2 Things Albert Einstein Taught Us About Ideas

In today’s world, the cost of validating the desirability and viability of an idea have dramatically decreased. Kickstarter has become de rigeur for funding new hardware ideas. The proliferation of open source software has made building applications easier and cheaper. Venture capital firms and and service providers such as Mattermark and CBInsights have heavily invested in analyzing the many readily available signals to identify future unicorn startups early on.

As those signals proliferate and become transparent, professional investors will quickly coalesce around consensus good ideas, angel investors will have to focus even more on the earliest pre seed stages where transparency is low, metrics are not available, and the entrepreneur only has an idea. A Minimum Viable Product may not exist yet and the team is in the problem/solution validation stage, at best. In fact, angel investing and the skill sets required from angel investors may return to where they were in the 20th century.

The two people in the picture above illustrate that this is not an entirely new challenge. In 1905, Max Planck was a 47 year old physics professor in Germany. Albert Einstein was a 26 year old assistant patent examiner in Switzerland. He had previously published five papers in the field of thermodynamics and was virtually unknown in the field of elementary physics and in academic research circles. In the same year and seemingly out of nowhere, he published four papers which revolutionized the world’s thinking about physics. Yet, the only experiments to prove any of his theses were ‘Gedankenexperimente’ - thought experiments. The questions which everyone in the field had to ask themselves at the time were 'Is the author trustworthy?' and 'Are the ideas valid?' Planck was very much in the position of an angel investor having to assess whether there was any credibility to the idea and the idea alone.

Dark horse founders without obvious track records emerge all the time.  Albert Einstein already observed that ‘anyone who has never made a mistake has never tried anything new’. Angel investors may have to make an investment decision solely based on the founder and their idea. They need to assess the qualities of a founding team and the right timing of founders and their ideas.

As Albert Einstein said: ‘If at first the idea is not absurd, then there is no hope for it'.

Thanks to Oana Olteanu for reading drafts.