Quite often I am approached to invest into “an exciting new idea that will make Billions of Dollars” from Idea People. The pitch is simple: “I had this amazing idea, give me money” — Oh and I get 5% equity in exchange, yay.
The scenario above is all too common to anyone on Seed Stage Venture Capital or Angel Investment. The problem with Idea People is that they overvalue the idea itself and hardly ever focus on the execution.
Very often Idea People will refuse a seed stage offer with a large chunk of equity with fuming outrage. “How dare this VC want so much equity for my amazing idea, it is worth Billions, I say Billions!”. Unfortunately quite often this stage tarnishes the relationship between the “Idea Person” and the investor.
Once the “Idea Person” fails to find any investor willing to invest in something that is not much more than a half baked idea, the “Idea Person” settles to bootstrap it. Generally this stage leads to abandonment and collapse of the idea, as the budding entrepreneur tends to put the project in the too hard basket and find the next big thing — Go to line 1 and repeat.
This article is not supposed to be a rant about Idea People, so please bear with me as I will list the solutions below.
The world needs Idea People more than ever. The dreamers, the creators, the inventors are more important than air. The only thing that needs to change with Idea People is the mindset. With the right mindset they will be able to convert into Success People.
Once they accept the fact that execution is more important than the idea itself, it becomes easier to give up equity and bring in talent that will fill all skill gaps. The most noble achievement for an “Idea Person” is to convert the idea into reality. My life mission at Outroll is to do exactly that, and I do work hard to share this vision with all Idea People that cross my way.
Idea People generally reach a tipping point where they realize that they need Execution People to help them achieve their vision. The most coveted entrepreneur is the Idea and Execution Person. Being able to find a new opportunity and converting it into a product single-handedly is as rare as unicorns — There are a few, but not the norm.
The change in mindset generally needs to come from inside, and many ideas will unfairly die before you become a Success Person. The following pointers may help you find out if you are an Idea Person and what to do.
How can I know if I am an Idea Person (gasp!):
- Are you overly protective and secretive about your ideas? “Idea People” tend to not disclose an idea to anyone else, and the idea will most likely die as just that, an idea. Most people will not bother to copy your idea, as it is just too hard and risky, go get out there.
- Do you overvalue the impact of the idea? Be realistic about your idea and it’s potential. Try doing a SWOT analysis to keep things real.
- Do you think that you can do everything on your own? If you are super genius with great time management you can build and launch an app on your own, however to achieve greatness you will always need a team. Try it, it makes everything more fun.
- Do you change ideas very often but never finish anything? The most creative and brilliant people tend to have dozens of great ideas a day. This is fantastic, but try to focus on the best ones and make it a reality. And get someone to help you!
- Do you want to own 100% of everything? This one is obvious, but to make the idea a reality you may have to share it with many people. It is still better to have 30% of a Billion Dollars than 100% of a failed idea.
- Do you blame not having money for not making it a reality? Thinking that money will solve your problems is a dangerous exercise. Money can help you fill the skill gap, bit it may be more important to build the right team and relationships.