Conventional wisdom is that ideas are everything and you must preserve your ideas. Modern, especially Silicon Valley wisdom is that ideas don’t matter, execution is everything. Both wisdoms are only partially correct.
While it’s true that your idea won’t have any meaning if you can’t execute it. Equally true, but rarely said, is that no matter how well you execute, you won’t make a big business unless your idea is big.
Very rarely do you come across people working on an idea with the potential to become a $100B+ company. Often, the simplest ideas make successful businesses. But most ideas you come across are unnecessarily far more complex. For example, if your idea is to open a sandwich shop, you will be a restaurant owner. Even if you are 100% successful, you will still not become big like Google. You will never become Apple.
If you expand the idea of the sandwich shop and you desire to become a chain of sandwich shops, you could become a much bigger business than your original idea, but still not a very big $100B+ business. No restaurant chain is worth $500B in value.
Now, let’s talk about other business. No cost of goods sold, a mostly automated system so no labor cost, recurring charges so no “keep on selling” pressure, and no inventory meaning asset-light, scalable meaning it could keep on expanding and becoming bigger like elastic. Consumer-focused, even if millions give $1 month, it could become several billion one day. Need-based or so much convenient that people don’t mind paying. Despite being the Mecca of innovation, you won’t find many decks like these floating around in investors’ offices.
If Jeff Bezos had decided to open a liquor store, Bill Gates had decided to be in the restaurant business, or Steve Jobs had launched a building materials company, they would still be very successful because they are great entrepreneurs, but there wouldn’t be trillion dollar businesses like Amazon, Microsoft or Apple. It was possible because they thought of very different business ideas. Ideas that had the potential to indeed disrupt things and become trillion-dollar businesses.
Execution is key. But ideas do matter. They matter a lot. That’s why no Silicon Valley VC will provide financing to entrepreneurs starting a sandwich shop or a car repair shop.
Text of the YouTube video