The first part of the lecture was on the "Idea", and I want to give an alternative approach.
First, do I believe that what Altman describes can work and is what he has seen has worked? Definitely yes.
Second, is that all that can work? I don't think so.
Third, do I suggest that the alternative approach I describe here will be common and/or always better than what Altman describes? No. Sometimes better? I do believe so. But even if the alternative approach is rare, that should not be a huge obstacle since the success Altman is talking about, the goal, is also rare. That is, for the rare successes, we should expect that some of the means will also be rare and not common.
But for the alternative approach, given that it is rare, we should have some solid evidence of its effectiveness, and I believe that we can.
I want to propose that it can be possible to have an idea, test it, essentially just on paper, and, if it passes the test, be quite sure the resulting product will be good and fairly sure the resulting company will be successful.
Yes, I'm proposing that the alternative approach provides a way to have the idea be by far the most important part of the work and the rest, e.g., the execution, be routine.
Or I would say that a good idea is one that makes it through the filters of my alternative approach. Then I am claiming that with a bad idea, yes, execution is everything but with a good idea execution is routine.
Yes, to me, the ideas like Altman describes look to me as far too unpromising to be taken seriously and promise that, yes, indeed, execution will be many times more difficult than the idea. Indeed, Altman is admitting that many start ups fail, that building a successful start up is difficult. I would agree that, starting with a bad idea, building a successful start up is difficult.
Now, for the alternative approach for finding a good idea for a start up:
First, the alternative approach is very selective, that is, rejects a lot of ideas. Some of the ideas the approach rejects will be able to be the basis of successful companies. The alternative approach rejects ideas when it just cannot build a rock solid case that the idea is good. E.g., the alternative does not know how to conclude that the ideas for Facebook or Twitter would lead to success. The alternative wants to accept only good ideas and in doing so will reject a lot of good ideas. The alternative approach asks for a lot from an idea, and many good ideas will not have that much.
Second, Altman does emphasize that a need and a corresponding solution one person sees in their own life can be relevant. Okay, I've been there and done that, that is, I've seen needs and solutions.
Third, what I'm proposing for an alternative is, at least in broad terms, and compared with what Altman describes, much older, much more thoroughly tested, and with a much better, really excellent, track record.
Actually, we all know at least something, maybe a lot, about the alternative and its track record. I learned about the alternative early in my career doing mostly US DoD projects around DC and also some other experiences, but there is much more information about the alternative readily available far from me.
So:
(1) Need.
To make the alternative work, we have to start with a suitable need, i.e., market need, that is, a suitable problem to solve. We want the first good or a much better solution to be, obviously, no doubt, a "must have" and not just a "nice to have".
Next, for this need, we want to find the first good or a much better solution, presented just on paper.
Then we want to evaluate the solution, also just on paper. Sorry, no, we don't "get out of the building" and talk to other people.
Big example of such a need? Okay, we'd like to have a safe, effective, inexpensive one pill taken once to cure any cancer. So, yes, early on, for Facebook, Twitter, Snapchat, a lot of doubt. For such a cancer pill, we have "no doubt"; to know this we don't have to "get out of the building", ask people, throw trial solutions against a wall to see if there is interest, etc.
(2) Solution.
Given the need from (1), we try to find a solution. If we fail here, and likely we will, we return to (1) and find another need. E.g., clearly so far the one pill cure for any cancer will fail here for at least a long time.
We want a solution that we are sure, "no doubt", will be the first good or much better.
Here's a way: Start with the real problem and see what about it we can assume. Then convert this problem and its assumptions into a mathematical problem. So, we are limiting ourselves to needs that lead faithfully to mathematical problems. Sorry, no intuitive heuristics need apply.
Next find a mathematical solution.
Develop the mathematical solution just on paper, as carefully done theorems and proofs, and then severely check the proofs.
Then observe that it is totally clear that the mathematical solution will be fully close enough to the first good or much better solution we want for the need.
If any of the work here in step (2) fails, then return to step (1)
(3) Product.
Write software to do the data manipulations specified by the mathematical solution. Severely check the software. That's essentially the product.
If fail here, then return to (1).
Track record? Okay:
(A) GPS.
(B) The version of GPS done first by the US Navy for the SSBNs.
(C) Beam forming in passive sonar.
(D) The A-bomb of WWII -- all three exploded just as planned.
(E) The H-bomb of the 1950s -- first test, 15 million tons of TNT.
(F) The SR-71, for Mach 3+, 80,000+ feet, 2000+ miles without refueling; proposed by Kelly Johnson just on paper; built and flown just as proposed.
(G) Keyhole satellite, essential a Hubble, before Hubble, but aimed at earth instead of space.
(H) The F-117 stealth, essentially a modified F-16, flew as planned, through Saddam's anti-aircraft artillery without a scratch.
(I) The airplane the Wright brothers took to Kitty Hawk, NC.
(J) Phased array radar for Aegis class ships.
(K) High bypass turbofan engines.
(L) RSA encryption.
(M) Hubble.
(N) LHC.
(O) COBE, WMAP, and Planck.
And there are many more. Such projects that failed in execution? Tough to find. Batting average? Near 1000.
Right: Projects A-O are all just technical projects. Right. But in each case they provided the intended solution for the need. As we have explained, to have a successful technical solution lead to a successful solution in business, we want such a solution to be a "must have"; else we return to (1).
The high bypass turbofan jet engine a commercial "must have"? Darned right: It saves an ocean of expensive jet fuel. How? Simple: Burning jet fuel releases energy. Want to convert that energy to kinetic energy and get the resulting momentum. But for mass m and velocity v, kinetic energy is (1/2) mv^2 and momentum is just mv. So, we pay in energy (1/2) mv^2 and get in the momentum we want mv.
So, since in kinetic energy we have v^2 but in momentum have just v, to get more of our desired momentum from our given, available energy, we want m to be large and v to be small. So, mostly we want to use the hot gasses from the combustion to turn a big ducted propeller that moves a huge mass of air at a low velocity. Instead, the military jet engines intended for supersonic speeds, and long used in commercial aviation because they were available, move a smaller mass at high velocity. So, for commercial, subsonic flight, a high bypass turbofan is a "must have". Then have the first good one or a much better one, as we have assumed, and very much should have a successful business.