A stranger corners you at some industry event. In hushed tones, he tells you he has a “great” idea. And he’ll “share” it with you so long as you promise that you won’t tell anyone or rip him off.
“It’s an amazing idea,” he assures you. “I’ve been thinking about it for years. I just need someone to make it happen.”
That lucky someone is YOU!
I rarely show myself at industry events. But when I do, this sort of thing happens regularly—like every five or 10 minutes.
Earlier in my career, I was eager to hear “great” ideas and spent hours listening to them. About 80% of them were crazy, ordinary, or incomprehensible. Of the 20% that had merit, I never implemented a single one.
The most common reason was that the ideas, however good they sounded, were outside my expertise. As you know, I make it a rule not to invest time or energy in businesses about which I know nothing.
A second reason was that the good ideas I understood were almost always ideas I was already working on.
And when a good idea was given to me about a business I knew I wasn’t already working on, I simply didn’t have time to follow through. I exchanged cards. I made promises. But nothing came of it.
Today, when someone tells me he or she wants to share a great idea, I say this:
“Don’t take offense, but I’d rather you didn’t tell me your idea. Not because it isn’t great, but because my to-do list is already six feet long with great ideas.”
Bob Bly tells me that people would routinely pester famous author Isaac Asimov with plot ideas for science fiction stories. They assumed he’d be happy to write and publish for 50% of the profits. Asimov’s response was, “Tell you what. I will give you a great idea for a story. Youwrite it up, you sell it, and then you can split the profits with me.”
Where Does Value Come From?
The belief that great ideas are intrinsically valuable—i.e., worth money in their ideational state—is common. This is the result of a thousand stories in business books and magazines with the same basic plot line:
A “regular guy” wakes up with a great idea for a new technology, marketing concept, book, etc.
Excitedly, he shares his idea with friends and family members, but they discourage him. He persists until one day he finds one person—a rich man, a publisher, a banker—who believes in him and his idea. They team up and voila! He becomes rich and famous.
The reality of success is much more like this:
A man wakes up one day with a great idea. His spouse says it’s the silliest idea she has ever heard. But he continues working on it quietly, making progress in small increments, hitting and overcoming countless obstacles.
Along the way, he develops relationships with people—vendors and customers and professionals who watch his progress. One day, one of those people approaches him and offers to invest in his growing enterprise. He accepts. Or he doesn’t. He has positive cash flow now, which puts him in the catbird seat. He can decide.
Great ideas are a part of business and social progress. But the value of any particular idea depends on many things, most of which have nothing to do with the idea itself.
Successful authors and businesspeople know this. They know that the idea becomes increasingly more valuable as it develops from an abstraction to a plan to a working model and, finally, to a product that proves itself in the marketplace.
Asimov had a genius for inventing great story ideas, but he wasn’t paid for that. He was paid for delivering books that sold.
Think about what he actually did.
He came up with a story idea. Then he sketched it out, discussed it with other people, thought about it some more, and altered some aspects of it. When he was happy with it, he submitted it to a publisher, made revisions based on feedback, then went ahead and rewrote and revised the story a dozen times before it was printed. And when it was printed, his work had just begun. He had to go on tour, promote his book at book signings, and make appearances wherever anyone would have him.
That’s how you become a bestselling author.
Action Trumps Abstraction
What’s that old maxim? “Success is 10% inspiration and 90% perspiration.” Every successful entrepreneur and author I know feels that way. Best-selling author and motivational speaker Robert Ringer wrote an entire book on the topic. In Action!, he says:
An idea, of and by itself, has no intrinsic value. It must be accompanied by action. It is action that cuts the umbilical cord and brings an idea out of the womb.
And that’s why Isaac Asimov, Bob Bly, Robert Ringer, and countless other successful people don’t want to hear about someone else’s great idea.
Please Don’t Send Me This Letter
Thanks a lot for your last essay on the great idea. It’s gratifying to hear that my ideas are worthless. It’s encouraging to know that you and your rich and successful pals don’t want to hear them.
I’m not saying that your great idea isn’t great. Nor am I saying that your ability to come up with great ideas is not a valuable skill.
Innovative ideas are responsible for the bulk of human progress in business, in social organizations, and in art. Good business ideas—such as the ideas behind Federal Express, Post-it Notes, Uber cars—improved the world.
And if you can generate good ideas, you may—one day—be able to get rich from them without doing any of the hard work of turning those ideas into products and selling those products.
I’ve written about James Patterson, one of the most successful authors of all time. (More than 300 million of his books have been sold to date.) A master at plotting crime novels, Patterson has reversed the idea/action ratio. He develops an idea and then hires a trusted writer to write the book. He gives some advice along the way, and then turns the project over to his publishing and marketing teams. They bring the book out—almost always at the top of the best sellers list.
Andy Warhol was doing this with art long before Patterson did it with books. After he became famous for his silkscreens of iconic American images (e.g., Campbell’s soup cans), he began hiring “apprentices” that often did 90% of the actual work. Yet he made, I’m quite sure, 90% of the profits.
How Do You Reverse the Idea/Action Ratio?
You can’t start out by doing what Patterson and Warhol did. It takes years of hard work to turn your name into a brand.
And even then, you won’t be able to make big money by dishing out ideas unless you own the means of production.
The means of production, as you may remember from reading Marx, refers to the non-human components of producing something—the factories, offices, machinery, and raw materials. In capitalistic economies, private companies own the means of production. By owning so much of the creative process, they decide what piece of the pie the idea generators will get.
When outsiders generate ideas, they are given just enough to keep them coming back (assuming they are capable of offering more good ideas). When the owners generate the ideas, they pay themselves as much as they legally can.
So if you want to reverse the idea/action ratio, you must create a brand and/or control the means of production.
It’s Research. It’s Development. And It’s Testing.
In the meantime, you should either be content with getting paid 2-10% of the profits for your great idea… or develop that idea yourself.
Much of what I’ve written about in the past 14 years has been on that subject: How to start and develop privately owned, personally run, entrepreneurial cash machines.
In those books and essays, I’ve given the following advice: If you have a great idea and you want to make a fortune from it, you need to develop it into something that resembles an ongoing business.
Spend an hour or two every day moving your idea forward. Begin with a written summary of the idea, a model, or a business plan. Get feedback and make improvements. At the same time, find a way to test the marketability of your idea. The closer you can come to a live marketing test, the better.
Let me give you two examples.
- If your idea is for a new book, you can test the basic concept by writing a 500-word outline and an introductory chapter. Then, based on that, you can come up with a dozen appropriate titles and test them as ads on Google or one of the ad networks. If one or several of your titles tests well, you will have some preliminary marketing results, an outline, and a first chapter that you can present to a publisher. Speaking as a publisher, I can tell you that if someone came to me with this much work done on a book idea, I’d give it a reasonable look.
- If your idea is for a product—say, a new line of jewelry—you could handcraft a few dozen samples and try to sell them. Maybe take them to a local flea market or auction them off on eBay. By incrementally improving the product based on demand—and keeping careful notes about sales—you may eventually have not just a physical product but also some proof that it can sell. Going to a large marketer with something like that would make much stronger pitch than going with merely the idea.
Big Secret: It’s Not the Idea After All
One thing you shouldn’t worry about when you test-market your idea on a small scale is having your idea ripped off by a big company.
I understand that many people have this fear: “As soon as some big company sees what I’m doing, they are going to steal my idea.”
In my experience, that seldom happens. Big companies are busy developing their own great ideas. They are not trolling flea markets and auction sites for new ones.
More importantly, the most successful entrepreneurs understand something about great ideas that most people miss: The #1 secret about improving your ideas is to understand that it’s not the idea that matters.
It’s the particular articulation of the idea.[Stay with me. This is a big, big secret. You won’t see it anywhere else—until the Internet gurus read this and begin repeating it.]
Keep in mind that innovations don’t just spring to life fully developed. If you look at any major innovation, such as the steamboat or the personal computer, you will see that its development history includes several or sometimes dozens of enterprising people all working simultaneously on the same idea. The one that wins is frequently not the first, nor is it always the best.
In The Tipping Point, Malcolm Gladwell argues that these “breakthroughs” are the result of a process where many versions of the same idea are put into the marketplace at the same time.
He uses the analogy of a high school science experiment to explain. In this experiment, a glass is filled to the rim with water. Then droplets of water are added to the glass, one at a time. What happens is that the surface of the water actually rises above the rim for a while in a sort of bubble. And then, at some indeterminable point, one extra droplet causes the bubble to break and the water to overflow.
Likewise in world of commerce, Gladwell says, various similar products enter the marketplace at the same time. And, for whatever reason, one suddenly makes a huge breakthrough and becomes the market leader.
Gladwell doesn’t say why, exactly, but I’ve been thinking about it. And my belief is that in any marketplace (commercial, cultural, artistic, etc.), a small number of people are always generating ideas and testing those ideas by making small changes in how they are constructed or how they are marketed or how they are priced.
The product that breaks through does so partly because of timing. (After hearing a lot of talk about the new idea, the market is ready to buy.) But also because one particular articulation of the idea—one particular version marketed and priced in a particular way—takes off.
That is why I tell the creative people I work with, “If you have a great idea, don’t worry that other people are jumping on the bandwagon. Just because their product is similar doesn’t mean it is the one that will work. Your job must be to test numerous articulations of it repeatedly so that, if the timing is right, yours will be the one that breaks through.”
Value your idea, but not too much. Increase its value by making it into a product. Then test that product, in various articulations, until the market tells you it’s great.
[Editor’s Note: For the last three years Mark has been involved in a new venture, Common Sense Publishing, which he runs with a forensic account and former Citigroup banker named Tom Dyson. Mark’s latest project is the Wealth Builder’s Club. Click here to find out more about it. – I highly recommend it and look forward to each one of their updates. – Craig Ballantyne]