Short answer – It Does A Lot, But Not As Much As You Think It Does
There is a never ending debate about how much do ideas matter when you are starting. There are arguments on both sides of this thesis. There are folks that believe ideas are dime a dozen and execution is everything and others who believe that ideas are what differentiate the great entrepreneurs from the mediocre ones.
So this makes me believe the answer is somewhere in the middle. A good idea executed well is obviously better than a good idea executed poorly. Similarly a bad idea executed well is marginally better than a bad idea executed poorly. Either way, execution does matter as does the idea.
I put a chart together based on my experience of the top 1-3 things that different folks care about the most when you are progressing along stages of your startup.
The first thing to keep in mind is that the idea matters most to your potential customers.
Which is why it matters so much.
Your customers may care about the team, the problem you are trying to solve (it better be important to them) but they certainly dont care as much about your market or your growth.
At the napkin stage when you are trying to recruit advisers, and early folks; your team and market matter to them the most, then possibly the idea.
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The next stage (if you are going that route) at the crowdfunding stage, the idea and your story matter the most. The market maybe somewhat matters, but the team does not seem to matter as much since they are largely the “people” behind the video.
The stage beyond that (again if it applies), which is the accelerator stage, the team and market matter the most. The assessment of whether the team can pivot plays a lot into this stage.
At angel investor stage the traction seems to matter most, followed by team. Enlightened angel investors care more about the team and the market, but accelerators have trained the startups and angels to write checks based on “traction”.
Finally when you are ready for the venture capital round, lots of things matter, but most VC’s will tell you that the market you operate in and the team matter the most, followed by growth in metrics.
If you look at the chart above, the obvious conclusion you will come to is that idea does not seem to matter to most people.
If, however you expand the “crowdfunding” stage to “recruiting customers“, then at that, stage ideas matters more than everything else.
So the idea does matter, it matters a lot and it matters to a key (if not the most important) constituent of your startup – the customer.
Does it matter as much as you think though?
That answer is also no, because, the other “constituents” including potential employees, care about working on a great problem, getting paid well and being challenged (in that order hopefully).
So, when any of your investors or potential advisors or an accelerator tells you “Ideas dont matter” – you know they are wrong, but not as much wrong as you really think they are.