Bad ideas

A known fact about startups is that most of the really successful ones looked like bad ideas at the beginning. This statement shouldn’t surprise and it is indeed a truism if we agree with another common knowledge in investing: to achieve superior returns you need to be right where everybody else thinks you are wrong.

The acceptance of this fact has generated a funny phenomenon, driven by an evident logical fallacy. If most great ideas looked like very bad ideas then every very bad idea could hide a great one.

It is obviously the investor’s job (and even before that, the founder’s) to distinguish “real” bad ideas from good ideas that just look like bad ideas. But it is not an easy feat. In doubt, most people tend to shy away from calling out a “real” bad idea when they see it. The internet has a long memory, and you don’t want to look like these guys .

There is a sort of collective hallucination. Founders are pushed to come up with the craziest idea possible, anything short the Elon would make you “unambitious”, observers that in lack of courage calls them “bold”, lots of puzzled faces looking hesitantly at each others. A modern version of The Emperor’s New Clothes.

Who will play the child?