This is pure nonsense. Please, please, please stop talking about ideas. What people steal --and the only thing with huge value-- are MARKET OPPORTUNITIES. Ideas are easy to generate. Everyone has loads of them. When an idea is combined with the work necessary to identify if a market opportunity exists it can become invaluable.
Ideas are not stolen because an idea, all by itself, does not identify whether or not anyone wants the thing or the service. If I told you that I had an idea to make a dish-washing sponge in the shape of a smiley face you, more than likely, would walk away laughing. So would I if someone came to me with that idea. How would you react if I actually manufactured them, sold a bunch and showed you that people want them? Right. You'd pay attention. You wouldn't laugh. And you certainly wouldn't walk away. Well, I saw exactly that happen at the Shark Tank show recently. I think the guy got a $300K investment.
$300K for the idea for a friggin smiley-face sponge?
Nope. $300K for the market opportunity he uncovered.
If you present someone with an idea and that idea is so good that it identifies the market opportunity without further work, well, it might get stolen. With most other ideas they'll listen and nod and possibly even think you are a moron and completely forget what you told them.
If, on the other hand, you show them an idea coupled with your work confirming that a good scalable market exists, hold on! The market opportunity will either be stolen or you'll have someone all over you wanting to become an investor or participate in some manner in the opportunity you identified.
"Ideas" and "market opportunities" sort of go hand in hand, don't you think? The market opportunity is assumed when someone talks about an idea for a business.
Yes, and validating the assumption of a market opportunity is called finding product-market fit. Failing to do so is a leading cause of death among startups. An actual market opportunity, not an assumed one, is certainly valuable - which is why a VC will invest in it where they wouldn't invest in just an idea.
> "Ideas" and "market opportunities" sort of go hand in hand
Only when the idea precedes the exploration of the opportunity space.
Have an idea -> Build a prototype -> Show it around -> Close some sales.
Here the idea is related to the market opportunity. It triggered a search for the opportunity when someone was interested or puzzled enough to do the work. Few will invest in an idea unless there's some kind of "sugar on top" that reveals really good potential for a market opportunity. Many will invest in a reasonably tested market opportunity.
When are an idea and a market opportunity not connected? When the idea does not precede the market opportunity.
I'll give you a couple of concrete examples from my own life.
A friend of mine came over one day many years ago and said that his contact at one of the local film studios told him that they were looking for a carpenter that would make them 100 sets of this specially designed piece of furniture for an expansion project. My friend knew that I, when not coding or designing products, liked to, among other things, do woodworking projects. I also had a pretty niche setup in my garage at the time.
So, here's an opportunity presented to me which had not originated with an idea.
What did we do? We spent that weekend making an unsolicited sample of the piece the studio needed. He delivered it on Monday to his contact along with pricing. By Wednesday we got the deal. By Saturday I had a pile of furniture-grade plywood in front of my house that was eight feet tall. We setup an assembly line and spent a week (with some help) cranking out the pieces. My neighbors were puzzled and probably somewhat concerned. A couple of them came over to help for a few bucks. Delivered on time and walked away with $60K profit. Sweet.
Any able carpenter would have taken that opportunity and run with it. We just ran faster and put a solution in front of the customer as painlessly and well-executed as possible.
Another time I had someone call me to tell me that there was a company in need of a box built to translate a communications protocol in real time. RS422 in and out. Status display. Power button. The conversations went something like this:
Me: "How many?"
Him: "Probably 25 per month"
Me: "How much are they willing to pay?"
Him: "They've been trying for months but it's a bunch of
Optics PhD's and this isn't their thing.
They are desperate for a solution".
Me: "Why?"
Him: "They have sold a bunch of these units at about $500K
a piece and this has been one of the only reasons
they can't deliver."
Me: "I can meet with them tomorrow AM"
End result: I sold them a protocol converter box for $3,000 a pop for the first 25 units, $2,000 each for the next 75 and $1,000 each thereafter in lots of 100 units.
I built it in a weekend: 1 RU enclosure. Off the shelf 8051 board. Small custom board with RS422 drivers and receivers. LCD display. Power supply. Connectors. I don't think the total cost exceeded $150. It would have been a sweet ride except that about six months later they got acquired by a large multinational and, effectively, shut down.
Again, a market opportunity that did not come from an idea.
Now, what if I said? "Let's build an RS422 protocol converter box and sell it for $3,000". And I did this in complete isolation of having identified a market need? Well, it'd be a flop. Sometimes fining opportunities is like finding a needle in a haystack. Someone almost has to sit on it for you to become aware it even exists.
I actually tried to convince them that this stuff was very simple and that they could do it. No interest whatsoever. I think what was going on behind the scenes is that they were in talks to be acquired (or planning to be in talks) and they really wanted their product to work. They probably also had a number of challenges of their own to deal with. In that context, it may have made sense to pay whatever was necessary to get going.
completely agree with this argument. I really like the authors argument that when the time is right many people will have the same idea at the same time. copying an idea is trivial, copying the execution, the stamina, the bravado to get shit done, and the balls to get other people to follow - significantly more difficult
The guy on shark tank with the smiley face sponge had one patent and two others pending. The idea wasn't the smiley face, it was a material which changed properties depending on temperature.
What you refer to as market opportunity is also commonly considered to be an idea. For example, lets say you find a group of folks willing to pay $1,000 for widgets that cost pennies because you discovered that (a) they don't know about these widgets and (b) it solves a major painpoint. Both are considered ideas.
> What you refer to as market opportunity is also commonly considered to be an idea.
Nope. Wrong.
The idea in your example is: "I want to make a widget that does x".
The opportunity is: "I made some widgets that do x and 100 people bought them at $1,000 each during the last 30 days".
An idea without an opportunity is: "I made some widgets that do x and I only found one person during the last 30 days who said they'd be willing to pay $50 for it".
Another idea is: "Let's make a website that allows employers to keep track of employee productivity"
The opportunity might be: "We built a prototype of a website that allows employers to keep track of employee productivity, showed it to ten companies and two of them bought licenses for $2,000 per month".
The lack of opportunity might look like this: "We built a prototype of a website that allows employers to keep track of employee productivity, showed it to ten companies and none of them saw enough value to even test it for free".
In other words, opportunities represent a very direct link to actually having a real business that can scale and grow.
Go ahead, quit your job and take idea number two above. Spend three months developing a prototype. No clue if there's a market opportunity there. It's probably worth millions. Maybe.
So, really, an opportunity is a tested idea. I completely agree.
It's hard to come up with an idea without at least some intuitive sense of what kind of need/desire its fulfilling. I think people deceive themselves here because they have a naturally inflated sense of how great their ideas are.
To use your phrasing: people think their idea is great enough to require very little testing to become an opportunity - their intuitive sense of how great their idea is is enough to begin immediately calling it an opportunity.
Well, another way to put it is that you come up with ideas and only others can validate them into opportunities. You can't turn an idea into an opportunity. The market, your customers, determine if there's an opportunity in it somewhere.
But I'll reiterate what I said about opportunities: The can and do exist in the complete absence of ideas.
The value is in opportunities. There are people who would love to steal your opportunities. They don't give a shit about your ideas. That's too much work. They want you to hand-feed them the juicy opportunities. It's almost like the difference between R&D and just "D". The first is hard. Once the "R" is done, the "D" tends to be a lot easier to execute brilliantly.
I have a database of probably about 600 ideas accumulated over time. Most are probably crap. No market opportunity. I am in the habit of logging ideas without passing any judgement at the time they are generated. Why? The Pet Rock. As my wife likes to remind me, I am to fucking smart to have ever considered the idea of selling rocks as pets in a little box. And she is right. So I try to not judge ideas until I really take the time to evaluate whether or not an opportunity exists.
As I navigate through my idea database and start testing them I start to discover the ones that might represent real opportunities and focus on them.
Sometimes opportunities require a lot of work to validate. An example of this are most iPhone apps today. You get two days, maybe three in the "New" list under your category and then it's a quick trip to page 253. Invisible. Gone.
Does that mean that there is no opportunity in application x based on idea y? Not necessarily. Having an app published on the app store is not validation, it just means that your app is now available for others to see, if you can get them there. In order to validate the idea you have to now do the legwork to create awareness and bring people to your app. Only after a real effort to get hundreds or thousands of people to have a look can you honestly say if your idea for an app that does x represents a real market opportunity. Some get lucky and take off on day one. Hardly the norm, of course.
This, BTW, as a developer, is one of the most frustrating aspects of dealing with people who approach you with app ideas. They don't understand that thinking that something is great doesn't mean that a million people are going to run to buy it.
A case in point is this guy who approached me about doing yet another storybook for kids. There's a million of them out there. Great idea right? The market opportunity is certainly validated. Right? Lots of people buying them. Right? Well, no. Not really.
The other element of this that hasn't been discussed is barrier to entry or barrier to market penetration. Sure, you can come up with a new series of children storybooks with great art, voicing, interactivity and music. The idea and the opportunity are identified and validated. The problem is that it will cost a bundle in marketing to unseat the top ten or top five sellers in that category. An absolute bundle. So, even though a market opportunity exists the idea and the opportunity are nearly worthless unless someone comes in with a truckload of money to make it happen.
When the guy asks me to do the dev work for 10% of the revenue...well, thankfully I can multiply by zero at blinding speed. No thanks. I told him that I'd do it for 25% and a non-refundable revenue advance payment of $50K upfront. He left. That was me using my Jedi powers to have him leave me alone.
We're probably just fighting over semantics. What you call opportunity sounds more like a proven idea versus your typical idea that needs proving.
Take the many instances when we say something like: "I have an idea: we could try selling blah to blah people." Is that an idea or a possible opportunity? I'd argue it is both.
Or "I have an idea: let's sell to blah people because I know they'd love this". Is that an idea or an opportunity? I'd argue it is both.
No where in the definition of an idea does it specfically exclude anything related to market opportunity.
Ideas are not stolen because an idea, all by itself, does not identify whether or not anyone wants the thing or the service. If I told you that I had an idea to make a dish-washing sponge in the shape of a smiley face you, more than likely, would walk away laughing. So would I if someone came to me with that idea. How would you react if I actually manufactured them, sold a bunch and showed you that people want them? Right. You'd pay attention. You wouldn't laugh. And you certainly wouldn't walk away. Well, I saw exactly that happen at the Shark Tank show recently. I think the guy got a $300K investment.
$300K for the idea for a friggin smiley-face sponge? Nope. $300K for the market opportunity he uncovered.
If you present someone with an idea and that idea is so good that it identifies the market opportunity without further work, well, it might get stolen. With most other ideas they'll listen and nod and possibly even think you are a moron and completely forget what you told them.
If, on the other hand, you show them an idea coupled with your work confirming that a good scalable market exists, hold on! The market opportunity will either be stolen or you'll have someone all over you wanting to become an investor or participate in some manner in the opportunity you identified.