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Ideas are worth $20 - Updated.

February 19, 2008

I have written a number of posts of the value of ideas versus the value of execution.  Last year I linked to Greg Moreno’s equation that suggested ‘brilliant’ ideas are worth $20.  This evening I got an email from a reader who asked,

You’ve said that ideas aren’t really worth much – it’s the ability to execute an idea that matters.  But if I’m able to execute my idea w/o a VC then why would I even bother to talk to one?  Doesn’t that sort of screw the VC over and indicate that ideas do have value?   Writing software is all about ideas and the ability to turn those ideas in to executable and deliverable code.  The rest is sales and marketing.  Last year, sales and marketing (odd that the two come together as S&M) were scary mysteries to me.  Today they are skills that need to be learned, practiced and developed.  Not much different from programming.  Anybody can do it.

I do believe ideas alone, i.e. simply in your head, are worthless.  Every time I think I have a truly unique idea I am surprised by the number of people who have the same idea.  To monetize your idea you must be able to execute on your idea.  Execution involves the ability to adequately fund your idea, which may include raising money from friends, family or venture capitalists.  I will let you in on an important secret: VCs often offer more than just money.

For example, if I needed $250,000 to build the next great Web 2.0 property (and for the record I am not) I could very easily write the check myself, but if I could I would raise the money from Fred Wilson.  Why?  Start with a few key connections, throw in much needed validation and don’t forget stellar Web 2.0 experience.  If I was starting a wireless spectrum licensing company and needed money I would Call John Boyd.  Do you get it?  Yes, it is true that over half of startup founders are fired within 12 months and a result you should seriously consider why you are raising money and from whom.  VCs aren’t the problem, they are simply a group of people who may or may not be able to help you.

Written by Alexander Muse · Filed Under Blog, Startups 

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