"sure execution is more important than patenting. That is until your competition realizes you skipped over one of the most important aspects of starting a business, takes your design, reverse engineers it, patents it and then charges you a huge licensing fee at which point your bottom line suffers considerably. "
I don't think that what is described above constitutes "good execution". The way you tell whether execution is good or bad is by its results. A suffering bottom line is a bad result. Therefore the execution that produced it was also bad.
Good execution might determine a patent is valuable. Or it might determine it is not valuable. It is a case by case thing. However, a strong patent is not an alternative to good execution that can make you successful despite poor execution.
The Wright Brothers had one of the strongest basic patents ever issued -- for the flight control surfaces that make controlled flight possible. Despite their patent, and vigorous patent prosecution, they had abysmal execution on the business side. More experienced businessmen like Glenn Hammond Curtiss and Alexander Graham Bell partnered and executed exceptionally well. The effectively negated the value of this basic patent for nearly 40 years, and wound up stealing the US aircraft market, and quickly dominated the Wright brother's business. Curtiss' and Bell's political connections made their company the go to manufacturer in World War I, not the Wrights.
This is not an isolated case. It is in fact a common occurrence.
So in the hypothetical described by David C., "Good Execution" without a patent would not result in huge losses to a competitor with a patent that his poor execution would result in. Instead, Good Execution would be to get product into market before competition can file a patent -- since a product already sold publicly prior to a filing constitutes prior art and the filing will fail as not meeting the "novelty" requirement. Furthermore, "Good Execution" would tie up all the major distributors with long term contracts, so that late entrants can only fight over the remaining scraps for several years. Good execution would also establish the first company as being the market leading brand so that people associate it it with the highest quality/reliability/value product in the field, so that competitors constantly have to work extra hard to get their offerings noticed.
I'm a technologist and an entrepreneur. I received awards for my inventions (Prescient Agents, Web Conferencing, etc.). I hold multiple patents, and have been a witness in a Microsoft patent case. I'm not a patent attorney nor agent, but I have taught graduate business courses in managing Innovation and R&D, and I've developed and taught a lot of case studies involving patents. So, I've looked at this questions from many different points of view.
I'm not dissing the value of patents to start-ups. They are generally useful to have, but never in my experience are they sufficient to ensure success, nor to defend against a better executing competition.
But getting back to the original question of whether great ideas or great execution, I can share this insight:
There are a very many people who have many great ideas. Indeed, quite a few people believe themselves capable of inventing six impossible things before breakfast most days, and I have no doubt that many of them do. But very few of these inventors are able to persuade others of the value of those ideas, and even fewer are able to enroll a sufficient number of others in executing a business that is capable of making those ideas successful.
For this reason, a great many good ideas never make it to market, and others that do fail to achieve success. But because they exist they can licensed or sold, and there is actually a number of inventors who successfully sell their ideas to others who are experts at executing on businesses that develop them. (I recommend Stephen Key's website and InventRight training program to people who have lots of great ideas but can't execute well in developing them).
In contrast, there are almost no individuals who "execute well" in a business sense. Good execution almost by necessity requires a well performing organization. There are very few of these in any market. Most of them are not particularly concerned with threats by someone with a good idea and no organization. Because other smart people are trying to license good ideas to top performing businesses daily. So, if someone has an idea and corners the market for left handed smoke shifters the well executing business pivots and takes some other market instead.
So, in practice, you'll never find a well executing company without a good idea. Because if they didn't already have one, a well executing company would find one and license it.
But this should cause us to now go back to the question of what is a "good idea"? If an idea is successful in the market, wouldn't we call it good? But if an idea is truly good, why can't it attract a bid from companies with a history of good execution? There are two likely possibilities: 1) because ideas are produced by individuals, a troublesome person with a great idea might be deemed too troublesome for any companies to bother to work with, or because 2) what is "good" is entirely relative, and an inventor saying their idea is good (but it never becomes successful in practice) is just exercising that relativity (some might say ego) to justify their individual value even in the face of little success.
Most people have a strong need to believe that they are in control of their lives and that any success they achieve is due to their own innate value, which in intellectual fields amounts to being a producer of great ideas. Except when they are blocked and unsuccessful; then it is generally more convenient to attribute that failure to others rather than in their own limitations. In both cases, luck is rarely considered to be an important factor, despite substantial evidence that it plays a large part in our daily circumstances.
As a result of this kind of psychology, a lot of these conversations SEEM on their surface to be about things outside ourselves, like case studies about this or that successful or failed business, but are actually really being driven by what is going on in our own internal landscapes of how we value our own abilities. A sign of this is when people spend a lot of time in explaining how a cause can be judged good, despite an effect that is judged bad, or vice versa. Which as you can see, I am also engaging in!