Geek Squad and the Ramen Eaters

On a link from the Endless Innovation blog, I ended up at the Fast Company blog where I read tidbits of questionable wisdom from Robert Stephens, founder of Geek Squad. Mr. Stephens had spoken at Advertising Age's "Idea Conference." Amidst the general emoting about what a groovy guy he was were these two quotes:

Ramen Noodles. This is why startups are so innovative. Large companies want to be nimble, that's why they go to "idea" conferences. I suggest starve departments of money.

and

I believe advertising is the tax you pay for being unremarkable.

Wow. That's pretty counter-intuitive stuff. In fact, it's counter-intuitive because it's wrong.

Startups are innovative because innovation is a prerequisite of starting up. No one builds a startup around doing something already being done in the production phase. Well, maybe if they've got an innovation that significantly cuts production costs. But again, innovation is a requirement for a startup. The Ramen is there because the startup is, well, a startup. This is all circular logic that only comes across as an epiphany if you don't think about it.

In my business, we do research. Research is by its very nature highly risky. Only 1 in 10 or so ideas really go anywhere. Without money, we would financially collapse 90% of the time. We don't want Ramen, we want a steady stream of investment funds, hopefully from our cash reserves. Take a look at the success rates for big pharma. Big pharma is big because the high-risk nature of drug development requires a big bankroll to keep looking for the next smash-hit drug.

In the startup world, you get this same result through corporate attrition as most of the Ramen-eaters starve after their idea fizzles.

As for advertising, I can't even imagine what Mr. Stephens was thinking when he said that. He must have had too many espressos and was simply floating on a cloud of caffeine. Geek Squad advertises like crazy. My company advertises, but in a different way. We work on the basis of personal relationships and those personal relationships have to be constantly nurtured. We could produce all kinds of wildly innovative things, but without that marketing, nothing would ever be noticed and we'd go under pretty quickly.

I think these "idea conferences" have to be taken with a grain of salt.