Comments on: Ideas are Gold http://www.personalmoneytips.com/blog/ideas-are-gold.htm/ ... common and UNcommon viewpoints about money Thu, 19 Jan 2012 04:05:46 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Everyday Economist http://www.personalmoneytips.com/blog/ideas-are-gold.htm/#comment-18 Everyday Economist Wed, 17 May 2006 21:13:29 +0000 http://www.personalmoneytips.com/blog/?p=64#comment-18 Ideas are cheap. They are worth nothing. You cannot give them away. Only ideas that are acted upon are worth something... but why his was worth Gold is another matter entirely. He sold advertising space per pixel. Imagine selling a page of paper at $1 a pixel (roughly $484,000) but would anyone buy that small of space on a piece of paper at that rate? No, companies understand that a piece of paper gets little exposure, the rates are already established. $1000 for a well crafted add on one piece of paper is a decent rate. He had 2 things going for him. 1. The first was Assymetric Information. No one knew how much a pixel advertisement was really worth. It hadn't been done before. Now that it has been done, people can see the real value and other websites sell pixel advertising for a LOT less. 2. He had traffic (or exposure if you want to use typical advertising terms). Traffic that came in the form of news coverage and word of mouth. People came to see the novelty of the MillionDollarHomePage. No pixel will ever sell as much, because no one will get as much traffic. The novelty is gone. So not only do you have to have a good idea, and work to make it happen, but you need some leverage for your idea. Leverage in the form of assymetric information, and novelty. Ideas are cheap. They are worth nothing. You cannot give them away.

Only ideas that are acted upon are worth something… but why his was worth Gold is another matter entirely.

He sold advertising space per pixel. Imagine selling a page of paper at $1 a pixel (roughly $484,000) but would anyone buy that small of space on a piece of paper at that rate? No, companies understand that a piece of paper gets little exposure, the rates are already established. $1000 for a well crafted add on one piece of paper is a decent rate.

He had 2 things going for him.
1. The first was Assymetric Information. No one knew how much a pixel advertisement was really worth. It hadn’t been done before. Now that it has been done, people can see the real value and other websites sell pixel advertising for a LOT less.

2. He had traffic (or exposure if you want to use typical advertising terms). Traffic that came in the form of news coverage and word of mouth. People came to see the novelty of the MillionDollarHomePage.

No pixel will ever sell as much, because no one will get as much traffic. The novelty is gone.

So not only do you have to have a good idea, and work to make it happen, but you need some leverage for your idea. Leverage in the form of assymetric information, and novelty.

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