Startups

Startup Ideas: What Are They Worth? Not Much

Startup Ideas Have Little Value

If you’re not following entrepreneur Sergio Schuler, then you’re missing out on some well-plotted, practical advice when it comes to building a startup. Schuler tells it like it is, and most recently took to his blog to give his “formula for calculating the worth of a startup.”

Whenever most hear the word “formula,” they automatically get ready for a series of x’s and y’s with a few operation and equals signs in between. Schuler doesn’t feel this is necessary. So just what is his formula exactly? In a couple of words, this:

Idea=Zero

And for the most part, he’s right. While it’s true that patents can have some value in the business world, there is a lot of work that goes in to patenting an idea worth anything. Simply applying for the patent guarantees you nothing as the USPTO allowed less than half (49.2 percent) of the applications it had received as of November 2013.

Furthermore, at any given time, the organization may have as many as 673,000 pending requests either awaiting first action (around 590,000) or requests for continued examination (roughly 83,000).

Bottom line: if you apply the hard work and resources that go in to obtaining a patent, then your idea is no longer an idea. It’s something much more valuable.

The Edison Consideration

Schuler didn’t touch on the value of patents, but he did point out rather astutely something most of the general population isn’t going to know:

Thomas Edison invented the electric lamp in the same sense that Christopher Columbus discovered America or that George Washington was our country’s First President.

He didn’t.

“Do you know the name Humphry Davy?” Schuler writes. “I did not think so. Mr. Davy was the actual inventor of the electric light, in 1809, 70 years before Edison.”

Schuler then points out that “21 other people ‘invented’ the electric lamp before Thomas Edison.”

“The difference between those 22 inventors and Edison is that the later (sic) had business acumen and invented the first commercially viable and practical electric light bulb.”

So yes, ideas alone are sort of worthless. However, implementation can be priceless.

Throughout this month, you’re going to hear a lot about the year ahead. Goals, objectives, outlooks, warnings, advice, etc., etc., etc.

All of these things can be beneficial, but if they’re all your ever listening to — if you’re not taking steps each day, even one, to make your business a reality — then you’re left with an unrealized idea.

That, and six dollars will buy you a Starbucks, but not much else.

[Image via Startupopen.com]

About the author

Chase H. Williams

Chase H. Williams is a writer, serial entrepreneur, professional procrastinator, dreamer, explorer and risk taker. He’s been weightless aboard a NASA C9-B aircraft and his head hasn’t quite come back down from the clouds. Visit his website @ chasewritescopy.com