Ignore Silicon Valley’s advice about ideas and execution

lead_960

TL;DR: Screen Shot 2016-07-26 at 1.53.42 AM


Spend enough time in Silicon Valley and you will hear the phrase (or some variation thereof) “ideas are cheap, execution is the only thing that matters” hundreds, if not thousands, of times. It’s one of those phrases easy enough to throw around while still sounding somewhat sophisticated and intelligent. Most of the time, the person giving the advice don’t have much to back it up with, because here’s the truth: great ideas paired with poor execution can almost always succeed, while the inverse simply isn’t true.

So here’s a contrarian idea to keep in mind next time someone tells you that your idea is worth nothing if you can’t execute it perfectly: they’re wrong.

By now, you have probably heard about the hype surrounding Pokémon Go. The idea is a great one: mix light augmented reality with an all-time beloved classic game, and allow people to download the game directly into the smartphones they already have. The execution, however, by all accounts, was an utter disaster. The game is buggy as hell, buttons work erratically and inconsistently, sign-up takes way too much time and effort (and is insecure too), servers are unpredictably unstable and a planned international rollout had to be killed to prevent the servers from melting down. Yet, by any measure, the game had been (and still is) an astounding success.

Less than two weeks into launching the game, Pokémon Go has surpassed Twitter’s daily active users count and is rapidly closing in on Snapchat’s. Daily active user estimates for the game range between 9.55 million (Recode estimate) to 21 million (SurveyMonkey estimate). By now, the game has become a social and cultural phenomenon… despite having botched the execution. As technology analyst Ben Thompson writes, “Pokémon Go is a useful reminder that the actual quality of an app or its associated services often has little or nothing to do with success.”

There are a number of other apps in recent history that crystalizes the thesis of this post: that ideas do matter, and often times, even more so than execution. A recent example that comes to mind is the Down to Lunch app, which has captured the interests of college students all over the country, as well as the attention of Silicon Valley’s venture capitalists. When the app first launched, it only had one button for one functionality: to notify your friends that you’d like to hangout. No mechanism to invite friends, options to choose the hangout’s purpose (lunch, dinner, drinks, homework, etc.), integrate with Facebook’s social graph, etc. Just one button, with one purpose.

As Nikil, one of the co-founders of DTL said in his own words, “it was SUPER ghetto in the beginning.” But that didn’t stop thousands of kids around the country from downloading the app – because the idea was great enough that the subpar execution did not hinder its viral growth.

On the flip side, pairing a mediocre product with the best execution has never, and will never, work in the long term. There’s only so much oxygen you can prop a bad product up with before it flames out on its own. It’s like expecting the best salesmen in the world to sell a mediocre product: sure, there’s no doubt that a few customers can be persuaded to purchase the product, but those sales will eventually stop once the customers realize they’ve been fleeced. A great recent example of this is the struggles of Rocket Internet, a company that specializes in ripping off other startups’ ideas and business models and exporting them to different international markets.

By any standard, the folks at Rocket Internet are execution machines – they’ve incubated and spun out hundreds of copycat startups.* If anyone in the world has refined and perfected the execution playbook, it is the mercenaries at Rocket Internet. Yet, a recent article in the Wall Street Journal reported they’re struggling to flip a profit on many of their ventures. As it turns out, many of these ripped-off ventures have horrendous unit economics – so it doesn’t matter that they have the best team in place to execute… if the product/venture/business model is shitty, then it’s already on the path of failure. It is possible, in the bull market, to disguise these ventures with bad product and great execution as good companies with “organic” demand, but as the tide recedes, the truth can no longer be ignored: the emperor has no clothes.

This entire post is, of course, not to say that execution doesn’t matter at all. There are a few startups with great ideas/products that have gone bust because of a failure in execution. So, execution matters. But not as much as having a great idea – because if what you’re building is fundamentally great, then odds are, people will be willing to overlook most (if not all) of the shortfalls in execution.

*From the WSJ article on Rocket Internet’s troubles and how it rips off other companies’ ideas: “On the top floor of its seven-story headquarters, employees monitor tech startups world-wide for businesses to copy. When an idea is approved, Rocket assigns marketers, engineers and managers. As the business develops, it moves down floor-by-floor, eventually making it to the ground level, where managers start to look for offices outside the building.”