Not Such a Good Idea.

Have you ever had what seemed to be great idea, but the more you looked into it the dumber it became. That happened to me this week for my blog topic. I finally decided to trash the idea, but then what to write about? How about assessing whether an idea warrants further investigation or action?

Nearly, 25 years ago I had a boss that said to me, "I can come up with 100 ideas a week. Your job is to tell me which one of those 100 are good." Nineteen years ago I began a career in venture capital. During that nineteen years I have often thought of that former mentor's words. That is much of what I did in those nineteen years. The task is much more difficult than it seems. Interestingly most successful venture capital firms invest in about one idea for each 100 they see.

There are all sorts of checklists, rules of thumb and and models that one can and should use to help deteremine which deals are viable. But this only gets you so far. Certainly, out of 100 deals there are 5-10 that have a chance - probably two or three that are about the same quality. How do decide between these? Unfortunately, I don't believe it's taught. Life's experiences teach you that certain people you can trust and others you cannot or who is going to work their tail off and who will turn tail and run.

Those same experiences teach you that certain types of business are much more difficult to pull off than others or that certain things must be in place before an investment is made. It teaches you that even though you can take advantage of situation you shouldn't. It will usually come back to bite you in the rear.

Finally, and perhaps most importantly you learn that there is a time to admit your mistakes and stop putting good money after bad or investing valuable time. Usually, the first time you wonder whether something is going to work is the time to get out. Most of us have to much ego to make that decision at that time, trying to save the investment or project instead.

I'm sure glad I decided not to write about that initial topic, but like most, I waited until the last possible minute. That's why I am writing this at 3:00 p.m. Friday. Live and learn.