When Ideas Are Easy And Execution Is Hard... It Makes Sense To Share Your Ideas

from the be-open,-be-good dept

We've been hitting on the theme that ideas are easy, while execution is hard for a while now -- and a friend pointed me to a worthwhile blog post by Brad Burnham, an experienced venture capitalist, now a partner with Union Square Ventures. Burnham muses that the successful entrepreneurs he's backed tended to be the ones who were the most open about their ideas, not just with him, but with everyone. What it really comes back to is this idea that ideas are easy and execution is difficult. The entrepreneur who is living and breathing the idea (and has probably already tested out a bunch of different related ideas) is likely to gain a lot more from the conversation with an outsider (even a potential competitor) than that other person is going to gain from talking to the entrepreneur. While there is an old-school mentality that you need to keep things secret, history has shown that that tends not to be the best way to grow a successful business. When you do that, you end up making all sorts of mistakes that a few conversations may have helped you avoid.

An interesting parallel to this debate is the discussion we had last year about noncompetes. What the research there has shown is that a big part of the reason for Silicon Valley's success is the fact that noncompete agreements are unenforceable in California. What happened, then, was much more job-hopping, and a much faster dispersion not just of ideas, but of problem solving and innovation across the industry. In AnnaLee Saxenian's book that kicked off this debate, she noted that Silicon Valley culture was such that many engineers here spent plenty of time discussing their biggest challenges with direct competitors, just to get better ideas -- believing that solving the big problems would work out better in the end for everyone, and that holding back ideas didn't solve anything. Amusingly, in that case, Burnham's partner at Union Square Ventures, Fred Wilson, took the other side: favoring noncompetes (though, I get the feeling Wilson's changing his mind as the evidence has been presented).

This also, by the way, goes completely against the theory (chiefly propagated by supporters of a stronger patent system) that without patents, the world would devolve into an innovation-free zone where trade secrecy ruled. That seems unlikely to happen, based on exactly what Burnham and others have noticed. Keeping an idea secret not only is unlikely to be effective, it can often stifle the necessary development. Thus, it will be the companies that are more open and free with their ideas that dominate the market. The key reason why, of course, goes back to what we talked about at the beginning. Ideas are certainly important, but it's execution that's the key to success -- and being more free in sharing your ideas will often help you execute better.

Burnham also asks about whether or not it's possible to "model" this openness -- and I think it is. In fact, in many ways it matches the infinite goods economic model we've been discussing, with the ideas representing the infinite goods, and the execution being the main scarcity. So, in the same way that freeing up music helps expand the opportunities for every other area of the music business, opening up your idea is likely to open up many huge new opportunities for the entrepreneur in how to execute successfully. If you really want to model it mathematically, you could probably build something based on the economic models that made Paul Romer famous (and should eventually net him a Nobel prize), but that might be overkill for what Burnham is looking for. However, if you're familiar with Romer's work, applying it to this scenario should make you see how much more powerful sharing ideas can be vs. keeping them secret. It's not just a small edge -- it can be a huge difference. I've been working on a few simpler models myself that I'm hoping to share (openly and freely!) soon enough, in the hopes that others can improve on them.

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  1. identicon
    Nasch, 6 Jun 2008 @ 7:58am

    Re: Re: Re: Re: repeating question

    This is an argument about "should" as well. Being official *should* have value, and being a knock-off *should* ruin your credibility ... but it doesn't necessarily need to be so. This becomes more likely the less-well-known the original creator is.

    No, it is not an argument about "should". You're putting words in his mouth. He is not saying being official should add value, he is saying it does add value. You may disagree with this observation, but don't make it into something it isn't. If you disagree, argue based on the facts. Convince us why the public would just as soon read "Harry Potter and the Mystical Diamond" by somebody they've never heard of, rather than the next Harry Potter book by JK Rowling.

    Even if you're right, and nobody cares which version is by the original creator, it could still be better for society if everyone could make derivative works without restriction. There would be more content, more content that people want, and (IMO) more money to be made from that content overall. Why should our society be intent on artificially concentrating revenue in the hands of the original creator, rather than producing a situation that is at minimum better for society, and better for every creator except that one, and potentially not even worse for them (if they appropriately take advantage of the market)? I know you think it's more important that the original artist gets protected than that everyone can benefit more fully from their creation, but my question is... why? Is it simply self-interest, or is there a more sophisticated explanation?

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