How To Judge Big Ideas
Don’t stop analyzing after listing the flaws
Powerful ideas often get mocked early in life, and there seems to be an inverse relationship between initial positivity and future impact. Salesforce and Facebook, for instance, are two disruptive companies that encountered heavy skepticism at first. Even technologies considered indispensable today once faced opposition yesterday: electricity was originally feared as too dangerous for normal people to manage inside of homes.
Pessimism is natural since very few concepts, by definition, are extraordinary, and all ideas, no matter how extraordinary, will contain flaws. Intelligent people often accurately identify these defects and conclude the idea will never gain traction, moving on with their busy lives and never analyzing the topic in much more depth.
They are right in the vast majority of cases, as bad ideas and big ideas both generally start out ruthlessly ridiculed. The mistake comes in ending the evaluation after articulating the problems. There should be two more steps:
- Are shortcomings temporary or permanent, i.e., will the market size grow from trivial to substantial if the technology becomes cheaper, faster, or more powerful?
- What new 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.