My 5th Tenet of Entrepreneurship is: Ideas are WORTHLESS. I’ve had a number of debates over the years about the value of ideas. As I wrote in my original Tenets article:
Ideas are worthless. Knowing what to do with those ideas – how to implement ideas, how to monetise them, how to drive them from an ephemeral, nebulous concept to a concrete solution/product/service is where value is created.
Reaction to this statement has been mixed. Probably the most succinct statement of the position of those that disagree was provided by Beth Carvin (an I-Entepreneur subscriber) in issue #4 of the discussion list: “This is a famous myth, IMHO. It’s what the people who steal ideas like to say.”
The way I try to explain my reasoning in support of the tenet goes something like this:
Imagine that you’re an inventor who just thought of a way to convert sand into gold. How valuable is that idea? You’re probably thinking billions! Trillions! Now imagine you never actually do anything about the idea. You don’t write it down. You don’t tell anyone. Soon, you forget all about it. How valuable is that idea now?
Alternatively, let’s say you, in fact, write down your idea. You know there’s a metallurgists conference coming to town, so you decide to make your big announcement there – that’ll generate some attention. So you pop along to the conference (uninvited). You bluster into the main hall, push aside the keynote speaker and yell “Eureka! I can turn sand into gold”. Silence. Then laughter. “Where’s your proof?’ , someone yells. “Who are you? You don’t look like a genius chemist”, yells another. “What have you been smoking?”, comes another retort.
Absolutely discredited, no scientist on Earth would touch you now – but you don’t have the skills to develop your idea without them. How valuable is your idea?
The point the above scenario tries to make is that thoughts and ideas have no value unless they are converted into some form of reality and acted upon. An idea that remains in your head is worthless. Further, unless you can harness the right resources – money, skill, people etc. – no idea, no matter how brilliant, is of much value.
Each step you take towards turning your idea from a nebulous concept to a concrete product or service – such as successfully obtaining a patent or producing a prototype or testing the market’s interest – increases the value of your idea, as you are reducing both technical risk (i.e. validating your idea’s efficacy) and market risk (i.e. documenting customer need/demand).
But taking your idea from the nebulous to the concrete is no guarantee that it will be of value – or, at least, the value that you ascribe to it.
One of the fundamental problems inventors and, to a degree, entrepreneurs encounter when seeking to sell or license an invention (in the case of an inventor) or secure funding (in the case of an entrepreneur) is differing perspectives of the “value” of their idea, invention or business. There are myriad methods of valuing inventions and ventures – some more art than science!