I do agree with his overall angle. Derek is arguing that ideas are not worth as much as everyone seems to think they are, and I whole-heartedly agree.
But I disagree with the example given where he multiplies the quality of an idea with the quality of the execution to get a measure of success. A multiplier says that without an excellent idea, your product will only ever reach some capped level of success.
Which gives far too much influence to the initial idea. It still says that an idea can single handedly multiply potential profits twentyfold. It still implies that before anything has been started, ideas do have some intrinsic value in their potential.
You see the problem with all this is that before an idea is fleshed out, whether it is good or bad is a matter of speculation. In hindsight anyone can look at the iPhone or iPod and say it was a good idea. But when someone (presumably Steve) at Apple said “We’re going to make an mp3 player”, how many knew it was the right thing to do?
The idea was made good by the execution. If Apple hadn’t done an excellent job of taking the iPod from an idea to a highly successful product, history would say it had been a bad idea to start with.
Execution is a million discoveries, a million solutions, and a million more ideas. That first idea? That’s just the first step on the way.
One final note: There is no doubt that a partially executed idea can be highly valuable. That value is in the partial execution, and has little to do with the simple spark that started it.
So this is how I would change Derek Sivers’ formula:
IDEA = 1
NO EXECUTION = $1
WEAK EXECUTION = $1000
SO-SO- EXECUTION = $10,000
GOOD EXECUTION = $100,000
GREAT EXECUTION = $1,000,000
BRILLIANT EXECUTION = $10,000,000
To make a business, you need to multiply the two.