“Can we do one more study?”
I heard top management ask that question many times during the two years I spent working on new products at The New York Times.
It’s a question that’s raised often at many big companies when a new idea is being discussed. In the case of The New York Times, what management was really asking my colleagues and I was: are the three, soon-to-be launched paid products you’ve been working on going to turn out to be any good, or are we wasting our money?
Big companies obsessively ask that question, because their approach to new ideas is that there are good ones than can be developed into revenue generators, and bad ones that should be abandoned as quickly as possible so as not to waste resources. Even as we move into an era of large-scale incubation of new ventures by enterprises, in which large, established companies increasingly play the entrepreneurial game, we see this overwhelming instinct to boil everything down to good idea versus bad idea, conclusively and irrefutably.
What’s interesting is that this is not how entrepreneurs generally approach ideas, initiatives, and strategies.
Sure, entrepreneurs will call out a blatantly bad idea, and kill strategies that aren’t bearing fruit in favor of new ones — quickly and without remorse — but they also work through troublesome ideas — ideas that get negative feedback, or that seem like potential dead-ends — longer than anyone in a large organization would find rational. They will, in effect, deliberately engage with so-called “bad” ideas in order to find their way to the positive outcomes they are ultimately seeking.
Rufus Griscom, a serial entrepreneur and founder of Heleo, an online publishing platform, sees bad ideas as a sort of tool for eventually discovering big opportunities. “A lot of bad ideas backed by a passionate entrepreneur can work on a small scale. Then, adjacent to those bad ideas, there may be some very powerful good ideas. If you really care about it, there’s a decent chance that other people care about it too and you can get it to critical mass. Then, if it does prove to, in fact, be a bad idea, you can find something adjacent to it that is a very powerful idea.”
He told me that his first startup, Nerve.com, was a case in point. An online magazine focused on serious ideas, Nerve built a loyal audience but its sex-centric brand turned off advertisers. So Griscom and his team decided to pivot into the online dating space, which had much larger potential. “We had the brand and the audience, and were then able to build an online dating business that was far more powerful as a business model than our core content execution.”
And while sometimes bad ideas are necessary stepping stones to good ideas, sometimes they are in fact actually good ideas — just ones that nobody else understands yet.
Garth Holsinger, also a serial entrepreneur, says that everyone thought his first company, GoCARD, was a terrible idea initially. An advertising business, GoCARD distributed free, artist-designed postcards in bars and restaurants.”This is absolutely crazy” was the response he got from most people. Garth tuned that feedback out, launched and built the company with cofounder Annett Schaefer-Sell, and ultimately turned it into a national phenomenon which Adweek called “the most innovative new media company of the past 10 years.” Garth and Annett sold GoCard in 2000.
To Garth, hearing people call your idea crazy can be a sign that you’re working on something nobody else understands yet – and that’s exactly where he wants to play. ”A lot of the motivation (behind dismissive feedback) is you’re doing something that is weird and strange, so a lot of our reaction is to immediately say, ‘No, that’s bad.’ What we really mean is it’s actually interesting but dangerous. Interesting and dangerous. And that gets translated as ‘no.’”
Venture capitalist Marc Andreessen of Andreessen Horowitz believes that the biggest opportunities, and the real money, lie in areas where no consensus exists on whether an idea is good or bad. “It’s very hard to make money on… consensus. Because if something is already consensus then money will have already flooded in and the profit opportunity is gone. And so by definition in venture capital, if you are doing it right, you are continuously investing in things that are non-consensus at the time of investment. And let me translate ‘non-consensus’: in sort of practical terms, it translates to crazy. You are investing in things that look like they are just nuts.”
Great VCs invest regularly in things that are, to all outward appearances, nuts. Big companies, by comparison, have no mechanism whatsoever for saying yes to ideas that seem outlandish. But to get to great ideas, they need to be able to do just that. Apple started off selling DIY computer kits, PayPal began as a way to beam money between Palm Pilots, YouTube began as a video dating site. Each of these, in their day, must have seemed like bad ideas. Yet these companies have become the biggest players in now-enormous fields.
So how can you put seemingly bad ideas to work for you, or at least open the door to reaping some of the rewards entrepreneurs like Rufus Griscom and Garth Holsinger do by pursuing ideas others would write off? Here are some steps to put you on the right path:
Listen, and keep listening. New venture creation is about designing new solutions to problems, and all good solution design begins with listening. But that listening shouldn’t stop once you’ve decided on a course of action. Continue listening, and listen to all stakeholders regularly. Pay special attention to new information and edge cases as you go — they often hold the clues to move you forward toward better versions of your idea.
Work in “hunch mode.” Think of strategies and initiatives not as fixed, final theses but as current best guesses. Recognize that you will likely need to update your hunch regularly, and sometimes radically, to eventually find your way to success.
Build to learn. Strategies and ideas are ultimately abstractions, and as such are inherently limited for understanding what’s good and what’s bad. Real, built things on the other hand have a way of revealing the truth about these things quickly. Get past abstract discussion to the building phase – even if you’re only building non-functional prototypes – to better evaluate an idea.
Resist instincts to kill. Instead of killing ideas and initiatives outright when they seem problematic, challenge yourself or your team to push further, reframe the problem and solution, or explore adjacencies. It is these very challenges to seemingly bad ideas that can end up leading to breakthroughs.
Be impatient. Making your way through the fog of ideas that seem — and actually could be — nuts only works if you are at the same time highly impatient to find your way to real, measurable success. Otherwise you will lose your way, get marooned, and never arrive at your destination.
As you work on new ventures and initiatives, it’s important to remember that great ideas are a bit like the island from the TV show LOST; you can ’t find them with a compass, you can only get to them by a series of unrepeatable steps, and you generally only recognize them when you’re right on top of them. Since great ideas are rarely self-evident, you must work and rework problematic ones. If you do so, eventually a great one may reveal itself.