Making ideas happen

Photo by Patrick Tomasso on Unsplash

People are fond of saying that ideas are worthless. 

There seems to be consensus amongst entrepreneurs that it’s “all about execution”. In the words of Steve Jobs (the most quoted of all tech icons): “To me, ideas are worth nothing unless executed. They are just a multiplier.”

Investors, too, seem to have fallen for this narrative. Paul Graham, who founded YCombinator and wrote a bunch of brilliant (and widely consumed) essays to create a kind of philosophy of startups, has waxed lyrical on this topic. In an essay entitled “Ideas For Startups” he writes: 

“[Founders] overvalue ideas. They think creating a startup is just a matter of implementing some fabulous initial idea.”

Graham goes to do something very interesting, postulating that startups are in fact questions. That might seems a little strange, but it’s a brilliant way of thinking about disrupting and transforming established industries:

“Treating a startup idea as a question changes what you're looking for. If an idea is a blueprint, it has to be right. But if it's a question, it can be wrong, so long as it's wrong in a way that leads to more ideas.”

The concept of “testing and iterating” ideas has become common parlance in the cut-and-paste startup vernacular, but it’s very important. A priori, an earth-shattering business idea to manufacture inflatable dartboards can seem like a stellar idea. A posteriori, things can look very different (and somewhat deflated). 

A dangerous habit.

The veneration of ideas is dangerous, because it makes startups defensive when they should be offensive (by this we mean proactive in engaging with customers, not rude). Startups must attack the market, but they can’t do this if they do not understand it (in the words of Bud Fox, “Read Sun Tzu”).

When you frame a startup as a question, you invite people into the process. We’re always a bit skeptical of founders who say they’re in “stealth mode”. How can a company refine and scale it’s proposition without telling people about it? By abandoning the pretence (or hubris) of assuming you know best, you can begin to create something valuable to other people.

Economics 101 (with a dollop of philosophy).

Are ideas “worth nothing”, as the Great Jobs proclaims? It’s a philosophical question as much as a business one. We should probably pause at this point to consider the limitations of language. Without getting too Wittgensteinian on a Saturday morning, the idea that ideas are worthless is an idea in itself, one that contradicts its own premise!

If we go up into the loft and dust off our old economics textbooks, we find that ideas are by no means worthless. According to classical economic theory, they should be treated as non-excludable goods, with clear benefits that are hard for “owners” to monetise:

“Non-excludable goods are defined in economics as goods or services whereby it is impossible to prevent an individual who does not pay for that thing from enjoying the benefits of it. Market allocation of such goods is not feasible.”

Which leads us to ask if VCs have an ulterior motive in talking down the value of ideas? Perhaps their eagerness to dismiss the potency of ideas is more rooted in commercial realpolitik than philosophical authenticity? After all, ideas are extremely hard to own. By downplaying the primacy of ideas, GPs can avoid awkward conversations with IP lawyers from rival portfolio companies.

Mere neurons.

The “ideas vs execution” dichotomy is a reductive red herring. Together, both matter. And without the other, each is meaningless. Considering the mechanics of startup life, it’s dangerous to diminish the importance of ideas since in fact, they are the spark that precipitates execution. Like a certain Danish prince immortalised by Shakespeare, first we conceive, then we act (even if it takes a bit of procrastination and soul-searching).

The history of technological progress bears this out. Contraptions as sophisticated as submarines, satellites and helicopters started life as mere neurons in the mind of brilliant thinkers, brought to life many years later by a procession of doers.

In 1578, the English mathematician William Bourne devised first plans for an underwater navigation vehicle; nearly 300 years later, in 1866, Julius H. Kroehl’s Sub Marine Explorer was the first submarine to successfully dive, cruise underwater, and resurface under the control of the crew. And geosynchronous satellites were popularised by science fiction author Arthur C. Clarke in 1945, nearly twenty years before the first geostationary communication satellite was launched in 1964 (and interestingly, used to telecast the 1964 Summer Olympics in Tokyo to the US). 

But it’s the remarkable history of the helicopter which best elucidates the reflexive relationship between inspiration and action. 

A 2,300 year journey.

Oscar Wilde said that, “An idea that is not dangerous is unworthy of being called an idea at all.” The helicopter is one such idea. Human beings have pursued vertical flight for millenia. The idea was perhaps always there, we simply needed the technological conditions to make it happen.

Since around 400 BC, Chinese children have played with bamboo flying toys, which create lift when spun by a stick attached to a rotor. And the 4th-century AD Daoist book Baopuzi by Ge Hong (抱朴子 "Master who Embraces Simplicity") describes some of the ideas inherent to rotary wing aircraft:

“Some have made flying cars [飞车] (also known as bamboo dragonflies 竹蜻蜓) with wood from the inner part of the jujube tree, using ox-leather (straps) fastened to returning blades so as to set the machine in motion [以牛革结环剑,以引其机].”

Similar designs to the Chinese helicopter toy appeared in Renaissance paintings and other works. But it was not until the early 1480s, when a certain Italian polymath named Leonardo da Vinci created a design for a machine that could be described as an “aerial screw”, that any recorded advancement was made towards vertical flight. 

Later, in the 18th and early 19th centuries Western scientists developed vertical flying machines based on the work that preceded them by hundreds of years. Finally, in 1906, Jacques and Louis Breguet began experimenting with airfoils for helicopters and cracked the first manned flight of a helicopter. The helicopter’s 2,300 year journey from idea to execution is a shot in the arm for founders everywhere, reminding us that progress is driven by the symbiotic relationship between imagination and perspiration.

The optimal trade off.

What then, is the optimal trade off between ideas and execution? Would you prefer a 5/10 idea executed to 10/10 standard, or a 10/10 idea executed to 5/10? We’d take the former option every time, but we strive every day to combine the two. Some days are easier than others, but onwards we go.

Whilst on the theme of flight, it’s worth mentioning the Wright Brothers. They had the strongest basic patents ever issued (for the flight control surfaces that make controlled flight possible). But despite this prized chunk of intellectual property (which they vigorously protected), they failed to execute on the business side. Experienced – and politically connected – businessmen like Glenn Hammond Curtiss and Alexander Graham Bell partnered and executed exceptionally well, dominating the US aircraft market and becoming the go-to aircraft manufacturer of WW1.

Ideas are never worthless, but they cannot flourish without execution – in other words, they can’t actualise and reach large numbers of people. Scott Belsky (the founder of Behance) wrote a book about it, the title of which (“Making Ideas Happen”) we stole for this blog post. It’s a great way of reframing the task of the modern entrepreneur. To generate value for customers, ideas cannot be nouns. They must be verbs.

We must also consider the dynamic nature of business – the infinite game we love to talk about here at Three Body Capital. The Prussian Field Marshal Helmuth von Moltke the Elder, who pioneered modern military organisation and tactics in the 19th Century, famously said that, “No battle plan survives first contact with the enemy”. It’s equally true that no business plan survives first contact with the customer. The same is true of sports – the best tactical system will fail if it isn’t tailored to the opposition, not to mention the weather conditions and a host of other parameters.

Lessons for investors.

It’s late in the startup cycle and ideas are a commodity these days. It’s genuinely hard to come up with something new, as the market for ideas has become more efficient and liquid. Increasingly, execution has become the differentiator, the thing that elevates founders and startups above their peers. This applies to our approach as entrepreneurs. But it’s exactly how we think about our process as investors too. 

In an increasingly analysed and commotised investment landscape, ideas simply don’t create the edge for fund managers they once did. Good trade ideas still persist and we work hard to find them, but even these cannot take flight without a robust process. As we are finding with our other business lines, execution makes good ideas great – it challenges, refines and monetises them. 

With this in mind, please do get in touch with your ideas. We’d love to hear your thoughts on what we’re doing (and what we’re not doing) and incorporate them into our thinking as we continue to execute on our vision of improving access to markets and connecting capital with opportunity. Ideas are never worthless, regardless of what people might say.