So you’ve got an idea for a business. And not just an average, run-of-the-mill idea, but a great one. In fact, it’s so powerful and compelling that you’re already envisioning yourself driving a new Lamborghini and seeing your face on the cover of Forbes.
Before spending your imaginary bankroll, however, you might want to consider what Derek Sivers has to say about the value of ideas for a business.
As the founder and former president of CD Baby, an online CD store for independent musicians, Derek knows a thing or two about turning a good idea into a successful business. He originally created the CD Baby website just to sell his own CDs. But when friends began asking if he could sell theirs too, the proverbial light bulb went off. CD Baby went on to become the largest seller of independent music on the web, with over $100M in sales for more than 150,000 musician clients.
Now that’s a good idea. But it also required great business execution to turn it into a $100 million business. Which brings us to the part about the true value of brilliant ideas for business.
Ideas vs. Execution
Derek believes that the real value of a business isn’t the idea, it’s the execution. In fact, he considers an idea as nothing more than a multiplier, having very little value without the execution. He’s even put together a handy multiplier table to illustrate how ideas and business execution work together to show the potential value of a business.
Let’s use your great idea as an example.
By itself, Derek gives a great idea a value of $15 – probably a bit less than you were expecting. However multiply that $15 by great execution, which Derek assigns a factor of $1 million, and suddenly your idea could potentially be worth $15 million. Even a weak idea, which Derek values at $1, could turn into a million-dollar business with great execution.
So, great idea + great execution = $20 million. Great idea + lousy execution = $20. Ask any experienced entrepreneur and they’ll tell you the same thing. Coming up with the idea is the easy part. Getting it done is the real challenge.
Protecting Your Idea
Okay, so what if you have a great idea but don’t have all the execution details worked out yet? It’s understandable you might want to protect that idea (even if it’s only worth $15) from someone else who might grab it and run with it. That’s why we designed the Ideator platform to make it easy to safeguard brilliant ideas for a business until you’re ready to unveil them to the world.
Here’s how it works:
When you first create an idea on Ideator, you automatically start out in stealth mode or, as we call it on the platform, “Private”. This means that no one – not even Ideator team members – can see that you even have an idea built out.
When you reach the point where you’re ready to build out your team and grant co-founders or team members access to your Private-facing idea, that’s when the non-disclosure agreement (NDA) kicks in. At Ideator, no one gets to see the details of your idea until you decide and send out invitations.
When you decide the time is right to get feedback from the community you can opt out of the stealth mode and make your idea “Public-facing”. Even then, only some parts of the idea are public (such as the photo of your idea and your elevator pitch, both of which can be as descriptive as you’d like) and will be visible to non team members. You don’t have to disclose any of the details unless you choose to do so. You can also make visible specific goals of yours so, for example, if you’re looking to hire a technical co-founder, you can open that up to the community.
So what are you waiting for? Get to work on the execution part so that you do your best to end up with $20 million rather than $20.
Originally published by Ideator.