A dime a dozen…
Usually, the founder or one of the co-founders has the idea underlying the business. Usually, this person wraps quite a lot of pride around that idea and considers the idea highly valuable.
The truth is that ideas truly are a “dime a dozen.” It is not the idea that is valuable. It is the execution of a viable business based on that idea that holds all the value.
RULE 10:
Ideas have little value. Businesses have value.
To see this for yourself, sign up for a Startup Weekend (or another hackathon). On Friday night of that event, about half of the participants will line up to share an idea. On a busy weekend, that could be forty or fifty ideas, all of which are freely tossed out into the crowd.
I’ve seen other creative sessions inside business schools where students are taught how to brainstorm business ideas at the start of class, and where each team of five to eight students comes up with twenty or thirty or fifty ideas in the course of a few hours.
Looking at the most successful startups in the past few decades, most are based on copycat ideas. Apple was not the first company to produce a computer, music player, phone, or tablet. Google was not the first search engine. Facebook did not invent social media. Whole Foods did not invent the supermarket or the organic grocery story. Starbucks did not invent coffee or the coffee shop.
I know it is hard to let go of ownership of the idea. I myself have filed over a dozen patents and have written more than two dozen business plans. Of the five startups I’ve founded or co-founded, all five started off following the “vision” I had initially come up with. In the end, however, it was the execution of the idea that made a business, not the idea itself.
Taking the initiative to start the company. Putting together the team. Taking the first steps to get the business going. Those all provided value to the company worthy of an extra bit of equity. Having the idea was simply a necessity before any of those steps could happen.
