Ideas vs. Execution
I recently had the chance to talk to a university class about entrepreneurship. I think talking about business might be the thing I like most, so having the microphone for an hour and half was a lot of fun. During my 90 minute rant about entrepreneurship, I somehow started talking about two types of entrepreneurs: idea people and execution people.
In my opinion, you are one or the other and it is important to know which one you are. I started thinking about the difference between the idea entrepreneur and the execution entrepreneur after reading this post on 43 Folders. Merlin Mann was inspired by this post at the O’Reilly ONLamp blog.
So I started talking about how you are either an idea person or an execution person and there is no question in my mind that I am NOT an idea person. I’ve had a lot of ideas, but they all sucked. I’m not bad though at spotting a good idea, and I think I’m halfway decent at figuring out how to make a good idea work. But my weakness as an entrepreneur is that I’m totally dependent on getting someone else to come up with the idea. As I was going on and on about the difference between the two types of entrepreneurs, the professor interrupted me and asked, “So how much is an idea worth?” and it caught me off guard. I had to think about it for a minute because as an execution entrepreneur, I clearly have a bias towards execution. In the end, I suggested that an idea is worth about 10% of the business and the professor answered back, “That’s generous.”
The O’Reilly blog post that I linked to above uses this formula:
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.
And Mann (from the 43 Folders post above) writes:
An idea is no more useful than a coupon for a bag of sugar; show me the finished cake, then we’ll talk.
The bottom line is that if you don’t have an amazing, passionate idea and the means to make it superb, you’re probably just a douchebag with an expensive phone. And a stack of NDAs.
I wasn’t nearly so harsh when I was in front of that class, but I do think that in the end I was generous to give 10% to the idea because an idea has no real value unless it is paired with execution. But before all of you idea people get on my case, remember that there’s nothing for guys like me to execute without your ideas.