@adlrocha - Ideas are worthless
That is why I am going to start giving them away!
|Alfonso de la Rocha||Feb 2, 2020|
I’ve been thinking lately about innovation and entrepreneurship, and I’ve been asking myself several questions: What makes an idea good? How do you turn a good idea into a successful business? What makes a startup or a corporation a success? What is (or was) the core idea of the most valuable companies in the world? And how can this value be sustained over the years? These simple questions are, in my opinion, not that easy to answer, but they serve as basic framework for innovation and entrepreneurship.
Focus on the “how” and the “why”, not the “what”
If you are a bit like me you most probably will always have with you a notebook to write your “next big idea” for a side-project, brand new system, or business. These ideas may seem great in their inception, and good enough to be worth your spare time. Even more, you even decide not to share your ideas with your peers, because they are so good that you don’t want them to copy you. Unfortunately, as good as these ideas may seem, you are never able make them come into fruition. What happened? Weren’t the ideas good enough? Or was the problem your lack of time, motivation, dedication and required knowledge to make them a reality? Let’s be honest a bit of both.
Look here or there, and you’ll see all the rivers of ink that have been spilled with the following headline: “Ideas Are Worthless”. After working for a while in the field of innovation, reading a good ton of books about entrepreneurship, and trying myself to make a reality a bunch of ideas, I am starting to completely agree with this claim. How many times have you heard the following sentence? “If only I would have thought of that, I'd be rich!” The most successful and sustainable businesses are rarely the result of the perfect idea, in the same way that great ideas do not always lead to great innovations (although it certainly gives you a head start). The idea is just the seed that need to be nurtured to grow a strong tree.
So if ideas are not important, what is? In my opinion, motivation and execution (the “why” and the “how”). The first thing an idea needs to become a reality is the “why”. An idea needs to excite you just by thinking about “her”. You will have to invest a lot of time, probably money, and sacrifice and risk several aspects of your life to make it a reality, so you better be fighting for something that is worth. Be specific and don’t try to convince yourself. Take the example of Bill Gates, if you had ask him in the 70s why did he drop out of school to build Microsoft he would have answered something like: “I want to put a personal computer in every home of the world to make people’s life easier”. This idea excited him enough to make him make the sacrifices he made to build Microsoft.
This “why” can be personal or transcend to something external. As long as it is exciting enough to get you going it represents a good motive. You may want to “put a PC in every home” or “recover the control of your data and your digital identity”. Both are two great examples of seeds “exciting enough” to help you build a successful business or tech disruption.
But again, the correct “why” is not enough if it is not combined with a great “how”. Having the right team, having the required skills to make your idea a reality, having the money, the contacts, access to the customers, etc. Execution is key, and you need the resources. Why do VCs invest in people more than in ideas? They know that good executors have higher probabilities of making “any idea” profitable. In short, once you have figure out your why, find your A-Team, as they will help you make sh*t happen.
The Ideas behind success
So what was the idea behind the currently most successful and valuable companies in the world? And how did they got there?
Microsoft’s idea was simple, they wanted to “democratize the use of personal computers”. In the times of the Altair 8800 and the development of the first software programs performing useful tasks, Bill Gates wanted to put an easy to use computer in everyone’s home. The way he came up with to do it was called Windows NT.
AirBnB wanted to “democratize accommodation”. They took the core business idea behind hotels and “decentralized” it putting in contact hosts with visitors.
Uber’s goal was to “make transportation accessible to everyone in the city”. They took the taxi business and implemented it better.
Apple is a hard one. I wouldn’t know how to frame it in my model. What we can agree of is the outstanding execution of Steve Jobs with impressive ideas such as the iPod and the iPhone. I guess that in this case having the right idea was as relevant as its execution.
Amazon wanted to take libraries to the 21st century with the use of the Internet. Jeff Bezos’ took the ecommerce idea that was starting to show up in the 90s with the appearance of the Internet, and he applied it to books (a long-tail model).
Instagram was originally a check-in app (Burbn) that evolved to become a photo app because it filled a need in that category more effectively than existing applications
Google just took the idea of search engines from companies such as Yahoo or Altavista and they implemented it significantly better. A good example of how ideas are worthless and it is correct execution what wins.
McDonald's thrived by making tasty, cheap hamburgers. Restaurant chains weren’t something new. Old idea, better execution.
Dell manufactured PCs better, cheaper, and faster than rivals. Their execution aimed to get out of business companies doing the same such as HP.
And as a final touch, let’s take as an example the companies of (for me) one of the most brilliant entrepreneurs out in the wild, Elon Musk’s Tesla and SpaceX. Just take the following tweet from Elon as the perfect illustration of the importance of execution. Everyone could be excited with the far-fetched ideas of ending with fossil fuel cars and replacing them with electric autonomous vehicles; or with the idea of populating Mars. But let’s be honest, these ideas alone are worth nothing, bordering on the stupid, but in the hands of someone with the execution skills of Elon Musk things are quite different.
What was Elon’s master implementation plan to remove all fossil-fuel cars? He would build an expensive electric sport car in order to get all the money and knowledge he required to start building affordable electric cars at scale. With the money of these affordable cars, he would make them even more affordable so that he can penetrate the pockets of a great demography. The problem of all these electric cars was to have the zero emission energy sources required to feed them, but Elon also thought of the solution to this: to build through Tesla zero emission electric power generation alternatives required for his electric cars. The cool thing about this execution plan is that he is actually managing to make it a reality. Brilliant!
What about SpaceX? Musk was frustrated that NASA wasn't doing more to get people to the red planet — and concerned that a backup plan for humanity wasn't being developed (for when Earth becomes an uninhabitable wasteland). So since its inception, SpaceX have been offering private space services (to, for instance, launch satellites to orbit for a modest fee) in order to test all the technology required to get the human race to Mars. Since then, SpaceX has developed several impressive aerospace systems: Falcon 1, its first orbital rocket; Grasshopper, a small self-landing test rocket; Falcon 9, a reusable orbital-class launcher; Dragon, a spaceship for cargo and soon NASA astronauts; and Falcon Heavy, a super-heavy-lift launcher.
Elon Musk and all the aforementioned companies are good examples of how having the “how” right overcomes a great “what” and an interesting “why”.
“Don't be afraid to share your idea. The value is not in the idea, but in the execution. Experienced entrepreneurs, business owners, and investors can give you valuable advice. If your idea is any good, people will steal it. Your job is to execute better than them.”
I myself have came up with several “million-dollar ideas” such as Acorns (my project was called Myra, I can share with you the deck I prepared if you are curious), or Mealime (I called it FestApp). Why did Acorns and Mealime were successful but not Myra and FestApp? Execution, execution, execution. The idea was there, I had a business model that theoretically worked, but I lacked the motivation, the time, the team… in short, the execution.
The why determines the culture
So if the “how” is so important, why caring about the “why”? Because the why will make you sustainable. The “why” determines the culture and the motivation to align the focus and direction of the team, specially when the group grows. The why is what attracts and retains talent (apart from a good paycheck at the end of the month, obviously). Let’s illustrate this using Microsoft as an example. The original goal of Microsoft was to “democratize personal computers”. This worked until the late 00s, when the company started losing their innovative culture, and losing site of the end goal. With Microsoft’s new CEO, Satya Nadella, Microsoft is starting to recover their lost culture, and this has been thanks to Mr. Nadella, who has recovered Microsoft’s “why”, aligning its people culture. This change is making Microsoft a more sustainable company than a decade ago (if you don’t trust me check the evolution of the stock since Nadella became CEO). I really recommend you read “Hit Refresh” to see the change of Microsoft with Nadella’s leadership. In the meantime I will leave you with two quotes I really loved from the book, and which perfectly depicts the point I am trying to make here.
“Culture eats strategy for breakfast.”
“I told them that we spend far too much time at work for it not to have deep meaning.”
There is no such thing as the Holy Grail.
And having said all this, don’t expect this framework to be the perfect recipe for your business success (if this was the case I would be rich by now), but after some patient observation, and many reflections I started wondering myself, “how such a dumb idea has made so much money?” or “why couldn’t I have come up with such an idea?”
It is decided! I will be giving away my ideas
Ideas are worthless, and I usually have lots of them that I am not able to execute by myself (due lack of “excitement”, motivation, or someone to help me with them). I decided that as part of my newsletter I am going to start giving away a new idea every week. Initially I will give them for free, with the only condition that, whether you decide to build it with me and jump me in the project or not, you have to keep me updated of the developments and the evolution of the idea. I usually have ideas that solve needs or that tackle concerns I have, so seeing any of them come into a reality (even if I can’t benefit from it), would make me really REALLY happy. So starting next week, expect a new great (and in many cases dumb) new idea you (or we) can start working on.