Your Ideas Have No Value

By  Carol Roth, entrepreneur.com,

Whether it’s brainstorming a new company, a new product or a new service, most entrepreneurs love the idea-creation part of business more than anything. This brings out the inevitable fear of sharing, where entrepreneurs range from staying tight-lipped to shoving an NDA in front of anyone who wants to hear what they’re up to. 

It also begets the “how do I protect my idea?” question over and over. The answer is, “you don’t” and the reason is that your ideas are basically worthless.

That’s right: ideas have little to no value. It’s the execution of the ideas that holds value. It’s why Facebook is worth billions of dollars (although that valuation is a debate for another day) and why myriad other social networks aren’t. It’s why the same company can be worth nothing or millions at different points of its lifecycle or under different ownership.

Let me give you some insight.

First, with rare exception, your idea already exists in some form. Most ideas are an improvement or a different take on an existing idea. Additionally, regardless of which components of your idea are actually “new,” there are probably many others that have thought of it as well. This is a main reason why venture capitalists will not sign nondisclosure agreements. Frequently, the same ideas come to light independently at the same time or near the same time.

Moreover, the component of your idea that differentiates it -- you -- can’t be replicated. You and your team are what differentiate how you frame a problem and its solution, the technology and other resources that you bring to the table and your willingness to do anything it takes to make it happen.

My favorite example in this space is Google. When Google started as a mere search engine, the idea to create a search engine was not new. There were many search engines that preceded Google, including OpenText, Magellan, Infoseek and Snap. What was different was the way the founders envisioned search, their competencies and, ultimately, their code. The idea for Google wasn’t valuable, but the execution of Google was and remains so.

Speaking of execution, it is really all that matters in determining value. It’s why VCs back founders more than anything -- they are investing in the people that they believe will execute well on any given idea. There are stupid ideas that become home runs (Snuggie, anyone?) and great business ideas that fall apart because of the execution (or lack thereof). There are also companies that have different fates under different management.>>>