A good idea may not be worth as much as you think, says Guy Kawasaki

Silicon Valley entrepreneur turned tech evangelist, Guy Kawasaki explains the value of a good idea.

It must happen a lot. Two friends discussing business ideas at a pub. One person may come up with an idea they have no interest in following through, while the other may see the potential, and have the skills to make it take off. Is it reasonable to compensate the originator of the idea? Does the person become a partner and take a small percentage of profits or is it a simple one-time fee? Most importantly, what is the idea worth?

For those in the business of selling an idea, it worth depends on the context.

  • How specific is it? Is it based on specific knowledge the person with the idea has that no one else has? That increases the value of the idea.
  • How applicable is it? Is this something everyone needs but they don’t know it yet (like a smartphone when it first came out)? That adds value, but only if you can convince someone that you can develop a market along with the product.
  • How affordable is it to make? It’s a lot easier to make a bunch of plastic coins that say “You Need This” on it than it is to mine an asteroid. Plastic coins costs pennies. Mining an asteroid will cost billions. The more affordable it is, the more accessible it will be to investors without a lot of cash.
  • How affordable is it to buy? Obviously, the less expensive the product or service is, the greater the odds of selling a lot of them.

Practically speaking, an idea only has value when it is implemented, so how much can you really make off an idea?

“Less than you think, is the honest answer,” says Silicon Valley based author, speaker, entrepreneur, and evangelist, Guy Kawasaki. “Good ideas are easy. Implementation is hard. I’ll give you a multi-billion dollar idea,” he continues. A waterproof phone with wireless charging, dual SIM, two-day battery, break-proof screen, and the best of Android and iOS features, sold through dedicated stores with knowledgeable staff. “How hard could that be?”

“A big issue with the fantasy of ‘all I need is a good idea’ is that you can only know something was a good idea after it’s successful. At inception, it’s impossible to know,” Kawasaki explains. Every time an entrepreneur starts a company or an investor writes a check, they all think it’s good idea. And yet 99 per cent fail.

“I can shoot down every company that has succeeded and tell you why they weren’t good ideas. I can also tell you why every failure could have succeeded. In other words, it’s a crap shoot. When you’re shooting dice and your number comes up, you can say you “knew” it was going to happen. You just don’t remember all the times you crapped out instead.”

Praseeda Nair

Kellen Rempel

Praseeda was Editor for GrowthBusiness.co.uk from 2016 to 2018.

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