Ideas or Projects

Many people come to me saying: “I have a project.” Most of the time, they don’t. They have an idea. Sometimes a good one, often a bad one. Quite often, it is a once-decent idea that has been made worse by changing macroeconomic conditions. The opposite almost never happens.

Calling an idea a project too early is one of the most efficient ways to destroy value.

Ideas are easy. They are optimistic by nature. They live in a base case where the sun shines every day, logistics work flawlessly, permits move on time, ships arrive as scheduled, and customs clears equipment without friction. Ideas do not worry about the rainy season, currency volatility, or who takes responsibility when things go wrong.

Take solar PV. The pattern is familiar, a piece of land is identified. Irradiation maps are available for free. A tariff is assumed. CAPEX comes from a quick Google search. At that point, people say they have a project. In reality, they have a possibility and a PowerPoint. The land itself has no intrinsic project value. It is just land, waiting for someone to do the hard work.

Projects begin where ideas become uncomfortable.

A project has been tested, at least on paper. Assumptions have been attacked. Numbers have survived sensitivity analysis. Risks have names and owners. Someone is accountable for delivery. There is a real customer or offtaker with a concrete problem to solve. The solution still works when conditions deteriorate.

This is why I am skeptical of so-called “low-hanging fruit.” If something truly were that easy, someone faster or more competent would have picked it already. When opportunities are presented as obvious and effortless, it usually means the hard work has not been done.

There is nothing wrong with ideas. Every project starts as one. The mistake is pretending the work in between does not matter.

If you want help, bring your idea. If you want funding, partners, or credibility, bring a project.

Idea and Project.pdf

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