Q: I've got a great idea for a business-but what is it worth? Can I find someone to pay me for it? Will someone take this idea to market and pay me a royalty?
A: Nothing. No. No.
OK, it isn't quite that bad, but it's close. Like many current and aspiring entrepreneurs, you have probably wondered about the value of your great business idea. Most people put a lot of stock in their ideas, but the fact is, an idea by itself is worth nothing. The sooner you understand this, the faster you'll move along the path to success.
This concept is very hard for most people to understand. It sure was for me! Ideas are a dime a dozen-lots of people have great ideas. And for every great idea you've had, there are probably quite a few other people who have had the same or a similar idea at about the same time-hey, it's a big world out there with a lot of people in it! An idea is just the start. It is the very early beginning of a product or service, and the idea stage is a long, long, long way from a successful business. Many people don't understand this because they don't understand how value is added to a company.
The very valuable (and pretty rare) skill in the business world is the ability (mixed with determination and persistence) to build a profitable business. It is easy to have the idea ("I'll make this gizmo, and it will revolutionize the auto industry!"), but it is very hard to think about how you'd actually go about designing the gizmo, how you'd make it, how you'd price it, how you'd get production going, how you'd make a compelling sales pitch to your customer, how much, if any, they'd buy, and, let's not forget, how you'd find the money to make this happen. Yep, that's the hard part. But if that sounds daunting to you, don't despair-I promise that you can learn how to do all those things! Just remember that there is a big, big difference between a great idea, a great product and a company that makes money selling it.
Related to the value of your idea is the question of how worried you should be about someone stealing it. The answer in most cases is not very. While it does happen, it doesn't happen as often as you might think, and the reason goes back to the value of an idea. If the real work is in the skill and time and effort it takes to build a successful business, then why would anyone capable of actually doing that want to try to do it with your stolen idea when they could just as easily come up with their own? Pretty much everyone who is capable of doing something with your idea is too busy with his or her own projects to steal yours. If your idea is something that, just by knowing it, other people could easily copy, then you've got bigger problems to deal with as you try to build your company.
I hope I haven't discouraged you from thinking up new and exciting business and product ideas. I hope that what you take from this column is the understanding that to strike it rich, you have to do much more than just come up with the idea. You have to take your ideas and figure out how to market them, how to sell them and how to produce them at a low enough cost to allow you to make money. You have to figure out how to respond to your competitors when they duplicate your products. You have to figure out how to manage your people, pay the bills and make your products and services better and better. In short, you have to build a company-that's the hard part.
Keith Lowe is an experienced entrepreneur who is a founder and investor in companies in several industries. Lowe also mentors new entrepreneurs; serves as past chairman of the board for Biztech, a nonprofit high-tech business incubator; and is a co-founder and officer for the Alabama Information Technology Association.