First Find an Idea, Then Find the Funding: Barry Ritholtz

(Bloomberg View) -- Luis Perez-Breva, professor at the Massachusetts Institute of Technology and head of its Innovation Teams Program, has a saying: “Nearly all ideas are born bad.” 

As he explained on this week's Masters in Business, people often have a sense that there's something broken. That hunch is what we often think of as an idea, but Breva explains why it isn't.

Megaphone.fm: Luis Perez-Breva Explains How to Be ‘Productively Wrong' by Masters in Business

“Being productively wrong,” he says, is how we should approach the evolution of ideas. The key to turning hunches into successful ideas is through the iterative process of trial and error, experimentation and failure. Entrepreneurs should focus on iteration, rather than venture-capital funding. Eventually, by being productively wrong, successful entrepreneurs create products and services that solve real problems. At that point, the focus can shift to funding.

Breva helped to create what's known as the E911 system -- the mobile-location technology for emergency calls made from wireless phones. He is the author of “Innovating: A Doer's Manifesto for Starting From a Hunch, Prototyping Problems, Scaling Up, and Learning to Be Productively Wrong.”

Some of his favorite books are cited here; conversation transcript will be available here.

You can stream/download the full conversation, including the podcast extras on iTunes, Bloomberg and Overcast. Our earlier podcasts can all be found on iTunes, Overcast and Bloomberg.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Barry Ritholtz is a Bloomberg View columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He blogs at the Big Picture and is the author of “Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.”

To contact the author of this story: Barry Ritholtz at britholtz3@bloomberg.net.

To contact the editor responsible for this story: James Greiff at jgreiff@bloomberg.net.

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