Nov 12, 2013
How To Judge Big Ideas
Imagine flaws improving
Powerful ideas and disruptive startups are often mocked early in life. Salesforce and Facebook, for instance, encountered heavy skepticism during their founding days. Even electricity, an indispensable foundation of modern society, once faced opposition: it was considered too dangerous for normal people to operate inside of homes.
Pessimism is natural. Every idea, no matter how extraordinary, will contain flaws because no idea is perfect. Intelligent people spot these issues sooner than others and dismiss the idea outright, concluding it will flop like most new ideas and move on with their busy lives.
Critics fail not because they are wrong, but because they are right about the wrong things. They fail to entertain how ideas and products may evolve — they fail to envision the future. Much like humans, bad ideas and big ideas both begin life with noticeable issues, and some of these may persist for life, which only calcifies the stubbornness of detractors. Critics see defects go unaddressed and smugly wrap themselves in a warm blanket of false comfort.
However, the primary difference between big ideas and bad ideas is that big ideas evolve to fix shortcomings, eventually producing such massive benefits that everyone acknowledges their value.
Instead of enumerating flaws then dismissing ideas, prudent people consider at least two more questions before reaching a judgment:
- Are shortcomings temporary or permanent, i.e., will the market size grow from trivial to substantial if the technology becomes cheaper, faster, more powerful, or otherwise better?
- What benefits are enabled by the idea? Do these benefits outweigh the costs (e.g., the number of deaths caused by home electricity is far surpassed by its innumerable benefits)?
Step two is the central challenge, demanding courage and creativity, and what distinguishes legendary venture capitalists like John Doerr and Michael Moritz from ordinary investors.
