David Cummings on Startups

Importance of Idea vs Team

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David Cummings

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Earlier today I got into a conversation with a colleague about the relative importance of a startup idea vs a startup team. Naturally, both the concept and the people are critically important, but if you had to pick one, which would be most important?

My general feeling is that the idea is more important than the team. Some arguments for and against it are as follows:

  • Strong ideas, especially pain killers over vitamins, are harder to come by since most ideas are vitamins (or candy!)
  • If it’s a good idea, or at least a good sandbox to play in, the chance of zigging and zagging to achieve success is much greater
  • Strong teams are hard to find but are more easily upgraded as the startup makes progress as opposed to pivoting and trying a new idea
  • Talented teams are more likely to figure out how to make something work, even if it is only a modest success
  • Investors bet on the jockey more than the horse, but it my anecdotal experience, investors bet on the idea more than the team for first-time entrepreneurs and then the team more than the idea for successful serial entrepreneurs

Startups ideas and startup teams are extremely important to the success of a new venture. In the end, I’d take a great idea with a good team over a good idea with a great team.

What else? What are your thoughts on the importance of idea vs team?

Comments

5 responses to “Importance of Idea vs Team”

  1. jlacreamcream Avatar
    jlacreamcream

    You know, I honestly think it has a lot to do with just how good of an idea it is. Is it the type of idea you have that you have to share with somebody? In that case, of course the idea itself, motivates. On the other hand sometimes I feel like all of the ideas i come up with are great? So who is to say, and how do you define, a great idea? I think that with a great idea, comes a great team.

    Reply
  2. Pete Franconi Avatar
    Pete Franconi

    When deciding between idea and team, I think it’s important to determine where the person fits within the hierarchy of the organization. If I’m the founder/co-founder, then employees or co-founders can be replaced in which case a great idea over a good team would be the preferred choice. If I’m an entry-level employee, I’d probably prefer a great team and good idea.

    Reply
  3. Greenlight NYC Avatar
    Greenlight NYC

    An idea is just that…an idea, it is nothing unless without the proper execution. A team (a properly chosen team) should be able to do just that. They, and you ultimately being part of the same team are responsible for making the idea a practicality, therefore the two go hand in hand.

    Reply
  4. Dick Reeves Avatar
    Dick Reeves

    I am in agreement with much of David’s statement here, but let me offer some anecdotal evidence in favor of the team over the idea. Over more than 8 years of investing in teams and ideas, it has always worked better for us to have an OK deal with a great team, than it has to have a good or great deal with an OK or mediocre team. The return multiples for the former are 5-10X those of the latter.

    I won’t bore you with the details, but two of our investments were in teams that had obviously more qualified teams than we usually invested in. In both cases the ideas appeared OK, but not especially interesting at the time we were making our decision. In one case the team had previously managed a large division of a public company and had several successful entrepreneurs on their board, in the other case it was a first-time entrepreneur that attracted a great outside management team in the form of board members and investing partners they picked up at TechStars.

    We willingly and regularly invest in great ideas and OK teams, but find that we must work much harder to get a decent return from them. We must just be certain to find some ideas with great teams to provide diversity.

    Reply
  5. leeshelton0210 Avatar
    leeshelton0210

    I personally think that a good idea and great team are more important. I genuinely believe in the importance of people in any situation. Ideas can be good but teams can make them great. Great ideas with a poor set of eyes can become stale, one dimensional and lack creativity, when growing into profitable businesses.

    If you take a good idea and build the foundations any idea needs with a great team, you can’t lose. Look at technology, similar ideas are promoted all the time, same touch screen, 4G technology but the great team that promote them, make them more appealing.

    Reply

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