Startup Opportunities, 2nd Edition

Trust Me, Your Idea Is Worthless

by Tim Ferriss¹

Earth-shattering and world-changing ideas are a dime a dozen. In fact, that’s being too generous.

I’ve had hundreds of would-be entrepreneurs contact me with great news: They have the next big thing, but they can’t risk telling me (or anyone else) about it until I sign some form of idea insurance, usually a nondisclosure agreement (NDA). Like every other sensible investor on the planet, I decline the request to sign the NDA, forgoing the idea, often to the shock, awe, and dismay of the stunned entrepreneur.

Why do I avoid this conversation? Because entrepreneurs who behave this way clearly overvalue ideas and therefore, almost by definition, undervalue execution. Brainstorming is a risk-free, carefree activity. Entrepreneurship in the literal sense of “undertaking” is not. Strap on your seat belt if you’re signing up for a startup. It’s a high-velocity experience.

If you have a brilliant idea, it’s safe to assume that a few very smart people are working on the same thing, or are working on a different approach to solving the same problem. Just look at the number of different travel apps on your iPhone or the number of diet and exercise sites on the web for an example of this.

Overvaluing the idea is a red flag, particularly in the absence of tangible progress. Sure, I miss out on investing in some truly great ideas with this attitude, but that’s okay with me; I don’t invest in ideas. Nor does Warren Buffett. I’ll lose less money ...