Selling an Idea
Selling an Idea
October 1, 2012
I’ve written in this blog that good ideas have no economic value. It seems to me that the world has a glut of good ideas. The hard part is implementing. Patents are the exception that proves the rule; even those ideas would be worthless if the government didn’t force a value on them.
So I take it as a challenge to see if I can sell a raw idea. I have a specific business idea in mind. It has the potential to change the world in a fundamental way and yet it is little more than a combination of existing ideas that are proven and successful. No inventions are necessary. This idea is in the Internet realm, broadly speaking.
Let’s agree that the odds are high that someone is already pursuing this business idea. That’s true with most of my ideas – at least the good ones. Whatever I noticed in the environment that triggered the idea in me is probably triggering a similar idea elsewhere. So I have to deal with that risk when I design a mechanism to sell my idea.
My model for selling my idea, while mitigating the risk for the buyer, is this: I’ll accept 5% equity in the business once created. If no business is created, no money is owed.
I will limit my offer to experienced venture capital professionals. This idea probably requires a $10 million startup cost, and the buyer would have to assemble the team. The upside potential is probably similar to Amazon.com, just for sizing purposes.
If you have access to that amount of cash, and you’re curious about the idea, there is no risk in asking for an explanation. Just send me a brief email explaining your interest and include a link to your firm’s website that lists you as a partner. I won’t ask for a non-disclosure agreement because credible players don’t stay in business long if they steal ideas.
If you hear my idea and decide to pass, it costs you nothing and you will have satisfied your curiosity. I will explain my idea by email to interested and qualified parties in the same order as the requests come in. Each requestor will have two working days to accept or pass. After two days, or a decision to pass, I will move the offer to the next interested party.
I will not be involved in implementing the idea beyond describing it.
If you would like some background on the quality of my ideas in general, my blog has plenty of examples stretching back several years. At least 95% of my ideas are ill-conceived or impractical. But I usually know it. I think this particular idea falls into the inevitable category, similar to the way it was inevitable that goods would someday be sold online. There’s a 100% chance that this idea will be implemented someday by someone. The value is in going first and locking in the market.
You can email me at email@example.com if you are interested and qualified. It is okay for you to be more curious than serious, as long as you are also qualified to invest.
I should explain my motives clearly. Obviously I wouldn’t mind owning 5% of something big. That’s a small part of my motivation. It wouldn’t change my lifestyle.
Secondly, I’m curious how this experiment will play out. I genuinely wonder if it is possible to sell a business idea. My prediction is that it can’t be done. This will be an interesting test.
Third, and most important, this idea would be deeply transformative to the entire world, in an enormously positive way. Governments would save gigantic amounts of money and economies would soar, although the economic impact could take several years to play out. One of my tricks for staying interested in life is that I like to have a few “change the world” ideas in play at any given time, no matter how unlikely they are. This fits that model perfectly. The odds of any startup working are tiny, but if this one worked, holy cow.
I’ll update blog readers on whether I get any interest. I won’t name names of people who respond.
If I get no responses, or no one is interested, I will describe my idea sometime next week just to get it out there.
How many of you think that qualified venture capitalists will ask to see the idea?
[Update 10/2/12: Ten people have asked via email to hear the idea. It looks as if most of them could legitimately raise $10 million for the right idea. The group is comprised of ex-VCs, current angels, rich geniuses, entrepreneurs, and a few investment-type firms. Not a crackpot in the bunch. I’ll keep looking at incoming email today and start sharing the idea soon.]