The Value of Execution in the Digital Era
I previously wrote about how the popular meme that ideas are worth nothing is meaningless — good executions of bad ideas are also worth nothing. This piece is about why, if ideas are valuable, execution is valued more in the digital era and the outcome of this is a new era of craft and performance.
The 20th Century, the Century of Ideas
In the 20th century mass production of physical objects reduced the value of craft — of execution. Once decoration could be mass produced, decoration had less value and this was part of the trigger for modernism which valued form over decoration. Novel ideas and abstraction became more highly valued than skillful figurative representation and execution.
In the 21st century the opposite may be happening as ideas, in the form of computer code, are mass distributed via the Internet.
A New Era of Arts & Crafts
Is the current mantra in technology circles about the value of execution over ideas part of a wider cultural reversal of the 20th century? Is it a signal from within the industry of a fundamental cultural change triggered by the Internet or just a small scale effect limited to the tech industry itself?
Given that technology is touching so many parts of our everyday lives it would be odd if it stopped there. But the trigger for a new era of Arts & Craft rather than abstract ideas could be a result of a startup ecosystem traditionally dominated by people from engineering rather than design backgrounds and from the free flow of ideas from startups to VCs or between open source developers, to then execute on.
As this percolates into other areas it may even explain why unrelated fields such as the one I used to be in, architecture, have seen a swing back to craft, via the rise to prominence of people like Peter Zumthor or Herzog & de Meuron.
Creativity and the World of Ideas in the Digital Era.
Steven Berlin Johnson writing in the New York Times ignored anecdotal evidence and sifted through a raft of data to conclude that the so called, ‘creative apocalypse’ the Internet threatened on the arts, and in particular, music, hasn’t come about. There are roughly the same number of creative people making the same amount of money as before the millennium (creatives outperformed other professions, making up 1.2 percent of the US job market in 2001 vs 1.3 percent in 2014, with annual income growing by 40 percent, vs the US average of 38 percent). The number of full time US musicians grew at twice the rate of the average of other professions from 1999 to 2014 and between 2001 and 2014 the number of independent musicians grew by 45 percent. While income for musicians in particular has remained roughly flat, the middle men, the music industry, is worth a tiny fraction of its pre-Internet value with global revenues declining 75 percent in real terms to $15 billion.
There is more good news in the fact that the process of discovering talent has become more meritocratic. Whereas in the past a would be Bob Dylan would have had to travel to New York to be discovered, thus favoring the people who were already there or had the right connections, today this can happen over the Internet through virtual networks.
The Reversal of the 20th Century Shift from Craft to Ideas.
The shift away from ideas to execution is one change that is a reversal of what happened in the twentieth century. When mass produced ornament became common place at the turn of the 19th century, new and original forms became more highly prized in architecture, rather than craft. Likewise, realistic photographic imagery triggered a shift away from figurative to abstract painting. In both these cases this was a shift away from execution (craft) to ideas (originality). In an age of mass production what mattered was ideas not craft.
The Age of Mass Distribution of Ideas.
The 21st Century is the age of mass distribution, where the internet has created infinite channels and a collaborative culture of idea sharing through open source has become the dominant means of production of the code that flows over these channels. In this era, the ability to control the dissemination of information and charge for intangibles such as ideas has diminished.
An idea can be infinitely reproduced in code whereas a unique event cannot. Because of this the price of ‘being there’ has increased. While the industry of recorded music (ideas) has declined dramatically, the business around performances (execution) has boomed. The record industry has declined but concert ticket prices have grown by 50 percent more than consumer prices since the mid 90s.
Johnson concluded: “The growth of live music isn’t great news for the Brian Wilsons of the world, artists who would prefer to cloister themselves in the studio, endlessly tinkering with the recording process in pursuit of a masterpiece. The new economics of the post-Napster era are certainly skewed toward artists who like to perform in public.”
But price and value are not the same. The price of an idea for a song vs its performance has changed, but that does not mean their intrinsic value has.
The true value of many things is subjective, which is why nobody can put a price on them, it varies. But we can look at things such as ideas, which are sometimes not priced at all, directly, but still highly valued, according to how they are protected.
One way of quantifying this difference between the value and price of ideas, the ‘cynic coefficient’, is to look at what ideas can be charged for and protected, either by law, force or practicality.
The swing towards valuing things that cannot be reproduced in code, such as a performance, may be seen as price inflation for rarity (supply-restricted analog things) as digital media becomes ubiquitous and supply of digital content is constrained only by demand.
Ideas That can be Protected Practically
Despite the notion that the switch to live music is a re-valuing of execution, the performance example has an implicit idea component. People are often not just paying for a performance (execution), but a performance by someone who wrote a song (idea) and they will pay a premium for this authenticity. Witnessing someone performing their own work in a particular time and place cannot be reproduced, it cannot be coded and so will remain unique, rare and analog, highly valued and highly priced. The price is for the person that came up with an idea executing it, not the ‘cover band’, and by combining the two you can protect the idea component and charge for it. When you go to a concert you are paying for ideas (experience and thoughts that only the author knows that drives a performance) that can’t be ripped off.
Ideas that can be protected by force
If ideas were really worth nothing then large corporations would be open about them. If all that mattered was execution, a company worth more than half a trillion dollars, like Apple, would have nothing to fear about being open about its product road map. In fact Apple is very secretive, outside of Apple colleagues have to use code numbers when talking about projects. A friend who was in charge of NASA’s manned space program was perfectly free to talk about the shuttle replacement, but now that he works for a company that makes phones, he cannot tell me what product he is working on. Apple is more protective of its ideas than NASA and that is because Apple is a creative company where ideas matter.
Compare this with the situation for startups. There is a popular myth that the principal advantage a startup has over an incumbent is speed and agility and that its ideas are worth nothing. Believing this myth is of practical convenience, since in order to raise money to be able to execute at all, startups have to communicate their ideas to investors. Investors, who have to talk to lots of startups to evaluate ideas (and of course the potential of a team to execute that idea), don’t sign Non Disclosure Agreements about other people’s ideas and so have a conflict of interest when saying whether ideas are worth anything.
For startups too, it is about ideas coupled with execution. Protecting your ideas (through a bit of secret alchemy or by building a brand to stamp them with authenticity, rather than the public idea parade of patents) enhances the advantage of agility.
If ideas aren’t partially protected by secrecy or brand awareness, startup agility risks the danger of being the advantage of a mosquito vs a billion dollar fly swat. The swat is often in the guise of a startup well funded by a top tier VC rather than an existing corporate.
The Inevitable Reaction, Moving back to Ideas
This creates a paradox, secrecy is the opposite of public awareness, so there is a danger zone between keeping an idea under wraps and evangelising it. In the digital age, where execution is valued more than ideas, what this means is truly innovative startups should perhaps not behave like lean startups and iterate over MVPs, but behave like Apple — be discrete till you have executed well on your ideas, then show the world.
