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July 23, 2011

3

Business = (Idea x Execution) + Luck

I just got done reading “Anything You Want” by Derek Sivers, founder of CDBaby, an online CD store that was founded in 2007 for independent musicians to sell their CDs directly to consumers. Loved the book. Thanks go to Lee Bradshaw for recommending it to me.

Anything You Want - Book Cover

My favorite takeaway from the book:

It’s so funny when I hear people being so protective of ideas. (People who want me to sign an NDA to tell me the simplest idea.)

To me, ideas are worth nothing unless executed. They are just a multiplier. Execution is worth millions.

Explanation:

AWFUL IDEA = -1
WEAK IDEA = 1
SO-SO IDEA = 5
GOOD IDEA = 10
GREAT IDEA = 15
BRILLIANT IDEA = 20

NO EXECUTION = $1
WEAK EXECUTION = $1,000
SO-SO EXECUTION = $10,000
GOOD EXECUTION = $100,000
GREAT EXECUTION = $1,000,000
BRILLIANT EXECUTION = $10,000,000

To make a business, you need to multiply the two.
The most brilliant idea, with no execution, is worth $20.
The most brilliant idea takes great execution to be worth $20,000,000.
That’s why I don’t want to hear people’s ideas.
I’m not interested until I see their execution.

Contrary to Sivers’ last couple of lines, I am interested in hearing about your idea, because if it’s great or brilliant and you can’t execute on it, I’ll buy it off you for $15-$20, then go execute on it like it’s my job :-)

 

Update:

After re-thinking the equation, I think it’s missing one variable: luck.

Startup luck is often tightly correlated to timing.  Entrepreneurs live in the future, and so we can have a hard time accurately judging when the market will be ready to accept a new product or technology.  So hitting the timing right can often seem like a stroke of pure luck.

So instead of the equation being:
Business = Idea x Execution

I think it needs to be:
Business = (Idea x Execution) + Luck

Read more from Business, Startups
3 Comments Post a comment
  1. Jul 30 2011

    Michael – you’re right about the luck factor. Absolutely. Thanks for adding that to the equation.

    Reply
    • Aug 1 2011

      Thanks for documenting your story in such a great book Derek! I also really enjoyed the approach you took in telling it:

      • Short
      • Lots of bullet points
      • Many, easy to follow headers

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