully secure funding, find product market fit, create a marketing and pricing strategy that works, etc).
The other thing is that you cannot neatly separate ideas and execution. As you break a high level problem into its components, there are ideas at every lower level that will allow you to succeed. A high level idea cannot succeed without the supporting lower level ideas (strategies and tactics) in a variety of disciplines (marketing, product, engineering, etc). If we take Facebook as an example: many people at several universities had the broad idea, but only one set of people also had the lower level strategies and tactics to turn that idea into a multi-billion dollar company.
My take on this: good high level ideas are worthless without the appropriate low level supporting ideas.
This. ^^^ Its all about the performance envelope. And who actually knows it.
Ideas are both general "ideas" (a product, or about a theory, or strategy) as well as "ideas" are about problem solving (practical, tactical, etc). A top "technical" guy in any field will be an idea guy, strictly because he is a problem solver that can abstract his experience back into higher-level principles.
Example: Programming requires creative problem solving. Likewise, you'd be amazed at how much "creativity" happens in accounting, tax, and legal professions. ALthough much of this is of the practical variety ("artisanal") rather than of the blue sky ("arty").
LIkewise, a top "Idea" guy in any field with have both levels of abstraction covered. I think somebody once made the remark that if you dream it but can't ship it, its more like a hallucination than an actual idea. So maybe the bad ones are not the "idea guys" but "the hallucinators". And in that case, yes, their value is certainly questionable. =D
Right, unless you measure everything on a log-scale.
And I am only half-joking. It is actually quite natural to think in log=terms. Just think how questionnaires have a size of organization, for example, as a multiple choice between 1-10, 10-100, 100-1000, 1000-10000, more than 10000.
I find this to be very wrong on many levels. I understand the OP worked in VC, so he comes from a place of knowledge, but let me deconstruct the argument slightly.
- "The idea is the core of a company and what defines it entirely"
But ideas change. An early stage company might work on a completely different idea next week, or a company that has not found product/market fit might pivot. Will the company have changed? It will still have the same founding team, still have the same employees, and the same tech. I don't think there is any evidence (none was provided) for how an idea "defines a company entirely".
- "That’s where an investor’s evaluation will start and end"
Bullshit. I know you are (were?) an investor, but it would be wrong to say that your method of evaluation is the way all people evaluate. Could a team of idiots with a great idea get funding? To give a pathelogic case, could a team with an amazing idea to change social networking, made up of unproven non-coders in a distributed team spread across the Eastern Europe, get funding? No.
- "Idea = “market + problem + opportunity”"
Well, if you redefine the term, its quite easy to say it has value. But even this disregards the value of the team.
- "If an investor turns you down, they probably think that, in order of probability: your idea is bad"
Again, different investors are different. There are plenty who look at the team first.
- "BUT, extraordinary teams executing extremely well on any idea doesn’t guarantee success."
Any team worth anything will pivot away from a bad idea.
But the biggest criticism I think I have is that the reason "ideas are worthless", is because you can't think up a good market, opportunity, and customer base. You start with the kernel of an idea, and refine it through continuous customer development, until you have a product which may differ substantially from the initial idea.
I think this discussion is just semantics at this point. Any highly refined idea to the point of tangibility is indistinguishable from execution at that point.
I wish this post would have given an example of one of these great "ideas" that have clear intrinsic value, even just in retrospect. Like what? Facebook's "idea" of an exclusive social network? That seems more like execution than an idea to me, especially considering we all know the story that multiple teams tried it and one won out -- and the one that got the traction was the one people cared about.
It seems to me that ideas, at best, are negatively important. A bad idea can kill a company obviously, but a "good idea" (whatever that means) guarantees nothing. I'd much rather have an all star team working on a terrible idea, since the idea is the easiest thing to pivot from. You can't pivot from your own team and skills -- well, maybe you can fire everyone (including yourself?), but that's kind of precisely the point.
Exactly. To me, it seems that ideas are not really so distinct from their execution. Of course it's possible to have a 'great idea' without the ability to execute it, and it's possible to possess the ability without the idea, but both of these should be disregarded as uninteresting. Some might say then, that the 'interesting' part is the balance of idea and implementation, but I think that the significant ideas/projects are really only so because of the people that fostered them.
I agree but, as I say in the post, this is true only at very early stages, and the best companies tend not to pivot. But this is a personal opinion.
- "Could a team of idiots with a great idea get funding? To give a pathelogic case, could a team with an amazing idea to change social networking, made up of unproven non-coders in a distributed team spread across the Eastern Europe, get funding? No."
I say this on the post, so I don't see what the comment is about. I say that after the idea, the investors look at the team and decide if they are the ones that can execute on it.
- "Again, different investors are different. There are plenty who look at the team first."
This might be true, what I'm saying in my post is that unconsciously I think that the idea you present yourself with will definitely change their opinion about the team. It's a hypothesis that comes with my observation of the funding market. I could be totally off.
- "Any team worth anything will pivot away from a bad idea."
See my last point about pivots. I agree with this, but again, this needs to happen at the earliest stages possible.
I say that after the idea, the investors look at the team
However you start out by saying '[the idea is] where an investor’s evaluation will start and end.' Setting your article up with a hyperbolic position and then gradually backing away with exceptions is a link-bait type article style which makes you look more concerned with attention than reasonable discussion.
I'm going to disagree with you on that the best companies tend not to pivot. I think there are lots of companies that pivot in such a seamless way that externally it all looks very planned. I also probably consider more things a pivot then you do, pivoting doesn't have to mean simply pivoting from an idea. It could mean pivoting from a plan of attack on an idea, dropping products that don't work, trying another kink in the armor, etc.
These "best" companies tend to be data driven and experiment a lot, we don't always see what is going on. Lots of people outside the kitchen will be able to say, everything they make here is good. You don't know the chef told the staff to make that plate over a dozen times until he was happy. Look at how many iterations of Apple's products were done before Jobs was happy. From the outside it just looks like genius, all the while he was pivoting and refining the ideas and products constantly.
You also discount the time the people spend working on stuff/ideas before the entity is official formed, people rarely take this into account. Much of this tends to happen before people look to raise money, so I could see where this might be a perspective someone on the "other side of the table" would have.
There are lots of "overnight" successes that took 10-15 years to reach that escape velocity that makes them great. They might have great focus during this time, but you can be damn sure they had to change it up a little to make it happen. Harmonix killed it with Guitar Hero and Rock Band, but they had a very long road to get there. Full of pivots.
I think the very best companies all have one thing in common though, they are tenacious, focused, and nothing will stand in their way if they decide to try and conquer something. They will pivot away from what is not working, and constantly refine the battleplan until the target is dead. Look at Toyota, Google, Apple, etc. they all are not afraid of change, pivots and redefining their focus.
Agreed about needing to change at the earliest stage possible, but this is my problem with your thesis. The mantra "ideas are worthless" is only ever used to talk about early stage companies.
The ideas that matter are the ones that survive short term tactical changes. If you don't have one of those, what are you really doing? Ever found yourself saying "well, the idea is that..."
I think the notion of ideas being worthless is, essentially, an overreaction to the trend of ideas being grossly overvalued at the expense of more practical considerations.
In my mind, this belief is best illustrated in the rapid rise of startups who have an interesting idea, but very little market validation or plans for monetization.
As with most complex topics, the truth is somewhere in the middle. Ideas are not worthless, but they're certainly not worth much. To be valuable (in a business sense) an idea must also be coupled with a strong need or desire derived from knowledge of the market. Add to that a strong plan for execution and you've got something of value.
I'm certainly not suggesting that these elements are always known from the beginning, but for an idea to grow in value, I think these factors need to be taken into consideration.
I would think that the idea arises as a result of the need/desire and not the other way around. I couldn't agree more with the idea that value is the result of many factors including the idea, the plan, the team, the environment. Claiming that value is a result of X makes for an interesting claim/discussion, but in my experience, is hardly ever true. Value is the result of many, many different factors, including all those that you listed (need/desire, knowledge of the market, a plan for execution, resources, timing, etc). Nothing is as simple as we try to make it.
My day job is web app development, but for the past year or so I've dedicated much of my spare time to making games. Or, more accurately, I've been trying to make games. So far I've just published only one, a mobile game that was not successful and, I have to admit in hindsight, really wasn't very good.
When it comes to game development in particular, I've heard it over and over again that 'ideas are worthless.' But it's become obvious to me that the exact opposite is true: ideas are everything. What I've been struggling to do in this past year is idea-forging, basically. I've been desperately clawing my way towards an elegant game idea which is both (1) fun/unique/interesting and (2) small enough in scope that I can create it in my spare time. At many points I've thought I've had such an idea, only to realize that the idea wasn't that great or the scope was much larger than I anticipated after some prototyping.
I completely agree with the article when it comes to how difficult it is to evaluate ideas before they've been implemented: Good ideas probably don't often initially look like good ideas. And bad ideas often look incredibly enticing. And I'm pretty sure that truly new ideas almost always look like bad ideas until you've actually seen them in action. (I guess this is part of why we see so many sequels and remakes from established game companies these days. New game ideas are risky, hard to evaluate, and probably expensive to prototype.)
However, ideas are worth less then execution. Execution includes the investigation into the market and the gaining of knowledge of the technologies and refactoring of potential solutions to the underlying pain.
Given this - the "idea" guy should never, ever, be compensated more then those who execute.
And ideally, everyone should be in the executing group. There shouldn't ever be an "idea" person.
>> And ideally, everyone should be in the executing group. There shouldn't ever be an "idea" person.
Agree 100%. Instead of an "idea" person, opt for a "business" person. A "business" person can do the idea person's job and several more. That means he can bring much more value to the table in a startup.
Of course not. Words aren't worthless either. Neither are numbers. But if the only thing you have is a word or a number, you don't really have much, and it's the same way with ideas.
Well... if you define it as “market + problem + opportunity”. Even then you don't have everything covered. If you are going to go that route you might as well broaden the definition.
I don't agree that the industry is saying that ideas are worthless. Let's not forget that the "no idea" entry in the last batch of YC funding was experimental, which I am curious to find out what came out of it and what were the results. Also, I think the reason the regular batch of YC funding puts so much emphasis on teams is because it's a good guarantee that the idea will be executed one way or the other. YC gets a lot of entries from people that, at the end of the day, they don't really know or they don't have a history working with them. Dealing with a team of strangers is definitely safer that dealing with a single person.
Worth of product = (quality of idea) * (quality of execution).
An idea, on its own, is worth nothing (good idea * no execution = nothing).
HOWEVER...
Kickstarter (and other similar companies) are changing this notion a bit. Many companies have raised significant capital off of ideas alone, although producing a convincing video takes no small effort and the well-funded campaigns are usually run by people who have done their fair share of execution in the past. Capital does not equal profit necessarily, but it can if an excess of capital is raised.
Ideas are the result of a process: brilliance / talent / skill leads to understanding and insight, which identifies valuable needs and lacks, which then get synthesized into an idea.
The idea is the final product of that process, that's why it's normally dismissed as worthless. An idea by itself is like the combination to a lock for a case you don't have, which is in a place you don't know.
Not ideas. Belief. There are tons of good ideas that you dismiss. There are tons of shitty ideas that you act upon. The difference is that one will call out to you and say "Make me happen" when the others don't, regardless of how many rational arguments exist for picking one or the other.
Develop healthy beliefs so that you can believe in healthy ideas.
Thanks yamalight. I just think that when people refer to "idea" they refer to much more than that, and should.
Imho business plan is way more than that and includes hiring plans, product timeline, marketing strategies etc.
While idea doesn't just come from "hey wouldn't it be cool if.." but usually entails a much deeper thought process about a market and an opportunity. Or at least it should.
You've redefined the meaning of "idea". Would it be safe to say that an "idea" - in its traditional meaning, as understood by everyone else - is worthless?
The point is that often the solution idea is derived from the market + opportunity.
So I'd say that every idea who didn't come from that understanding and observation is worthless, the ones that are conscious reasonings based on a lot of factors are not.
I think you're saying that ideas are worthless, but ideas can become valuable when combined with good execution (involving market and opportunity, etc)?
Same. I have many ideas for interesting products. These ideas are not of value in themselves and I'll happily hand most of them off for the asking (I would in fact back in kickstarter if anyone seems able to execute.)
Now, an idea + something else can be of value, but then it is beyond a mere idea. An idea which has been validated by market research to show its marketable and at least enough technical research to give a rough idea of development costs and production costs can be valuable, but then you have added a lot to it.
Even just an idea + a detailed plan for researching and then developping the idea can be valuable, but again that has at least added something.
I won't quite go so far as to say that a bare idea is worthless (absolutes often make me hesitate), but without something more it is worth very little.
Good article. The Valley preconception that great execution on a bad idea will fix things always rang a bit hollow to me. Seems to me to be the most common cause of failure - people build great stuff for problems which don't exist.
I think the idea (hah) there is not that great execution fixes a bad idea, but that a great team will discover that the idea sucks and move away from it while executing. Great execution on a bad idea is not great execution.
True but harder than it sounds in practice. People (1) fall in love with ideas for long times and (2) are worried about being labelled (or seeing themselves) as quitters.
about NDA: I've worked with a friend on an idea. It was my idea. Because of the way he worked I decided I don't want to continue on that project. He continued anyway. The funny thing is that even though I told him all the details of my idea and I helped him even after I stopped working, he didn't build my idea. The result was similar with what was done before and so was not enough to differentiate in the market. Essentially he did all the easy stuff without understanding why it was so important to do the hard/new stuff.
Paul Graham is wrong. The focus should be on great teams executing good ideas. Execution matters - but you need an idea to execute. Changing ideas doesn't mean the ideas don't matter.
Ideas are indeed worthless today. But to believe that completely is stupidity.
Internet, as of today, is a gold rush. Anyone worth his programming skill can work on an idea and get funded. But then, with the passing of time, all the low hanging fruits will be gone. Once we reach that point, good ideas will become scarce. Great ideas may not even emerge. VC funding will be gone too. Perhaps, in a decade or so.
Internet based companies are extremely easy to replace today. A chilling fact but true. Compare this with firms like Citibank, British Petroleum, etc. They have been here for decades and will be here. The same cannot be said for companies like Facebook and to a large extent Apple.
As long as new technology emerges, new opportunities will emerge with it. There's also reason to believe that technological change is accelerating, leading to ever more possible great ideas.
Your 'perhaps in a decade or so there will be no more great ideas' reminds me of many failed predictions about the saturation of technology.
Ideas are relatively worthless because there's so many out there that are reasonably possible. "Software is eating the world".
Ideas are also relatively worthless because any idea person is paralyzed by at least 47 of their own before someone shows up asking to sign an NDA for the 48th. Ask any technically capable business minded person.
Ideas are also worthless compared to execution on them.
Ideas are also worthless without the implementation expertise and marketing expertise to get it real, and the money that it might take, whether its funding or bootstrapped.
If the idea doesn't come with an owner who can code or market, they better be bringing their own money or some way to pay for the time of others. I have plenty of my own reasonably validated ideas and niches dying for attention that I could rather lose time and my own money on.
The "idea" guys in my life know now an idea is worthless without the real legs that will prop it up, the skills to build, the skills to build the right thing, and the skills to find and reach your audience. Giving an idea more value than traction with a paying audience is confusing activity with results in many ways.
Ideas might be more valuable to someone who doesn't have any other value to add in getting from activity to a measurable result.
Got an idea that still stands that test? It's much more worth talking about :)