7. Why ideas matter less than execution to investors and your startup business

In this post, I want to talk about why execution is more important than ideas. I am certainly not the first to make this point, but from my experience many founders have not internalized this lesson yet.

Why even bother talking about the execution vs. ideas thing when obviously we would like to have both great ideas with stellar execution?

The problem is that the media, and many founders, focus on and fetishize the “big idea”. One consequence of this is the many founders choose not to collaborate or communicate about their business out of fear that their idea will be “stolen”. Another is that leaning on the power of the idea tends to lead to “build it and they will come” type business plans. After all, the founder thinks, how could this amazing idea not succeed?

I don’t want to suggest that ideas are unimportant in general, just to take issue with the centrality of the “big idea” as key to the success of a business. When I talk about “ideas” here, that is the kind I mean.

And remember, I am saying this as someone who is basically an idea guy. I am way stronger at ideas than execution, and I work very hard to compensate. So please, take it from me.

First off, let’s look at the need to hide or protect the idea. It is a very rare case where the idea itself is the key to the value of the company. If it is, patent it immediately, then tell the world and get to work. In the other 99.9% of cases, don’t worry about it. Everyone will see the idea as soon as you go public, and probably even before that, because secrets are hard. The thing that will protect you is your strong execution of the idea and all the details involved.

I came across some profound thoughts while looking around at what others have said on this topic. Two really struck me.

Derek Sivers said “ideas are worth nothing unless they are executed. They are just a multiplier.” The point being that the vast majority of value comes from the execution, but it is adjusted a bit by the quality of the underlying idea. It is worth reading here.

Ron Leshem talks about how we should look at business being a Verb not a Noun. When looking at a business as a thing that exists, it is tempting to value it based on what it is. When looked at as a dynamic process, the value clearly comes from the things it does, the execution. His full article is here.

To me, one of the biggest reasons to focus on execution over ideas is that “the idea” of the business is likely to change. It is very likely that, by the end of the road, you will not be doing your big idea anyway. Almost every startup I have seen has experienced at least one major pivot before finding real success.

This is one of the reasons early stage investors focus so much on the team. We want to know that this group can execute against the business concept, whatever that concept ends up being. Investor ask if they have the skills and tenacity to make it through the inevitable hardships and direction changes. Are they mature enough to abandon their pet idea if necessary?

In reality, that big idea is probably not wholly novel anyway. If the idea is really good, many others have probably thought of it already. I see many companies pitching ideas they think are original that I have seen from several other companies over the last few months, and I only see a tiny fraction of the pitches out there. A good business idea connects to some significant need or pain. If there is a big enough market experiencing the issue, there are probably lots of people thinking about how to address it.

Even if you are the first to start a business around the idea, others have probably had the idea and chosen not to execute against it for any number of reasons. In many cases it is because that person is focused on executing against some other idea. Success can be more about what you choose not to do than what you do.

I have had thousands of what I, in my humble opinion, consider to be good business ideas. I have executed against almost none of them. With many of them, I actively encourage others to take them on because I would like to see them exist in the world, and I know I will not get around to them.

There is an interesting phenomenon where it seems that an idea’s time has come. All the pieces are in place and many people wind up having the same idea at the same time. Some of the most famous big ideas in science are examples of this.

Although Einstein created special relativity, there were many other groups working along the same lines because of well understood issues with the laws of electro-magnetism.

The same was true of Darwin. There were other people studying and getting ready to write about evolution and natural selection, but Darwin got there first.

While researching this post, I saw one article using Leonardo da Vinci to make the case for the primacy of the “idea”. While it is true that he is widely celebrated for his ideas and inventions, actually almost none of them were ever built, used, or important. What was it that actually made him famous in his life? It was the flawlessly executed paintings and frescos he created.

There are numerous examples of hugely successful companies that found massive success because of fantastic execution despite not having the “big idea”. 

Apple revolutionized the computing world, but it did not invent the graphical user interface or the mouse, those came from Xerox. Xerox invented all kinds of amazing things, but failed to execute at all on many of them.

Facebook did not create social networks, there was Friendster, Myspace, and many others operating first.

Amazon did not invent online retail, they just clearly did it better than anyone else.

Ford did not invent the car and Elon Musk did not invent the electric car.

There is a whole book called Fast Second about how companies with stellar execution can come in and steal the market from the first mover, after they have proved out an idea.

I don’t want to suggest that companies should not have any vision. The idea or vision is what guides the direction of the execution, even if the idea is not original. Consider the ratio between idea and execution. Thinking of a big idea might take only moments, but executing it to become a successful company takes years, if not decades, of hard work.

Ideas should not be put on a pedestal and treated as sacred objects. Ideas need to be abused, tortured, and tested constantly. They need to be tempered in the fire of experimentation and reforged when found wanting. That is part of the job of execution. It is hard to judge an idea until you start to execute against it. Lots of ideas look good on paper, but don’t survive first contact with reality.

So please, founders, stop treating the concept behind your business like the crown jewels of England. Talk about your idea. Get feedback on it. Refine it. Make plans and start executing on it. Discover you need to change the plan, then revise and repeat. Endlessly.

And when you pitch, do tell me the idea, but don’t forget to talk most about how that will come to fruition under your hand.

Till next time … Ciao!