Nathaniel Whittemore wrote an excellent post demolishing the Silicon Valley mantra that "execution" is all that matters. Ideas do matter... a lot. Great execution of bad ideas still result in failure. Pivots and execution are the buzz words in Silicon Valley. But, if a startup pivots from one bad idea to another dubious idea...they just prolonged the failure. Bill Warner, founder of Avid Technologies, said recently “Some of you guys are so smart you turn what should have been a one year failure into a five year death march.”
Mark Zuckerberg of Facebook was used as an example of the "execution is all that matters" meme played out in the movie The Social Network, although I don't think Mark subscribes to this belief. The Winklevoss twins had an idea for a web site to allow college students to connect, called ConnectU. But, they didn't have the technical skills to execute on the idea, and didn't recruit a team that could do it. Mark Zuckerberg developed Facebook around the same time. The difference? Conventional wisdom is "it was all about execution", but the reality is Mark had much better ideas...and the ability to execute.
Silicon Valley jumped on the "ideas are worthless" meme for several reasons. First, everyone has ideas...lots of them. Good ideas are available everywhere. Startups have great ideas, big successful companies have more good ideas than they can handle, and people who read Techcrunch and Techmeme have hundreds of good ideas. But ideas alone are worthless. Investors get pitched ten ideas a week, hundreds per year. Unless there is a skilled team to execute them...they truly are worthless.
Investors place a very high value on founders and teams. The belief is that the initial idea will change or "pivot" several times anyway, so don't get too excited about the idea. The key, they believe, is the ability of the team to adapt and pivot. I do agree that you invest in teams, and teams rank very high in terms of importance...but not to the exclusion of ideas.
Silicon Valley, and especially the tech press, can be very binary. Things are either good or bad, winners or losers, smart or stupid. No middle ground. The "ideas are worthless" meme is an example of this extreme, single minded, jump on the band wagon type of thinking.
The reality is that startups need a great idea, a great team, great timing, a market that can grow significantly, and a lot of luck. You need all of these elements to succeed...especially luck. The notion that execution and the ability to pivot is the single most important contributor to success is nonsense. Ideas matter, and so do all the other elements.
Yosi Vardi always says "We don't know what will succeed. We just make guesses, and hope to be right once in a while." He is right. I have seen startups fail that I thought were a lock for success. And, I have seen startups that I had absolutely no interest in...go on to succeed. In the Venture Capital business if you can be right half the time you will make a lot of money. You just don't know which half will succeed. They all look good when you write the check.
Nathaniel, thanks for reminding us that ideas do matter. They matter a lot!
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