The Good Idea Paradox

No one has ever lost big money with a bad idea. Because no one can get big money to lose with a bad idea.

The danger is in good ideas. You can get money for them and pretty well everyone has a good idea that won’t work.

Implementing a good idea is far harder than having the good idea. Note a recent case where the brothers who purportedly dreamed up the idea for Facebook and sued to get value for it, received $66,000,000. About one 1600th of Facebook’s IPO value.

The judge pointed out that the implementation was the value, not the idea.

The paradox explains why so many businesses fail. People think a good idea and a few tactical steps are all that matters. Location, Location, Location, comes to mind. Tactics are important but the real problems are in logistics. Having the right product at the right place, at the right time, at the right price, with the right margin, offered by the right staff for the right customer is difficult. I have only just thought about it, but I would be willing to bet that Wal-Mart’s logistic system is worth more than their real estate. Does anyone know?

Business ideas are like poker hands. Bad hands cost little because you don’t play them.  The only really expensive poker hands are the second-best ones.

Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.

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