I would say a good idea is 5% of the equation

[Dwight Schrute]

None of these are great or good ideas.

They're not even ideas to begin with

All of those are great ideas.
Or at least, they were at their time.
Each and everyone of them.

If they hadn't popped up in someone's head in the past, those niches/industries wouldn't exist.

 

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[vinylawesome]

Interesting Debate. This debate reminded me of an article I read years ago by Derek Sivers. I tend to agree with it, below.

............................................................................................................
Ideas are just a multiplier of execution
2009-07-28

It's so funny when I hear people being so protective of ideas. (People who want me to sign an NDA to tell me the simplest idea.)

To me, ideas are worth nothing unless executed. They are just a multiplier. Execution is worth millions.

Explanation:

AWFUL IDEA= -1
WEAK IDEA= 1
SO-SO IDEA= 5
GOOD IDEA= 10
GREAT IDEA= 15
BRILLIANT IDEA= 20
-----------------
NO EXECUTION= $1
WEAK EXECUTION= $1000
SO-SO EXECUTION= $10,000
GOOD EXECUTION= $100,000
GREAT EXECUTION= $1,000,000
BRILLIANT EXECUTION= $10,000,000
To make a business, you need to multiply the two.

The most brilliant idea, with no execution, is worth $20.

The most brilliant idea takes great execution to be worth $20,000,000.

That's why I don't want to hear people's ideas.

I'm not interested until I see their execution.

Source: https://sivers.org/multiply

 

[Bamcis]

I think it's as simple as executing any goal related to the idea. Even if the idea is bad, it will take some sort of execution to realize this. It is in the series of actions that ideas come together.

It is my believe that execution will always outweigh an idea. It's like telling someone, "I thought of this crazy, innovative, world-changing idea!!!"....................

.........still waiting for the idea? Or do you get it...

BAMCIS

 

[Dave510]

This may be the absolute most naive thing I've ever read of this forum...

So, you believe that had you had the IDEA for a better search algorithm (specifically page rank), you would have turned that idea into a billion-dollar company like Google?

You would have been able to convince Tom Perkins to give you $25M?

You could have convinced Eric Schmidt to join the company as CEO (in retrospect, he was key to growth and was a competetive advantage over other search companies)?

You would have figured out how to monetize search results better than the competition? Note that Google didn't pioneer keyword advertising...they stole it from goto.com/Overture and did it better

You would have figured out how design innovative low-cost server farms that the competition couldn't build and that you wouldn't have been able to scale without?

You would have figured out how to design a distributed, redundant and cost-effective edge network to reduce latency, which made your user experience better than your competition and allowed you to go International?

You would have figured out that a minimalist UI would would exponentially increase page views and become a de facto standard for search pages?

You would have conceived of "I'm feeling lucky?" which drove popularity of the site in the first few years?

You would have been forward thinking enough to acquire Keyhole, Doubleclick, Grand Central and Motorola Mobility, which ultimately led to Google Earth, the best ad network on the web, Google Voice and Android?

I could go on for days with all the smart moves (I.e, execution) that Google made that had absolutely nothing to do with Page Rank. It's the tens of thousands of other decisions they've made over the years that turned That one research project in grad school into a $300B company -- where search results contribute a very small percentage of direct revenue?

You think YOU could have done that had you had the single idea for Page Rank?

I think some of the disagreement stems from not clearly defining idea and execution. Execution involves a lot of problem solving, and problem solving generally involves the use of some kind of idea. For example, most of those Google execution can be reframed as an "idea", e.g. The "idea" of "I'm feeling lucky?", or the "idea" of minimalist UI and etc. The difference is that these "ideas" are combined with action to serve a bigger idea (the company's mission or goal).

For some, the idea is just the goal or purpose of the company, for other people it's that plus hundreds and thousands of small "ideas" and creative thinking that builds up the company.

Ultimately though, you can be successful either way: thinking up amazing big ideas and executing decently (having mediocre small ideas when solving the smaller problems), or taking a decent idea/preexisting idea and execution amazingly (thinking up new and efficient ways to better serve the big idea).

 

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[Bamcis]

For some, the idea is just the goal or purpose of the company, for other people it's that plus hundreds and thousands of small "ideas" and creative thinking that builds up the company.

I think these multiple "ideas" you refer to stem from actual executions. Creative thinking and problem solving are actions.

Alone, thinking is an action. This leads to an idea, or thought. Then your brain (subliminally or not) executes the next course of action. Even if that means to postpone or cancel further executions related to the idea.

 

[Dave510]

I think these multiple "ideas" you refer to stem from actual executions. Creative thinking and problem solving are actions.

Alone, thinking is an action. This leads to an idea, or thought. Then your brain (subliminally or not) executes the next course of action. Even if that means to postpone or cancel further executions related to the idea.

I'm trying not to use execution when defining execution, that just muddles the water even more. It's true that the "ideas" are tangled up with action, but they're not always just a response to action, sometimes you just come up with a genuinely new idea that contributes to your goal (the big idea), so in the case of Google, something like "I'm feeling lucky", and then the action to implement the idea follows.

In a sense, execution is just a poorly defined word, so as to mean everything and nothing. There are ideas, and there are actions. Ideas are meaningless if you never act on them, and actions are meaningless if they aren't driven by good ideas (whether they're big ideas which form the foundations of a company, or small ideas that help build on and improve the company).

 

[Andy Black]

I'll bet on the jockey - someone with a strong WHY and the ability to get stuff done... someone who isn't married to a particular idea or a particular way of executing, but will evolve both based on feedback... feedback that comes from actually executing on the idea.

 

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[juan917]

Exactly... The fact that every VC I've ever met would tell you that they care MUCH more about the team than the idea tells me that the people who vote with their money believe that execution is more important than the idea.

Anyone who believes otherwise has never tried to raise money...

I haven't.. how do you even get in touch with these guys? They make themselves difficult to access

 

[eliquid]

Really? Let's take the first one on my list...

I've always considered the idea of a restaurant that serves quick and inexpensive prepared food to be a good idea. And literally trillions of dollars per year indicate that many other people agree.

But, you don't think a business that serves quick and inexpensive food is good idea? In fact, you don't believe that's even an idea?

Can you please define "idea" for me so that I can better understand why this isn't an idea? And can you explain why trillions of dollars get poured into this market, and yet it's not a good idea?

Oh, and when you're done, can you give me an example of a business you've conceived that's based on a better idea.

I highlighted in your post above ( might need to expand to see )why exactly they are not great or good ideas and why they are not ideas at all. You made my argument for me.

1. You said yourself, in your reply, these are markets.

2. Not all restaurants are quick and inexpensive

3. Not all restaurants are successful.

4. See #1, it's market

5. Food and restaurants are markets, not ideas.

6. The burden of proof is not on my end just because you think a market is also an idea. Maybe it was an idea in the 1400's when there might not have been restaurants though. Today it's commonplace and now a market. Its not an idea though.

 

[eliquid]

This may be the absolute most naive thing I've ever read of this forum...

I could say that about you mixing up markets and ideas....

So, you believe that had you had the IDEA for a better search algorithm (specifically page rank), you would have turned that idea into a billion-dollar company like Google?

You could have licenced it at it's lowest level as an idea to Yahoo. You could have also put in some work to make a MVP and grew it as well.

You would have been able to convince Tom Perkins to give you $25M?

I've been apart of deals with funding before, have you? One of the companies I had equity in was funded by a Shark Tank celeb and then went on to Y-combinator as well. I've seen plenty of people invest insane money in companies that were ideas or barely a company.

You could have convinced Eric Schmidt to join the company as CEO (in retrospect, he was key to growth and was a competitive advantage over other search companies)?

Hindsight is 20/20, but people join companies for lots of reasons.
I know one former CEO who left a large ecom doing to be CEO of a much smaller company. You don't have to be wildly successful to get talent.

You would have figured out how to monetize search results better than the competition? Note that Google didn't pioneer keyword advertising...they stole it from goto.com/Overture and did it better

I've already brought up how they got this from Goto, right? Funny enough you said they stole it, so lets use your words and something I already mentioned before too as well. You can't steal execution, but you can steal great ideas. Didn't Apple steal from Xerox and then Microsft steal from Apple? Look at what they stole. That one idea that was stolen changed the entire face of personal computing. All were executed differently though.

You would have figured out how design innovative low-cost server farms that the competition couldn't build and that you wouldn't have been able to scale without?

Someone would have. Someone does. Someone figured out flight, right? But this came with the IDEA of a better algo. You're catching on now I see.

You would have figured out how to design a distributed, redundant and cost-effective edge network to reduce latency, which made your user experience better than your competition and allowed you to go International?

See my point above.

You would have figured out that a minimalist UI would would exponentially increase page views and become a de facto standard for search pages?

A/B testing? This isn't specific or new to Google. BTW, I created a Sales LPs that became the defacto standard for affiliate marketers in the rebill space a few years ago. I know this 1 LP helped sell over 1B dollars of supplements and Biz Op training back between 2008-2011. I personally have seen multiples of people/companies make millions off it.

I know people who ripped and copied these pages and did very little to almost no execution other than throwing up ads on FB who made millions on it. The great idea lead to success for them, not the execution or how they did or how long they grinded on it.

There is nothing special about me though. Anyone could have done this and came up with it later in time on their own.

You would have conceived of "I'm feeling lucky?" which drove popularity of the site in the first few years?

This isnt anything special or inventive. Whats your point on this? Reaching?

You would have been forward thinking enough to acquire Keyhole, Doubleclick, Grand Central and Motorola Mobility, which ultimately led to Google Earth, the best ad network on the web, Google Voice and Android?

Companies have been acquiring others for some time and using their tech/resources. Google has just dont a lot of it. Look at Microsoft and Yahoo and they have gotten not very far in comparison to Google. I seen where Facebook acquired Instagram. Yawn.

I could go on for days with all the smart moves (I.e, execution) that Google made that had absolutely nothing to do with Page Rank. It's the tens of thousands of other decisions they've made over the years that turned That one research project in grad school into a $300B company -- where search results contribute a very small percentage of direct revenue?

Yes, it all started with the idea. Without that idea and the multiple ones that followed, all the execution in the world could have ended them up like Lycos.

You think YOU could have done that had you had the single idea for Page Rank?

Sure, I could have licensed it off to Yahoo or built it up like Google with the help of partners and investors.

If it was a shitty idea though that didnt provide value or was sellable, it would have ended up another mediocre company though.

 

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[eliquid]

Exactly... The fact that every VC I've ever met would tell you that they care MUCH more about the team than the idea tells me that the people who vote with their money believe that execution is more important than the idea.

Anyone who believes otherwise has never tried to raise money...

I guess the fact that finding a unicorn for a VC is all that matters hasnt ever been brought forth to you. Reason being, almost every VC deal fails for most VCs and they rely on that 1 unicorn to pull them out of it?

Yeah, that really proves having a great team is all that. So much that the VCs have to overfund a pool of start ups to find one that actually makes them money.

That talent must really be something for so much failure....

If the VC's care so much about the team and their experience, then they are only investing in great teams of talent that can execute, right? If that's the case, then why do most of the funded startups fail and the VC has to rely on that 1 magic unicorn to pull them out of it?

Seems to me, talent and experience and execution doesn't mean shit for the most part. This VC example pretty much nailed it shut for me.

Without the great idea, it's just people running around in circles and VC throwing their money away.

 

[eliquid]

As I said earlier, a market is just one or more solutions to a group of related problems (i.e., a market is one or more ideas that have been implemented)...

Anyway then, two questions for you:

1. What was the "idea" behind McDonalds?

2. Do you believe that had you had that exact idea first, you could have executed on it and had been just as successful?

1. A franchise that could run itself and be run by anyone. The hamburger, milkshakes, and drive ins where not new. Ray had an idea to buy the original store and rights from the prior owners and turn it into a franchise that ANYONE could run and that ANYONE could work. He basically took the assembly line and put it into fast food with specific and easy instructions that anyone could follow AND he made it repeatable without fail for the most part. Later ideas came with focusing on kids with happy meals, etc

2. Anyone could have. There are lots of Ray's in the world. That anyone could be you.

Im starting to see a pattern though with you. You seem to think these people behind the companies have "special powers" and are magical and without them, the company would have failed.

There are everyday people doing just as much in smaller companies in which the smaller companies have great ideas too. There is nothing special about Ray, Eric, or anyone else.

There is always another Ray, Eric, Elon, Richard Branson in the wings somewhere about to take another company off. They are all replaceable.

 

[eliquid]

Yeah...I guess my lack of real world experience dealing with how successful companies are run has really blinded me...

Btw, can I assume you've started at least one or two billion-dollar companies? Or are you still waiting for a great idea to come to you?

If you knew how successful companies are ran, you wouldn't just cherry pick billion dollar ones.

Success isn't determined by largest sales numbers, but how much of that is actually being kept. I know small business owners that keep 5x more money generated from their business than some CEO's of larger companies that do 50MM+. A successful business to me is one that generates cash for myself, not one that merely generates high sales numbers which doesn't tell the whole tale. Enron anyone?

What would I need with a billion dollar company? Or even a billion dollars in my bank account?

Why waste my time with that personally when I can live just as good a life with only $5MM in my bank account?

I think you need to come down from the high rooftops thinking success is only those that can bring in Billions

I guess everyone in FLF is a failure and knows nothing about business because Im pretty sure with 99% certainty that no one here is an actual Billionaire or runs a Billion dollar company.

I guess none of us no shit and only JScott does since he know everything. Gee he must run a Billion dollar company himself. Thank the high heavens he graces us here everyday in his spare time.

 

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[eliquid]

So, you've now said that if you had the original idea for a fast food restaurant, you could have been as successful as Ray Kroc and if you had the idea for Page Rank, you could have grown it into Google.

Pretty impressive.

Again, have you started any billion dollar companies yet? Or are you still waiting for the right idea to come to you?

Again, someone somewhere would have took those ideas just as far. Reason being, they're great ideas. Just like anyone could come in and not do anything with them.

Ray Kroc was no superhero with special powers to be the only one to take McDonalds to the top. He was just there at the right time and place and had the willingness to take HIS great IDEA forward with the help of others.

If Ray wasn't around, someone else could have had that idea and been at the right place and time to do the same years later and called it McGrunges or something with the help of a team to move it forward.

 

[eliquid]

Ah yes...the rallying cry of those who have given up on the possibility of success:

"I could easily be a billionaire if I wanted to be, but money is just a waste of my time..."

Why should I change my values and my goals to fit your definition of being successful?

Why should I go into a certain business just because you think billion dollar companies are the only way to go?

I start a business to fit my goals, not yours. Sorry, I dont want the lifestyle most billionaires had coming up when most of my goals fit within $5-10MM just fine.

 

[eliquid]

That's a reasonable argument when you believe that execution is more important than ideas. But, if you believe that ideas are 95% of the equation, why stop at $5-10MM? Just have more ideas! Or better ideas! In fact, all you have to do is have 10 million-dollar ideas today, and you'll be worth another $10MM tomorrow! Do that every day, and you'll be a billionaire this year!

Or, you can come up with one idea that's 1/300 as good as Page Rank...and then you'll have your billion dollar company overnight!

But perhaps just coming up with a couple million-dollar ideas better fits your goals/lifestyle...

WAIT! I just had a trillion dollar idea! A fountain of youth! Just waiting for my trillions of dollars to come in...now that I've had the idea, it's only a matter of time...

The fallacy you have is this:

1. Everyone has or can come up with, Billion dollar ideas.

Some ideas are worth $1, some are worth $1k, some are worth a few million, some are worth billions. Not all of us come up with billion dollar ideas. Not every idea you dream up is worth billions.​

One thing I know, you cant take an idea worth only $1k and execute it to billions. EVER.

So, if you can come up with a million dollar idea and profit on it and live successfully, whats wrong with it? I may never have a billion dollar idea, but at least I'm not excuting on shitty ideas worth $1.
​

2. From your wording above, success comes overnight. I thought you knew how success business ran though?

3. Keep executing on poor ideas 24/7. Hire top talent to execute those poor ideas. Sell that poor idea to the consumer. I'll check back in on you in 12 months and see if you are still pushing poor ideas and getting far with grinding the daylights out of a poor idea.

​

 

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[eliquid]

Edit: Time machine!

Edit: Food that tastes like chocolate cake but helps you lose weight and is healthier than broccoli!

Edit: Flying cars!

Edit: A machine that comes up with great ideas for me so I can get rich without even having to come up with ideas!

Oh boy...I'm gonna be so rich! Gonna go take a nap until the money starts rolling in...

A great idea has to also be realistic and doable. Else how are you ever gonna sell it?

Usable time machines? Not doable right now

Flying cars are not doable atm, possible hovercrafts are, but you're not about to disturb GM, Ford, and others with a flying car. Electric cars are doable because it is doable since its not a new idea. flying cars, you're reaching into all kinds of problems.

You can possibly come up with food that taste like Chocolate and is good for you. Look at Soylent. Not the same, but close.

 

[eliquid]

Okay, on a more serious note, I honestly think you under-estimate what it takes to start, grow and manage a very successful company and -- if you really think you could have been as successful at starting McDonalds or Google -- you probably overestimate your ability to do it.

I've held senior positions at and managed 8-figure P&Ls for three billion-dollar companies; I've been involved in two billion-dollar acquisitions (one from each side of the table); and I've started my own business that, at its peak, generated 8-figures in revenue per year (and am two years into the next one that I hope does much better). So, I've met the people who have started and managed large companies, I have a pretty good understanding of what it takes to manage a large company and I know what's involved in starting and growing a small company.

To start a billion dollar company is easy -- it starts just like any other company, with an idea. But, the difference between the company that fails after 12 months and the company that grows to billions in revenue has nothing to do with the idea that the company was conceived upon. The difference is that the billion-dollar company made hundreds or thousands of small, but very good, decisions along the way. They hired the right people, brought in the right advisors, focused on the right customers, built the right product, managed their cash flow, acquired assets appropriately, positioned themselves in their market, had appropriate relationships with partners/vendors/competitors at all stages of growth, managed their margins to the industry, optimally traded equity for resources, optimally leveraged debt, marketed to their buyer demographic correctly, etc.

These hundreds/thousands of decisions are what differentiate the billion-dollar companies from the failed companies. And what differentiated the billion-dollar companies from the million-dollar companies that might have had the same -- or very similar -- ideas upon which they were founded. In my experience, those who start successful companies are very good decision makers. They don't get 50% of the decisions right -- they get 90% of the decisions right. Sure, some are very lucky (right place, right time), but most are very attuned to their market, their competition, their customers, their suppliers, etc., and that's what makes them successful.

There's a reason why someone who graduates from Stanford or Harvard business school is statistically many, many, many times more likely to succeed starting a business than someone who doesn't go to college. It's not because they have better ideas; it's because they have better relationships, better access to capital, better decision-making skills, better networks of potential advisors, employees and partners, etc.

And again, I've worked for/with those who have started ultra-successful businesses, and my experience tells me that they are different than the average business owner. They are (typically) smarter, more focused, better at making decisions and better at hiring the right people at the right time. "Superpowers"? Nope. But, certainly a special affinity for the particular business/market/product that they are selling.

Like I said, my current business has been very successful. It's built on the same exact idea that thousands of other people around the world have built their businesses as well. But, I'm making more money than most. How can that be if we all started with the same idea? In my view, it's that I've executed better than most. My competitive advantage wasn't my idea (we all had the same idea) -- it was how I implemented (executed) that idea. Had I executed better (as some have done), I'd make more money. If I executed worse, I'd make less money.

So, you can go on believing that you could execute as well as those who start billion-dollar companies (if only you had the idea first!), but based on my experience, until you do it, I'm skeptical. And I think you very much either under-estimate the skill it takes or over-estimate your own skill.

Again, you base success on only billion dollar companies and what they do.

You're not going to build a billion dollar company on a $1 idea, a $10 idea, a $1k idea or even an idea worth $100k with hundreds of Standford grads making decisions all day unless you have another great idea to put on top of it or a great idea to start with.

 

[eliquid]

Okay, on a more serious note, I honestly think you under-estimate what it takes to start, grow and manage a very successful company and -- if you really think you could have been as successful at starting McDonalds or Google -- you probably overestimate your ability to do it.

I've held senior positions at and managed 8-figure P&Ls for three billion-dollar companies; I've been involved in two billion-dollar acquisitions (one from each side of the table); and I've started my own business that, at its peak, generated 8-figures in revenue per year (and am two years into the next one that I hope does much better). So, I've met the people who have started and managed large companies, I have a pretty good understanding of what it takes to manage a large company and I know what's involved in starting and growing a small company.

To start a billion dollar company is easy -- it starts just like any other company, with an idea. But, the difference between the company that fails after 12 months and the company that grows to billions in revenue has nothing to do with the idea that the company was conceived upon. The difference is that the billion-dollar company made hundreds or thousands of small, but very good, decisions along the way. They hired the right people, brought in the right advisors, focused on the right customers, built the right product, managed their cash flow, acquired assets appropriately, positioned themselves in their market, had appropriate relationships with partners/vendors/competitors at all stages of growth, managed their margins to the industry, optimally traded equity for resources, optimally leveraged debt, marketed to their buyer demographic correctly, etc.

These hundreds/thousands of decisions are what differentiate the billion-dollar companies from the failed companies. And what differentiated the billion-dollar companies from the million-dollar companies that might have had the same -- or very similar -- ideas upon which they were founded. In my experience, those who start successful companies are very good decision makers. They don't get 50% of the decisions right -- they get 90% of the decisions right. Sure, some are very lucky (right place, right time), but most are very attuned to their market, their competition, their customers, their suppliers, etc., and that's what makes them successful.

There's a reason why someone who graduates from Stanford or Harvard business school is statistically many, many, many times more likely to succeed starting a business than someone who doesn't go to college. It's not because they have better ideas; it's because they have better relationships, better access to capital, better decision-making skills, better networks of potential advisors, employees and partners, etc.

And again, I've worked for/with those who have started ultra-successful businesses, and my experience tells me that they are different than the average business owner. They are (typically) smarter, more focused, better at making decisions and better at hiring the right people at the right time. "Superpowers"? Nope. But, certainly a special affinity for the particular business/market/product that they are selling.

Like I said, my current business has been very successful. It's built on the same exact idea that thousands of other people around the world have built their businesses as well. But, I'm making more money than most. How can that be if we all started with the same idea? In my view, it's that I've executed better than most. My competitive advantage wasn't my idea (we all had the same idea) -- it was how I implemented (executed) that idea. Had I executed better (as some have done), I'd make more money. If I executed worse, I'd make less money.

So, you can go on believing that you could execute as well as those who start billion-dollar companies (if only you had the idea first!), but based on my experience, until you do it, I'm skeptical. And I think you very much either under-estimate the skill it takes or over-estimate your own skill.

Building, selling, or fipping homes is not an idea. Neither is selling ebooks and courses on it.

Its the same as if I say I want to sell toner ink. Gee, hundreds of other companies do it and make millions. So can I!

However, toner ink and selling toner ink is not an idea, its a commodity.

What seperates you from the others though, thats the idea. The great idea.

Like how Page Rank was to Google versus Yahoo. Both were search engines though and that was not an idea ( search engines ). That idea lead to them having a better value and result to the user.

 

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[eliquid]

A serious question for you...

I assume you have a business. Is your business based upon a unique idea? Or are there other businesses that exist in the world that are based on the same idea? If you have a unique idea, I'm very curious what it is -- can you tell us?

But, assuming there are other businesses in the world based on the same idea as yours, are they all generating the same amount of revenue/income? If the idea were the bulk of what it takes to be successful, I would expect that all businesses based on the same idea would essentially all achieve the same level of success, no?

Have any businesses based on the same idea as yours failed? Why did they fail and you succeeded? It was the same idea!

Have any businesses based on the same idea as yours done better than yours? Why would that be?

Again, I have a business that based on the same exact idea of thousands of other businesses -- yet we all achieve a different level of success. Why should that be if the idea is the bulk of the driver to success?

I build businesses that have a unique idea, a moat if you will. No one else is doing it like me, but some may come close.

This moat ensures my success, at least in the very beginning to some degree.

I also have some that are not unique ideas that are mostly passive income, but the focus and bulk of what I do is in unique ideas no one else is doing.

EDIT: I will make this clarification.

My unique ideas are not totally new and mind-blowing, but they are unique and new ideas built on top of other ideas. Sort of how like Page Rank was for Google in the search engine space.

 

[eliquid]

Nope, I spent a long time in Silicon Valley and am well-networked across many parts of the tech industry. I've been part of startups that generated no revenue, startups that have generated 6- and 7- figures in income, mid-sized companies that generated 8-figure income. I've worked with founders of a couple of the largest companies in the world and I'm friends with founders of companies ranging from just getting started to 9-figures in income, founders who have raised up to $10M in VC, founders who have sold their companies for various amounts of money, etc. I have friends in senior positions of nearly every big tech company you could name and many of the small ones too.

It's pretty safe to say that my experience -- while mostly only in tech -- ranges across every sized business...

Ok, true.. but every example you gave in this thread has ONLY been about billion dollar companies. You've harped on it a lot, as if they are the only ones successful.

Maybe you need to change your examples.

 

[eliquid]

You mentioned earlier that you think Page Rank could have been licensed to a company like Yahoo!

What do you think a reasonable price range might have been for how much it could have been licensed for?

Are you saying it couldnt have? Anything is possible. Ideas and MVPs are licensed every day and this is one route they could have taken.

My point is this. That idea for Page Rank could have been sold as an idea. You can't sell pure execution, you can only sell execution married to an idea ( such as a complete business already running ). You can sell ideas though without execution. This is what licensing and even patents touch on.

People steal, copy and borrow ideas. They dont with just execution. This by itself proves ideas are more valuable.

As far as price range for licensing, I have no clue. Things are worth what people are willing to pay for them. Yahoo could have paid them multiple millions for decades just for the idea via a license or Google could patent it and not did anything and then went after Yahoo and sued them if they used it and made millions. Many options abound actually. If they sold the license of it, they would have been paid what it was worth to Yahoo and they could have rejected or accepted it.

 

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[eliquid]

I assume your business isn't operating in stealth mode (i.e., your customers, vendors, competitors know about it), so can you tell me the unique idea your current business is based upon?

Perhaps this will clarify things for me...

I generally keep these things under wrap. No sense in bringing more attention to it unless you are a potential customer of mine.

I don't invite attention to what I do to have new competitors spring up. This has happened in FLF before and even in Skype groups I have been in. Also I've been ripped off before ( see my LP example several posts up ), so bringing light to companies I own with unique advantages is something I don't divulge in public.

However, one of my companies is easily seen in my signature.

 

[eliquid]

The idea was worth $1B. The company is worth $300B. That extra valuation has to come from somewhere.

I would argue that extra valuation comes from the fact that the founders of Google took that idea and *executed* on it to the tune of 300x it's standalone value.

And, using those numbers, the idea was .33% of the value of Google; execution was 99.66% of the value of Google.

Now, without the idea, the company would be worth $0. Without the execution, the company would have been worth $1B. So, it's clear that execution by itself is worthless, whereas an idea by itself may not be. But, I consider execution to be a multiplier -- not only can it multiply the value of an idea by a tremendous amount, it can also multiply the value of an idea by 0. Bad execution can cause an otherwise good idea to be worth nothing.

One day I'll tell the story of my first startup. It's a good example of how poor execution can ruin a company, whereas someone else executing the same idea much better made a fortune...

You assume Google is based on 1 idea in this comment, Page Rank. When in fact they have thousands of great ideas. Dont tie their $299B remaining to 1 idea. You know better.

Remember they stole the great idea from GoTo as well, as well as had great ideas to become one of the leading mobile phone OS companies and to open source a browser.

You're leaving shit out you know you need to include when it comes to the remaing $299B and the other great ideas that contributed to it. You can't tie 1 great idea to everything Google is when they have thousands more great ideas that sprang forth from their own workers 20% free time ( like GMail )

 

[eliquid]

Yes, I saw the website for your company listed in your sig. I didn't see anything obviously unique about it (not saying it's not, I just didn't see it), which is why I asked...

Understandable, but you probably are not my customer demo, which is why you dont see what is unique. You don't have a history in digital marketing or competitive research with SEO and online marketing.

That would be like me saying there is nothing unique about your construction company when I know nothing about construction and RE. I wouldn't know what to look for, to even understand.

 

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[eliquid]

Thank you. That's all I wanted to hear. You've mentioned several times that Page Rank was "the idea" behind Google.

But, as you point out above, Google is thousands of ideas. But, obviously, the folks at Google didn't come up with these thousands of ideas before they launched -- they came up with these thousands of ideas (I prefer to call them "decisions") over the course of the past 15 years. These are the ideas/decisions that have differentiated the company from what the company would be if ANY OTHER people were running it.

If you had the idea for Page Rank and started a company like Google, it's unlikely you'd be where they are (you could be more successful or less, but unlikely exactly the same). Same if I started the company or anyone else. That's because there are thousands (millions?) of ideas/decisions that define a company through it's life...and these ideas/decisions are what makes a company unique. If a founder has good ideas/decisions, a company is more successful; if not, a company is less successful.

Personally, most people I know consider these thousands of decisions that a company makes throughout its lifetime to be the *execution* of the company. Which is why most people say that execution is more important than the idea. And, it's quite obvious to me that some people are better at making/delegating these thousands of decisions than other people.

Of course, if anyone were to say "the thousands of ideas/decisions that a company makes over its lifetime is more important than the initial idea," I think we'd all be in agreement here.

Perhaps it's better to say that, "Execution is more important than the initial value proposition of the company."

Page rank was the idea behind Google. Notice the past tense I used now and before in my old post. You even mentioned it in your reply here just now. WAS is the key word. Past tense.

Page Rank was the idea behind Google. Thats what got them off the ground to success.

As a company grows, can it not spring forth new ideas?

As a person ages, can they not have new great ideas?

I can have new great ideas ( I try to come up with 20 a day and put into a notebook ) for years. Its doesnt mean I executed on anything to have those great ideas though as I age daily. Again there is no execution and no decisions Im making for executing to have these.

Some of these ideas get shelved, some get put into some of my businesses, some are just for 1 business. Some are for new ones. No execution is going on that for this to happen.

I dont have a team of Harvard PhDs and I am not executing all day long on 1 thing to have these. My collection of great ideas get put to use as needed and put into my businesses to make them more valuable to my customers.

The ideas are not tied to execution or spring forth from execution.

 

[eliquid]

You'd be right...there is nothing unique about my real estate business. The only differentiator is the fact that I execute better than most. Other than execution, my real estate business has absolutely no competitive advantage. In fact, I don't believe that any flipping business has an unique value proposition, which is why the business can never fully be fully separated from the owner (i.e., can't easily be sold or liquidated).

It's also the reason why I wasn't able to easily scale it any larger, I got bored with it and am no longer focusing on it, other than for passive income (lending and partnerships)...

I would bet you my right arm if you had a great idea ( like I mentioned before, a UVP, which you also bring up ) you could sell it easily because then you would have a competitive advantage. See now where the great idea is 95%. A great idea would have made all the difference in your post above.

Note, I never once said you couldn't make money executing. Plenty of people do that in day jobs. Plenty of people do it in a business like yours.

I never once said you couldnt make money with a commodity business that has no great idea. Look at RE and Insurance sales. Look at car dealers. Look at freelance web designers.

I just said executing on a shitty idea would get you no where.

There is a big different in shitty ideas, ok ideas, good ideas and great ideas. Some them can be worth $1, $100, $1k, $100k or $1m and even $1B.

Some businesses like RE are OK ideas ( depending on how you do it ) where each OK idea of just flipping a house is worth $50k or so. Doesnt mean you can't money or a living or have yourself a nice job, but its not a great idea either since their is no unique value ( unless you add one, I dont know what that would be in RE though ).

The fact you didnt have a great idea, AKA your UVP and advantage, means all you did was create a job for yourself. You said so yourself with "which is why the business can never fully be fully separated from the owner".

The fact you made money in RE with no unique advantage is proof that an OK idea can work. I can also go make 6 figues working a day job too as proof with no idea and just executing in a day job.

All said was the idea is 95% and execution 5%. I never said you couldnt make living if you didnt follow that.

The great idea is what creates the blue ocean for you. It's what sets you apart to be unique and have an advantage.

Ever notice on Shark Tank and other similar shows they ask the pitch people if they have any patents? Ever noticed that and wondered why? Thats the unique idea that has value and sets things apart most times for a lot of those pitches. That great idea that got a patent is what creates their moat for them.

That great idea is now protected and worth something if executed or licensed.

 

[eliquid]

Except that that "great idea" doesn't exist in my business niche/industry (if it does, I'm not smart enough to find it and neither are any of my competitors). I wrote a long post about why that is in a real estate thread here yesterday...

The only differentiator in the flipping business is execution (again, as far as I can tell).

Thank you for finally confirming my points earlier.

Without a UVP or advantage, it's not a great idea. You're basically saying this right now about your business and industry in RE

Earlier you wanted to say that:

- Fast food restaurants
- Pens (or any other common office supplies)
- Video game machines
- Automobiles
- Clothing lines
- Common food products
- Dry cleaning stores
- Dog food
- Box manufacturing
- Power tools
- Grocery store
- Music producer

Are all great ideas. However, they are not.

Unless you have a UVP/advantage that separates you, it's not a great idea. A market is not an idea. The idea is the UVP or advanatge.

Since you have finally said what I have been trying to prove now, I am exiting the thread to enjoy my day with family at the lake.

Thanks for the mental stimulation and debate. You have been a good person to debate with and never lost your head. I fully respect you for that.

 

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[jon.a]

A long time ago I was part of a fleet evaluation team for Naval Aviation.
We tested the operational squadrons for readiness.

Some were exceptional
Some average.
Some sucked.

Why?

They all had the same tools.

It was the people. Leadership. Execution.

 

[eliquid]

What other ideas did Larry Page or Sergey Brin have that were unique, other than Page Rank? I can name a couple, but 99.9% of the success Google has had is with ideas that people had before them. They weren't the first to launch a search company; they weren't the first to use a minimalist UI; they weren't the first to build server farms; they weren't the first to create redundant edge networks; they weren't the first to create ad networks; etc. And obviously, all the companies they acquired, it wasn't Google that came up with the ideas behind those companies either.

Google wasn't successful because it had unique ideas (for the most part, other than Page Rank, it didn't). It was successful because it was able to take the ideas that had been around long before Google and string those ideas together in a fashion that created a business that appealed to billions of people. In other words, other than perhaps Page Rank, not a single idea from Google would have stood on its own to create a billion-dollar business. It was how those ideas were actually IMPLEMENTED -- by what people, in what form, in what order, in relationship to what other ideas, etc. -- that determined the success of Google.

And that is what EXECUTION is all about.

There are many more good ideas out there than there are successful business people. There's a reason for that...

Now you are jumping into unique.

You're bringing up things I already talked about with Google taking from others. Ive brought that up many times already now.

Dont confuse unique with great. I myself work with unique ideas. Many others just work with great. Some do both.

Google had tons of great ideas, lets not try to muddy the waters with unique now. Your idea doesnt have to be unique to be great.

You're reaching now trying to angle your argument with just "unique" now.